PROTECTION OF LECHUGUILLA CA VE 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON NATION.AL PARKS, 

FORESTS, AND PUBLIC LANDS 

OF THE 

COMMITTEE ON 

NATURAL RESOURCES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 

ON 

H.R. 698 

TO PROTECT LECHUGUILLA CA VE AND OTHER RESOURCES AND 

VALUES IN AND ADJACENT TO CARLSBAD CAVERNS NATIONAL PARK 

66-951 

HEARING HELD IN WASHINGTON, DC 

MARCH 2, 1993 

Serial No. 103-8 

Printed for the use of the Committee on Natural Resources 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1993 

For sale by the U.S. Government Printing Office 

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 

ISBN 0-16-040753-2 
COMMI'ITEE ON NATURAL RESOURCES 

HOUSE OF REPRESENTATIVES 

GEORGE MILLER, California, Chairman 

PHILIP R. SHARP, Indiana DON YOUNG, Alaska, 

EDWARD J. MARKEY, Manachusetta Ranking Republican Member 

AUSTIN J. MURPHY, Pennsylvania JAMES V. HANSEN, Utah 

NICK JOE RAHALL II, West Virginia BARBARA F. VUCANOVICH, Nevada 

BRUCE F. VENTO, Minnesota ELTON GALLEGLY, California 

PAT WILLIAMS, Montana ROBERT F. SMITH, Oregon 

RON DE LUGO, Virgin Islands CRAIG THOMAS, Wyoming 

SAM GEJDENSON, Connecticut JOHN J . DUNCAN, JR., Tennessee 

RICHARD H. LEHMAN, California JOEL HEFLEY, Colorado 

BILL RICHARDSON, New Mexico JOHN T. DOOLITTLE, California 

PETER A. DEFAZIO, Oregon WAYNE ALLARD, Colorado 

ENI F.H. FALEOMAVAEGA, RICHARD H. BAKER, Louisiana 

American Samoa KEN CALVERT, California 

TIM JOHNSON, South Dakota SCOTT MCINNIS, Colorado 

LARRY LAROCCO, Idaho RICHARD W. POMBO, California 

NEIL ABERCROMBIE, Hawaii JAY DICKEY, Arkansas 

CALVIN M. DOOLEY, Califoi;nia 

CARLOS ROMERO-BARCELO, Puerto Rico 

KARAN ENGLISH, Arizona 

KAREN SHEPHERD, Utah 

NATHAN DEAL, Georgia 

MAURICE D. HINCHEY, New York 

ROBERT A. UNDERWOOD, Guam 

HOWARD BERMAN, California 

LANE EVANS, Dlinoie 

PATSY T. MINK, Hawaii 

THOMAS J . BARLOW III, Kentucky 

THOMAS M. BARRETT, Wisconsin 

DANIEL P. BEARD, Staff Director 

RICHARD MELTZER, General Counsel 

DANIEL VAL KISH, Republican Staff Director 

SUBCOMMITI'EE ON NATIONAL PARKS, FORESTS, AND PUBLIC LANDS 

BRUCE F. VENTO, Minnesota, Chairman 

EDWARD J . MARKEY, Massachusetts JAMES V. HANSEN, Utah, 

NICK JOE RAHALL II, Weat Virginia Ranliing Republican Member 

PAT WILLIAMS, Montana ROBERT F. SMITH, Oregon 

PETER A. DEFAZIO, Oregon CRAIG THOMAS, Wyoming 

TIM JOHNSON, South Dakota JOHN J . DUNCAN, JR., TenneBSee 

LARRY LAROCCO, Idaho JOEL HEFLEY, Colorado 

NEIL ABERCROMBIE, Hawaji JOHN T. DOOLITTLE, California 

CARLOS ROMERO-BARCELO, Puerto Rico RICHARD H. BAKER, Louisiana 

KARAN ENGLISH, Arizona KEN CALVERT, California 

KAREN SHEPHERD, Utah JAY DICKEY, Arkansas 

MAURICE D. HINCHEY, New York 

ROBERT A. UNDERWOOD, Guam 

AUSTIN J . MURPHY, Pennsylvania 

BILL RICHARDSON, New Mexico 

PATSY T. MINK, Hawaii 

RICHARD HEALY, Staff Director 

CHARLES (STAN) SLOSS, Counsel 

GWYN F'LETcHER, Staff Assistant 

STEPHEN HODAPP, Republican Consultant on National Parks 

(II) 
CONTENTS 

Page 

Hearing held: March 2, 1993 ....... .... .. .. .. ... .... .. ........ ... .. .... .... .. . .. .. .. .. .. .. .. ... .. .. .. .. .. .. ... 1 

Text of the bill: H.R. 698 .................. .... .. .. .. .... .... .............. .... .... .... ............ ...... .... .... . 2 

MARCH 2, 1993 

Statements: 

Opening statement of Chairman Vento ........................................................ .. Hon. James V. Hansen, a Representative in Congress from the State 

of Utah .......................................................................................................... . Hon. Joe Skeen, a Representative in Congress from the State of New 

Mexico ........................................................................................................... . Panel consisting of: 

Hillary A. Oden, Assistant Director, Energy and Minerals Resources, 

Bureau of Land Management, Department of the Interior, accom- panied by Joe lncardine, Geologist, Bureau of Land Mana_gement ... Dennis Fenn, Ph.D., Deputy Associate Director, Natural Resources, 

National Park Service, Department of the Interior, accompanied 

by Ronal Kerbo, Cave Mana~ement Specialist, National Park Service, and Harvey Duchene, Private Sector Petroleum Geologist ......... Panel consisting of: 

Daniel Fong, Ph.D., Assistant Professor of Biology, the American 

University, Washington, DC, representing the Conservation Committee of the National Speleological Society, accompanied by John 

Shelton, National Speleological Society Liaison to the National 

Park Service .......................................................................................... . John B. Gustavson, Geologist and Petroleum Engineer, Boulder, CO, 

representing Yates Energy Corporation ............................................. . 

APPENDIX 

MARcH 2, 1993 

Additional information for the record: 

1 

7 

9 

26 

35 

55 

65 

Prepared statement of Congressman Curt Weldon, a Representative in 

Congress from the State of Pennsylvania ................................................... 81 

Letter to Chairman Vento from Richard T. Gale, President, Association 

of National Park Rangers, dated February 18, 1993 ................................. 84 

(III) 

H.R. .698, TO PROTECT LECHUGUILLA CAVE 

AND OTHER RESOURCES AND VALUES IN 

AND ADJACENT TO CARLSBAD CAVERNS 

NATIONAL PARK 

TUESDAY, MARCH 2, 1993 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON . NATIONAL PARKS, FORESTS AND PuBLIC LANDS, COMMITTEE ON NATURAL RESOURCES, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:05 a.m., in room 

1324, Longworth House Office Building, Hon. Bruce F. Vento 

(chairman of the subcommittee), presiding. 

OPENING STATEMENT OF CHAIRMAN VENTO 

Mr. VENTO. The Subcommittee on Parks, Forests and Public 

Lands will be in order. 

Today, we are going to hear testimony on H.R. 698, which I introduced on January 27. It is intended to provide additional protection to the Lechuguilla Cave in New Mexico. This is located in 

Carlsbad Caverns National Park in New Mexico, at least the portions that we are now aware of. Lechuguilla, of course, is a phenomenal resource. It is the deepest cave in the United States, over 

1,500 feet in depth; extends more than 60 miles, and that probably has been only partially defined, exceeding already Carlsbad Caverns itself, with the possibility that this is only a small percentage, 

as I mentioned, of its full size. 

Lechuguilla Cave also contains many rare and unusual features 

such as the gypsum chandeliers. I note that we have kindly been 

provided a copy of Lechuguilla Cave by one of the organizations that has been most interested in protectmg it, and so we are deeply 

grateful. I think that most of the members will be receiving copies 

of this coffee table book which permits us to share in some of the 

phenomenal resources, at least visual resources that are present in 

the area. · This. cave is described by experts as the best example of such formations in the world. The carbonate formations are also abundant 

in the area, but the gypsum formations that we view in these 

photos are very unusual. The full extent and significance of this 

cave has only begun to be recognized. For example, through articles 

such as the one that appeared in National Geographic in 1992, 

March 1992, that describes in more detail some of those resources 

for the members. 

[A copy of the bill, H.R. 698, follows:] 

(1) 
103n CONGRESS 

1ST SESSION 

2 

H.R.698 

To protect Lechuguilla Cave and other resources and values in and adjacent 

to Carlsbad Caverns National Park. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 27, 1993 

Mr. VEKTO introduced the following bill; which was referred to the Committee 

on Natural Resources 

A BILL 

To protect Lechuguilla Cave and other resources and values 

in and adjacent to Carlsbad Caverns National Park. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembl,ed, 

3 SECTION 1. SHORT TITLE AND FINDINGS. 

4 (a) SHORT TITLE.-This Act may be cited as the 

5 "Lechuguilla Cave Protection Act of 1993". 

6 (b) FINDING.-Congress finds and declares that 

7 Lechuguilla Cave and the other resources of Carlsbad Cav8 ems National Park and adjacent public lands have inter9 nationally-significant scientific, environmental, and other 

10 values that should be retained in public ownership and 
3 

2 

1 protected against adverse effects of mineral exploration 

2 and development and other activities presenting threats to 

3 those values. 

4 SEC. 2. LAND WITHDRAWAL. 

5 (a) IN GENERAL.-Subject to valid existing rights, 

6 the lands referred to in subsection (b), and all other lands 

7 within the boundaries of the area specified on the map 

8 referred to in such subsection which may become subject 

9 to the operation of the public land laws, are hereby withIO drawn from all forms of appropriation under the public 

11 land laws (including the mining laws) and from the oper12 ation of the mineral leasing and geothermal leasing laws. 

13 (b) LAND DESCRIPTION.-The lands referred to in 

14 subsection (a) are the public lands comprising approxi15 mately 5100 acres in Eddy County, New Mexico, as gen16 erally depicted on the map entitled "Dark Canyon Cave 

17 Protection Area" , dated January 1993, and filed in ac18 cordance with subsection (c). 

19 (c) PUBLICATION AND FILING.-As soon as possible 

20 after the date of the enactment of this Act, the Secretary 

21 of the Interior shall publish in the Federal Register a no22 tice containing the legal description of the lands with23 drawn by subsection (a), and shall file such legal descrip24 tion and a detailed map of the lands referred to in such 

25 subsection with the Committee on Natural Resources of 

•HR 698 IH 
4 

3 

1 the House of Representatives and the Committee on En2 ergy and Natural Resources of the Senate. 

3 (d) TECHNICAL C0RRECTIONS.-The map and legal 

4 description referred to in subsection (b), shall have the 

5 same force and effect as if they were included in this Act 

6 except that the Secretary of the Interior may correct cleri7 cal and typographical errors in such map and legal de8 scription. 

9 (e) PUBLIC lNSPECTION.-Copies of the map and 

10 legal description referred to in subsection (b), shall be 

11 available for public inspection in the offices of the Director 

12 and appropriate State Director of the Bureau of Land 

13 Management. 

14 (f) MANAGEMENT.-The lands withdrawn by this sec15 tion shall be managed by the Secretary of the Interior, 

16 acting through the Bureau of Land Management, pursu17 ant to the Federal Land Policy and Management Act of 

18 1976 (43 U.S.C. 1701 and following) and other applicable 

19 provisions of law, including this Act. 

20 SEC. 3. MANAGEMENT OF EXISTING LEASES. 

21 Notwithstanding any other provision of law, the Sec22 retary of the Interior shall not permit the holder of any 

23 mineral lease affecting lands withdrawn by section 2 or 

24 any adjacent public lands in New Mexico that are man25 aged pursuant to section 603 of the Federal Land Policy 

·-.HR 898 IH 
5 

4 

1 and Management Act of 1976 (43 U.S.C. 1782) to carry 

2 out any drilling or other activities on such lands that could 

3 have any adverse effects on Lechuguilla Cave or any other 

4 cave resources located within Carlsbad Caverns National 

5 Park or within the lands withdrawn by section 2. 

0 

•HR 888 m 
6 

Mr. VENTO. Carlsbad Caverns National Park is located in the 

Guadalupe Mountains, part of the Capitan Reef formation that 

stretches from Carlsbad to the Guadalupe National Park in Texas. 

The geology has lent itself to the formation of extensive caverns 

which also comprise some of the most rugged and remote and spectacular landscapes in that State. Adjacent to Carlsbad Caverns National Park are the national forest lands and public lands managed 

by the Bureau of Land Management, including a number of areas 

BLM manages as Wilderness Study Areas under section 603 of 

FLPMA. For a number of years, there have been proposals to afford national park, wilderness or other special protective status to the 

lands in this general area, with greater protection of caves from adverse effects of mineral exploration, especially drilling for oil and 

gas being a major objective of the proponents of such measures; 

that is, those seeking protection. 

Concerns about possible effects on oil and gas drilling on the cave 

resources in this area have heightened as there have been increased mineral exploration activity, primarily on lands near the 

Dark Canyon Area north of Carlsbad Caverns National Park. In 

fact, I know that Congressman Richard~on initially had introduced 

legislation giving protective status to Lechuguilla Cave some years 

ago. Other members of the delegation may also have sought protection in other measures that don't immediately come to my mind. 

Because of the possible adverse effects on Lechuguilla Cave and 

other nationally significant resources from such drilling activity associated with the risk of gas well blowouts, such as inadvertent alteration of cave structures or contamination or simple hydrological 

changes in the groundwater or aquifer formations beneath the surface, during the last Congress I proposed withdrawing the Dark 

Canyon Area from mineral entry and mineral leasing. This withdrawal was approved by the committee as part of the bill to withdraw other public lands for the Waste Isolation Project, or WIPP 

facility, but was not included in the final version of that legislation. So this is not the first attempt that the committee has made with 

regards to this. The committee has been and is very interested in 

this resource. 

Similarly, we have been involved with identification and indicing 

of cave resources on public lands as well as, concerns about other 

types of leasing such as geothermal leasing in and around other 

types of park or other conservation resource areas. 

The measure before us that I have submitted for consideration 

and will be heard today addresses possible development of already 

existing mineral leases. This is new in the sense that we are trying 

to address the existing leases, not just potential future leases. The 

BLM is currently reviewing plans for such development adjacent to 

Carlsbad Caverns National Park and has issued a draft environmental impact statement on this subject. The bill would prohibit the Secretary of Interior from permitting 

the holder of a lease involving the Dark Canyon Area or any adjacent BLM Wilderness Study Area to carry out any drilling or other 

activities that could have any adverse effects on Lechuguilla or any other cave resource within the Carlsbad Caverns National Park or 

the Dark Canyon area. 
7 

One only wonders · at the passive role of the . Park Service in the 

last decade, especially since the rediscovery or the full discovery of 

what has been known as Lechuguilla Cave. The cave's entrance 

was identified in 1914, but only recently, in the Eighties, has come 

to light the full extent of this particular resource . . But one not only 

has to wonder about the passive role that the Park Service . has 

played in this case in terms of. not working with the BLM and/or 

the Forest Service concerning the P9tential impact of their activities on Carlsbad and on Lechuguilla Cave, which is located-or the 

entrance of which is located at least in the park. . It has been called to my attention that the New Mexico State 

BLM Director has seen fit to in fact provide a dollar value agreement agreeing to a Yates Energy private appraisal of $18.7 million 

as the value of certain leases. It 1s clear to me that this is an illconceived and hasty action by the New Mexico. BLM State Director 

to disco\lrage action on our efforts and to make the task, of protection of this important resource more difficult at Lechuguilla. 

I am very disappointed, of course, with the action of the Director 

in this particular case, the State Director. His action casts a shadow on the concluding service of a long -career. Certainly this reflects, at least to me, poor judgment, and provides comfort to the 

holder of the gas and oil lease, but · it doesn't adequately consider 

the public interest in a world-class resource, Lechuguilla Cave, 

whic:h is a part of our American heritage. So I am very disappointed to note that particular action, especially since the EIS has not been finalized, and one of the alternatives is a "no drill" alternative in the EIS, and I just don't see 

the basis for taking that particular action and giving aid and comfort. I wish that that had not occurred. I think it is ill-conceived 

and :poor judgment on the part of the State Director, who I note 

is gomg to be leaving public service shortly after a distinguished 

career. But I am very disappointed in that action, esrecially since 

this is/ending legislation. It clearly is aimed at, as said, giving aid an comfort to Yates Energy, but I really think that that was 

not necessary and inappropriate in this instance. 

Mr. Hansen, do you have any opening comments? 

STATEMENT OF HON. JAMES V, HANSEN, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF UTAH 

Mr. HANSEN. Vecy briefly, Mr. Chairman. Thank you for recognizing me. I, too, welcome the witnesses here, especially our 

friend Joe Skeen. 

If it is okay with the chairman, I would ask unanimous consent 

that my opening remarks could be included as part of the record 

on this legislation. 

Mr. VENTO. Yes. Without objection, your entire statement and 

other statements of members and witnesses in their entirety will 

be made a part of the record. 

No objection? So ordered. 

Mr. HANSEN. Thank you. I would like to add, if I may, that I sit 

on a committee called IntelJigen~e. It is having a very important hearing this morning, and somEi1ow they got scheduled at exactly 

the same time, which rarely happens around here, as we all know. 

[Laughter.] 
8 

So I think that with your permission I better run to that meeting. I have my information here and I will submit it. Thank you. 

I have to say I have a little concern on the one bill. Looks to me 

like it has the potential of creating a buffer zone. AB you know, I 

go into orbit and ballistics when buffer zones are mentioned, as I 

represent the State of Utah, which is basically owned by the Federal Government, and buffer zones would, in fact, give you all of 

the State, and I hate to see any precedents established. 

Mr. VENTO. Would the gentleman yield to me? 

Mr. HANSEN. Yes. I would be happy to. 

Mr. VENTO. You know, this is a legislated action, so it is no reason to imply that there would be anything left hanging. I mean I 

think you should take comfort in the fact that we are trying to legislate specific land policy, not infer that it is going to occur. 

Mr. HANSEN. Well, I appreciate that. I have to admit, or have to 

say that anything that even infers something of buffer zones makes 

me very, very nervous. I have taken comfort before and been rolled, 

so comfort is a hard thing for me to take around here. [Laughter.] Thank you very much. 

Mr. VENTO. I thank the gentleman and I trust he will do his 

homework on this issue. 

[The prepared statement of Mr. Hansen follows:] 

OPENING STATEMENT OF HON. JIM HANSEN 

Mr. Chairman, while I do have questions about the need for this legislation, which 

does not appear to confer substantial additional authority to the Secretary of the 

Interior, and the timing of the legislation, when the Interior Department is in the 

middle of an EIS, I do support your efforts with this bill and agree that the spec- tacular resources of Lechuguilla (pronounced lech a gee ah) Cave deserve protection. While that may sound like a "motherhood and apple pie" statement, I assure you that is not the case for this gentleman. As you know, in the past I have strongly opposed efforts in this Committee to 

transform BLM lands adjacent to national parks into buffer zones on a wholesale 

basis, and I intend to continue to do so. However, this legislation points out that on a site-specific basis, where there is a direct relationship between park resources and activities on adjacent BLM lands, protective action may be warranted. 

Having said that, I also recognize that enactment of this measure and any resulting compensation to current oil and gas leaseholders could ultimately cost the tax• 

payers of this country tens of millions of dollars. Therefore, I intend to carefully follow this legislation to ensure that the final language is both reasonable and based on sound scientific evaluation. I hope we avoid repeating the scenario of last Congress when we rejected a thorough USGS scientific report on the impacts of using 

natural overflow from a hot springs outside of Yellowstone National Park in favor 

of a park biologist advocatin~ absolute protection and passed out of this Committee an unnecessary buffer zone bill. 

I look forward to working through these issues with you and the gentleman from 

New Mexico, as I know that he has a keen interest in this matter. 

Mr. VENTO. Mr. Thomas. 

Mr. THOMAS. Mr. Chairman, I just welcome and I am glad the 

gentleman is here who represents this district. I think that is a 

very important part of it. 

I have nothing further. 

Mr. VENTO. Tha.nk you. 

We are pleased to welcome Congressman Joe Skeen from the 2nd 

District of New Mexico. 

Mr. Skeen, your statement has been made a part of the record, 

so you can feel free to summarize or to read the relevant parts 

thereof. Please proceed. 
9 

STATEMENT OF HON. JOE SKEEN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE-OF NEW MEXICO 

Mr. SKEEN. Thank you, Mr. Chairman and members of the committee. I appreciate the opportunity to be with you · today to offer 

some thoughts and comments on the pending legislation to protect 

Lechuguilla Cave. I would just say in response to the chairman's 

remarks; the horse is out of the barn. The problem is that you have 

two p-eat natural resourc~s involv,ed in this particular piece of leg- islation. But you also have the right to · s9me people who in· good 

faith were o:perating lcmg before the cave was discovered and to the 

extent that 1t is today. So I think that there is something that we 

are going to have to consider in the area ofcompensation, notwithstanding the fact that I know how you feel about this, bu.t I think 

it is a consideration that is going to have to be given some creden~e ~ . 

Lechuguilla Cave is the world-renowned natural resource located 

near Carlsbad Caverns National Park, and it is formed from limestone and gypsum with many fractures and a very permeable bedrock. Over 60 miles of cave have been discovered so far, and yet 

this is estimated to be about onlr 5 percent of th,e total mass. Truly 

this is one of the most extraordinary caves that has ever been discovered and I think it is world class. 

This particular area and geological formation also happens to be 

very rich in oil and gas production. The farther the cave extends, 

the greater the potential for conflict due to the dangers associated 

with hydrocarbon gases infiltrating Lechuguilla Cave and the 

Carlsbad Caverns. Hydrocarbon contamination of these internationally known natural wonders could pose a safety problem to 

researchers and visitors who may be in the caves at the time of release. 

Rest assured that I too want to protect this natural resource as 

well as the researchers and the visitors in the caves. However, I 

do want to make sure that oil producers and their constitutional 

rights are protected. If an active lease is affected, we must provide 

them fair market value compensation for the taking of this lease 

or leases. I believe this should include the value at which the potential reserve is valued. Oil and gas producers spend millions of 

dollars developing the appropriate infrastructure, and many years 

of expertise are required before leases are acquired from the Federal Government. This has been an ongoing process for many, 

many years. 

Absent the drilling of a well, the Interior Department, or anyone 

else for that matter, cannot give absolute assurance that drilling 

activity will not have an adverse effect on the cave resources. 

Therefore, we must continue to work toward developing a strategy 

that will deal with future conflicts, and there must be a reasonable 

solution which does not shut out the interests of the oil and gas 

producers. If 60 miles is just 5 percent of its total volume, we will 

not be able to manage, nor afford to keep, these producers from developing the reserves. 

I believe the pror.erty rights of the lease owners must be pro- tected, and this bil, in effect, will take· their rights away. Therefore, I would like to explore a solution with the chairman which 

would prevent drilling in the proposed environmental impact state-
10 

ment . area identified by BLM while at the same time providing 

some form of compensation to the owners of these leases. It was 

January 28, 1991, when one of the owners of the lease, the Yates 

Energy Corporation, submitted an application to drill and was notified by BLM that the APD would not be approved within the normal 30 days, and 2 years later BLM had informed Yates that they 

were going to change their preferred alternative to a no drill _ recommendation. · · 

Now, it is _my understanding that BLM and Yates have agreed 

upon a value of $18.7 million for the reserves and the Federal 

lease. I would like to ~ubmit this information for the record, and 

I am sure that you already have it, Mr. Chairman. _ . Mr. VENTO. Without objection, that will be made a part of the 

record. I would also ask that the letter of February 26th, the day 

after this areement was signed, from the BLM, be made a part of the recor , which advises the State Director to--

Mr. SKEEN. That is your prerogative. 

Mr. VENTO. Well, I think it would be appropriate that they be 

put in the record together. Without objection. 

[The BLM memorandum of February 26 follows:] 
• Me11orandu111 

11 

United States Department o( the Interior 

BUREAU Of LAWD MANAGEMENT' 

WASNINOTON. Or.. l0l40 

February 2e, 1993 

To: state Director, N•v Mexico 

Froa, Aotin9 Director 

Subject: K.R. 698 Lechuquilla cave Protection Act - Agreement ot 

Value, Oil and Gas Le•••• NM - 62161 and 81894 

Recently, during preparation tor an upcoming hearing on this Act, we became aware ot the reterenced Agreement ot Value. Upon a curaory review ot this document I believe it would be appropriate 

to reopen th• question ot value regarding th••• reaources. 

several actions continue which are pertinent to this question. First, the EIS on these resource• haa not been coaplated, Until the 

record ot decision has been executed and become tinal there are many element• ot a proper delineation ot resource valuea that are yet to be determined. 

Second, there ia the proposed Act itaelt. One can only speculate regarding both the ti•ing and content ot thie Aot if it doe• become 

Law. 

Given these tactore I strongly believe that there ia not a tin 

baaia at this time tor concurring on a value for the resource• that 

may in some way be iapacted. Accordinqly, I wish that the matter 

of resource value be reopened ao that all pertinent factors may be 

considered in the preparation of whatever value deter11ination• ••Y 

Gt •o•• time be appropriate. 

Please provide me with a propoeed wor~ plan tor a thorough review 

ot thie project to be chaired by the Office of the AH1iltant 

Director for Enet'9)' and Mineral Reeourcee. It ahould include 

aileatones ·keyed to the completion of the EIS and the potential 

pasaage ot K,ft. 091 into law, Upon review and approval of thie 

plan, a complete review will co1111ence with a reexamination keyed to 

those reaouroea that ere eventually delineated ae impacted and th• manner in which they are impacted. 

Please provide the propoead plan by 4/6/93. QUeetione ehould be 

directed to the Aaai• tant Director for Enerqy and Mineral 

Reaourc••· 

Carson W. Culp, Jr,, 

cc: 101, -.e., 140, Oombeck(LUC) 
12 

[The Yates Energy Corporation letter of February 26 and agreement of value between the BLM and Yates follow:] 
13 

February 26, 1993 

Congressman Bruce F. Vento 

2304 Rayburn Houae Office Building 

Washington, D. c. 20515-3102 

Re: B. ~- 698/Lechuguilla Cave Prot•ct:ion Act 

Dar~ Canyon Properties 

Eddy County, New _Mexico 

Dear Congressman Vento: 

Yates Energy Corporation ("Yates") acquired an interest in 

1,801.68 acres of United State• of America Oil and Gae Lease• and 

patented minerals. The United States of America Oil and Ga• 

Lease• ( "Subject Land" ·) involved, located within the proposed 

Lechuguilla Cave Protection Act area, are: 

Town•hip 24 South, Range 24 Bait, N,M.P.M. 

Lease IOI IOl-62161 

Leaae IOI 1111-81891 

Section i9: All 

Section 30: All 

containing 1,281.68 acrea, more or less. 

Section 201 NW/4NE/4, W/2NW/4, SW/4, 

NW/4SE/4 

containing 320.00 acres, more or lesa. 

In our due diligence work prior to purchasing these 

propertiea, - examined a letter which had-been reviewed and 

edited by Richard L. Manus, Ar•a Manager for the Carlabad 

Resource Area Headquarters for the Bureau Land Management -(BLN), 

which · contained certain as·•ur~e• about. developing the Subject .Land. I als6 personally ~t with BLM engineering and cave . resource personnel in Carlsbad to discuss drilling in this area, 

and as no known cave entran~•• were located on the Subject Land, 

drilling locations would adhere to the specific lease 

stipulations contained within aaid federal leaaes. Possible 

P.O. Box 2323, Sunwest Centre, Suite 1010, Roswell, New Mexico 88202 1505) 623-4935 - Fax ISC5J 623-4947 

66-951 0 - 93 - 2 
Congre•• -n Bruce F. Vento 

B. R. 698 

February 26, 1993 

14 

modifications in our drilling procedures were discussed, however 

it was never indicated by the BLM that drilling would not be 

allowed. 

Based on these assurances from the BLM, Yates concluded it's 

purchase of an interest in said property and was appointed by the 

working interest owners to serve as Operator. Therefore, the 

reference herein to Yates shall represent all of the interest owners in the Subject Land. 

In May 1990 Yates staked several proposed well locations in 

Sections 19 and 30 during a BLM field inspection, said locations were approved by the BLM Surface Protection field inspector. The 

Notice of Staking for these locations were filed, which resulted 

in a meeting with various BLM personnel from Roswell and Carlsbad 

wherein we discussed potential cave resources that :night be 

encountered in drilling. Yates was preparing to drill our initial test well in the NW/4 of Section 20-24S-24B on patented 

surface and minerals, and the safeguards that would be used in 

drilling were discussed. Yates volunteered to provide the BLM 

with drilling information to allow them to evaluate the well. 

Thi• initial test well wa• co-need May 18, 1990 and 

drilled without encountering any unu• ual problem•, no cave resources were encountered. The well in presently shut-in as a 

Delaware gas well, waiting on pipeline. The pipeline 

construction can not be economically justified until additional 

production has been eatablished in the area. Thia well bolatered 

the geologic concept that aubatantial natural ga• deposits exiat 

under the Subject Land. 

Baaed on the geologic information gained in drilling the 

first well, we selected a location in the SB/4 of Section 19 for our aecond teat well. The location wa• in compliance with the 

lease stipulation• and was approved by the BLM Surface Pro.tection 

field representative. This location, while on federal miner~ls, 

is located on fee surface property. Cave re• ourcea, should they 

exist at this location, would be owned by the private surface owner. We have an agreement with said owner for access onto his 

property and to conduct drilling operation•• 

We submitted an Application to Drill c•APD•) to the BLM for 

purposes of commencing drilling operations for it• Diamondback 

Federal No. 1 Well to be located 2,007 feet FSL an 1,063 feet FBL 

Section 19. By letter dated February 6, 1991, Richard L. Manus, 

2 
Congressman Bruce F. Vento 

B. R. 698 

February 26, 1993 

15 

Area Manager for the Carlsbad Resource Area Headquarters, BLM, 

notified Yates that its APD •will not be approved within the 

normal 30 days and will be held pending until the cave matter is 

resolved in this area. No firm approval date can be given at 

this time•. 

Yates submitted a Request for State Director Review, 

Statement of Reason• and Brief to BLM State Office in Santa Fe, 

New Mexico, on February 28, 1991, requesting the State Director 

to overturn the Decision and direct the Area Manager to commence the notice period for Yates' APD and to thereafter approve the 

APD. By Decision dated April 5, 1991, the Deputy State Director 

of BLM upheld the Decision of the Carlsbad Resource Area delaying 

the processing of Yates' APD, but directed the Carlsbad Resource 

Area Manager to review the APD for completeness and by July 1, 

1991, either (1) approve the application as submitted or with 

appropriate conditions of approval~ or (2) disapprove the 

application with the reasons for disapproval. Thereafter, Yates 

agreed to extend the time in which BLM was required to make the 

decision on several occasions ultimately to October 31, 1991. 

However, by letter dated October 3, 1991, from the Area Manager 

of the Carlsbad Resource Area to Yates. regarding a decision of 

the State Director of BLM to require the preparation of an environmental impact statement ("EIS") and that the BIS process 

would not be completed until March 1993. No action has been 

taken on Yates' APD as of this date either approving or denying the same. ·· 

The Subject Landa are adjacent to the Carlsbad Caverns 

National Park, administrated by the National Park Service 

("RPS"). 

The filing of the APD resulted ·in some concern by NPS and so- officials in BLM concerning the potential for an oil and gas well to intercept and/or cause damage to cave resources. As a result of those concerns, .the BLM established a Cave and Karst 

Area Task Force in or ~ut February or March 1991. This Task 

Force was divided into two groups, the Technical Work Group and 

the Oversight Committee. The Technical Work Group began meeting, 

but it was apparent by June 19.91, .that it would be unrealistic 

for the committee to have developed any information that would be 

unrealistic for the committee to have developed any information 

that would be valuable to BLM in making a decision with respect 

to the APD within the original time provided in the April 5, 1991 

Decision. After the deadline for making a decision with respect 

3 
Congressman Bruce P, Vento 

B, R. 698 

February 26, 1993 

16 

to the APO was extended, the· Technical Work Group continued to 

meet on a regular basis in an effort to develop -thods of 

determining where cave and karat f-ture• are likely to occur and 

how they can be avoided and develoi;aent of drilling programs that 

could be implemented to reduce and aitigate any damage that may result to a cave or karst feature as a result of drilling, 

Several experiments were conducted. The Cave and Jtarst Area Taak 

Force met in the months of August and September, 1991, to diacuea 

these matter and the draft of the Bnvironmental Assessment that was developed by BLM, 

The BLM and NPS, as the cooperating agency, prepared A Draft 

BIS which was released August 31, 1992, The BIS was subje~t to a public hearing held on October 22, 1992, and the collllll9nt period ran through November 20, 1992. Substantial concerns were raised · both in the public comments as well as in the written conunents to 

the draft EIS by NPS and various organizations that have. interests in cave resources, wilderness areas, and areas of 

critical environmental concern, 

Due to such express concerns, it baa been indicated that the 

BLM will recommend a no drill alternative as their preference 

when the final BIS is published, The BLM has ·conducted an internal evaluation of the value of oil and gas resources :·in and 

under the Subject Land, and are continuing to conduct extensive 

studies to determine whether oil and gas activities will 

adversely affect Lechuguilla Cave or other cave reaourcea. 

The legislation that you have introduced in the Bouse of 

Representatives, •• R, .698, calls for the protection of 

Lechuguilla Cave and specifically provides that no drilling or other activity shall be permitted if auch activities could have an adverse effect on Lechuguilla Cave or any other cave resources. We feel that the essential issue that been omitted 

from•• a. 698 is the one of compensation of the owners of the 

property interests who must bear the burden to provide adequate assurance that Lechuguilla Cave will be absolutely protected. Absent the drilling of a well, neither the BLM nor anyone else can give such assurance that drilling activity will not have a potentially adverse affect on cave resources. Pot: thia reason, 

the lease owners' property rights have been effectively negated 

and taken away. 

4 
Congressman Bruce F. Vento 

B. R. 698 

February 26, 1993 

17 

Therefore, I reapectfully r~est that a. R. 698 be amended 

to apecifically provide for compensation to the parties whose 

property interests are being taken. 

For you information, Yates and BLM have entered into an Agreement of Value For Settlement Purposes, a copy of which is 

attached hereto, which sets forth the current fair market value 

of the oil and gas leasehold resources located in and under the 

Subject Land, in the event that no drilling activities are allowed. 

Your assistance and attention in this critical issue is 

appreciated. Congressman Joe Skeen and John B. Gllstavson of 

Gustavson Associates will be testifying on our behalf at the 

Sub-Committee hearing March 2nd on B. R. 698. 

/u:b 

,-c/goldnu99et/Vento. Ltr 

Yours very truly, 

YATES BRBRGY CORPO~IOS 

~~~ 

Vred G~•• President 

5 
18 

AG!l!!HENT Ql VALUE FOk S!TrLEMEIIT PUJU'OS!S 

THIS AGREEMENT OF VAUJE FOR SETILEMEIIT PURPOSES (hereinafter referred to 

a• the "Agreement") is made and entered into this 25th day of February, 1993, 

by and among YATES ENERGY CORPORATION, individually and as operator of the oil 

and gas leases identified below (hereinafter referred to as "Operator"); and 

the BUREAU OF IAND MANAGEMENT (hereinafter referred to as the "BU{") an agency 

under the Department of the Interior of the United States of America. 

U:CITALS 

A. Operator owns and operates the oil and gas leasehold estate and 

interest therein arising· under the following United States of America Oil and 

Gas Leases: 

(1) Lease NM NM-62161 covering the following described lands 

located in Eddy County, New Mexico 

Township 24 South, Range 24 East N M,P.M. 

Section 19: Lots l,2,l,4,El/2Wl/2,El/2(All) 

Section 30 : Lots l,2,l,4,El/2Wl/2,El/2(All) 

containing 1,281.68 acres more or less. 

(2) Lease NH NH-81894 covering the following described land in Eddy 

County , New Mexico: 

Township 24 South, Range 24 East N.H.P,M. 

Section 20 : NV1/4NE1/4,Wl/2NV1/4 ,SW1/4,NV1/4SE1/4 

containing 320 acres, • ore or less. 

8 . BU{ conducted an internal evaluation of the value of oil and gas 

resources in and ·under the Subject Land. BU{ prepared a report entitled 

"Opinion of Value" which is attached as Exhibit "A". Operator has also 

secured an independent appraisal of the oil and gas resources on the Subject 

land, which is attached as Exhibit "B" . 

C. Legislation has been introduced in the Houae of Representatives, 

H.R. 698, that calls for the protection of Lechugilla Cave and specifically 

provides that no drilling or other activity shall be permitted if such 

activities could have an adverse effect on Lechugllla Cave or any other cave 

resources. BU{ ls currently conducting extensive studies to determine whether 

oil and gas activities will adversely affect Lechugullla Cave or other cave 

resources. 

D. Operator and BU{ have agreed to enter into this Agreement for 

the purposes of setting forth the current fair market value of the oil and gas 

leasehold resources located in and under the Subject Lands if Congress or the 

Department determine that no drilling activities can occur. 
19 

AGUEKENT 

The partlea hereto agree as follows: 

1. Valuation of Oil and Gas Resources: Operator and BLM agree that 

the value of the oil and gaa leasehold interest on, in and under and that may 

be produced from the Subject Landa ls 18 . 7 million dollars as reflected in the 

independent appraisal attached hereto. BLM concludes that estimates of 

producible reserves and the valuation thereof as reported in the appraiaal is 

acceptable and accurately values said resources . 

YATES ENERGY CORPORATION 

BUREAU OF LAND MANAGEMENT 

By 
20 

Mr. VENTO. I think we have to have full exploration of the whole 

gamut and the whole spectrum of this particular question. 

It is appropriate to leave the decision of whether or not the oil 

and gas froduction will have an effect upon Lechuguilla to the Secretary o the Interior. However, in the Dark Canyon Area, which 

is the closest to the cave, we should prevent further oil and gas activity as long as we compensate the leaseholder, and I believe that 

we can and should do this legislatively. 

Mr. SKEEN. Again, Mr. Chairman, I commend you for giving this 

issue the heightened awareness that it deserves and the attention 

that it deserves. You have obviously done your homework very 

well. And we have always enjoyed your visits to New Mexico and 

welcome you back. Even the oil and gas folks would be happy to 

see you. 

Mr. VENTO. Thank you, Joe. I appreciate that invitation to a 

great State. And I appreciate your participation. 

[The prepared statement of Mr. Skeen follows:] 

TESTIMONY OF HON. JOE SKEEN 

Mr. Chairman and members of the committee, I appreciate the opportunity to appear toda_y to offer my thoughts and comments on the pending legislation to protect 

Lechuguilla Cave. 

Lechuguilla Cave is a world renowned natural resource located near Carlsbad National Park,. formed from limestone and gypsum with many fractures and a very 

permeable bedrock. Over 60 miles of cave have been discovered so far, and yet, this 

1s estimated to be only 5 percent of its total mass. Mr. Chairman, I apologize for 

not being able to attend the sound and picture presentation here in the Morris K. 

Udall Room on Monday; however, I'm sure it was spectacular. Truly this is one of 

the most extraordinary caves ever discovered. 

This particular area and geological formation also happens to be very rich in oil 

and gas production. The further this cave extends, the greater the potential for con- flict due to the dangers associated with hydrocarbon gases infiltrating Lechuguilla 

Cave and the Carlsbad Caverns. Hydrocarbon contamination of these internationally known natural wonders could pose a safety problem to researchers and visitors 

who may be in the caves at the time of a leak. 

Rest assured that I too want to protect this natural resource, as well as the re- searchers and visitors in the caves. However, I do want to make sure that oil pro- ducers and their constitutional rights are protected. If an active lease is affected, we must provide the fair market value compensation for the taking of their leases. 

I believe this should include the value at which the potential reserve is valued. Oil 

and gas/roducers spend millions of dollars developing the appropriate infrastructure, an many years of expertise are required before leases are acquired from the 

Federal Government. 

Absent the drilling of a well, the Interior Department, or anyone else for that 

matter, cannot give absolute assurance that drilling activity will not have an ad- verse effect on the cave resources. Therefore, we must continue to work toward developing a strategy which will deal with future conflicts; it must be a reasonable 

solution which does not shut out the interest of the oil and gas producers. If 60 

miles is just 5 percent of its total volume1 we will not be able to manage nor afford 

to keep these producers from developing tne reserves. I believe the property rights of the lease owners must be protected and this bill 

in effect will take their rights away. Therefore, I would like to explore a solution 

with the chairman which would prevent drilling in the proposed environmental impact statement area identified by BLM, while at the same time providing some form 

of compensation to the owners of these leases. 

It was January 28, 1991, when one of the owners of a lease (Yates Energy Corp.) 

submitted an application to drill (APD) and was notified by BLM that the APD 

would not be approved within the normal 30 days. Two years later BLM had informed Yates that they were going to change their preferred alternative to a no-drill 

recommendation. Now, it is my understanding that BLM and Yates have agreed 

upon a value of $18.7 million for the reserves and the Federal lease. I would like 

to submit this information for the record. 
21 

It is appropriate that we leave the decision of whether or not oil and gas production will have an effect upon Lechuguilla to the Secretary of the Interior. However, 

in this dark canyon area which is the closest to the cave, we should prevent further 

oil and gas activity as long as we compensate the lease holders. I believe we can and should do this ltigislatively. It is my belief that the Interior Department must conduct more studies to determine how often casing leaks occur and where the hydrocarbons end up. No data has 

been developed to show actual casing condiiions in older wells, mines containing ex- posed gas, and possible explosive concentrations of natural gas. There, seem to be 

far more unknowns in the equation than knowns. 

Again, Mr. Chairman, I commend you for giving this issue the heightened aware- ness that it deserves. I look forward to working with you to protect this cave and 

provide adequate compensation to the oil and gas industry which is vital to sustain 

the current tax base in our rural communities. 

Mr. VENTO. I want to just comment to my friend from New Mexico concerning this. I am pleased, -first of all, to see his support for 

the protection of Lechuguilla Cave. Obviously, as the gentleman 

has pointed out, if, in fact, there is a curtailment of the leases, then 

there has to be a recognition of.that. Of course, I think that the 

BLM is still in the process of going through what the preferred alternative would be in terms of the EIS, and what the impact will 

be. So we are trying to rely, or we will look to that at least as providing some direction and hopefully there will be agreement with 

the Park Service and the other interested groups in terms of the 

conclusion of that EIS; 

You know, I would just point out to the gentleman that the leaseholder bought these leases from others most recently, after the discovery and recognition of the importance of Lechuguilla Cave for, 

obviously, a far different price than the recent appraisal numbers 

that have been thrown around. ._ But, in any case, the legislation that I have proposed only curtails drilling in the event that that adversely affects the resource. 

So we are still providing the opportunity for some judgment, albeit 

a sharper focus on the lease activities, the gas and oil activities 

that might occur there. 

Further, if there should be any taking under the Constitution 

that requires compensation. That is not a matter that anyone disagrees with. But it has not been determined that a taking has occurred or will occur. Further, it is not constitutional for Congress 

to attempt to establish the required level of compensation. So we 

can't even do that. 

So all of this is really subject to .interpretation and to a judicial 

process in the event that there isn't agreement as to what the 

value might be. So I think the gentleman has suggested that he 

wants to work with me as we go through this process. This area 

is in the district he represents. He has an active interest in it, and 

I certainly want to work with you and come to an agreement. 

I think the common goal is, of course, the protection of the resource, and I think as long as we keep that in mind, there may be 

different ways and alternatives to accomplish that. We don't want 

to curtail any activity unless it really makes sense. But, on the 

other hand, we don't want to put the resource at risk. That is the 

concern that I have in this, and I don't think, considering the nature of this world-class resource, that we should do that. We should 

really avoid it. 
22 

I am not satisfied that the present policy path that has occurred 

to date would in fact avoid that risk. That is the reason that I have 

introduced the legislation. So I am not satisfied with the present 

policy path that is being followed. It seems to me that there are 

some risks. 

Now, maybe the EIS will come forward and BLM will adopt a nodrill alternative. But it seems to me that the information that has 

been gathered in recent months and in the last years has in fact 

pointed strongly in that particular direction. 

So, with that said let me yield to the gentleman to see if he has 

any comments or reaction to my comments. 

Mr. SKEEN. I certainly do, Mr. Chairman. I appreciate the comity 

with which you approach this thing. But let me remind you that 

there are two world-class resources involved here. This is not a 

small matter and one in which we have just all of a sudden discovered that we have got two coexisting world-class resources: the 

cave is one, the natural resources, the oil and gas production is 

there. The oil and gas production-it is unfortunate that they are 

coexistent, but this is one of the world-class areas of production for 

oil and gas. It has been historically since the early 1900s. 

And these leases were existent. Whoever they bought them from, 

and this trading goes on between producers of oil and gas in that 

part of the country historically, and the Yates operations have been 

well-known and well-documented for many, many years. They have 

been leaseholders for quite some time. They have been producers. 

In addition to that, they have been great investors in infrastructure. You don't just walk into an oilfield and develop it overnight, 

or in this case that you have heard that there is a cave there that 

might provide some kind of an opportunity to make a quick buck. 

That is not the idea at all. 

As a matter of fact, this same production company has extensive 

oil and gas, or oil lines-pipelines investment, and has had extensive drilling in that area, and production in the area that is under 

discussion. And I think that you have appraisers available to you 

and you will have them, I understand, testifying before you this 

morning as to the values inherent in this operation. · All I am saying is you have got a situation here where you have 

rights of the oil and gas producers to the value of the produce, or 

to the product that they have been delivering in good faith, operating in good faith on good faith leases and all the rest of it, and 

something should be done about the compensation if you are going 

to shut it down in a no-drill situation. 

You have indicated that you are open-minded about this, and I 

appreciate that. But then we ought to • examine all facets of this 

particular question and the arguments. 

Mr. VENTO. Well, we are going to hear that this morning. I think 

that oil and gas occurs in a number of areas on the face of the 

Earth. As far as we know, there is only one Lechuguilla Cave. I 

think that is the concern we have in terms of the nature of this. 

Mr. SKEEN. I understand that, too, Mr. Chairman. Oil and gas, 

it is produced in a lot of places in the world, but this is also one 

of the few places in the United States that has tremendous potential and it has proven great reserves, and therein lies the problem. 
23 

Mr. VENTO. Yes. I think one of the problems, it seems to me, is 

that as· Lechuguilla Cave has taken on more importance these 

leases for oil and gas have dramatically increased in value, and so 

I am very concerned that we don't-:--

Mr. SKEEN, I don't think they have increased in value, Mr. 

Chairman. The value is inherent and has been there for some time, 

and it is not an increase in the value just because you found the 

cave, that cave has been located there. 

Mr. VENTO. Well, that is my judgment. 

Mr. SKEEN. I think that is a misconception. 

Mr .. VENTO. I would certainly not agree with that. 

Mr. SKEEN. Well, I would certainly not disagree with it. 

Mr. VENTO. Well, I would agree that they don't increase in value 

just because the cave is there. 

So, in any case, are there other questions of our colleague here? 

Congressman Thomas .. Mr. THOMAS. Thank you, Mr. Chairman. 

Joe, as I understand it, there is surrounding this particular cave 

dedication some 5,000 acres to be withdrawn. 

Mr. SKEEN. That is my understanding as well. 

Mr. THOMAS. And. then a proposition to manage the adjoining 

acres. I. don't quite understand. Do you have a feel for the amount 

of land that would be affected then by the cave's development? 

Mr. SKEEN. Well, I think that historically speaking that is the 

kind. of situation in which w~ talk about buffer zones, and I am assuming that is what you mean. Anytime we have a natural wonder 

such as this cave or any other park area, and so forth, it has been 

our. policy in Congress· or been the attitude of Congress that we 

need to protect it with buffer zones, and I have a great-I get a 

great deal of anxiety when I see this taking place. 

The most vulnerable part of the entire country is the 13 Western 

States that are public land States because they are open to the acquisition of more buffer zones for everything that comes down the 

pike. So I think that as finally we stop and take a look at also the 

other inherent resource values and the operations that have been 

going on in good faith and not denigrate them or derogate them. 

Mr. THOMAS. I share that concern. Often it is not the facility that 

is being protected, but it is the management surrounding lands, I 

think. And the language is to be managed in a way that ·does not 

affect the cave in an undefined area. 

Mr. SKEEN. What does that mean?,· Mr. THOMAS. I don't know the answer to that. · Mr. 'SKEEN. I don't either. 

Mr. THOMAS. Thank you. . . Mr. VENTO. Does the gentleman ,have any questions? I would just 

point out that when you look at the value here these particular 

leases were initially leased on a noncompetitive basis for a dollar 

an acre, and that is what the public has got back today. 

Mr. SKEEN. Mr. Chairman, that is not unusual either. 

Mr. VENTO. No, I know. _ Mr. SKEEN. In the interim we have also now imfroved production 

on those areas, and you are going to have to dea with it, that the 

leases are no longer worth just· a dollar. 

Mr. VENTO. No. I understand. And the initial leaseholders-
24 

Mr. THOMAS. Would the gentleman yield? 

Mr. VENTO. Just a minute. The initial leaseholders then who 

gain that noncompetitive right-as you said, it is not unusual that 

they trade this off to another company which bought them for 

$200,000, I believe, in the late 1980s, and now, of course, we get 

values estimated at $20 million. But there has been work and effort put into it to try and establish that, I guess. 

I would yield to the gentleman. Mr. THOMAS. Did I understand the gentleman to say that all the 

public gets out of mineral leases is $1 an acre? 

Mr. VENTO. What we got out of these to date is $1 an acre. 

Mr. THOMAS. No royalties on production? 

Mr. VENTO. Well, there is no production yet. I mean that is my 

point. There is no production that is taking place. 

Mr. SKEEN. There is some production. · Mr. VENTO. Not on this particular-not in the areas we are talking about here. 

Mr. SKEEN. There is production in that area, Mr. Chairman, I believe. And I think that the appraisers that you are going to have, 

or people who have done appraisals will address that. 

Mr. VENTO. But the areas that we are talking about here in 

terms of the acres that specifically are in contention, there is no 

drilling that has occurred there. So we don't even know if there is 

any-going to ever be anything discovered there. . Mr. SKEEN. Well, I may be mistaken, but then I understand that 

there has been some drilling-- · Mr. VENTO. Well, there has been drilling on some other leases, 

but I mean not necessarily on the ones we are talking about here. Mr. SKEEN [continuing]. And within the area that we are discussing about the 5,000 acres. 

The other thing, too, Mr. Chairman, is the Federal Mineral Leasing Act of the Federal Government is very anxious to lease these 

lands. That is why they have those lotteries. They draw the---

Mr. VENTO. Well. 

Mr. SKEEN. And they also get 50 percent of the proceeds. 

Mr. VENTO. Well, I think that is right. The question is how we 

should proceed. But I think the concern that we have is that obviously the value of these is greatly increased is what my point is. Mr. SKEEN. Because of production, Mr. Chairman. 

Mr. VENTO. Well, this is somewhat on a speculative basis here, 

and there is some conjecture that is involved in terms of what the 

value is here. Very often as the areas are more important to the 

public from the conservation standpoint, I fear--

Mr. SKEEN. Well, I understand that, Mr. Chairman. 

Mr. VENTO [continuing]. That the increase in value is tantamount to leveraging the public to pay a lot more. I suspect that the 

Solicitor at the new Justice Department under Janet Reno will 

have something to say about this issue. I would hope that we 

wouldn't follow the pattern of the past decade of passiveness. Mr'. SKEEN. I would be very interested in hearing that. Mr. 

Chairman, the value of those leases goes up not because of the discovery of a cave or something. It is from production. That is historic. -
25 

Mr. VENTO. I wouldn't want to be held up on· that basis. That is 

right. . Well, I understand the gentleman, and obviously we don't intend 

to in any sense of the word take anything from anyone. But we are 

interested--

Mr. SKEEN. Let's hope not. 

Mr. VENTO. I mean fair compensation is required whatever the 

solution i1;1. But on the other hand, we are not interested in overcompensating and rewarding this sort of activity. That is the concern t~at obvious!~ t~s, member has, and that I have in terms of 

protecting the public interest. ·. Mr. SKEEN. I share that same concern, and I ju:st-true value, 

real value based on prudent,........;;.. 

Mr. VENTO. Yes. Well, you ltnow, the thing is I know whose side 

I am on in terms of this particular issue. 

Mr. SKEEN. Well, I am on both sides, Mr. Chairman. . Mr. VENTO. Yes. Well, youknow, I am not here to give aid and 

comfort to those that are interested in leveraging more dollars out 

of this than what the value is and/or with the threat of damaging 

the resource as the quid pro quo. 

Mr. SKEEN. I don't think you are here to abridge their rights either, Mr. Chairman. Knowing you as well as I do, I am sure that 

you &re very interested in taking care of their rights-protecting 

their ril?hts. . Mr. V'ENTO. Yes. Well, we appreciate the gentleman's testimony. 

We look forward to ongoing discussion on this issue. 

Mr. SKEEN. Well, I am sure we will have, and I thank you very 

much, Mr. Chairman. 

Mr. VENTO. Thank you. 

Mr . . SKEEN. I have an Intelligence Committee meeting too. 

Mr. VENTO. Yes. Okay. Thank yoμ. 

STATEMENTS OF HILLARY A. ODEN, ASSISTANT Om.ECTOR, 

ENERGY AND MINERALS RESOURCES, BUREAU OF LAND 

MANAGEMENT, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY JOE INCARDINE, GEOLOGIST; AND DENNIS 

FENN, PH.D., DEPUTY ASSOCIATE DIRECTOR, NATURAL RESOURCES, NATIONAL PARK SERVICE, DEPARTMENT OF THE 

INTERIOR, ACCOMPANIED BY RONAL KERBO, CAVE MANAGEMENT SPECIALIST, AND HARVEY DUCHENE, PRIVATE 

SECTOR PETROLEUM GEOLOGIST 

. Mr. VENTO. I am pleased to welcome Hillary Oden, the Assistant 

Director of Energy and Natural Resources, Bureau of Land Management, Department of Interior. 

He is accompanied by Dr. Dennis Fenn, the Deputy Associate Director for Natural Resources from the National Park Service, Department of Interior. 

Gentlemen, your statements have been made part of the record, 

and you can proceed, Mr. Oden, to summarize or to read the relevant portions. I notice that Dr. Fenn is accompanied by a number 

of other assistants. Mr. Oden, you perhaps are as well, so you 

might want to introduce them as you introduce your testimony. Please proceed. 
26 

STATEMENT OF lllLLARY A. ODEN 

Mr. ODEN. Thank you, Mr. Chairman. 

I would like to introduce Mr. Joe Incardine, behind me. He is 

with the BLM office in Santa Fe, New Mexico, and has been the 

project leader for the Dark Canyon EIS on this subject. 

Mr. VENTO. Yes. I see him in the plaid shirt behind you, so he 

is noted. And the others are all assistants to the Park Service witness, Dr. Fenn, and he will introduce them when he introduces his 

testimony. 

Please proceed with your testimony, Mr. Oden. . Mr. ODEN. I appreciate the opportunity to aJ>pear here today on 

H.R. 698, the Lechuguilla Cave Protection Act. This bill is designed 

to protect the Lechuguilla Cave in New Mexico. Lechuguilla Cave 

is a nationally significant resource and unquestionably deserves top 

priority protection of its values. I won't comment on its wonders as 

the following people will do a much better job of that than I. 

The administration supports the concept of the bill. However, we 

urge the Congress to delay consideration of protective legislation until the final Dark Canyon EIS-Environmental Impact Statement-now being developed is completed, hopefully in the late 

spring of 1993. 

The Bureau of Land Management will not allow any new leases 

or new drilling in the EIS area, and has already suspended the 

lease u__pon which drilling was proposed, at least until completion 

of the EIS process and a final decision is made. We will be considering the National Park Service initiated stu<!y, "Rer,ort of the 

Guadalupe Geology Panel to the National Park Service, ' as part of 

our EIS process and as part of the decision as to whether to allow 

further drilling or other oil and gas activities in the area. The Secretary of the Interior will review this issue, and we would be 

pleased to consult with this subcommittee before a final decision is 

made. Here I might mention that the Guadalupe report recommends a protective area that includes lands that are outside of, 

not only H.R. 698, but also the larger EIS area. Section 2 of H.R. 698 would withdraw, subject to valid existing 

rights, 5100 acres from all forms of appropriation under public land 

laws and the operation of the mineral leasing and feothermal leasing laws. Section 3 would direct the Secretary o Interior not to 

permit the holder of any mineral lease affecting lands withdrawn 

by section 2 or any adjacent public lands in New Mexico that are 

managed pursuant to section 603 of FLPMA, to carry out any drilling or other activities on such lands that could have any adverse 

effect on Lechuguilla Cave or any other cave resources located 

within Carlsbad Caverns National Park. 

The 5100 acres in H.R. 698 includes the Dark Canyon Special 

Management Area established by the BLM Carlsbad Resources 

Management Plan of 1988. In 1990, a management plan specific to 

the Dark Canyon Area was approved, designating an area of critical environmental · concern (ACEC) which includes a portion of the 

Mudgetts Wilderness Study Area and a scenic area. The scenic 

area and the ACEC are approximately 5100 acres, and these areas, 

as outlined in the approved management plan, coincide with the 

protection· area outlined in H.R. 698. These areas were established 

for protection of the high visual and natural resource values and 
27 

rare plant species, including the values of the six caves within that 

area. I might mention here that BLM manages over 900 caves 

throughout the Western U.S. However, unfortunately, none are as 

spectacular as Lechuguilla. . AB mentioned above, the BLM has been engaged in protecting 

and a continuing effort to protect the natural and scenic values in 

the Carlsbad area. There are about 100,000 acres of public -lands 

containing caves in the Carlsbad area. Detailed drilling guidelines 

to protect cave resources are applied by the BLM to the many oil 

and gas operations in the area. . • 

Recently, in September of 1991, due to our concern for 

Lechuguilla Cave and other values, BLM determined it was necessary to prepare an EIS, with the National Park Service as a cooperating agency, on an Application for Permit to Drill that had 

been proposed in January of 1991, approximately 11⁄2 to 2 miles 

from Lechuguilla Cave on· a Federal .oil and gas lease. The EIS is 

being prepared to ensure that no adverse impacts to cave resources 

occur. 

The EIS covers a study area of approximately 8320 acres, including the Dark Canyon SMA. The draft EIS was released to the public for comment in September of 1992 with the comment period 

running to November 20 of 1992. The preferred alternative in the 

draft EIS was to approve the APO .· after moving the location 500 

feet to avoid the potential for a cave, and apply enhanced precautionary measures for the well operations, including a site specific lineament study before drilling. Other alternatives looked at 

included a no action alternative, which would deny the APO and 

any future drilling within the EIS area, and a directional drilling 

alternative. We received ·more than 500 letters commenting on the 

draft EIS. The majority of these comments advocated cessation of 

all drilling. 

After reviewing the comments · and analyzing the recommendations of the National Park Service Guadalupe Geology Panel and 

the Cave and Karst Task Force Oversight Technical Group, the 

BLM plans to publish a final EIS in the late spring of 1993. The 

Cave and Karst Task force, which includes representatives from 

the National Park Service, United States Geological Survey, Forest 

Service, BLM, oil and gas industry, State of New Mexico Oil Conservation Division, Bureau of Mines and Mineral Resources, consultants, and volunteers, has been invaluable to us. The following 

cave detection studies have been coordinated and reviewed by the 

task force: lineament fault and fractures study; geophysical natural 

potential study; and a helium gas study. 

Currently, with the 5100-acre proposed withdrawal, there are 

four oil and gas leases totaling 2080 acres that have stipulations 

which prohibit surface occupancy. Some 730 acres within the Wilderness Study Area are unleased. AB to the remainder of the proposed withdrawal area, there are two producing gas wells within 

2 miles of Lechuguilla Cave and portions of three leases held by 

production. There have been estimates of 30 billion cubic feet of gas 

or more reserves in this area and the value of the leases· involved 

may exceed $20 million. 

In connection with your statement, the information about the 

agreement of value, I received a copy of this on February 26, Fri-
28 

day, and it was agreed t.o by the state Direct.or and Yates Energy 

Corporation on February 25th. It indicates that the fair market 

value of two leases, about 1600 acres, was $18. 7. million. The Acting Director of BLM on February 26 responded to this a~eement 

advising the State Director that we felt that it was a little premature and that the value of the resources involved should be reviewed after the decision reached in the EIS and/or upon passage ofH.R. 698. · We agree with you, Mr. Chairman, that it is somewhat premature t.o ~eculate on the effect of any current fair market value 

until the EIS process is completed and we determine what restrictions may be placed on exactly what lands in what fashion before 

we start talking about possible takings and fair market value. 

Section 3 of the bill bans drilling or other activities on existing 

oil and __ gas leases that could have any adverse effects on 

Lechuguilla Cave or any other cave resources. The combination of 

qualifying words such as "could," "any," and "any other cave resources," which, perhaps, may include caves discovered in the future, may lead to the conclusion that the Secretary of the Interior 

must ban drilling activities or even producing or reworking activities on the two existing wells in the area. This could, of course, constitute a taking under the Constitution for which the Federal Government could be liable. We would suggest that if it is the intent 

of Congress not t.o allow any oil and gas activities in the area that 

should be clearly stated in the bill. 

Also in my testimony I have reference to a couple of places in the 

bill where the geothermal leasing laws are mentioned separately. 

That should be looked at, and we would also recoinmend additional 

language be added to authorize the Secretary t.o control access t.o 

BLM managed lands in the area and prohibit all forms of mineral 

and geological cave resource collection, except under permit for scientific purposes. The language, we believe, would be most helpful 

if another entrance t.o Lechugu.illa Cave is found on BLM managed lands, or if an entrance is discovered t.o another cave associated 

with the same formations. 

We would be happy to work with the committee in drafting ap- propriate language. This concludes my statement. 

Mr. VENTO. I appreciate you seeking t.o strengthen my legislation. We appreciate very much that, and we wilf get back with a 

question or two in a moment. 

[The prepared statement of Mr. Oden follows:] 
29 

STATBMBlfT OP HILLARY A. ODEH, ASSISTANT DIRECTOR, EHERGY AHD 

MIHERALS RESOURCES, BURDO OF LAHD MAHAGEKDIT, OHITED STATES 

DEPARTHBHT OP THI INTERIOR, BIPORI THE SUBCOHHITTEE ON NATIONAL 

PARKS AND PUBLIC LAHDS, COHHITTEE OH HATORAL RESOURCES, HOUSE OF 

REPRESDITA'l'IVES, ON R.R. ua, THE "LECHUGUILLA CAVE PROTECTION 

ACT OF 1993. 11 

I appreciate the opportunity to appear here today to give you our 

views on H.R. 698, the "Lechuguilla Cave Protection Act." This 

bill is designed to protect the recently discovered Lechuguilla 

Cave in New Mexico. The Lechuguilla Cave is a nationally 

significant resource and unquestionably deserves top-priority 

protection of its values. 

The Administration supports the concept of the bill. However, 

for reasons I will discuss, we urge the Congress to delay 

consideration of protective legislation until the final Dark 

Canyon Environmental Impact Statement (EIS), now being developed, 

is completed by the late spring of 1993. The Bureau of Land 

Management (BLM) will not allow. any new leases or new drilling 

and has already suspended the existing leases at least until the 

completion of the EIS process and a final decision is made. We 

will soon be considering the National Park service (NPS) study, 

"Report of the Guadalupe Geology Panel to the National Park 

Service", as part of our EIS process and as part of the decision 

as to whether to allow further drilling and other oil and gas 

activities in the area. The Secretary of the Interior will 

review this issue and we would be pleased to consult with this 

subcommittee before a final decision is made. 

66-951 0 - 93 - 3 
30 

2 

Section 2 of H.R. 698 would withdraw, subject to valid existing 

rights, 5,100 acres in Eddy County, New Mexico, from all forms of 

appropriation under the public land laws (including the mining 

laws) and the operation of the mineral leasing and geothermal 

leasing laws. Section 3 would direct the Secretary of the 

Interior not to permit the holder of any mineral lease affecting 

lands withdrawn by section 2 or any adjacent public lands in 

New Mexico that are managed pursuant to section 603 of the 

Federal Land Policy and Management Act of 1976 (43 U.S.C. 1782) 

to carry out any drilling or other activities on such lands that 

could have any adverse effects on Lechuguilla Cave or any other 

cave resources located within Carlsbad Caverns National Park or 

within the lands withdrawn by section 2. 

The s,100 acres in H.R. 698 is a portion of the Dark Canyon 

Special Management Area (SMA) established by the ·BLM Carlsbad 

Resources Management Plan (RMP) of 1988. In 1990, a management 

plan specific to the 03rk Canyon area was approved, designating 

an Area of Critical Environmental Concern (ACEC) which includes a 

portion of the Mudgetts Wilderness Study Area (WSA) and a scenic 

area. The scenic area and the ACEC are approximately 5,100 acres 

and these areas, as outlined in the approved management plan, 

coincide with the protection area outlined in H.R. 698. These 

areas were established for protection of the high visual and 

natural resource values and rare plant species. 
31 

As mentioned above; the BLM has had a continuing effort to 

protect the various natural and scenic values in the Carlsbad 

area. There are about 100,000 acres of public land containing 

caves in the Carlsbad area. Detailed drilling guidelines, to 

protect cave resources, are applied by the BLM to the many oil 

and gas operations in the Carlsbad area. 

3 

Recently, due to our concern for Lechuguilla cave and· other 

values, the BLM determined it was necessary to prepare an EIS, 

with the NPS as a cooperating agency, on an Application for 

Permit to Drill (APD) that had been proposed approximately 1 1/2 

to 2 miles from the Lechuguilla cave on a Federal oil and gas 

lease. The EIS is being prepared to ensure that no adverse . 

impacts occur. The EIS covers a study area of approximately 

8,320 acres, called the Dark Canyon SMA. The draft EIS was 

released to the public for comment on September 18, 1992, with 

the comment period running to November 20, 1992. The preferred 

alternative in the draft Eis· was to approve the APD after moving 

the location soo feet to avoid the potential for a cave, and 

apply enhanced precautionary measures for the well operations, 

including a site specific lineament study before drilling. other 

alternatives included a "no action alternative"; which would deny 

the APD and any future drilling within the EIS area, and a 

directional drilling alternative. 
32 

More than 500 letters commenting on the draft EIS .were received. 

The vast majority of these comments advocated cessation of all 

drilling. 

4 

After reviewing the comments and receiving the recommendations of 

the NPS Guadalupe Geology Panel and the Cave and Karst Task Force 

Oversight Technical Work Group, the BLM plans to publish a final 

EIS in the late spring of 1993. The Cave and Karst Task Force, 

which includes representatives from the NPS, United States 

Geological survey (USGS), United States Forest Service (USFS), 

BLM, oil and gas industry, State of New Mexico Oil Conservation 

Division, New Mexico Bureau of Mines and Mineral Resources, 

consultants, and volunteers, has been invaluable. The following 

cave detection studies have been coordinated and reviewed by the 

Task Force: 

1) A lineament fault and fractures study; 

2) a geophysical natural potential study; and 

3) a helium gas study. 

currently, within the 5,100-acre proposed withdrawal, there. are 

four oil and gas leases totalling 2,oso acres that have 

stipulations .which prohibit surface occupancy. Some 730 acres 

within the Mudgetts Wilderness Study Area are unleased. As to 

the remainder of the proposed withdrawal area, there are two 
33 

producing gas wells within two miles of Lechuguilla cave and 

portions of three leases held by production. There have been 

estimates of 30 billion cubic feet (BCF) or more of natural gas 

reserves in this area and the value of the leases involved may 

exceed $20 million. 

We .have comments on specific provisions in H.R. 698. 

Section 3 bans drilling or other activities on existing .oil and 

gas leases "that could have any adverse effects on Lechuguilla 

cave or any other cave resources •.• " The combination of 

qualifying words such as "could", "any", and "any other cave 

resources", which perhaps may include caves discovered in the 

future, may lead to the conclusion that the secretary of the 

Interior must ban drilling activities or even producing or reworking activities on the two existing wells in the area. This 

could constitute a "taking" under the constitution for which the 

Federal Government could be liable. If it is the intent of 

congress not to allow any oil and gas activities in the area, 

that should be clearly stated. 

5 

Also, the reference to existing leases 1n section J does not 

explicitly include geothermal leases. Since "geothermal leasing 

laws" are mentioned separately in section 2(a) as ·if distinct 

from mineral leasing laws, it is unclear whether the restrictions 
34 

6 

on drilling set forth in section 3 are also meant to apply to 

geothermal leases. However, there does not appear to be any 

potential for geothermal resources or locatable or other leasable 

minerals in the area. 

We also recolDll\end additional language be added to authorize the 

secretary to control access to BLM managed lands _and prohibit all 

forms of mineral/geological and cave resource collection, except 

under permit for ·scientific purposes. This language would be 

most helpful if another entrance to Lechuguilla Cave is found on 

BLM managed land, or if an entrance is discovered to another cave 

associated with the same karst formations. We will be happy to 

work with the committee in drafting appropriate language. 

This concludes my statement. I will be happy to answer 

questions. 
35 

Mr. VENTO. We are {>leased to welcome Dr. Dennis Fenn. Dr. 

Fenn, would you please introduce your associates? 

STATEMENT OF DR. DENNIS FENN 

Dr. FENN. Thank you, Mr. Chairman. Immediately to my left is 

Mr. Ronal Kerbo, who is a cave management specialist from the 

National Park Service, and to his left is Mr. Harvey Duchene, who 

is a private sector petroleum geologist. Both of these gentlemen are 

here to answer any technical q-uestions that the committee might 

have .and to support the testimony that we are giving this morning. 

Mr. VENTO. Please proceed with your testimony, Dr. Fenn.lam 

pleased to see Ron Kerbo, who, I am reminded, brought.me through 

Carlsbad Caverns without any problems .on my way out. 

Dr. FENN. Those are always good cave guides that can bring you 

back home once they get you in a cave. 

Mr. VENTO. This is your first effort, I guess, to appear before the 

committee, so we are especially appreciative, Dr. Fenn, of your appearance here today. . . . . Dr. FENN. Thank you, Mr. Chairman. We appreciate the oppor- tunity to appear before you today and provide testimony on H.R. 

698, a bill that, if enacted, would provide certain protections for 

Lechuguilla Cave and other cave resources in Carlsbad Caverns 

National Park in southeastern New Mexico. 

We recommend that the committee withhold action on H.R. 698 

until actions currently underway within the Department of Interior 

have had an opportunity to be reviewed and agreed to. 

Mr. Chairman, we support and applaud the basic concept of H.R. 

698; that is, to provide protection for the highly significant resources of Lechuguilla Cav~ and adjacent cave resources both within Carlsbad Caverns National Patk and the adjacent lands under 

the administration of the Bureau of Land Management. 

Th~ ~ a?onal f ark Servi~e vyith the. assistance of many groups and i:ndividuals 1s only begmmng to discover and understand the 

marvels of this world-class cave. Currently, Lechuguilla Cave is the 

deepest known cave in the United States at almost 1600 feet, and 

the eighth longest in the world with over 60 miles of surveyed passages to date. While the cave's entrance has been known · since 

1914, it was long thought to-be a small cave of relatively little significance, although early explorers had noticed air issuing from between rocks on the cave floor. However, in 1986, as the result of 

a 2-year period of episodic removal of floor fill, a major breakthrough occurred, and the cave is now known world wide for its remarkable resources. 

The . geology, minerals and fauna of Lechuguilla Cave are indeed 

remarkable. The cave contains previously unknown speleothem 

types, such as underwater helictites; the largest known gypsum, or 

selenite, stalactites in the world; potentially new microbiological 

species; and one of the most outstanding in-cave exposures of ancient geological reef complex in the world. 

The speleothems include not only the underwater helictites and 

the 20-foot-long gypsum (selenite) chandeliers, but millions of 

hydromagnesite balloons; thin hair strands of gypsum 20 feet long; calcite raft cones of unusual size and number; and outstanding examples of almost every known type of calcite and gypsum feature. 
36 

Rare chemosynthetic bacteria and obligate fungi, which derive energy from gypsum, sulfur, magnesium and iron, and which are believed to have a role in speleogenesis, have been found in 

Lechuguilla Cave. 

In October 1990 the National Park Service and BLM became concerned for the well-being of Lechuguilla Cave as a result of the request to drill for oil and gas on BLM lands not far from the then 

known location of the cave. This concern resulted in the BLM forming a Cave and Karst Drilling Task Force that later recommended 

mitigation measures. Subsequently, the BLM prepared a draft environmental impact statement on the impacts from reasonable foreseeable development of oil and gas resources within Dark Canyon. 

The draft EIS was completed and sent out for comment in September 1992. These comments have been received and are being reviewed and incorporated into the EIS as appropriate. We recommend that Congress take no action on H.R. 698 until the EIS 

is finalized and a record· of decision is signed. 

The caves of the Capitan Reef are generally thought to have been 

created by the dissolution of the reefs carbonate rocks by acidic 

groundwater. This dissolution can occur along an adjacent to bedding planes, joints or fractures, and faults in the rock. A major concern in this matter is that gas well development in the area might 

result in leakage that could travel through the fractures and spaces 

between the bedding planes to contaminate Lechuguilla Cave. Additionally, there may be a potential for direct impact to the cave 

from drilling, because current technology lacks an effective method 

to identify or predict cave passageways with any degree of certainty. 

In January of this year the Southwest Regional Director of the 

National Park Service notified the BLM State Director that he was 

at that time assembling a panel of well-respected and independent 

geologists who have extensive knowledge of the geology, cavern development, and karstic features in and around Carlsbad Caverns 

National Park. The panel's charge was to evaluate the area surrounding the park's two principal caves that would need to be excluded from drilling and other mineral exploration to assure the 

protection for Carlsbad Caverns and Lechuguilla Cave. The panel's 

report has only recently been submitted to us for review. Therefore, 

we are not in a position at this time to make recommendations 

based on that report. We expect that review of th~ panel's report 

might be complete within 30 days. Furthermore, BLM is committed 

to taking the report into consideration in the preparation of the 

final EIS. 

It would be important to point out, also, that the draft EIS, as 

currently constituted, focuses on future drilling and related activities. We are also concerned with the potential for adverse impact 

that might accompany existing activities, a concern that is also addressed in section 3 of H.R. 698. Our recommendations later will 

address section 3. 

Only a small portion of the entire Lechuguilla Cave system has 

been discovered to date. Studies that include airflow analyses to 

determine potential volume and size of the cave system have provided some clues as to the actual size. However, these studies have 
37 

not as yet resulted in a clear determination of where the rest of the 

cave is located. 

Preliminary data resulting from the panel's evaluation suggest 

an area of potential risk substantially larger than the 5100 acres 

proposed for withdrawal in H.R. 698, and indeed the BLM EIS considers considerably more acreage. The possible size of the 

Lechu,niilla Cave system and the probability that Lechuguilla Cave 

extencfs beyond the current boundaries of the national park suggest 

that we need to consider a larger withdrawal area. We are not prepared at this time, however, to make specific recommendations in 

this regard on H.R. 698. 

Worldwide attention is focused on the wonders of Lechuguilla 

Cave and Carlsbad Caverns. The concerns expressed over the request to drill for oil and gas in the area immediately north of 

Lechuguilla Cave are being addressed through the EIS process now 

underway. We commend your efforts to afford a degree of protection for this cave resource and look forward to working with BLM, 

this committee, and others in Congress to arrive at a solution that 

fully provides for the protection of Lechuguilla Cave and related 

cave systems in the project area. 

Mr. Chairman, this concludes our remarks and we are now pre- pared to answer your questions at this time. 

[The statement of Dr. Fenn follows:] 
38 

STATBJIDT 01' DR. DBIIJIJ:S l'BIIJI, DBPU'l'Y ASSOCllTB DJ:RBCTOR, IIATUltAL 

llUOUJlCU, DTJ:OIIIAL PARJt SDVJ:CB, DSPAR'l'IID'l' 01' 'l'JUI J:IITDJ:Oll, 

BUORB TJIB SUBCOXNJ:T'l'BS OB 10.TJ:OIIIAL PllU, l'ORUTB, ARD PUBLJ:C 

LARDS 01' TJIB KOUBB COIIJlJ:T'l'BB OB DT'DDL RUOUJlCBS, COBCBR• J:JIG 

R.R. &98, A BJ:LL TO PJtOTBCT LBCKUGUJ:LLA CAVIi ARD 0'1'JID llUOUJlCU 

ARD VALUBS J:B ARD ADJACD'l' TO CARLSBAD CAVDBS DTIOIIAL PUX, •ff 

NUJ:CO. 

March 2, 1993 

Mr. Chairman, I appreciate the opportunity to appear before you 

today to provide testimony on H.R. 698, a .bill that, if enacted, 

would provide certain protections for Lechuguilla Cave and other 

cave resources in Carlsbad caverns National Park in southeastern 

New Mexico. 

We recommend that the committee «ithhold action on H.R. 698 until 

actions currently underway within the Department of the Interior 

have had an opportunity to be reviewed and agreed to. 

H.R. 698, if enacted, would withdraw, subject to valid and 

existing rights, approximately s,100 acres in Eddy County, New 

Mexico, known as the "Dark canyon Cave Protection Area," from all 

forms of appropriation under the public lands laws (including the 

mining laws) and from the operation of the mineral leasing and 

geothermal leasing laws. copies of maps depicting this area and 

legal descriptions are to be available for public inspection in 

the offices of the Bureau of Land Management. The withdrawn 

lands are to be managed by the Secretary of the Interior acting 

through the Bureau of Land Management pursuant to the Federal 

Land Policy and Management Act of 1976 (FLPMA) and other 

applicable provisions of law. 

H.R. 698 would not permit the holder of any mineral lease 

affecting lands within the withdrawn area or any adjacent public 

lands in New Mexico managed pursuant to section 603 of the FLPMA 

to undertake any drilling or other activities on these lands that 

could have any adverse effects on Lechuguilla Cave or other cave 

resources located within Carlsbad caverns National Park. 
39 

Mr. Chairman, we support and applaud the basic concept of H.R. 

698, to provide protection for the highly significant resources 

of Lechuguilla Cave and adjacent cave resources, both within 

Carlsbad Caverns National Park and the adjacent lands under the 

administration of the Bureau of Land Management (BLM). 

The National Park service, with the assistance of many groups and 

individuals, is only beginning to discover and understand the 

marvels of this world-class cave. currently, Lechuguilla cave is 

the deepest known cave in the United States (about 1,600 feet) 

and the eighth longest in the world (over 60 miles of surveyed 

passages to date). The cave's entrance has been known since 

1914; it was long thought to be a small cave of relatively little 

significance, although early explorers had noticed air issuing 

from between rocks on the cave floor. However, in 1986, as the 

result of a 2-year period ·of episodic removal of floor fill, a 

major breakthrough occurred, and the c~ve is now known world wide 

for its remarkable resources. 

The geology, minerals, and fauna of Lechuguilla cave are remarkable. The cave contains previously unknown speleothem types 

(such as underwater helictites); the largest known gypsum 

(selenite) stalactites in the world; potentially new 

microbiological species; and one of the most outstanding in-cave 

exposures of an ancient geological reef complex in the world. 

The speleothems include not only the underwater helictites and 

the 20-foot-long gypsum (selenite) chandeliers, but millions of 

hydromagnesite balloons; hair-thin strands of gypsum 20· feet 

long; calcite raft cones of unusual size and number; and 

outstanding examples of almost every known type of calcite and 

gypsum features. Rare chemosynthetic bacteria and obligate fungi 

(which derive energy from gypsum, sulfur, magnesium, and iron, 

and which are believed to have a role in speleogenesis) have been 

found in Lechuguilla Cave. 

2 
40 

In October 1990 the National Park Service and BLM became 

concerned for the well-being of Lechuguilla Cave as a result of a 

request to drill for oil and gas on BLM lands not far from the 

then-known location of the cave. This concern resulted in the 

BLM forming a Cave and Karst Drilling Task Force that later 

recommended mitigation measures. Subsequently, BLM prepared a 

draft environmental impact statement (EIS) on the impacts from 

reasonable foreseeable development of oil and gas resources 

within Dark Canyon. The draft EIS was completed and sent out for 

comment in September 1992. Those comments have been received and 

are being reviewed and incorporated into the EIS as appropriate. 

We recommend that Congress take no action on H.R. 698 until the 

EIS is finalized and a record of decision is signed. 

The caves of the Capitan Reef are generally thought to have been 

created by the dissolution of the reef's carbonate rocks by 

acidic groundwater. This dissolution can occur along and 

adjacent to bedding planes, joints (fractures), and faults in the 

rock. A major concern in this matter is that gas well development in the area might result in leakage that could travel 

through the fractures and spaces between the bedding planes to 

contaminate Lechuguilla cave. Additionally, there may be a 

potential for direct impact to the cave from drilling, because 

current technology lacks an effective method to identify or 

predict cave passageways with any degree of certainty. 

In January of this year the southwest Regional Director of the 

National Park Service notified the BLM State Director that he was 

at that time assembling a panel of well respected and independent 

geologists who have extensive knowledge of the geology, cavern 

development, and karstic features in and around Carlsbad caverns 

National Park. The panel's charge was to evaluate the area 

surrounding the park's 2 principal caves that would need to be 

excluded from drilling and other mineral exploration to assure 

protection for Carlsbad cavern and Lechuguilla Cave. The panel's 

report has only recently been submitted to us and is under 

3 
41 

review. Therefore we are not in a position at this time to make 

recommendations based on that report . we expect that review of 

the p1.nel's report might be complete within 30 days. Further, 

BLM is committed to taking the report into consideration in the 

preparation of the final EIS. 

It would be important to point out, also, that the draft EIS, as 

currently constituted, focuses on future drilling and related 

activities. We are also concerned with the potential for adverse 

impact that might accompany existing activities, a concern that 

is also addressed in section 3 of H.R. 698. Our recommendations 

will address section 3. 

Only a portion of the entire Lechuguilla cave system has been 

discovered to date. Studies that include air flow analyses to 

determine potential volume and size of the cave system have 

provided some clues as to actual size. However, these studies 

have not as yet resulted in a clear determination of where the 

rest of the cave is located. 

Preliminary data resulting from the panel's evaluation suggest an 

area of potential risk substantially larger than the 5,100 acres 

proposed for withdrawal in H.R. 698, and indeed the BLM EIS 

considers considerably more acreage. The possible size of the 

Lechuguilla cave system and the probability that Lechuguilla Cave 

extends beycnd the current boundaries of the national park 

suggest that we may need to consider a larger withdrawal area. 

We are not prepared at this time, however, to make specific 

recommendations in thi s regard on H. R. 698. 

Worldwide attention is focused on the wonders of Lechuguilla cave 

and Carlsbad cavern. The concerns expressed over the request to 

drill for oil and gas in the area immediately north of the 

Lechuguilla Cave are being addressed through the EIS process now 

underway. We commend your efforts to afford a degree of 

protection for this cave resource, and look forward to working 

4 
42 

with BLM, this Committee, and others in Congress to arrive at a 

solution that fully provides for the protection of Lechuguilla 

cave and related c~ve systems in the project area. 

Mr. Chairman, this concludes my prepared remarks on H.R. 698. I 

would be pleased to respond to your questions at this time. 

5 
43 

Mr. VENTO. Yes. Well, I appreciate your testimony, and the work 

of the scientists in this area. Obviously, we are concerned about the 

clarity in terms of this issue, as both Mr. Oden and Dr. Fenn have 

testified to with regard to the s~cifi<:s of the boundary. If I understand, Mr. Oden, what you are saying, and Dr. Fenn, 

is that you are not prepared today because you want to do more 

work in terms of establishing the proper boundary and conclude 

the EIS. Is that basically correct, Mr. Oden? 

Mr. ODEN. That is correct. 

Mr. V~o. Dr. Fenn? 

Dr. FENN. That is correct. 

Mr. VENTO. In fact, you implied that there isn't adequate area 

covered by the bill that I have. In other words, it may not be adequate in . terms of covering the areas that need to be withdrawn. 

Dr. FENN. I think what we would say is that we would like to 

have a chance to evaluate the scientific reports and see if there 

isn't a firm geologic line that coμld be drawn to assure protection, 

rather than the more political, lines that have been established 

now. ·. Mr. VENTO. But, in reading the report of the Guadalupe Geology 

Panel to the Park Service, which, obviously, is the information you 

were relying on, they outline the problem and then the recommendation they make is that a cave protection zone be established on the north side of Carlsbad Caverns National Park. The 

south side of this zone would be the northern boundary of the park, and the north side of the zone would be dAfined by the intersection 

of the deep. water table within the north limit of the Goat Seep and 

Capitan Reef formation or the axis of the Dark Canyon syncline, whichever is the farthest north. No drilling should be allowed 

south of the north edge of the cave protection zone. · How large an area is that? I~ that the map that we have over 

here, that you have placed up here? 

Dr. FENN. It is. . Mr. VENTO. And this formation that your assistant there is pointing to at this time is what boundary? 

Dr. FENN. Maybe we can let Mr. Duchene who actually served on 

that panel, perhaps, answer that question. , Mr. VENTO. Yes. Okay, Mr. Duchene. 

Mr. DUCHENE; Let me address the map. Mr. VENTO. Yes. You have~ to keep the microphone with you, though. We have sort of an archaic' system here. You don't have 

this walk-around, lecture-type of microphone. . We have the map in front of us, in any case. But I think the 

other member does not. · Mr. DUCHENE. The map that we have over here covers Carlsbad 

Caverns National Park, and the area to the north which we included within a recommended eave protection zone. The rock package which contains caves out here includes the Capitan and Goat 

Seep Reefs and the back reef limestones which are associated with 

it, all of which can contain caves. 

In order to define that, .we tried to pick the northern, limit of that 

carbonate package, and also to try to define a geological feature, 

here the Dark Canyon syncline, which we felt would be a limit to 

where any hydrocarbons or toxic gases leaking upward from below 
44 

would be directed away from Carlsbad Caverns National Park. In 

this case the Dark Canyon syncline extends across, basically, the 

northern part or the northwestern part of Carlsbad Caverns, and 

if you have bubbles of gas that leak upward and they come up underneath the Dark Canyon syncline, which is a basically concave 

upward bend in the rocks, if they are on the north side of that 

those bubbles would tend to be directed away from the cave resource and off to the west. 

To the east that syncline becomes less well defined. So we chose 

the pinch-out of the water table against the rock, or the cave-bearing package in order to have a definable northern boundary. Because all of the rocks are located within this area are tilted to the 

east, we felt that any hydrocarbons leaking upward would tend to 

either migrate away from the park or westward along the north 

side of the park and away from the cave resource, if we kept 

boreholes away from the area inside the protection zone. 

Mr. VENTO. Of course, my concern-I think I can hear you all 

right-is, how does this relate to the leases, how large an area is 

this that would be then what we call-what we are referring to 

here as a cave protection zone along this northern boundary. How 

large an area is it? And where are the leases situated in that 

boundary? 

Mr. DUCHENE. Well, the leases in question are located in this 

area. I believe the 5100 acres that you referred to lie approximately 

in here. 

Mr. VENTO. Okay. So this is a much larger area? 

Mr. DUCHENE. Yes, it is a much larger area up here. 

Mr. VENTO. This is the 100,000-acre area, is that correct? 

Mr. DUCHENE. Pardon me. 

Mr. VENTO. A hundred thousand acre area? 

Mr. DUCHENE. No, it is not that large, Mr. Chairman. I would 

guess that it is probably in the neighborhood of 15,000 acres. 

Mr. VENTO. Okay. So it is about three times. And that is 15,000 

total, in toto? 

Mr. DUCHENE. That is correct. 

Mr. VENTO. Okay. It is in total. 

In any case, has the BLM had an opportunity, Mr. Oden, to review this report, and if so, do you believe that it has merit? 

Mr. ODEN. No, sir, we have not had time to review it. We received the report Friday and the map, I guess, Monday-yesterday. 

And we do have some questions of the preparers of it and want the 

Cave and Karst Task Force to also take a look at it. At least one 

of the members, I believe, on this Guadalupe Committee was also 

on the Cave and Karst Task Force. We would like to have the opportunity for some discussion and make sure that we are clarified 

as to the boundaries and the basis for it, and particularly how far 

east it would go. Looking at that additional acreage on there, it 

looks like there are some additional existing producing wells and 

leases that may be involved, including some State leases, State 

land. So we do want to have further discussion. 

Other than that, the people on the committee from their resumes 

look to be experts, and I wouldn't attempt to question their capabilities. 
45 

Mr. VENTO. What administrative tools does the BLM or the Park 

Service have to carry out the recommendations of the report? Do 

you have the tools if you decide to do so? 

Mr. ODEN. If we go along with the recommendation for no further drilling in the area, we will have to look at compensation then 

for the lessees who do have drillable locations and leases that 

haven't been drilled. And absent litigation where a judge would tell 

us to compensate, we would need direction from Congress giving us 

the authorization to compensate for whatever taking might occur. 

Mr. VENTO. Would you have the opportunity to, in fact, trade the 

leases within for leases without on an equal value basis? 

Mr. ODEN. No. The Mineral Leasing Act and the. Reform Act of 

1987 would not allow us to trade leases. 

Mr. VENTO. The recent Reform Act of 1987? 

Mr. ODEN. 1987. 

Mr. VENTO. Okay. Has ,the .BLM suspended leasing on public 

lands within the recommended cave protection zone at this time? 

Mr. ODEN. We gave all the lessees in there the opportunity to 

have their leases suspended. The only one who really needed to 

take advantage of the opportunity was the lease upon which the 

proposed well was to have been ·drilled. It was getting near the end 

of its term, and they took advantage of that and we did suspend 

that one lease. 

Mr. VENTO. You don't have any new leases that you are opening 

up in these areas, do you? 

Mr. ODEN. No, sir. 

Mr. VENTO. Wouldn't it also be desirable to close these lands to 

hardrock mineral entry at this time? 

Mr. ODEN. It might be useful if there are no mining claims on 

there, and our indications are that there are no locatable or even 

other leasable minerals there of any value that we can see. 

Mr. VENTO. Well, I think the concern gets to be that all of a sudden you find, as in the case of the Jemez, some common mineral 

that is patentable and we are off to the races again in terms of surface occupancy for whatever reason, and activities that would be 

problematic. So it would probably be easier to do that. 

I think the confusion is that the BLM has a designation over 

some of this area, does it not? 

Mr. ODEN. I am sorry, sir, I don't understand. 

Mr. VENTO. Is part of this Wilderness Study? Is any part of this 

ACEC as well? 

Mr. ODEN. Yes. 

Mr. VENTO. That is what I. am talking about, is that the BLM 

has an administrative designation over it, and I think it is important to understand this. Can you explain how that operates in this 

particular instance? Here we have an area of critical environmental 

concern. It sounds good butMr. ODEN. All right. I don't have it before me, but we can supply 

it for the record, just what our management of the prescriptions for 

the ACEC would be. However, in any ACEC if there happens to be 

a mining claim there, for example, our regulations provide that 

they do have to get approval for any operations in there, and any 

such approval, if there was a mining claim and an operation proposed, would make sure that there would not be any adverse im-
46 

pact on any of the values in there for which we established the 

ACEC. 

[The information follows:] 

Mana~ement prescriptions for the Area of Critical Environmental Concern and 

the scenic area within the Dark Canyon Special Management area include: 

1. No surface occupancy stipulations on future oil and gas leases on 4,970 acres. 2. Avoid future right-of-way actions on 4,300 acres. 3. Restrict surface disturbance to limit visual and environmental impacts on 4,300 acres. 4. ApJ_>l:r, seasonal drilling limitations on 730 acres to reduce visual impacts during 

heavy VISitor use season. 5. Close 4,300 acres to mineral material sales. 6. Limit off-road vehicles use to designated routes and restrict fire suppression 

and geophysical exploration activities to conform with off-road vehicle limitations. 

7. Manage 3,570 acres to conform with Visual Resource Management Class II, and 

730 acres to conform with Visual Resource Management Class III, guidelines. 

Mr. VENTO. That is interesting Mr. Oden, the pu.ryose. But the 

operation of it, or the effect of it is, obviously, contradictory. On the 

one hand there's an ACEC administrative designation of this area, 

and I don't know the s~uence in time, but not knowing the sequence in terms of how this occurred, and then we have the leasing 

or the continued leasing-in fact the sale of leases, and really I 

think an orderly progression towards the development of oil and 

gas leasing. Then I got the report of the scientists here, which I 

think based on the care with which BLM has proceeded, obviously 

they are trying to be careful, but it just seems to me that the 

avowed purpose of the ACEC and the continued activity and performance with regards to leasing, notwithstanding the studies that 

have been done by BLM, and now finally this report, indicate to me 

that there is a conflict between those two objectives and the way the policy has proceeded really on two tracks today to the point where we are faced with a big estimate of value and the problem of resource damage not only to the cave but resources that in all 

probability are · on BLM lands, cave resources on BLM lands. If the 

reports of the scientists, which you said are distinguished academicians in their area, have to be reconciled, you understand my dilemma? 

Mr. ODEN. I think I understand. And, of course, these things have progressed over the years. For example, the first gas production in the area dates back to 197 4. One of the wells within the 

EIS area first started producing in 1974. The resource management plan which created the ACEC occurred in 1988. 

Mr. VENTO. Well, I understand. And I said I didn't know thesequence of when it was designated. The FLPMA law which accorded 

ACEC action was a 1976 law, as niy staff reminds me. 

Let me recognize Mr. Hinchey for any-Mr. Hinchey, did you have any questions of the witnesses? We have got some good witnesses here. I want you to get involved, if you have a question. 

Mr. HINCHEY. Well, I would just like to try to understand a little 

bit more than I do. 

You are recommending, Dr. Fenn, that no action be taken on this 

legislation until after the completion of an EIS, is that correct? 

Dr. FENN. That is correct. And the Park Service has a chance to 

study this report and·get its influence into the EIS process. 

Mr. HINCHEY. And how long do you anticipate that that would 

take? 
47 

Dr. FENN. Actually, the lead agency is BLM. Maybe I should let 

Mr. Oden answer that question in terms of timing on the EIS. 

Mr. ODEN. Presently our timing cm the EIS, that is, before we 

had receiveq this report, . would be to come out with a final EIS in 

late spring, April-May, then with a record of decision approximately about 60 days after that. The timetable might be delayed 

a little bit, needing to fold in and take into consideration this latest 

report. 

Mr. HINCHEY. So you might think that it will be August or September? Or October? 

Mr. ODEN. That is very possi,ple, sir. 

Mr. HINCHEY. What is likely to occur in the meantime? 

Mr. ODEN. No new activities have occurred in there or will occur 

until after the EIS is completed and a decision is made. 

Mr. HINCHEY. So no drilling will take place or no new leases will 

be granted? 

Mr. ODEN. No new leases will be granted in the EIS area. No 

new drilling_ will take place. We essentially by starting the preparation of the EIS in 1991 actually put a moratorium on the activities 

in the area. · Mr. HINCHEY. What would be the harm then in passing the legislation? 

Mr. ODEN. Only that we would like. to be in a position to better 

advise you as to the exact area to be included in the legislation · as 

well as any other things that we would recommend as a result of 

our review· of this geology report and the conclusions of the EIS. 

Mr. HINCHEY. How long has the EIS process been ongoing now? 

Mr. ODEN. We started it in_ September of 1991, I believe. The 

draft EIS was released il). September of 1992 with a public comment period that ended November 20, 1992. We are analyzing 

those comments and preparing responses and determining what 

changes in any of the alternatives that we have should be. 

And, of course, this Guadalupe Geology Panel Report will be part of that consideration. · ·· · Mr. HINCHEY. Based on your preliminary findings, do you anticipate that you would recommend that the scope of this legislation be broadened? · Mr. ODEN. As far as the area is concerned, it very well might be. 

Mr. HINCHEY. What is the likelihood of that? 

Mr. ODEN. Probably fairly good. I hate to give a definitive answer 

until all our technical people have had a chance to really digest 

this and have conversations back and forth with the group that 

prepared this latest report. 

Dr. FENN. We are in the same position. We just got the report 

on Friday ourselves and haven't really had a chance to review it 

and so you have heard a ·figure of 15,000 acres today, but, that is 

an opinion of a person that was on the committee. The agencies 

themselves haven't had a chance to study it. 

You will notice that those recommendations don't have any sideboards, any east or west boundaries on them, and · that . is; 

again, there are some management decisions that have to take 

place and some recommendations. It looks to me like there is going 

to be a need to have larger than a 5,100 acre cave protection area, 

if that is the plan. But how much larger we are not prepared offi-
48 

cially to say at this point until we have a chance to study the report. 

It is the National Park Service's desire to have time to study that 

report and look at things that is causing us to recommend that you 

hold up on action on this bill. It may not be sufficient to protect 

the case. . Mr. HINCHEY. I just think that the chairman is trying to do 

something very important here in terms of the national heritage 

and in terms of protecting what appears to be an extraordinary 

natural resource. I just want to congratulate him on taking this 

far-sighted look at this and proposing this legislation. Mr. VENTO. I thank the gentleman. I think that your questions 

are right on. I think we are faced with a dilemma if we let this 

process proceed, and it looks to me as though the no drill alternative in all probability is what may be the conclusion, maybe even 

over a larger area. But in the name of trying to perfect the bill, 

we may end up being co-opted in terms of what the decision might 

be, and I think in all probability even if a decision is made for that 

no drill alternative, as Mr. Oden said, they need legislative action. 

So I hope that we might be able to fashion legislation at least stating the expression of the House as to at least a minimal area that 

should be available for protection and giving some flexibility to expand that through administrative action by the BLM or the Park 

Service. 

I don't want to editorialize, but I think your line of questioning, 

Maurice, is right on. 

Ms. Shepherd? Did you have further questions, Ms. Shepherd? 

Ms. SHEPHERD. Thank you. I have just one question, and that is, 

what are the alternatives that are open to you that you would recommend should you choose to enlarge the area that is protected? 

What levels of protection do you give? It would just simply be restricting it to drilling? . Mr. ODEN. Alternatives could be a larger area with no drilling in 

part of it. Could be with additional drilling only in certain places 

or under certain circumstances in another part. The most extreme 

alternative would be to say no further drilling and plugging of the 

existing producing wells in the area. A whole range of things could 

be looked at. 

Ms. SHEPHERD. Did you have very much testimony in behalf of 

drilling? Is this an economic issue in New Mexico relative to the 

people that live in the area? 

Mr. ODEN. Yes. There were quite a number of-comments in response to the draft EIS about the economic needs and the fact that 

some people believe that the drilling could continue under appropriate mitigating measures, and still obtain the resources of the 

gas as well as protect the cave. So there are comments on all sides. 

Ms. SHEPHERD. No further questions, Mr. Chairman. Thank you. 

Mr. VENTO. We are pleased to welcome our colleague from New 

Mexico. I know that he has been busy on the Intelligence Committee and other work this morning. 

Mr. RICHARDSON. Mr. Chairman, I have no questions. I did want 

to thank you for holding a hearing on this important New Mexico 

bill. 
49 

Mr. Chairman, I think your bill on the Lechuguilla is a good one. 

If you recall, you and I thought we could accomplish the same goal several years ago by a dialogue on the floor, and ap_parently because we are coming back this way we probably need to put this 

in legislative languafe. But I think you have got a good bill here. 

I think it is needed. hope we can accommodate some of these concerns. 

Mr. VENTO. Well, I earlier-if the gentleman would yield-recognized his efforts to legislate in this area early on. There may have 

been others from New Mexico too, but the gentleman was most preeminent in my memory of his outstanding role, as he is with most 

New Mexico policies. 

Mr. RICHARDSON. Mr. Chairman, I will yield some more time. 

[Laughter.] 

Thank you. 

Mr. VENTO. Well, as I said, we are pleased to work on this. Obviously, the concerns that are being raised really are positive and I 

accept them in good faith, Mr. Oden, in terms of strengthening the 

bill we have talked about, trying to avoid mineral entry, and I 

think there are other concerns here. One of the statements-if the 

gentleman has concluded his questions, let me just point it outDr. Fenn, I am tempted to ask YQU about the difference between 

obligat(3 fungi and symbiotic fungi,. but I withhold, knowing that I 

know the answer to it already and it would bore piy colleagues. . . But· it does show some very interesting life forms that are in all 

probability here and as we begin to explore those types of protein 

substances and their application in terms of other problems that 

we have. It is · very important to maintain these. It may be worth 

a lot more than whatever the value of these leases are, as we try 

to preserve this unique and specialized, absolutely I think specialized, indi«enous types of microbes that may be present here. 

So I will leaye that and the rickettsia and other topics to my 

microbiology efforts. You know, you have to be careful with me because I have more entomology than any other Member of Congress. 

Dr. FENN. I see. I will make a note of that . . Mr. VENTO. It doesn't serve me too well in terms of the Banking Committee, but over here it might have application:. I have been 

trying to get Mr. Richardson for years to explain more of the 

lifeforms and the Jemez salamander, the famous Jemez salamander, which is still an outstanding issue between us. He has got 

to get his homework done. 

Mr. RICHARDSON. Mr. Chairman, in that connection I would like 

to ask unanimous consent to insert my statement and my exposition on the salamander in the record. 

Mr. VENTO. Without objection, so ordered. 

One of the concerns, seriously, Dr. Fenn, that I had, and I am 

sure that you noted it, being Park Service personnel, was the concern of the Park Service, who I feel took more of a passive attitude 

in terms of protection of resources. You know, none of us expect 

buffer zones to be demonstrated, but it is not unknown, for instance, where there is a resource, an obvious resource problem which emanates from outside the boundaries of a park, for it to be 

addressed by the Park Service, whether that is geothermal, and 

that is one that has occurred in the Yellowstone area, or whether 
50 

it is the hydrologic features that have occurred with the Everglades 

and/or the type of oil and gas leasing that is occurring with regards 

to Carlsbad Caverns. Lechuguilla, after all, the opening to the cave 

and access, is on a Park Service designated area. So I am concerned about the fact that the Park Service, I feel, 

didn't take an aggressive enough attitude and that there are Park 

Service tools that were available, short of BLM withdrawal or designation of further areas as park or legislative, and I just wanted 

to state that for the record. You might want to respond on behalf 

of the Park Service at this time. 

Dr. FENN. Thank you, Mr. Chairman. In fact, I would like to 

defer that to Mr. Kerbo, who I think has some comments to share 

with you, being the person on the ground there with that issue. 

Mr. VENTO. Yes. Okay. Mr. Kerbo? 

Mr. KERBO. Yes, Mr. Chairman. Being the cave specialist at 

Carlsbad Caverns National Park when the breakthrough in 

Lechuguilla . Cave occurred, in May of 1986, we weren't sure for 

some months, until toward the end of 1986 that in fact this was 

going to be a major cave. Oftentimes a cave in the Guadalupe 

Mountains, having hit one of the joints running perpendicular to 

the reef front in that point actually stop, and Lechuguilla Cave did 

that relatively quickly. So we withheld news releases until November of that year when finally a way around this barrier was discovered by explorers and the cave began to expand at, for cavers, quite 

an alarming rate, and we did begin to consider that since the surface there was wilderness that the cave was going to eventually extrude from beneath that surface wilderness designation and protection either onto adjacent BLM lands or underneath lands on the 

National Park that were not designated wilderness. 

We attempted to come to some proposals that would protect the 

cave by virtue of it too being a wilderness area. So, as early as 

1988 we began to consider a cave or underground wilderness, or 

portions of that cave. Not necessarily those with already that designation, but it was our only avenue that we could reasonably come 

to at that time to protect a cave that was going to wander off the 

park or underneath other park properties that would keep, perhaps, the development of those portions of the cave in the future, 

even by the National Park Service, and that continues to be a concern that as Lechuguilla Cave which is currently being managed as 

a Category 4 cave, which is one that is either newly explorednewly discovered, . excuse me, or newly discovered portions of a 

known cave, and we are beginning to zone it into sections where 

only so many people are allowed into each section of the cave, and 

there are many restrictions on the explorers and researchers that 

enter the cave. 

So we have been concentrating on the known cave, and one of 

our problems, of course, has been what do we do when the cave 

leaves the park? What do we do when the cave leaves surface-designated wilderness? And I believe that this bill will finally, through 

some of those earlier, perhaps misguided efforts of wilderness designation for that cave eventually gain us at least the same measure 

of protection for the subterranean resources that we had hoped 

that wilderness might do. 
51 

Mr. VENTO. I think the problem is that while you have had some 

policies-I mean the engagement of the BLM in this. Did the Park 

Service support the EIS for these lease procedures that we are 

talking_ about here? ·. Dr. FENN. We did, yes. In fact, we were very strongly supportive 

of the fact that we needed a full EIS rather than an EA or anything less in terms of assessing the potential Qiological effects of 

those actions. . I would add to Ron's statement in answer to your question. The 

Park Service, as a whole, I think, is realizing that it does need in 

fact to be more proactive. A lot of times what happens outside of 

park boundaries has a profound-could have a profound effect, on 

what happens inside parks. I think the agency as a whole is recognizing the need to be more proactive in those kinds of issues. Part of what happened with the Lechuguilla situation is that 

cave exploring was occurring, the cave kept moving closer and clos~ 

er to these areas, and you almost had two events colliding from opposite directions at once. It may look · like, in retros~, that we 

weren't as involved as we should have been, but I don t really think 

that was the actual fact on the ground. 

Mr. VENTO. When, Mr. Oden, were these leases issued? 

Mr. ODEN. I think I will have ~ 

Mr. VENTO. At least those that are within the 5100 acres. You 

have to yield to Mr. Incardine? 

Mr. ODEN. If you will hold on a moment, Mr. Incardine, I believe, 

can help with that. 

Mr. INCARDINE. The leases were issued within the study area between the years of 1977 and 1991. 

Mr. VENTO. And what was the activity in-you said between 

1977 and 1991? 

Mr. INCARDINE. That is correct. 

Mr. VENTO. As late as 1991 they were still issuing leases? 

Mr. INCARDINE. That is correct. And those are leases that were 

issued under the Carlsbad Caverns RMP, which had no surface occupancy stipulations. So, in other words, drilling would have to 

occur from outside of the EIS study area, because there is no surface occupancy allowed there. 

Mr. VENTO. What is the size of the EIS study area? Is this the 

EIS study area we are looking at here essentially? No? 

Mr. INCARDINE. No. That is a different designation. The EIS 

study area is 8000 something acres. 

Mr. VENTO. Eight thousand acres. That would be, then, horizontal drilling? Is that what we call that? 

Mr. INCARDINE. Directional drilling. 

Mr. VENTO. Or tangential drilling? 

Mr. INCARDINE. Directional. 

Mr. VENTO. Directional drilling. But I mean it seems sort of ironic that, you know, after the discovery that leases were issued .that 

late. I mean wasn't there a recognition at that time within BLM 

that there was a conflict between cave protection and continued issuance of these leases? These were non<.'ompetitive leases. What 

was the cost of these leases? 

Mr. INCARDINE. These were competitive leases. 

Mr. VENTO. These were competitive leases? 
52 

Mr. INCARDINE. After 1988 they were competitive. 

Mr. VENTO. Okay. After the reform law passed, they were competitive? 

Mr. INCARDINE. That is correct. The stipulations were believed to 

be severe enough to where they wouldn't harm any of the cave resources or visual resources within the special management area 

that the BLM designated. 

Mr. ODEN. Also, these leases that were issued in 1991 were on 

the western part there. It looks like a minimum of about 3 miles 

from the Lechuguilla Cave area. And we felt that with the no surface occupancy stipulation at that time on the lease would provide 

adequate protection. Of course, we learn more and more as we get 

into this process. 

Mr. VENTO. Well, it is surprising to me, considering the nature 

of the resource being understood at that time, even after 1988, 

even after they are competitive and the value probably was greater in this area. But when you consider the nature and the cost of the 

problems that you encounter, just in terms of study, that there 

would be real problems here. 

I would just quote from the recent report on page 12. "It has 

been suggested in the Dark Canyon Environmental Impact Statement, Bureau of Land Mana~ement, '92, that slanted or deviated 

well bores are potentially mitigating measures to avoid drilling undesirable surface location. It should be recognized that drilling on 

a slant through· several hundred or a thousand feet of vertically 

fractured cave bearing Capitan-Goat Seep rock package is far more 

likely to intersect cave openings than are vertical holes. Slant drilling and directional drilling are methods used in the oil and gas industry where the intersection of vertical fracture is desired." 

And so if, in fact, they are relying on that tyP8 of fracturing in 

order to facilitate what they are doing, and this 1s their suggestion, 

it sounds to me like it is even more harmful in terms of intersecting types of cave resources that might be present there. 

And of course, this is 1993. I understand that. But nevertheless, 

when you have these types of risks, it just seems amazing to me. 

Last year I was trying to get legislation going on this issue. We 

passed it through the committee but we were not successful in the 

final analysis. 

But it just seems to me, considering the nature of the ACEC designation and other things, and the concern of the Park Service, 

that this should not have necessarily translated into issuance of 

leases at that late a date, albeit 3 miles away. 

It looks like from the map that the 51 acres that we have identified that there are operating leases on, or operating wells on, those 

on that area, is that correct, Mr. Oden? 

Mr. ODEN. Yes, sir. There are two producing wells in that 5100 

acres. 

Mr. VENTO. What are the wells? Is that Sidewinder No. 1 and 

Diamondback Federal No. 1? 

Mr. ODEN. No. The Sidewinder No. 1 is a shut-in gas. well. It appeared to be noncommercial when they drilled it in 1990. That was 

drilled on patented land, both surface and minerals. The two producing wells we are referring to are over in the east in Section 22 

and 23. 
53 

Mr. VENTO. Now, how far are they from the opening of the cave? 

Mr. ODEN. Looks like roughly about 2 miles to the nearest one. 

Mr. VENTO. Well, I don't know what the production is there, but 

again, I mean insofar as the science, that would be a problem. I 

can understand why the other leases end up getting value. Are 

they significant producers? I think your testimony said 30 billion 

cubic feet. Is that correct? Am I readirig that correctly? 

Mr. ODEN. The 30 billion cubic feet was an estimate based on 

what w~s felt would be found in the vicinity of the proposed location over to the west there in Section 19. 

Mr. VENTO. What are the nature of these wells then, these ones 

that are operating? 

Mr. ODEN. On the one of them-we will have to get you answers 

on that. We don't have those available. 

[The information follows:] 

[Supplied by Mr. Oden) 

WELLS WITHIN THE DARK CANYON ENVIRONMENTAL IMPACT STATEMENT STUDY AREA 

NO. 1 GUADALUPE FEDERAL: T.l4S, R24E; SECTION 22, SE1/4NE1/4 

Operator:. W.A. Moncrief; spud: 6/11/84; 1st prod: 9/25/92; original reserves (as of 

1/93): 1.89 Bcf; produced (as of 1/93): .03 Bcf; remaining reserves: ~.86 Bcf. 

(This well sat idle for 8 years because they were waiting on a pipeline to be con- structed) · · · 

NO. 1 RIDGE FEDERAL: T.l4S;R24Ej SECTION 23, NE1/.iNW1⁄4 

Operator: W.A. Moncrief; spud: 7/17/82; 1st prod: 4/21/83; original reserves: 3.5 bcf 

(Morrow); produced (as of 1/93): 2.47 bcf(Morrow); remaining reserves (as of 1/93): 

1.03 bcf (Morrow); additional reserves unproduced (as of 1/93): 2.0 bcf (other Morrow), 0.76 bcf (Strawn). · 

NO. 1 CHAPARRAL OZ FEDERAL: T.!4S, R24E, SECTION 17, SE1/4NE1/4 

Operator: Yates Petroleum; spud: 4/74; 1st prod: 12/80; original reserves: 0.170 

bcf; produced (as of 1/93): 0.169 bcf; remaining reserves (as of 1/93): 0.001 bcf. 

Mr. VENTO. Okay. Well, I would like to know that. 

Well, in your testimony you recommend, Mr. Oden, that language be added to the bill to allow BLM to control access and prohibit mineral, geologic and cave resource collecting except under a 

permit for scientific purposes. But the relevant section of FLPMA, 

section 302(b), says the Secretary shall subject to this Act and 

other applicable law regulate through permits or other instruments 

that the Secretary deems appropriate the use of public lands. 

Doesn't that already give the Secretary such authority if he chose 

to exercise it? 

Mr. ODEN. Yes, it does give some authority. We just felt, because 

of this particular really significant cave, that in the interim before 

these cave protection regulations from the 1988 bill become effective this in the interim would give us a little stronger control over 

anybody in the area. 

Mr. VENTO. Yes. Well, you have raised the cave protection resources; We acted on that·in 1988. That was Rick Boucher's billmeasure, that of the gentleman from Virginia. 

~im can we expect final· regulations to implement the Cave 

Protection Resources Act of 1988? 

Mr. ODEN. My understanding is that the final regulations should 

come out in the very near future. The draft regulations were issued 
54 

in January. They are still in the comment period, I believe, and the 

intent is to get those issued as soon as we can. That is an interagency-that is a derartmental effort. 

Mr. VENTO. Yes, know it is with the Forest Service that you 

are working on that. But we would hope, given this particular concern, that there be some priority given to it. 

Do you need additional language for the legislative authority you 

are seeking? 

Mr. ODEN. Pardon? 

Mr. VENTO. Do you need additional language for the authoritydo you need additional legislative language for the authority you 

are seeking in this instance? 

Mr. ODEN. Yes, we believe so. 

Mr. VENTO. Well, if you could submit us a draft of it. I would like 

to look at it. We obviously intend to move along with the legislation, so if you have specific language and/or boundaries, because I 

don't think that based on the discussions here this morning that 

we really can afford to wait. We intend to mark-up on the 18th. 

I would just note for the record further with regard to the valuation attributed to, or signed up to by the BLM State Directorwhat is the normal basis and the utility of such agreement? Is it 

relied upon? I mean here we have a private appraisal. What is the 

normal procedure and the utility for such action? Clearly this was 

intended for impact purposes, to underline something to the committee; the committee has taken note of it. What is the utility of 

such purpose in the field for this purpose, especially based on private appraisal? It seems to me almost a solo action, you know. 

Mr. ODEN. The State Director advised me that he felt that it 

would be useful to have this information as fart of the final EIS 

so that there would be opportunity to see al the values involved 

there. 

Mr. VENTO. Is this customarily done in the preparation of an EIS 

in terms of, for instance, when one of the alternatives is a no drill 

alternative? 

Mr. ODEN. No. Usually not to this formal an extent. Of course, 

we agree to values all the time in exchanges and sales. 

Mr. VENTO. Well, I mean when you are in a negotiation there's 

a purpose to it. So I just find it unusual to find a signed document 

that is put forward which would-state that. 

Mr. ODEN. It is a little bit unusual in this respect. 

I would also like to correct when I said the comment period was 

still open on the cave protection regulations. That is now closed. 

Mr. VENTO. Oh. Okay. 

Mr. ODEN. The people are analyzing the comments. 

Mr. VENTO. Well, I very much appreciate the testimony. I haveas I said, there are a number of questions. . Mr. Hinchey, did you have further questions of the panelists-? 

You have no further questions. 

I could go on, as I said, and talk about some of the others, but 

I do want to hear from the other witnesses that we have today. We 

appreciate very much your efforts. And, as I said, we intend to 

move forward with the le,pslation and we hope that your advice 

and counsel will be useful m terms of boundanes, and we will look 

for some sort of language that will be workable to permit the com-
55 

mon objectives which have been stated by all of the witnesses, including my colleagues from New Mexico. 

Thank you very much, gentlemen. 

Mr. ODEN. Thank you, sir. 

PANEL CONSISTING OF DANIEL FONG, PH.D., ASSISTANT PROFESSOR OF BIOLOGY, THE AMERICAN UNIVERSITY, WASHINGTON, DC, RE:PRESENTING THE CONSERVATION COMMITTEE OF THE NATIONAL SPELEOLOGICAL SOCIETY, ACCOMPANIED BY JOHN SHELTON, NATIONAL SPELEOLOGICAL SOCIETY LIAISON TO THE NATIONAi,. PARK SERVICE; AND 

JOHN B. GUSTAVSON, GEOi,OGIST AND PETROLEUM ENGINEER, BOULDER, COLORADO0 REPRESENTING YATES ENERGY CORPORATION 

Mr. VENTO. The next panel is Dr. Daniel Fong, the National Speleological Society, and Dr. John Gustavson, representing Yates Energy Corporation. 

Welcome, gentlemen. We are pleased to welcome you both. Your 

statements have been made a part of the record, so you can feel 

free to summarize those statements or read relevant portions 

thereof. We have a few other witnesses that we have to hear from 

this afternoon on the other measures that are before us, and I appreciate their patience as we are trying to accommodate the hearmg of a number of different topics that are very important. 

Dr. Fong, and you might want to introduce your associate. 

STATEMENT OF DR. DANIEL FONG 

Dr. FONG. Mr. Chairman, my name is Daniel Fong. I am an assistant professor of biology here at American University in Washington, DC. With me is Mr. John Shelton, past president of the National Speleological Society and presently the NSS liaison to the 

National Park Service. !, ,myself, am also a member of the National 

Speleological Society. 

The NSS is a membership organization dedicated to the conservation and scientific study of cave resources. We are here today 

representing the NSS to express the Society's strong support for 

the passage of H.R. 698. We have already submitted written testimony for the record, so I will just summarize some of the important points here . . Today there are more than 40,000 caves known in the United 

States, and there are many more new discoveries each year. Although we believe that all caves are significant and should be protected and managed appropriately, we are really here to underscore 

the fact that Lechuguilla Cave is a world-class premium cave by itself. We have already heard that it is the deepest cave in the United States, and that it is-at over 60 miles of passages-it is the 

fourth longest cave in the United States. It is world famous for the 

extraordinary beauty of the formations, and some of them are 

found nowhere else, period. 

The NSS has provided members of the subcommittee and are 

probably distributing copies of the book Lechuguilla, Jewel of the 

Underground, and some of you may have .attended the audio-visual 

presentation in this room yesterday. You have seen pictures of its 

immense size, the intricate geological formations, the phenomenal 
56 

crystal structures, and just as awesome wilderness beauty. You certainly must agree that Lechuguilla Cave is superlative by all 

standards. 

In addition, as a scientist myself, Lechuguilla Cave has given us 

really exciting insights into the complex interaction between geology and microbiology and how caves form. In short, we think that 

this cave is a national treasure. 

Both Lechuguilla Cave and Carlsbad Caverns itself are found in 

the Guadalupe Mountains, an area that is honeycombed with caves 

and interconnected fractures. Conditions that favored the creation 

of these two caves should exist beyond the boundary of the National Park itself. In fact, geological and biological evidence indicate a hidi probability, not just a possibility, of underground connections 6etween Lechuguilla Cave and the Dark Canyon Area. In 

fact, some passages in Lechuguilla Cave lie less than a half mile 

from the adjacent BLM land and it is very likely, we think, that 

Lechuguilla Cave will soon extend well into the Dark Canyon Area. 

This is the primary reason why passage of H.R. 698 is critical to 

the continued protection of Lechuguilla Cave. 

Cave openings in the Dark Canyon Area have shown a lot of air 

movement equal to that of Lechuguilla Cave, indicating the presence of a large undiscovered cave in that area. In addition, studies 

of the lineament trends by a task force of the BLM itself, a geophysical study of the natural potential of the area as well as data 

from the Guadalupe Geology Panel of the National Park Service all 

link known passages in the park to the Dark Canyon Area. 

Helium gas released in Lechuguilla Cave was also detected 

across the National Park boundaries in the Dark Canyon Area. My 

own work in Lechuguilla concerns the cave's biology. In June, I will 

again be going down to Lechuguilla Cave and this time specifically 

to examine the possibility that the cave is part of an extensive underground regional aquifer, and this will be an important groundwater source for the area, especially in the arid Southwest. Of 

course, any contamination of this aquifer as a result of drilling operations would have a tremendous negative impact on the whole region. Other biological studies that have already been done in 

Lechuguilla Cave have shown that there are the presence of several cave-dependent species in the cave itself. It includes a cave 

limited millipede, a centipede, a dipluran, as well as a beetle. All 

of these species are found in Lechuguilla Cave as well as in some 

other caves, you know, in an extensive region. ~ain, there is biological evidence showing that there is a high probability of underground connections between Lechuguilla Cave and the surrounding 

area. 

Drilling operations are inherently dangerous to caves and cave 

resources. A Draft Environmental Impact Statement, published by 

BLM, did an excellent job of detailing some of the hazards to the 

caves that can be caused by speculative drilling as is proposed. The 

EIS pointed out, for example, that when a cave is encountered during drilling, fluid or cement, sometimes thousands of cubic feet of 

cement, can be pumped into the area; You have seen the pictures of the cave formations. You can just imagine what can happen to 

those formations if that occurs. 
57 

Drilling into a cave would alter the barometric pressure, the temperature and humidity in the cave. Cave formations as well as cave 

organisms depend on a very narrow range of humidity and temperature conditions. Any drastic changes would have tremendous 

negative impact on formations as well as organisms. 

During drilling operations natural gas could also escape, migrate 

into the caves or into fractures leading into the caves, and an explosive mixture can result when natural gas mixes with OXYgen in 

the caves. Even without an explosion, the balance of the cave atmosphere, again, would be disrupted. 

Finally, the EIS pointed out that existing wells in the area have 

already intercepted crevices and have already experienced problems in terms of lost circulation and had cementing problems. This 

is already published in the Draft EIS. Clearly, drilling in the area 

already has experienced many problems that can cause potential 

danger to the caves. 

Potential hazards are unacceptable, we think. Cave resources 

here are not replaceable. Their value in their current condition is 

recognized through legislation, the media, as well as tourism. 

Cave resources in Carlsbad Caverns National Park and the surrounding area attract visitors from across the country and from 

around the world. Both cavers and non-cavers come, make special 

efforts to visit the area just to see the underground resources here. 

So, undamaged cave resources in the area is of tremendous economic value to people in the area, as well as to all of us in the 

United States. Any damage to these cave resources, and particularly pollution of the caves by hydrogen sulfide or other gases as 

a result of drilling, would seriously reduce visitation to the area. 

Even if several billion cubic feet of natural gas can be found by 

drilling in this area, a possibility is being debated by qualified petroleum geologists on both sides, short-term economic value would 

be insignificant compared to the long-term, irreplaceable value of 

these caves to all of us in the United States. 

The Federal Cave Resources Protection Act, which was passed by 

the U.S. Congress in 1988, states that it is the policy of the United 

States that any cave found-significant caves found in Federal 

lands must be protected and managed. The proposed Department 

of Interior regulations under the Act stated that all caves under jurisdiction of the National Park Service are deemed to fall within a 

definition of "significant cave." Therefore this certainly applies to 

Carlsbad Caverns National Park and Lechuguilla Cave, and all 

steps should be taken to ensure that no form of surface pollution 

can invade the area. 

While the NSS strongly supports the protection of the Dark Canyon area as well as Lechuguilla Cave through passage of H.R. 698, 

we also recommend that the area of protection be expanded. The 

recommended boundaries do not, right now do not encompass the 

interrelated geologic features that need protection. The entire Guadalupe Escarpment area has the same potential for spectacular 

caves like Lechuguilla. With new passages being discovered each 

year, we believe that the buffer zone around Lechuguilla Cave 

should be expanded towards the north and the northeast. 

Thank you for the opportunity to present this statement. 
58 

Mr. VENTO. Well, thank you very much, Dr. Fong, for your testimony and the work of your organization. 

[The prepared statement of Dr. Fong follows:) 
NATIONAL 

SPELEOLOGICAL 

SOCIETY, INC. 

Cave Avenue 

Huntsville AL 35810 

(205) 852-1300 

Celebrating 

fifty years 

dedicated to 

the exploration, 

study, and 

conservation 

of caves. 

59 

STATEMENT 

ON 

H. R. 698 

LECHUGUILLA CA VE 

PROTECTION ACT OF 1993 

BYTHE 

NATIONAL SPELEOLOGICAL SOCIETY 

CONSERVATION COMMITTEE 

March 2, 1993 
60 

STATEMENT 

BY THE NATIONAL SPELEOLOGICAL SOCIETY ON 

THE LECHUGUILLA CA VE PROTECTION ACT OF 1993 

Presented by Dr. Daniel Fong 

March 2, 1993 

Mr. Chairman, my name is Daniel Fong, and I am an Assistant Professor of 

Biology on the staff of The American University in Washington, D.C. I am here 

today representing the Conservation Committee of the National Speleological 

Society (NSS) and want to express the Society's strong support for passage of 

H.R. 698. 

The NSS is a non-profit national membership organization concerned with the 

conservation, scientific study, and exploration of caves. During over fifty years of 

our existence we have docwnented that there are more than 40,000 caves in the 

United States, and many new discoveries are being made each year. Although we 

believe that all caves have significance and should be managed appropriately, we 

are not here to argue that Lechuguilla Cave should be protected simply because it is 

another cave. Instead we want to underscore the fact that Lechuguilla Cave is one 

of the most significant caves known. 

Our members include some of the most knowledgeable people in the country 

regarding caves and cave resources. These cave specialists and experts agree that 

Lechuguilla Cave ranks as one of the premiere caves in the world. At over 1,500 

feet it is the deepest cave in the United States and currently ranks as sixth longest, 

with over sixty miles mapped and much more passage anticipated; it is world 

famous for the extraordinary beauty of its formations, some of which are found 

nowhere else; and data which has been collected in Lechuguilla has provided 

scientists with exciting new insights into the origin of oil field porosity and about 

the complex interactions between geology and microbiology in cave formations. 

Not only is Lechuguilla located in Carlsbad Caverns National Park, but also it lies 

in that portion of the Park which has received official designation as Carlsbad 

Caverns Wilderness. Where a unique cave like Lechuguilla is concerned, every 

effort must be made to eliminate any conceivable risk from commercial uses which 

might adversely affect its very special features. 
61 

Statement by the National Speleological Society 

on H.R. 698, March 2, 1993 

NSS members discovered Lechuguilla Cave and on a volunteer basis have worked 

closely with the National Parle Service at Carlsbad Caverns National Parle and with 

the contiguous Roswell District of the Bureau of Land Management to identify and 

protect these unique natural cave resources. 

Both Lechuguilla Cave and Carlsbad Cavern are found in the Guadalupe Escarpment, an area honey-combed with caves and interconnected fractures. Geologists 

and explorers are convinced that the conditions that favored the origin of these two 

caves extend far beyond the northern boundary of the National Parle. Passages in 

Lechuguilla have been discovered thatJie less than half a mile from the adjacent 

BLM land. It seems only a matter of time until explorers find the passages which 

will take them underneath the area now known as the Dark Canyon Special 

Management Area. 

The method by which these caves in the Guadalupe Mountains formed supports our 

belief in the existence of connections between known passages. Noted geologist and 

cave expert Dr. Arthur N. Palmer, one of the authors of the book, "Lechuguilla, 

Jewel of the Underground", indicates that during the formation of the Guadalupe 

Mountains there was severe fracturing of the rocks. This fracturing, which in itself 

is the major factor in the creation of the area's caves, also is the primary reason why 

the passage of H.R. 698 is so critical to the continued protection of Lechuguilla. 

Several cave openings in the Darlc Canyon area, such as Big Manhole Cave, have 

air movement equal to that of Lechuguilla Cave and indicate the presence of large, 

as-yet-undiscovered, caves in that area. Both the Bureau of Land Management and 

the National Park Service have conducted geologic studies which support this 

expectation. The BLM Cave and Karst Task Force, in its study last year of 

lineament trends, Mr. Art Lange's natural potential geophysical study, and the Parle 

Service's Guadalupe Geology Panel, all link known cave passages in the Park to 

the Dark Canyon area. 

The BLM Task Force also proved an air connection with a helium study in which 

that gas was released in Lechuguilla and was detected in a well across the National 

Park boundary in the Dark Canyon area (see the BLM Dark Canyon Draft EIS, 

p. 3-18). Clearly, any pollution by gases released by drilling could enter 

Lechuguilla Cave. Some gases frequently released by drilling, such as hydrogen 

sulfide, are extremely toxic to humans and other animal life. Hydrogen sulfide, in 

particular, is common in the rocks beneath the area and is a well- known hazard 

2 
62 

Statement by the National Speleological Society 

on H.R. 698, March 2, 1993 

even to workers at the surface. It is extremely toxic and corrosive and kills 

instantly at levels of only one tenth of one per cent in air. In addition, the acids 

which would be formed in the cave by escaping gases would change existing 

conditions and damage the spectacular mineral formations in the caves. 

My own work in Lechuguilla concerns the cave's biology. In June I will again be 

going to Lechuguilla with several colleagues, this time specifically to examine the 

possibility that the cave is part of an extensive regional aquifer that is an important 

ground water source. Of course, any contamination of this aquifer as a result of 

drilling would have a serious negative impact on the whole region. 

The aquifer has the potential to harbor a diverse and unique animal life. The 

Edwards aquifer in Texas is well known for its diversity, and species related to 

some of the Edwards aquifer animals recently have been found close to Carlsbad 

Caverns National Parle. One, an amphipod, Artesia wellbourni, was found in 

Border Cave in Culberson County, Texas, located only about fifteen miles southwest of the Parle. 

Biological studies which already have been conducted have revealed the presence 

of several cave-dependent species, including a millipede (Speodesmus tuganbius), 

a centipede (Thalkethopus gral/atrix), an undescribed species of dipluran, and a 

wide-spread but undescribed Rhadine beetle. All of these species are found in 

Lechuguilla as well as in other caves throughout an extensive region. Again, this is 

a clear indication that underground connections exist between Carlsbad Caverns 

National Parle and the surrounding area. 

Drilling operations inherently involve dangers to cave resources which seem 

unavoidable with the current state-of-the-art. The Dark Canyon Draft Environmental Impact Statement published by BLM and relating to a proposed drilling 

operation in Dark Canyon lists the following hazards to caves posed by drilling: 

1. If a cave is encountered, drilling fluids pumped into it under pressure 

(e.g., water, additives, cuttings, and mud) would flood the cave passage (p. 4-2). 

2. Drilling into a cave would alter the barometric pressure, temperature, and 

humidity in the cave, whether or not it has a natural entrance to the surface, altering 

or destroying speleothems and cave microorganisms (pp. 4-3, 4-4). 

3 
63 

Statement by the National Speleological Society 

on H.R. 698, March 2, 1993 

3. If a dry cave is encountered, cement is pumped in to seal it -- in many 

cases, thousands of cubic feet of cement (pp. 4-3, 4-4). 

4. During drilling, completion, or production of the well, natural gas could 

migrate into caves or into fractures that lead to caves, contaminating them. An 

explosive mixture could result when the gas mixes with oxygen in the caves. Even 

without an explosion, the delicate balance of the cave atmosphere would be 

disrupted, causing rapid deterioration of cave formations and the disruption or 

death of cave life. This could happen even after a well was depleted and plugged. 

(pp. 4-4, 4-5) 

5. Chemical leachate from lined mud pits could penetrate into underlying 

caves (Table S-1). 

6. Table F-2 includes an extensive list of existing wells in the area that have 

intercepted cavities, lost circulation, or had cementing problems. Clearly the 

drilling in that area already has experienced many problems that are potentially 

dangerous to caves. 

These potential hazards are unacceptable. The cave resources that may be l0st are 

irreplaceable. Their value in their current condition is widely recognized through 

legislation, the media, and tourism. 

The cave resources located in Carlsbad Caverns National Park and the surrounding 

area attract visitors from across the country and from around the world. Both 

cavers and non-cavers make a special effort to visit this area in order to view the 

cave resources found here. The protection of undamaged cave resources therefore 

represents an effort of tremendous economic value to the Carlsbad area of New 

Mexico. Many jobs and businesses depend heavily on tourist dollars. Any damage 

to the cave resources, and particularly pollution of these caves by hydrogen sulfide 

or other gases, would seriously reduce visitation by both tourists and explorers. 

Even if several billion cubic feet of natural gas were found by drilling in this area, 

a possibility debated with qualified petroleum geologists on both sides, this shortterm economic value would be insignificant compared to the irreplaceable value of 

these caves to all the people of the United States. 

The Federal Cave Resources Protection Act, passed by the U.S. Congress in 1988, 

states that it is the policy of the United States that Federal lands be managed in a 

4 
64 

Statement by the National Speleological Society 

on H.R. 698, March 2, 1993 

manner which protects and maintains significant caves. The proposed Department 

of the Interior regulations under the Act which were published in the FEDERAL 

REGISTER on January 13, 1992, stated that all caves under the jurisdiction of the 

National Park Service "are deemed to fall within the definition of 'significant 

cave'." The Act therefore clearly applies to the caves of Carlsbad Caverns National 

Park, and all steps should be taken to ensure that no fonn of subsurface pollution 

invades this area. 

While the NSS strongly supports the protection of the Dark Canyon area through 

H.R. 698, we also recommend that the area of protection be expanded. The 

recommended boundaries do not encompass the interrelated geologic features that 

need protection. The entire Guadalupe Escarpment area has the same potential for 

spectacular caves like Lechuguilla. With new passages being discovered each 

year, we believe that the buffer zone around Lechuguilla Cave should be expanded 

several miles toward the north and northeast, parallel to the Escarpment. In 

addition, consideration should be given to including a portion of the Lincoln 

National Forest to the west, where caves in related geologic features can be found. 

Thank you for the opportunity to present this statement. 

5 
65 

Mr. VENTO. We are pleased .to welcome Mr. John B. Gustavson. 

I think I Minnesotarized your name with an F, but I have corrected 

it now. 

Mr. GUSTAVSON. You were close, Mr. Chairman. 

Mr. VENTO. Welcome. 

STATEMENT OF JOHN GUSTAVSON 

Mr. GUSTAVSON. I am John Gustavson, and Members of the Congress, ladies and gentlemen, I have been asked to come here today, and let me make clear right away that although the agenda states 

that I represent Yates Energy Corporation, I and my firm are totally independent mineral appraisers. However, in this particular 

case it came about that an independent appraisal needed to be 

done, and for various funding . ·reasons this particular appraisal 

could not be done in a formal sense under funding by the BLM, 

wherefore Yates .Energy Corporation together with the BLM agreed 

that they would hire, that they would retain an independent minerals appraiser. So, therefore I am. in the unusual position of not 

really being here as an advocate for your bill, Mr. Chairman, nor 

am I an advocate against your bill, Mr. Chairman. I am here strictly to testify with regard to the facts as I see them, the facts with 

regard to the fair market value. 

I have already made available a copy of my testimony, so in 

order to save time I am going to only spend about 30 seconds to 

a minute to qualify myself, since this is the first time I have the 

opportunity to testify for the committee. 

I am both a geologist and a petroleum engineer, · and through 

years of experience I have also become a minerals appraiser. My 

profession affiliations include membership in the American Institute of Professional Geologists, Society of Petroleum Engineers, and 

the American Institute of Minerals Appraisers. My academic training includes Masters degrees both in engineering and in geology, 

and I have also had various teaching appointments during my career. 

Very specifically, I have for the last, say, 20 or 25 years functioned as an independent consultant; ·and I am very proud to call 

myself a consultant with a capital C, indicating that I may be 

available for hire but it is on a · fee-only basis, and that I am not 

an oil oferator nor am I in any way claiming to have a single barrel of oi attached to my name or my company. 

I am in the unusual position of having approximately equal numbers of clients on the industry side and on the government side. 

Thus, I have served as an expert for the U;S. Department of Energy in . a recent case at the so-called WIPP site, not too far from 

this particular case. In that case I was on the government side in 

a comparable case where it · was a matter of estimating the fair 

market value of some soil formations that, unfortunately, encroached on the proposed: WIPP site, and that caused substantial 

delay in that whole activity. 

I have been and I am an expert appraiser, independent appraiser 

for the U.S. Army Corps of-Engineers, having just within the last 

year testified in the State of New Mexico in U.S. Claims Court and 

in case of a condemnation for an expansion of the Melrose Bombing 

Range. In that particular case there was a more than 10 to 1 dif-
66 

ference in the appraised fair market value between the appraisal which I performed for the U.S. Army Corps of Engineers and what 

industry and landowners prepared. I am happy to report that that 

particular case turned out in the favor of the U.S. Governmentthat was my side-and there are records available that shows how 

I performed an independent appraisal. 

I can also mention there are, much to my chagrin, perhaps, that 

I sometimes work for the Internal Revenue Service, but don't we 

all these days? I have therefore the honor of both performing expert testimony and expert appraisal for the Internal Revenue Service and I have on several occasions, and as I said here, I am also 

in cases against the Internal Revenue Services. Needless to say, 

not the same cases. 

Department of Interior has for many years been a client of mine, 

various of the agencies thereunder, an since some of these cases 

unfortunately go to court, I can also say that I have served and am 

serving at this very moment as an appraisal expert for the Justice 

Department in comparable cases to this. 

Now, just to make sure that the Congressional Record doesn't 

show me as a hired gun for the U.S. Government, I will also state 

that I work frequently for the oil industry. Major, well-known companies like Texaco and Chevron are, indeed, and have been clients 

of mine. 

Now, finally, let me mention that for about 8 years I have had 

the opportunity to teach a course called Appraisal of Oil and Gas 

Properties under the aegis of the University of Tulsa. This is a continuing education course, and I am proud to consider it a forum 

where representatives of industry, of government, of the financial 

sectors, legal sectors, accounting sectors, everybody who has anything to do with the valuation of oil and gas properties in the United States have come. Presently we count that more than 2500 people have attended these particular courses, and I humbly suggest 

that that represents a forum at which time I have the market in 

the same room, and consequently I conduct my case histories on 

the basis of that. 

So, Mr. Chairman, I am sorry this was more than the 60 seconds 

I promised, and I will now very speedily give the opinion and the 

base for the opinion that I am offering with regard to the fair market value of 18. 7 million, and I will then be, certainly be willing 

to ask any questions you may have with regard to the appraisal 

process. 

I have been requested to estimate the fair market value of the 

so-called Yates Energy lease in Township T-24 South, Range 24 

East, Eddy County, New Mexico. The property consists of approximately 1600 acres of leasehold obtained from the U.S. Bureau of 

Land Management. This is common practice in minerals appraisals. I first determined the highest and best use of the leasehold 

property. Inasmuch as Yates already in 1991 intended to drill gas 

wells on the lease and to market the produced gas through an existing pipeline, which by the way Yates himself, or Yates Company 

had constructed only 5 miles away from the lease, and further that 

Yates was financially capable of drilling the wells, just like Yates 

had drilled numerous other gas wells of this type before, and also 

including one on this particular lease. I personally have no dif-
67 

ficulty ascertaining that the criterion for current use or use in the 

very near future was satisfied. 

In addition, a detailed geological audit performed by me and my 

staff will be described briefly in the following. The findings of that 

audit reveal that there were excellent geologic comparison between 

the subsurface of the Yates Energy lease and other producing gas 

fields in the immediate neighborhood, and that the probability of 

production was so high as to influence knowledgeable buyers and 

sellers to consider this fact in any bargaining. Consequently, I arrived at the conclusion that the highest and best use of the Yates 

Energy lease was for the production of gas as well as the income 

stream associated therewith. · · Having thus determined the highest and best use of the property; 

I proceeded to select the approach that could reasonably provide 

me an estimate of the fair market value. I selected the so-called income approach which provides the most reliable results when the 

highest and best use of a property is to produce income in the near 

future with a high probability. 

The base for the income approach is the financial forec;ast which, 

consequently, was prepared by me utilizing a reserve estimate. I 

prepared this on the basis of the ayailable geological and production data for the Yates Energy lease as well as for the surrounding 

area. As part of this effort, I performed a detail geologic audit that 

I carefully reviewed through electrical logs as well as various production data and other geologic and engineering data related to the 

property and the nearby area. This work disclosed that the geologic 

work already performed in 1991 by Yates Energy and its associates 

had been accurately performed. Thus sources of data had been accurately transposed onto maps and reasonable interpretations of 

the subsurface and the gas-containing formations and structures 

had been made. · I then compared these interpretations which I had derived not 

only with those provided by Yates Energy, but also with those provided by the U.S. Bureau of Land Management as part of the Draft 

Environmental Impact Statement. I found that there was good correspondence in all cases, and that this work by various parties, including this independent appraiser, basically confirms the same 

structural and reservoir morphology of the Yates Energy lease. 

Having thus satisfied the mapping and interpretation accuracies, 

the next task undertaken by me was the risking, that is to say the 

determination of the probability that . the various geologic and petroleum engineering features would indeed be encountered upon 

the drilling of the Yates Energy 5-well planned program. This was 

done, and that is documented in the appraisal reports which I have 

submitted by careful evaluation of both the reservoir which . contains the gas as well as the structure which traps the gas in the 

quantities predicted. 

The combination of the various probabilities for reservoir thickness, the location of the reservoir stream channel in the subsurface, 

the existence of the trapping for it, and the character of the structure led to an overall probability of the gas being trapped exactly 

as mapped of 51 percent. This number was subsequently used by 

me in my appraisal as described in the following. 
68 

I utilized a drilling scenario which had been planned by Yates 

Energy in 1991, but which was subsequently stopped by the U.S. 

Government, and I further utilized the financial parameters associated with updating these to the present time. I was thus able to 

develop a production forecast. Other parameters included gas 

prices which I obtained from the nearby El Paso natural gas line. 

They will al&o take this gas at a location just 5 miles to the northwest of the Yates Energy lease. 

From public sources of forecast, as well as from energy banks, 

which I monitor on a regular basis, I established that $1. 79 per mcf 

is_ a reasonable price forecast for this spring of 1993. Likewise, I 

ascertained that the petroleum industry as well as the financial industry utilize an escalation figure for gas prices of from 5 percent 

to 7 percent per year in the price forecast. Consequently, I _utilized 

a 6 percent escalation for gas prices, and I also determined the operating costs, which were found to be typical based on analyzing 

not only Yates Energy's but also other oil industries operating costs 

and comparing those in the nearby area. That operating cost was 

then also escalated at 6 :percent per year. 

Finally, _ then by looking at analogous wells in the many surrounding fields, I prepared production forecasts which could be expected from the subject property. This then together with the volumetric content of the interpreted structure on the Yates lease provided me with the information so I could provide a reserve estimate 

with a cash flow forecast for the property. I covered this with the 

drilling costs, the costs of laying the pipeline over the 5 miles to 

the nearby El Paso pick-up, and I was able to complete net revenue 

flow forecast for the Yates Energy lease. The net revenue, Mr. 

Chairman, to the operator would be $82 million over the next 20 

years. _ The final step in the appraisal was then to utilize several industry proven methods of converting this future net revenue into appraised value at the present time. The methods used are described 

in detail in my appraisal report, and they include among other 

things a cash payback method which is used in the analogy with 

real estate -appraisals. Also, I utilized a discounted cash flow method utilizing a discount rate which has been found by my research 

to be typical in the oil industry and in the financial industry for 

comparable properties. And finally, I also did a more subjective risk, present worth method which examines a large number of the 

specific characteristics of the field and consequently applies market 

value discount factors to the future cash flow for the effect of these. 

Now, I then took the values that I achieved from each of these 

different methods, and I reconciled them; that is, I gave most 

weight to those methods in which I, by experience, have found 

greatest confidence. Fortunately, in this case all three methods 

yielded results which were very close, so the reconciliation was not 

a difficult task. After I had performed my job, and after I had delivered a copy of my report, my appraisal report to the BLM, the BLM 

disclosed to me that they had m a separate activity, and actually 

using a separate methodology, that had arrived at values of from 

$18.9 to $19.5 million for the fair market value. However, I was not 

aware of that when I did my job, and it in no way had therefore 

influenced my particular activity. 
69 

So, therefore, Mr. Chairman, and Members of Congress, I am 

pleased to offer this explanation that I estimated an appraised fair 

market value of $18. 7 million, which I herewith offer to be the 

value of the Yates Energy leasehold as of May 1993. 

Thank you very much, Mr. Chairman. 

Mr. VENTO. Thank you, Mr. Gustavson. 

[The prepared statement of Mr. Gustavson follows:] 
70 

TESTIMONY TO THE CONGRESS 

OF THE UNITED STATES OF AMERICA 

My name is John B. Gustavson and I reside in Boulder, Colorado. I am employed by 

Gustavson Associates, Inc. in the capacity of President of a consultant firm with 

approximately 15 employees. Of profession, I am both a geologist and a petroleum engineer 

and I have through my experience become a minerals appraiser. 

I have been a consultant in the area of minerals appraisal for about 10 years preceded by 

another 20 years in the fields of oil and gas exploration and production as well as with the 

economics associated therewith. My professional affiliations include membership in the 

American Institute of Professional Geologists, the Society of Petroleum Engineers and the 

American Institute of Minerals Appraisers. 

My academic training includes Master's degrees in both engineering and in geology, and I 

have taught from time to time at the University of Tulsa and at the University of Colorado. 

I have published numerous articles in professional journals, both those related to the trade 

as well as in peer-review publications. 

My professional experience can briefly be described as having spent the last 25 years as an 

independent consultant, heading up a company that slowly has gained more and more 

reputation for providing appraisal of the fair market value of oil and mineral properties. 

My clients, as well as those of my firm, include both government and industry members. I 

have thus served as an expert for the Department of Energy, the U.S. Army Corps of 

Engineers, the Internal Revenue Service, and various agencies of the Department of the 

Interior. I have also served as an expert for the Justice Department in certain cases. 

On the industry side, I have functioned as an expert appraiser for major oil companies such 

as Texaco and Chevron as well as for numerous independent companies and financial 

institutions. 

With regard to New Mexico, I can claim personal direct experience in the geology, oil and 

gas production and the economic conditions in southeastern New Mexico, a state in which 

I also hold real estate, albeit in the northeastern part of the state. As a totally independent 

appraiser, I have no interest in any oil or mineral properties and my work in this particular 

case has strictly been that of a fee paid independent appraiser. 

Finally, as evidence of my ability to provide an expert testimony in this particular case, I can 

mention that I already in 1985 had developed a Continuing Education course for the 

University of Tulsa, which since then has been given numerous times to students all over 

the country as well as internationally dealing with the subject of Appraisal of Oil and Gas 

Properties. This course, which is the only one of its type in the country, has become widely 

recognized as a course which keeps detailed track of the market discount factors through 

hands-on experience and classroom exercises. 

I therefore feel qualified to offer the following opinion: 
71 

I have been requested, as an independent minerals appraiser, to estimate the Fair Market 

Value of the so-called Yates Energy Lease in Township TZ4S-R24E, Eddy County, New 

Mexico. The property consists of approximately 1,600 acres of leasehold obtained from the 

U.S. Bureau of Land Management. As is common practice in mineral appraisals, I first 

determined the Highest and Best Use of the leasehold property. Inasmuch as Yates, already 

in 1991, intended to drill gas wells on the lease and to market the produced gas through an 

existing pipeline only five miles away from the lease, and further that Yates was financially 

capable of drilling these wells just like Yates had drilled numerous other gas wells of this 

type before, I have no difficulty ascertaining that the criterion for cu"ent use or use in the 

very near future was satisfied. 

In addition, a detailed geological audit was performed by me, and will be described in the 

following. The findings of that audit revealed that there was excellent geologic comparison 

between the Yates Energy Lease and other producing gas fields in the immediate 

neighborhood, and that the probability of production was so high as to influence 

knowledgeable buyers and sellers to consider this fact in any bargaining. Consequently, I 

arrived at the conclusion that the Highest and Best Use of the Yates Energy· Lease was for 

the production of gas, as well as the income stream associated therewith. 

Having thus determined the Highest and Best Use of the property, I proceeded to select the 

approach that could reasonably provide me an estimate of the Fair Market Value. I 

selected the so-called Income Approach which provides the most reliable results when the 

Highest and Best Use of a property is to produce income in the near future with a high 

probability. The base for the Income Approach is a financial forecast which consequently 

was prepared by me utilizing a reserve estimate. I prepared this on the basis of the 

available geologic and production data for the Yates Energy Lease, as well as for the 

surrounding area. 

As part of this effort, I performed a detailed geologic audit, that is I carefully reviewed 

electric logs as well as various production data and other geologic and engineering data 

relating to the property and the nearby area. This work disclosed that the geologic work 

already performed in 1991 by Yates Energy and its associates had been accurately 

performed. Thus, sources of data had been accurately transposed onto maps, and 

reasonable interpretations of the subsurface and the gas-containing formations and 

structures had been made. 

I then compared the interpretations which I had derived, not only with those provided by 

Yates Energy, hut also with those provided by the U.S. Bureau of Land Management as part 

or its Environmental Impact Statement. I found that there was good correspondence in all 

cases, and that this work hy various parties, including this independent Appraiser, basically 

confirms the same structural and reservoir morphology of the Yates Energy Lease. 

Having thus satisfied the mapping and interpretation accuracies, the next task undertaken 

by this Appraiser was the risking, that is to say the determination of the probability that the 

various geologic and petroleum engineering features would indeed be encountered upon the 

drilling of the Yates Energy five-well program. This was done and is documented in the 

appraisal report by careful evaluation of both the reservoir which contains the gas as well 

as the structure which traps the gas in the quantities predicted. 

2 
72 

The combination of the various probabilities for reservoir thickness, the location of the 

reservoir stream channel, the existence of the trapping fault, and the character of the 

structure led to an overall probability of the gas being trapped exactly as mapped of 51 

percent. This number was subsequently used by me in my appraisal, as described in the 

following. 

Utilizing the drilling scenario as having been planned by Yates Energy in 1991, but 

subsequently stopped by the U.S. Government, and further utilizing the financial parameters 

associated therewith, I was able to develop a production forecast Other parameters 

included gas prices, which I obtained from El Paso Natural Gas, who will take the gas at 

a location 5.2 miles to the northwest of the Yates Energy Lease. From public sources of 

forecasts as well as from energy banks which I monitor on a regular basis, I established that 

$1.79 per MCF is a reasonable price forecast for this Spring of 1993. 

Likewise, I ascertained that the petroleum industry as well as the financial industry utilize 

an escalation figure of from 5 to 7 percent per year in their price forecasts. _Consequently, 

this Appraiser utilized a 6 percent escalation for the gas prices. Then, I determined the 

operating costs, which were found to be typical, by analyzing Yates Energy's operating costs 

and comparing with operating costs of wells in the nearby area. This operating cost was also 

escalated at 6 percent per year. 

Finally, by looking at analogous wells in the surrounding fields, this Appraiser prepared 

production forecasts which could be expected from the subject property. This, together with 

the volumetric content of the interpreted structure on the Yates Energy Lease, provided the 

necessary information to arrive at a reserve estimate with cash flow forecast for the 

property. When coupled with the drilling costs and with the cost of laying the pipeline over 

the 5.2 miles to the nearby El Paso pickup, this Appraiser was able to prepare a complete 

and realistic cash flow (net revenue) forecast for the Yates Energy Lease. The net revenue 

to the operator would be $82 million over the next twenty years. 

The final step in the appraisal was then to utilize several industry-proven methods of 

converting the future net revenue into an appraised value at the present time. The methods 

used are described in detail in the appraisal report and include a cash pay-back method 

which I used in analogy with real estate appraisals; also, a discounted cashflow method was 

used utilizing a discount rate a~ has been found by my research to be typical in the oil 

industry for comparable properties, and finally a more subjective risked present-worth 

method which examines a large number of the specific characteristics of this field, and 

consequently applies a market value discount factor to the future cash flow for the effect 

of these. 

The values achieved from each of these methods were finally reconciled, with the most 

weight given to those methods in which this Appraiser has found greatest confidence on the 

basis of industry experience. Fortunately, in this case all three methods yielded results 

which were very close, so the reconciliation was not a difficult task. 

My final reconciled appraised Fair Market Value is $18.7 million, which I herewith offer to 

be the value of the Yates Energy Lease as of May I, 1993. 

3 
73 

Mr. VENTO. When were you asked to do this appraisal? 

Mr. GUSTAVSON. I was asked approximately 4 to 5 weeks ago. 

Mr. VENTO. Well, I note some of the figures that you use for the 

escalation clause. In terms of gas, that does have a significant impact, I guess, in the overall value, if there is no escalation or if it 

is substantially lower than that. Can you give us some magnitude? 

You obviously selected 6 percent, but what if inflation is to run less 

than that? 

Mr. GUSTAVSON. Mr. Chairman, the answer is that the fair market value when utilizing the income approach is not all that sensitive as long as we stay to single-digit escalation factors and as 

long as the estimate also escalates the operating cost. But certainly 

it has a small effect, but it is not major. I stayed within the range 

of the 5 percent which banks currently estimate gas prices will escalate and the 7 percent which the oil industry estimates. 

Mr. VENTO. What is this estimate? You suggested that the reason 

that Yates Energy, and I note your insistence of not representing 

Yates Energy Corporation in this process, but being asked here as 

an independent witness and presenting this on your own without 

support of Yates in any way; is that correct? 

Mr. GUSTAVSON. No, that is not entirely correct, Mr. Chairman. I made the statement that I-and let me clarify, I am not an employee or have any interest in Yates Energy Corporation. I am simply hired on this particular basis, didn't know them before one 

month ago. I was strictly hired on a fee basis to prepare this particular independent estimate. Mr. VENTO. And to come to various forums, I guess, to the court 

or to the committee, and present the valuation; is that correct? 

Mr. GUSTAVSON. Excuse me, sir? 

Mr. VENTO. And come to the committee and present the valuation. Is that correct? That is part of your assignment is to come 

here and present the valuation? 

Mr. GUSTAVSON. Yes. 

Mr. VENTO. Yates has actually directed you to do this; is that 

correct? 

Mr. GUSTAVSON. That is correct. I have been asked to do this. 

Mr. VENTO. So they paid for your plane ticket and your expenses 

and so forth and so on today? 

Mr. GUSTAVSON. That is correct. 

Mr. VENTO. Okay. Not that I am trying to-I just want to make 

certain that we understand it, because the implication was that 

somehow the BLM didn't have the resources and so they were off 

requesting this. Clearly this appraisal woqld be valid as of May. 

But if, for instance, the time sequence was different, then the appraisal would be substantially different again, or the acres would 

be different. Is that correct? You are talking about 1600 acres here 

versus-you are just talking about a specific allocation here. 

Mr. GUSTAVSON. We are talking about 1600 acres within the 

5500 acres that was the-tha.t is my recollection-was the subject 

of your bill. 

Mr. VENTO. That is correct. And there are 18,000 acres that are 

considered, and there is 15,000 acres there, so all of this is only 
74 

valid in the context of one look, one picture, and then it would have 

to all be done over for another purpose. Is that right? 

Mr. GUSTAVSON. This particular property will, of course, not 

move outside the area if the area is expanded, Mr. Chairman. So 

I would say that the appraisal would probably remain valid for this 

particular leasehold, for these particular 1600 acres independent of 

whether you were to propose to expand your area beyond that. 

Mr. VENTO. Yes. Well, one other question, Mr. Gustavson. From 

your statement I take it that your estimate of value was premised 

on a drilling scenario planned by Yates. But, does this, as an example, in these terms of 1600 acres, is this an area where there is surface occupancy permitted? Is this an area where there is basically 

directional drilling that is identified? 

The other factor is does this constitute any type of review of the 

land-use policies that relate to the ACEC or other restrictions that 

may be put on to prevent or mitigate damage or special restrictions 

that I would think would affect the estimate? Does this take into 

consideration any other of these land-use policy limitations? 

Mr. GUSTAVSON. I have taken into consideration those factors 

that existed at the time the Yates Energy prepared to drill this in 

the spring of 1991 under the valid BLM lease and the prevailing 

permits and permissions and regulations that related to the surface. As of that time then, of course, a stopping, if you will, of the 

activities have taken place and the Draft EIS has been prepared. 

But, in essence, the fair market value that I estimated, and I am 

pleased to say that we analyzed also what was the fair market 

value in the spring of 1991, if that were to be the case, there is 

practically no difference between the two numbers. 

Mr. VENTO. So your point is that this recognizes-these types of 

appraisals recognize no liability in terms of damage to underground 

resources or formations that might be incident to this activity or 

any surface activity where you may have damage occurring to the 

resources as a matter of liability and so forth that would occur. Is 

that correct? 

Mr. GUSTAVSON. It relates strictly to those that, of course, exist 

in the State of New Mexico and also related to the broader Federal 

regulations with regard to drilling on government lands'. But specifically, it does not take into any consideration what would happen 

if, for example, an outgrowth of the cave was encountered or a totally new cave was encountered. It does not consider that except 

utilizing the standard drilling costs as have been experienced in 

the area. 

Mr. VENTO. So, if you had a blow-out in the cave or some explosion or something as a result of the consequence,. you know-I note 

that the BLM. witness today testified to the fact, Mr. Gust&.vson, 

that frequently at the well sites, even though this is directional 

drilling that we are talking about here, that there is often various 

types of materials associated with that that can and do cause contamination and other problems, which I don't know how the liability or reasonable care clauses might go, but that would obviously 

affect the impact or the profitability of any such lease, would it 

not? 
75 

Mr. GUSTAVSON. I have not been asked to study specifically the 

impact of encountering caves. My work has been strictly limited to 

the appraisal of the fair market value. 

Mr. VENTO. Well, I thought you had studied everything from this 

appraisal. But I appreciate the question I am asking you is another 

avenue of interest and concern, obviously one that is the focus of 

the topic of this hearing, and that is why I felt compelled to push 

the envelope so to speak in terms of what your . appraisal is and 

what the limits o~ it were. So I do appre?iate :your attempt to respond to my questions, and the record I think will show that. 

I had a number of other questions, but I think that all the testimony, particularly from Dr. Daniel Fong is important. 

Dr. Fong, the species that you identified here as I was listening 

to your testimony, are these endemic to the area of New Mexico, 

other caves in New Mexico, those centipedes, millipedes and 

other-the beetle. I guess you referred to those three. 

Dr. FONG. And the dipluran as well. Yes, endemic to that particular region of the Guadalupe Mountains. But I believe the beetle 

has a wider range and is also found now in the Gypsum Plains. 

Mr. VENTO. Where is that? 

Dr. FONG. That would be on the south along-into Texas. 

Mr. VENTO. Would they be considered candidates under, for instance, the Endangered Species Act, either threatened or endangered? 

Dr. FONG. The answer is we don't know, Mr. Chairman. Biological studies in Lechuguilla itself has just barely begun. Most of the 

effort is concentrated in the microbiological of the cave. That is 

where a lot of the excitement is. 

Mr. VENTO. Well, is that absolutely unique to the cave, endemic 

to the cave itself, or is it also forms that occur in other caves in 

this re_gion or formation? 

Dr. FONG. You are talking about on microbes? 

Mr. VENTO. Yes, the microbiology. 

Dr. FONG. That, no, we don't know. We have been sampling the 

microbes. The problem with microbes-you know, identification of 

microbes is there are standard laboratories that are set up for identifying microbes, but they use methods that are specific to identifying human pathogens. These are definitely something new. So 

standard methods really do not apply to that. That means that we 

have to come up with new ways of identifying these chemosynthetic bacteria that we are finding in the cave. 

Dr. Larry Mallory at the University of Massachusetts as well as 

Dr. Norm Pace at the University of Indiana-Indiana University, 

sorry, who is a member of the National Academy of Sciences are 

working at ways of looking at these microbes. 

Mr. VENTO. Mr. Hinchey, did you have any questions of the witnesses? 

Mr. HINCHEY. Mr. Gustavson, do you have any idea how much 

Yates paid for those leases in the first instance? 

Mr. GUSTAVSON. No, I do not know that. 

Mr. HINCHEY. I was just wondering. Because it would be interesting to know the nature of the benefit that might ensue to them. 

Mr. GUSTAVSON. Well, like I said, I was asked to make an appraisal of the property as specified, and I have not looked into the 
76 

many, many years of history of exploration of Yates in this area except for knowing that they have explored in this area for many, 

many years, made some discoveries, learned something about . the 

geology and undoubtedly also built a number of dusters. 

Mr. VENTO. If the gentleman would yield to me-the number we 

have been given from BLM in terms of the payment of the consolidation, which is the legal sale of some noncompetitive, apparently 

some competitive leases when they consolidated a series of leases. 

I don't know if it is only applicable to these 1600 acres. It may be 

more extensive than that. It was $200,000. And that was as late 

as the late 1980s or 1990. So, this valuation is in light of that, I 

think, very significant. I guess the valuation doesn't consider that 

particular aspect. It simply looks at it under the parameters of 

what Mr. Gustavson has suggested. 

Thank you for yielding. 

Mr. HINCHEY. Well, I just thought it might be an interesting 

point, and I thank you for providing that information. I also want 

to thank you very much for holding this hearing. 

Mr. VENTO. Well, it is the BLM that provided it. I didn't. You 

know that is a BLM--

Mr. HINCHEY. But you provided it to us. 

Mr. VENTO. Yes. Sure. Well, I thought it was important to get 

it in the record. Yes. 

Do you have any further? 

Mr. HINCHEY. No. Just to say that it might tum out that the 

highest and best use for this particular resource, the cave itself and 

as it expands might more be in the area of the aesthetic and even 

the spiritual. We have already learned that the commercial activities that have taken place near the cave may . have, according to 

Mr. Fong's testimony, I believe he said may have intruded upon it 

already and may have interfered with this resource. 

And furthermore the suggestion that has been made, I think by 

yourself, Mr. Chairman, and others that the biological benefits that 

might ensue from the knowledge that we would gain as we learn 

more about this resource could be far in excess of whatever value 

might be associated to the minerals that could be derived from the 

cave itself. 

In any case, this is an extraordinary resource and one that needs 

to be protected, and I think expeditiously in view of the activities 

that are going on around it. We are very grateful to you, Mr. Chairman, for your activities and for the opportunity I have had to learn 

about it this morning-or this afternoon. 

Mr. VENTO. Well, I appreciate your attendance and attention to 

this. I think it is an important issue. I think that Dr. Fong has indicated the importance of the microbiology and the lifeforms that 

are present there, especially the bacteria, and I suppose a lot of 

other microbiological forms that we may not even be aware of in 

terms of other types, and which may have an application in terms 

of a practical utilization. 

Dr. Fong, did you want to comment on that? 

Dr. FONG. Yes, I do, as a matter of fact. There are two comments. 

First, of course, is that I think it is practically impossible to place 

a dollar value on the cave itself because of the fact-we all agree 

on the magnificence of the cave itself. Placing any kind of dollar 
77 

value on it is impossible. It is simply priceless. Like I said, it has 

got to be treated as a national treasure. 

Second, in terms of the-any kind of gas that can be produced 

and so on are going to be nonrenewable resources. It can be used 

up. But the potential for endangerment or the hazard, the potential 

hazard in affecting this priceless national treasure is, no matter 

how small the probability of that is, the ultimate risk is something 

that I don't think we can accept, simply because we will be endangering something that is priceless. No matter how small a probability it is, when you multiply the two it is a high risk. It is a risk 

that we should not take. 

A third thing is that the cave in its present condition, and the 

cave resources in the national park in the present condition will 

have long-term economic impact, positive impact in the area for as 

long-into the future. But the gas will run out sometime. 

And fourth is that there are unexplored economic values from the 

cave that we can potentially tap as well. Professor Larry Mallory, 

whom I mentioned earlier, at University of Massachusetts is specializing in trying to identify antibiotic activity from bacteria that 

he has isolated from different caves. He has mostly worked with 

cave bacteria from the Massachusetts-along the New England 

area, but he has-the l.ast trip I was in, last November, in 

Lechuguilla Cave I brought Dr. Mallory into the cave and we sampled some of the material. He is also very, very excited and very 

interested in looking for the antibiotic potential of the bacteria that 

can be isolated from those caves. 

So there are unknowable but tremendous potential for economic, 

aesthetic as well as all other benefits that we can derive from the 

cave, if we can protect it. 

Mr. VENTO. I would just point out and recognize that D:r. Fong 

and Mr. Sheldon are authorities because they have both been down 

in that cave. It is about a 150-foot, 160-foot vertical drop. And so, 

if you are going to be a scientist, you had better be a very young 

one or one that is in very good shape in order to accomplish this 

particular feat. I was interested in going down, but, in the name 

of protecting my staff I didn't go down. [Laughter.] 

I tried it on my own, and you can see what happened to me. I 

have my own problems, already. 

Mr. Sheldon? 

Mr. SHELDON. Mr. Vento, just one quick closing comment .. I want 

to really unde;rscore the point of the significance of this cave. You 

know, Mr. Fong stated that there are 40,000 known caves in the 

United States, and that is true, and we feel that they are all significant to some degree. Mr. Gustavson testified, trying to put a financial value on the oil and gas resources of about $18 million, but 

Lechuguilla Cave by all consensus of all of our members in .our organization-we are the largest organization in the world dedicated 

to exploration, conservation and res.earch-and from all those members across the country and around the world there is no doubt in 

any of those minds that Lechuguilla, if it isn't the most significant 

cave in the world-that is a subjective thing-it is certainly right 

up at the top of the list. It is one. of the finest resources of caves 

this country has. 
78 

It is a priceless national treasure. It deserves the full protection that this government can provide it. 

One closing comment is that in the future there will probably be 

other conflicts with other caves, and I don't want to come across 

as being, you know, a super tree hugger or a cave hugger, although 

we sort of are. That is our special interest, and we will certainly, 

you know, try to propose reasonable management regulations for 

all caves in this country. 

One of the ways it will help resolve some of these issues before 

they become an issue, in other words, before we are already into 

oil and gas exploration and cave exploration then comes along and 

causes a conflict, one of the ways it will help prevent that is by the 

promulgation of the regulations under the Federal cave law that 

this committee put through and passed here about 4 years-or 5 

years ago. 

The regulations are still in the process. Unfortunately, it is talting a long time for them to come out, but I think when they do 

come out they are going to help offset and prevent some of these 

problems of the future. 

Thank.you. 

Mr. VENTO. Well, I appreciate that. It is hard to find superlatives 

to describe the resource that is here. I think we are struggling a 

little bit with the national treasure, and we hear about the crown 

jewels, and it is really difficult to put into words the nature of the 

resource that is present here and really present an accurate description. You almost have to see it. 

The National Geographic films and the work that you have all 

done to really introduce this to the world and to our Nation is I 

think very important, and so I want to congratulate you both, and 

your organizations and others that have participated in that. We 

have an intact ecosystem environment here which, obviously, could 

be threatened, and we understand that everybody wants to protect it, but, you know, everybody has their job in terms of valuation. 

The irony of all of this is that most of the protection could be afforded or could have been accorded by the national government in 

terms of its own land management agencies if they had used more 

reason, even as late as 1991, issuing competitive leases that had 

an impact in this particular area. You might say back in the early 

Seventies that there was not the knowledge or understanding of 

the significance of the cave. But after 1985 or 1986-1986, pardon 

me, that particular excuse no longer should have existed, and yet 

for 5 years after that, and I don't know what the extent of leasing 

is, it went forward. So here we have, and, of course, we could have, I think, arrested 

things or at least at some point along that point to in fact. We have 

Yates Energy proceeding ahead without any clear direction of policy from the BLM or the land-use agencies. I would have at least 

expected the Park Service to weigh in a lot more heavily than was 

the case in this particular instance. And so here we are faced now, 

with more severe problems today. 

The answer' we are getting from the administration is, Wait, we 

have to study it a little bit more so you get this just about right. 

Well, my patience is at an end, and I think that we talte the knowledge we have now and we move forward and do policy. If it isn't 
79 

perfect, that means we will have a job next year to improve it. That 

does not bother me greatly. 

What does concern me is the potential path that we are on right 

now, which sounds like it would leave this subject to damage, and 

I think that that is unacceptable. That is unacceptable when we 

hold ourselves as a nation and as a people in terms of conservation 

of resources that we have entrusted to us. We wouldn't accept this 

particular decision if it were being made in some other country. We 

would be on our toes barking about it, and speaking to the damage that is occurring, and we shouldn't accept it when it is occurring 

in our backyard. 

Well, thank you, gentlemen, for your testimony and your attention and responsiveness to my questions. 

Mr. VENTO. I have no further questions. I just want to thank you 

all for your patience and your participation. It has been most help- ful. Thank you very much. 

The meeting stands adjourned. 

[Whereupon, at 1:33 p.m., the subcommittee was adjourned, to 

reconvene subject to the call of the chair.] 

81 

APPENDIX 

MARCH 2, 1993 

ADomONAL MATERIAL SuBMITl'ED roa THE HEARING RECORD 

STATBMBNT BY 

CONGR.BSSMJUf CURT 1fBLDON 

BBFORB TBB SUBCC»RITTBB ON NATIJRAL PARXS, 

FORESTS AND PUBLIC LANDS 

MARCH 2, 1993 

MR . CHAIRMAN, THANK YOU FOR ALLOWING ME TO TESTIFY BEFORE THB 

SUBCOMMI'ITEB ON NATURAL PARKS, FORESTS AND PUBLIC LANDS ON H.R. 

698, THE LECHUGUILLA CAVB PROTECTION ACT OF 1993. 

WITH OUT A DOUBT, THE PROTECTION OF .THIS UNIQUE CAVB IS OF 

INTEREST TO ALL OF US. AS YOU ARE WELL AWARE, EXPLORATION OF THE 

LECHUGUILLA CAVE BEGAN IN 1986. AMONG THE MANY FEATURES THAT 

THIS WONDER IS NOTED FOR ARE 42-MILE-PER-HOUR WINDS THAT ROAR OUT 

OF THE ENTRANCE; 16,000 -YEAR-OLD FOSSILS IMBEDDED IN THE CAVB 

WALLS; 20-FOOT GYPSUM "CHANDELIERS"; GIAN+ "SODA STRAW" 

FORMATIONS; AN ENORMOUS CRYSTAL GLACIER; AND A ROOM FULL OF 

40-FOOT SQUARE CRYSTAL BLOCKS. 

ACCORDING TO RECENT INFORMATION ON LECHUGUILLA, ITS MAPPED 

PASSAGE LIB WITHIN 3 MILBS OF THE CARLSBAD CAVERNS, AND SOME 

SCIENTISTS BBLIBVB THE CAVBS ARB CONNECTED. HOWEVER, LBCHUGUILLA 

FORMATIONS ARB PARTICULARLY FRAGILE COMPARED TO THE HEAVILY 

TOURED CARLSBAD CAVERNS. IT IS FOR THIS REASON THAT THE NATIONAL 

PARK SERVICE {NPS) HAS TIGHTLY RESTRICTED ACCESS TO THE CAVB FOR 

FEAR THAT BVBN EXPERIENCED SCIENTISTS WOULD DAMAGE SOME FEATURES. 

LIKE THE MANY SCIENTISTS AND ENVIRONMENTAL GROUPS WHO HAVB 

RAISED CONCERNS OVBR DRILLING ACTIVITIES NEAR, I ALSO SHARE THEIR 

CONCERNS ABOUT THE NEED TO PROTECT THIS UNIQUE WONDER. I ALSO 

FEEL, HOWEVER, THAT EFFORTS MUST BB MADE TO PROVIDE FINANCIAL 

COMPENSATION TO THB YATES ENERGY CORPORATION/UT! ENERGY 

CORPORATION FOR ITS OIL AND GAS LEASING TRACKS. 
82 

AS YOU MAY KNOW, BPFBCTIVB OCTOBBR 1, 1989, ROBBRT B. BUNN 

AND HIS WIFE, PRANCBS B. BUNN ASSIGNED LEASE NM-62161 TO UTI 

BNBRGY CORPORATION, BT AL . THIS AGREBMBNT, HOWEVER, IS SUBJBCT 

TO A CONDITION WHICH REQUIRBS UTI TO BBGIN THB DRILLING OP AN 

EXPLORATORY WELL FOR OIL AND GAS ON LANDS DESCRIBED IN THE 

AGREEMENT WITHIN THRBE YEARS. IP THE ASSIGNEB SHOULD PAIL TO 

BEGIN DRILLING WITHIN THE TIMB FRAME OUTLINED IN THE AGREBMBNT, 

THB LEASE WOULD THEN BE REASSIGNED TO ANOTHER PARTY. 

IN ACCORDANCB WITH THIS AGREBMBNT, UTI ENERGY CORPORATION, 

LOCATED IN PENNSYLVANIA, ESTABLISHED A PARTNERSHIP WITH THE YATES 

ENERGY CORPORATION. THIS PARTERNSHIP WAS ESTABLISHED BECAUSE 

THEY LACICBD SUFFICIENT STAPP IN NEW MEXICO TO OVERSEE A DRILLING 

OPERATION. SHORTLY THBRBAFTBR , YATES SUBMITTED TO THB BUREAU OP 

LAND MANAGEMENT SIX COUNTERPARTS OP ITS APPLICATION FOR PERMIT TO 

DRJLL (APD) ITS DIAMONDBACK FEDERAL NO. 1 WELL. 

ON FEBRUARY 7, 1991, YATES RECEIVED A LBTTBR STATING THAT THE 

APD "WILL NOT BB APPROVED WITHIN THE NORMAL 30 DAYS AND WILL BB 

HELD PENDING UNTIL THB CAVB MATTER IS RBSOLVBD IN THB AREA. NO 

FIRM APPROVAL DATE CAN BB GIVEN AT THIS TIMB•. THIS REGULATION 

REQUIRED YATES TO CONSULT WITH THB APPROPRIATE FEDERAL SURFACE 

MANAGEMENT AGENCY AND WITH OTHER INTERESTED PARTIES AS 

APPROPRIATE. 

SHORTLY THBRBAFTBR, THE BUREAU OF LAND MANAGEMENT (BLM) AND 

NPS INITIATED A DRAFT BNVIRONMBNTAL IMPACT STATEMENT (BIS) TO 

DETERMINE THB EFFECTS OF DRILLING ON LBCHUGUILLA. ALTHOUGH THE 

DRAFT EIS RBCOMMBNDBD DRILLING, IT WAS REJECTED BY THB 

ENVIRONMENTAL PROTECTION AGENCY ( BPA) . AS A . RESULT, BLM HAS 

SUBSEQUENTLY INDICATED THAT IT WILL NOT SUPPORT DRILLING IN THB 

FINAL BIS. IN ALL, THIS PROCESS HAS TAKBN _NBARLY TWO YEARS TO 

RBSOLVB. 

IN A RECENT STATEMENT, BLM ACKNOWLBDGBD THAT BECAUSE DRILLING 

MAY NOT TAKE PLACE, THERE WILL BE A TOTAL LOSS OF 25 BILLION 

CUBIC FEET OF NATURAL RESOURCES AS WELL AS AN ASSOCIATED BENEFITS 

LOSS OF TAX REVENUES. FURTHERMORE, THEY HAVE ALSO ACKNOWLEDGED 
83 

THAT UTI AND ITS PARTNERS WILL BB DBNIBD AN ECONOMIC INTBRBST OF 

SOMB $18.7 MILLION DOLLARS BY REFUSING THE APD. 

LIKB THB OTHER MEMBERS OF THIS SUBCOMMITTEE, I RECOGNIZE THE 

IMPORTANCE OF PROTECTING LECHUGUILLA CAVE. I DO NOT DISPUTE THE 

FACT THAT THIS UNIQUE AND FRAGILE CAVE SHOULD PROTECTED FROM 

OUTSIDE IMPACTS. YBT, WHILE I SUPPORT THESB EFFORTS, I ALSO FEEL 

THAT IF UTI AND ITS PARTNERS ARE DENIED THEIR PROPERTY RIGHTS, 

THEY SHOULD BE COMPENSATED UNDER THE TAKING CLAUSE OF THE 

CONSTITUTION. THAT PRECEDENT HAS PREVIOUSLY BEEN WELL 

ESTABLISHED BOTH AT FEDERAL AND NON-FEDERAL GOVERNMENTAL LEVELS. 

IF THE FEDERAL GOVERNMENT DENIES THEIR ECONOMIC RIGHTS, THEN THIS 

CORPORATION SHOULD BE PAYED FAIR MARKET VALUE FOR THEIR PROPERTY. 

BECAUSE H.R. 698 CURRENTLY DOES NOT ADDRESS COMPENSATION 

ISSUES, I WOULD BE PLEASED TO WORK WITH THE SUBCOMMITTEE TO 

ENSURE THAT THIS MATTER IS RESOLVED. AGAIN, I APPRECIATE THE 

OPPORTUNITY TO TESTIFY BEFORE YOU THIS MORNING, AND I WOULD BE 

HAPPY TO WORK WITH THE SUBCOMMITTEE TO HELP ADDRESS THESE VITAL 

ISSUES. 
84 

The Honorable Bruce F. Vento 

4074 South Iriondo 

Boise, ID 83706 

02-18-93 

Chairman, House Subcommittee on National Parks, Forests and Public 

Lands 

Reem 812 

O'Neill House Office Building 

Washington, D. c. 20515 

Dear Congressman Vento: 

The Association of National Park Rangers was very pleased to learn 

of HR-678, the Lechuguilla cave Protection Act, which would provide 

additional protection to Lechuguilla Cave and other caves within 

Carlsbad Caverns National Park. We agree completely that these 

caves, as well as others in the area, are world class resources which deserve all possible protection. 

A recent panel of independent geologists h.as indicated to the 

National Park Service that the agency needs to be particularly 

sensitive to the structural geology of the northern and eastern 

sections of the Capitan Reef within and adjacent to the park. To 

this end, the experts are preparing a report and maps indicating a boundary below which they believe no wells should be drilled. If 

wells already exist, they should be properly plugged when their 

production life is exhausted. 

Once again, the Association believes your proposed legislation comes at a time when some of cur nation's finect natural and 

cultural resources are facing possible destruction or damage from 

threats originating outside the boundaries of units of the national 

Park System. Only thorough the enactment and enforcement of timely 

and forceful environmental protection laws and regulations can we hope to strike a balance between resources preservation and 

appropriate energy development. Thank you for your continuing 

efforts to find such a balance. 

Sincerely yours, 

~..l-CGo~ 

Richard T. Gale 

President 0 

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