```

[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

 
 CHALLENGES FACING DOMESTIC OIL AND GAS DEVELOPMENT: REVIEW OF BUREAU 
 OF LAND MANAGEMENT/U.S. FOREST SERVICE BAN ON HORIZONTAL DRILLING ON 
                             FEDERAL LANDS 

=======================================================================

                        JOINT OVERSIGHT HEARING

                               before the

                      SUBCOMMITTEE ON ENERGY AND 
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES

                             joint with the

                 SUBCOMMITTEE ON CONSERVATION, ENERGY, 
                              AND FORESTRY

                                 of the

                        COMMITTEE ON AGRICULTURE
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                          Friday, July 8, 2011

                               __________

            Committee on Natural Resources Serial No. 112-90
               Committee on Agriculture Serial No. 112-21

                               __________

    Printed for the use of the Committees on Natural Resources and 
                              Agriculture

         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov
      

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

72-151 PDF                       WASHINGTON : 2011 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 

                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann, 
    TN
Jon Runyan, NJ
Bill Johnson, OH

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       DOUG LAMBORN, CO, Chairman
               RUSH D. HOLT, NJ, Ranking Democrat Member

Louie Gohmert, TX                    Peter A. DeFazio, OR
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Mike Coffman, CO                     Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Dan Benishek, MI                         CNMI
David Rivera, FL                     Martin Heinrich, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Paul A. Gosar, AZ                    Betty Sutton, OH
Bill Flores, TX                      Niki Tsongas, MA
Jeffrey M. Landry, LA                Vacancy
Charles J. ``Chuck'' Fleischmann,    Edward J. Markey, MA, ex officio
    TN
Bill Johnson, OH
Doc Hastings, WA, ex officio
                                 ------                                
      

                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                        Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois         TIM HOLDEN, Pennsylvania
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas            JOE BACA, California
JEFF FORTENBERRY, Nebraska           DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio                   DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania         HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida            JIM COSTA, California
MARLIN A. STUTZMAN, Indiana          TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia                LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama                 PETER WELCH, Vermont
TIM HUELSKAMP, Kansas                MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee          GREGORIO KILILI CAMACHO SABLAN, 
RENEE L. ELLMERS, North Carolina         Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York      TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois             JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota
                                 ------                                

                           Professional Staff

                      Nicole Scott, Staff Director
                     Kevin J. Kramp, Chief Counsel
                 Tamara Hinton, Communications Director
                Robert L. Larew, Minority Staff Director
                                 ------                                

           Subcommittee on Conservation, Energy, and Forestry

                 GLENN THOMPSON, Pennsylvania, Chairman

BOB GOODLATTE, Virginia              TIM HOLDEN, Pennsylvania, 
MARLIN A. STUTZMAN, Indiana              Ranking Minority Member
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        MIKE McINTYRE, North Carolina
MARTHA ROBY, Alabama                 JIM COSTA, California
TIM HUELSKAMP, Kansas                TIMOTHY J. WALZ, Minnesota
RANDY HULTGREN, Illinois             CHELLIE PINGREE, Maine
REID J. RIBBLE, Wisconsin            MARCIA L. FUDGE, Ohio
KRISTI L. NOEM, South Dakota         GREGORIO KILILI CAMACHO SABLAN, 
                                         Northern Mariana Islands

               Brent Blevins, Subcommittee Staff Director
                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Friday, July 8, 2011.............................     1

Statement of Members:
    Holden, Hon. Tim, a Representative in Congress from the 
      Commonwealth of Pennsylvania...............................     9
        Prepared statement of....................................    10
    Holt, Hon. Rush D., a Representative in Congress from the 
      State of New Jersey........................................     3
        Prepared statement of....................................     5
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     2
        Prepared statement of....................................     3
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................    10
        Prepared statement of....................................    12
    Thompson, Hon. Glenn T., a Representative in Congress from 
      the Commonwealth of Pennsylvania...........................     6
        Prepared statement of....................................     7

Statement of Witnesses:
    Abbey, Hon. Robert, Director, Bureau of Land Management, U.S. 
      Department of the Interior.................................    13
        Prepared statement of....................................    14
    Fuller, Lee, Vice President of Government Relations, 
      Independent Petroleum Association of America...............    43
        Prepared statement of....................................    45
    Holtrop, Hon. Joel, Deputy Chief, National Forest System, 
      Forest Service, U.S. Department of Agriculture.............    17
        Prepared statement of....................................    19
    Mall, Amy, Senior Policy Analyst, Natural Resources Defense 
      Council....................................................    59
        Prepared statement of....................................    61
    Matsen, Maureen, Deputy Director of Natural Resources and 
      Senior Advisor on Energy, Commonwealth of Virginia.........    38
        Prepared statement of....................................    39
    Mayer, Craig L., General Counsel, Pennsylvania General Energy 
      Company L.L.C..............................................    48
        Prepared statement of....................................    50
    Miller, David, P.E.., Standards Director, American Petroleum 
      Institute..................................................    41
        Prepared statement of....................................    42
    Wofford, Kate Giese, Executive Director, Shenandoah Valley 
      Network....................................................    56
        Prepared statement of....................................    57

Additional materials supplied:
    Pittsburgh Tribune-Review article, ``Public water safe from 
      radioactivity throughout region'' by Timothy Puko, dated 
      June 21, 2011,.............................................    24
    New York Times article ``Drilling Down: Insiders Sound an 
      Alarm Amid a Natural Gas Rush'' by Ian Urbina, dated June 
      25, 2011, submitted for the record.........................    77
    New York Times article ``Behind Veneer, Doubt on Future of 
      Natural Gas'' by Ian Urbina, dated June 26, 2011, submitted 
      for the record.............................................    78
    Walton, Peter C., Rockingham County, Virginia................    81
                                     

JOINT OVERSIGHT HEARING ON THE ``CHALLENGES FACING DOMESTIC OIL AND GAS 
 DEVELOPMENT: REVIEW OF BUREAU OF LAND MANAGEMENT/U.S. FOREST SERVICE 
             BAN ON HORIZONTAL DRILLING ON FEDERAL LANDS.''

                              ----------                              

                          Friday, July 8, 2011

                     U.S. House of Representatives

             Subcommittee on Energy and Mineral Resources, 
             Committee on Natural Resources, joint with the

   Subcommittee on Conservation, Energy, and Forestry, Committee on 
                              Agriculture

                            Washington, D.C.

                              ----------                              

    The Subcommittees met, pursuant to call, at 10:03 a.m. in 
Room 1324, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee on Energy and Mineral Resources] 
presiding.
    Present from Subcommittee on Energy and Mineral Resources: 
Representatives Lamborn, Fleming, Thompson, Rivera, Duncan, 
Flores, Fleischmann, Holt, Sarbanes and Markey (ex officio).
    Present from Subcommittee on Conservation, Energy, and 
Forestry: Representatives Thompson, Goodlatte, Stutzman, 
Tipton, Southerland, Hultgren, Holden, Costa and Pingree.
    Mr. Lamborn. The Subcommittee hearing will come to order. 
The Chairman notes the presence of a quorum, which under 
Natural Resources Committee Rule 3(e) is two Members.
    The Natural Resources Subcommittee on Energy and Mineral 
Resources and the Agriculture Subcommittee on Conservation, 
Energy, and Forestry are meeting today for a joint oversight 
hearing to hear testimony on ``Challenges Facing Domestic Oil 
and Gas Development: Review of Bureau of Land Management/U.S. 
Forest Service Ban on Horizontal Drilling on Federal Lands.''
    Under Natural Resources Committee Rule 4(f), opening 
statements are limited to the Chairman and Ranking Member of 
the Subcommittee. In addition, opening statements will be 
offered today by the Chairman and Ranking Member of the 
Agriculture Subcommittee and, should they wish to participate, 
the full committee Chairmen and Ranking Members of both 
committees.
    In addition, I ask unanimous consent to include any other 
Members' opening statements in the hearing record if submitted 
to the clerk by close of business today. Hearing no objection, 
so ordered.
    I now recognize myself for five minutes for an opening 
statement.

 STATEMENT OF THE HONORABLE DOUG LAMBORN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Lamborn. Today the Subcommittee is meeting to review 
the future of oil and gas development on Federal lands in light 
of Administration proposals to enact complete bans on 
horizontal drilling on Federal lands.
    Earlier this year, the U.S. Forest Service of George 
Washington National Forest released a forest plan that had the 
Administration's preferred alternative as a ban on horizontal 
drilling on more than one million acres of Federal mineral 
estate. This plan as proposed by the Administration would 
essentially close the entire resource to energy development, 
eliminate a key priority in the multiple-use mission of Forest 
Service lands, and further erode our efforts to generate 
domestic energy security.
    While efforts are proposed by the Forest Service to close 
these acres to domestic development of our own natural gas, the 
Cove Point LNG terminal operated by Dominion purchased nearly 
nine million cubic feet of Norwegian natural gas just this 
year. Let me repeat that. While our Forest Service is working 
to close our American lands to all drilling, we are importing 
natural gas from Norway to meet the domestic needs of Virginia 
and Maryland.
    While the Forest Service is pursuing this ban on fracturing 
and horizontal drilling, BLM is in the process of holding 
hearings in the West to review the policies for the use of 
fracturing on Federal lands. Hydraulic fracturing. BLM Director 
Abbey was quoted earlier this year saying, ``We have not seen 
evidence of any adverse effects as a result of the use of the 
chemicals that are part of that fracking technology.''
    This is important because a 2009 BLM instruction memorandum 
says that, ``Application of directional/horizontal drilling 
technology is increasing. The BLM strongly supports this 
environmental best management practice as a means of providing 
substantial reductions in surface disturbance and overall 
impacts from oil and gas development.''
    BLM says horizontal drilling is an environmental best 
management practice and there is no evidence of any adverse 
effects, and yet the policy of this Administration now appears 
to be an outright ban starting with 1.1 million acres in 
Virginia.
    The key questions for the committee today are: How did this 
policy proposal from the Forest Service reach this point? How 
did our land managers determine that the best policy is an 
outright ban on development, and what does this portend for the 
future?
    Americans are desperate for new jobs, and today's jobs 
report says that our economy continues to struggle with only 
18,000 new jobs created in June. That is why it makes so little 
sense to ban domestic development here while we continue a 
dependence in the case of Virginia and Maryland on Norwegian 
natural gas.
    The Forest Service, as a custodian of our lands, has an 
obligation to work with a multiple-use mission to serve the 
people of Virginia and the United States by promoting the 
conservation of our resources, which undeniably should include 
the development of appropriate oil and gas resources on Federal 
lands.
    I look forward to hearing from our witnesses today.
    [The prepared statement of Mr. Lamborn follows:]

          Statement of The Honorable Doug Lamborn, Chairman, 
              Subcommittee on Energy and Mineral Resources

    Today the Subcommittee is meeting to review the future of oil and 
gas development on federal lands in light of Administration proposals 
to enact complete bans on horizontal drilling on federal lands.
    Earlier this year, the U.S. Forest Service George Washington 
National Forest released a forest plan that had the Administration's 
preferred alternative as a ban horizontal drilling on more than 1 
million acres of federal mineral estate. This plan as proposed by the 
Administration would essentially close the entire resource to energy 
development, eliminate a key priority in the multiple-use mission of 
Forest Service lands, and further erode our efforts to generate 
domestic energy security.
    While efforts are proposed by the Forest Service to close these 
acres to domestic development of our own natural gas, the Cove Point 
LNG terminal operated by Dominion purchased nearly 9 million cubic feet 
of Norwegian natural gas THIS YEAR. Let me repeat that, while our 
Forest Service is working to close our lands to all drilling, we are 
importing natural gas from Norway to meet the domestic needs of 
Virginia and Maryland.
    While the Forest Service is pursuing a ban on fracturing and 
horizontal drilling, BLM is in the process of holding hearings in the 
West to review the policies for the use of fracturing on federal lands. 
BLM Director Abbey was quoted earlier this year saying, ``''We have not 
seen evidence of any adverse effects as a result of the use of the 
chemicals that are a part of that fracking technology.''
    This is important because a 2009 BLM instruction memorandum says: 
the ``Application of directional/horizontal drilling technology is 
increasing. The BLM strongly supports this environmental Best 
Management Practice as a means of providing substantial reductions in 
surface disturbance and overall impacts from oil and gas development.''
    BLM says horizontal drilling is an ``environmental Best Management 
Practice'' and there is ``no evidence of any adverse effects'', and yet 
the policy of this Administration now appears to be an outright ban 
starting with 1.1 million acres in Virginia.
    The key questions for the Committee today is how did this policy 
proposal from the Forest Service reach this point? How did our land 
managers determine that the best policy is an outright ban on 
development and what does this portend for the future?
    Americans are desperate for new jobs and it makes little sense to 
ban domestic development here, while we continue a dependence on 
Norwegian natural gas. The Forest Service as a custodian of our lands 
has an obligation to work with a multiple-use mission, to serve the 
people of Virginia and the United States by promoting the conservation 
of our resources, which undeniably includes the development of 
appropriate oil and gas resources on Forest Lands.
    I look forward to hearing from our witnesses today.
                                 ______
                                 
    Mr. Lamborn. And I now recognize the Ranking Member, 
Representative Holt of New Jersey, for five minutes for his 
opening statement.
    Mr. Holt. Thank you. And will the Chair and Ranking Member 
of the Agriculture Subcommittee also get comments?
    Mr. Lamborn. Absolutely. Absolutely.
    Mr. Holt. Good. Thank you.

 STATEMENT OF THE HONORABLE RUSH D. HOLT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Holt. Thank you, Mr. Chairman. According to the title 
of today's hearing, there is a ban on horizontal drilling on 
Federal lands imposed by this Administration. Not true. 
Unfortunately, once again this is a hearing title which amounts 
to a broad and misleading generalization, another case of 
blowing an issue far out of proportion to score what seem to be 
political or ideological points.
    In fact, the so-called ban in question is actually one of 
seven possible alternatives of a draft environmental impact 
statement issued as part of a required update of the land 
resource management plan for the George Washington National 
Forest. So let me reiterate. No decisions have been made on 
whether or not to allow horizontal drilling in the George 
Washington National Forest.
    Now, it is appropriate that we have a hearing on it. All 
that has happened, though, is that the Forest Service is 
evaluating the environmental impacts of a number of 
alternatives as required by law, and they should be looking at 
these alternatives and we should be looking at them too.
    None of the alternatives discussed in the EIS would change 
the existing practice of allowing traditional vertical oil and 
gas drilling in George Washington Forest for the--I forget how 
many--acres that are already under lease. Twelve thousand acres 
are already under lease. Furthermore, none of the alternatives, 
it appears, are going to--well, we will look at those 
alternatives.
    Horizontal drilling is commonly used in association with 
hydraulic fracturing, and recent investigations have raised 
questions about potential water quality hazards associated with 
fracking. There is currently a study of potential effects being 
conducted by the Environmental Protection Agency.
    The Counties of Rockingham, Augusta and Shenandoah, 
Virginia, three of the largest agricultural counties in the 
State, have expressed their opposition to allowing horizontal 
drilling in the National Forest because of concerns about water 
quality. The Cities of Harrisonburg and Staunton, those cities 
have passed similar resolutions of opposition.
    To underscore the importance of being cautious about moving 
forward with hydraulic fracturing in this area, the George 
Washington National Forest protects a number of river basins, 
including the Potomac River, that provides drinking water for 
us, you here in Washington, D.C.
    Given the local concerns and the unanswered questions, the 
Forest Service I believe is acting responsibly with their 
proposed EIS and the procedure associated with it while we wait 
for the facts to be assembled, which is the point I want to 
make. I mean, even if the Forest Service were eventually to 
decide to prohibit horizontal drilling in the George Washington 
Forest, it should be based on facts, and we know it would not 
be a permanent ban.
    The Forest Service has made it clear that if natural gas 
can be accessed in nearby areas on private lands without 
adverse impacts to water quality the Forest Service should 
consider and reconsider the issue. But banned or permitted, the 
decision should be based on evidence. The distortion in the 
title of today's hearing makes me wonder how grounded in 
evidence this discussion will be.
    Now, in the last 20 years natural gas development on 
Federal lands has more than doubled, from 1.2 trillion cubic 
feet 20 years ago to about 3 trillion cubic feet last year. 
Moreover, according to the Bureau of Land Management, 90 
percent of the new natural gas wells on public lands employ 
hydraulic fracturing. So overall, U.S. natural gas production 
is at its highest level ever.
    You know, the plans for terminals to import liquified 
natural gas are being turned around because it is likely that 
there will be for as far as we can see export of natural gas. 
So those are the facts as I see them. I hope that we will 
restrict this hearing to, wherever possible, evidence and 
facts.
    I thank the Chairman.
    [The prepared statement of Mr. Holt follows:]

       Statement of The Honorable Rush D. Holt, Ranking Member, 
              Subcommittee on Energy and Mineral Resources

    Thank you Mr. Chairman.
    According to the title of today's hearing, there is a ban on 
horizontal drilling on federal lands imposed by the Administration. 
Unfortunately, once again, this is a hearing title which amounts to a 
broad and misleading generalization.
    In fact, the ``ban'' in question is actually only one of seven 
possible alternatives in a draft Environmental Impact Statement (EIS) 
issued as part of a required update to the Land and Resource Management 
Plan for the George Washington National Forest. Let me just reiterate 
that--No decisions have yet been made on whether or not to allow 
horizontal drilling in the George Washington National Forest. All that 
has happened is that the Forest Service is evaluating the environmental 
impacts of a number of alternatives as required by law. Furthermore, 
none of the alternatives discussed in the EIS would change the existing 
practice of allowing traditional, vertical oil and gas drilling in the 
George Washington Forest. It appears though, that the oil and gas 
industry is not seeing the forest for the trees.
    Horizontal drilling is commonly used in association with hydraulic 
fracturing. Recent investigations have raised questions about potential 
water quality hazards associated with fracking, and there currently is 
a study of potential effects being conducted by the Environmental 
Protection Agency. The Counties of Rockingham, Augusta, and Shenandoah, 
Virginia--three of the largest agricultural counties in the state--have 
expressed their opposition to allowing horizontal drilling in the 
National Forest because of concerns about harm to water quality. The 
City of Harrisonburg and Staunton have also passed similar resolutions 
of opposition.
    And to underscore the importance of being cautious about moving 
forward with hydraulic fracturing in this area, the George Washington 
National Forest protects a number of river basins, including the 
Potomac River that provides the drinking water supply for Washington, 
D.C. Given the local concerns and the unanswered questions, the Forest 
Service is acting responsibly with their proposed EIS while we wait for 
the facts to come in.
    Even if the Forest Service were eventually to decide to prohibit 
horizontal drilling in the George Washington Forest, it would not be a 
permanent ban. The Forest Service has made it clear that if natural gas 
can be accessed in nearby areas on private lands without adverse 
impacts to water quality, the Service could reconsider the issue.
    George Washington is famously quoted as saying, ``I cannot tell a 
lie.'' I cannot let stand the accusation that the Obama Administration 
is somehow banning horizontal drilling on public lands based on what is 
happening in the George Washington National Forest. That could not be 
further from the truth.
    In the last 20 years, natural gas development on federal lands has 
more than doubled, from 1.2 trillion cubic feet in 1991 to nearly 3 
trillion cubic feet in 2010. Moreover, according to the Bureau of Land 
Management, 90 percent of new natural gas wells on public lands employ 
hydraulic fracturing. Overall, U.S. natural gas production is at its 
highest level ever. Those are the facts. And that is the truth.
    I yield back.
                                 ______
                                 
    Mr. Lamborn. Thank you.
    I now recognize the gentleman from Pennsylvania, a Member 
of this Subcommittee and also Chairman of the Subcommittee on 
Conservation, Energy, and Forestry on the Agriculture 
Committee, Mr. Thompson, for five minutes for his opening 
statement.

STATEMENT OF THE HONORABLE GLENN THOMPSON, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Thompson. Thank you, Chairman Lamborn, Ranking Members 
Holt and Holden. I appreciate your help and interest in holding 
this important hearing.
    Since its inception, the National Forest System has been 
intended for multiple uses. This includes timber harvesting, 
recreation tourism and, yes, mineral extraction such as oil, 
gas and coal. For an example, I don't have to look any further 
than the Allegheny National Forest, which is in the 5th 
District of Pennsylvania, which I am privileged to represent.
    The world's oil industry was born there 151 years ago with 
Drake Well and since its founding 64 years later in 1923, oil 
and gas production has continued in the nearby Allegheny 
National Forest. Some will have you believe that natural 
resource production, whether it is oil, gas, coal or timber, 
and environmental stewardship are mutually exclusive. Nothing 
could be farther from the truth.
    And for those who think otherwise, I certainly invite them 
to Pennsylvania and the Allegheny National Forest to see for 
themselves. Through effective management practices, we have 
successfully produced oil, gas and timber for decades in the 
ANF while protecting our environment. In fact, we boast of 
having the finest hardwoods in the world, and because of their 
value I believe that the ANF is one of the few--perhaps the 
only--National Forest which actually makes money for the Forest 
Service.
    Because we are blessed with abundant natural resources, 
Pennsylvania is again returning to its energy roots with the 
production of natural gas from the Marcellus shale field, which 
many experts feel was one of the largest gas plays in the 
world. The Allegheny National Forest is part of that play.
    Through modern technology, especially horizontal drilling 
and hydraulic fracturing, production of oil and natural gas 
from our many shale formations are now possible. In plain 
English, no fracturing and no horizontal drilling means no 
natural gas or oil from shale and no energy security.
    The Marcellus has brought us upwards of 100,000 new jobs to 
Pennsylvania alone, significant new tax revenues to the state, 
over $200 million to build new roads, none of that with 
taxpayer dollars, and an unimaginable amount of natural gas to 
the country. After only four years of production and being less 
than 10 percent developed, the Marcellus is already providing 
the entire Northeast United States with over 10 percent of its 
natural gas.
    Aside from the jobs, both direct and indirect, and the 
public and private revenue it creates, the shale boom is 
helping to stabilize the natural gas market in the United 
States. Access to affordable natural gas directly impacts 
consumers. Because of the production of shale gas brought by 
the horizontal drilling, our citizens can afford to heat their 
homes this winter, and the price of many goods produced from 
natural gas saw no increase in cost because of gas prices.
    Natural gas, which sold four years ago for a record price 
of over $13 per thousand cubic feet, has been stabilized to 
around $4.50. Dow Chemical and other petrochemical companies 
were set to move offshore just a few years ago because of high 
and unsustainable natural gas prices in the United States. 
Fortunately, because of our ability to produce shale gas 
through horizontal drilling and hydrofracturing, instead of 
moving offshore, Dow is now planning to expand its operations 
in the United States. Jobs.
    Make no mistake. Our affordable and predictable natural gas 
prices are a direct result of our ability to produce it through 
horizontal drilling and hydrofracturing. Without a doubt, 
development will have its challenges, but I am convinced that 
we can meet these challenges and do it effectively as we have 
for decades.
    Knowing of our need for affordable and reliable energy, 
which we are blessed with in this country, I am extremely 
concerned about the Forest Service placing a moratorium on 
applications for permits to drill any ``horizontal well and 
associated hydraulic fracturing.'' Not only does this undermine 
the Service's mission of multiple use, but it also comes at a 
time when we are becoming more dependent on foreign sources and 
when world energy consumption continues to increase while the 
Federal Government continues to stymie development of our own 
natural resources.
    Let us not forget that oil, gas, coal and all minerals and 
timber on Federal lands are not owned by the Forest Service, 
but by the citizens of our country, who would greatly benefit 
from their production. Any action to prevent their development 
should be based on sound science and fact, not philosophy and 
not political agendas.
    The basic question I have regarding the decision by the 
Department of Agriculture and the Forest Service to place or 
propose a moratorium on even processing a permit to drill 
utilizing hydraulic drilling and hydraulic fracturing is when 
and why did they come to the conclusion that these processes 
should be banned in the forest? Did they perform environmental 
and economic analyses? Do they have any evidence that 
horizontal drilling and hydraulic fracturing are inherent 
threats to the forest, human health or our water supply?
    It appears to me the Forest Service has no credible reason 
for moving in this direction. Now, I assume the Forest Service 
witnesses think otherwise and they will present logical, 
science-based facts for their proposed moratorium. I do want to 
thank our witnesses on this first panel, Director Abbey, Deputy 
Director Holtrop, Director Ferguson and Supervisor Hyzer. We 
look forward to your testimonies and the opportunity to have a 
productive dialogue.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Thompson follows:]

   Statement of The Honorable GT Thompson, Chairman, Subcommittee on 
      Conservation, Energy, and Forestry, Committee on Agriculture

    Chairman Lamborn, Ranking Members Holt and Holden, I appreciate 
your help and interest in holding this important hearing.
    Since its inception, the National Forest system has been intended 
for multiple-use. This includes timber harvesting, recreation, 
tourism--and yes, mineral extraction, such as oil, gas and coal.
    For an example, I don't have to look any further than the Allegheny 
National Forest (ANF) which is in the Fifth District of Pennsylvania, 
which I am privileged to represent.
    The world's oil industry was born there in 152 years ago with Drake 
well. And since its founding 64 years later in 1923, oil and gas 
production has continued in the nearby Allegheny National Forest.
    Some will have you believe that natural resource production--
whether it is oil, gas, coal or timber--and environmental stewardship 
are mutually exclusive. Nothing could be farther from the truth and for 
those who think otherwise, I invite them to Pennsylvania and the 
Allegheny National Forest to see for themselves.
    Through effective management practices, we have successfully 
produced oil, gas, and timber for decades on the ANF, while protecting 
our environment. In fact, we boast of having the finest hardwoods in 
the world and because of their value; and I believe that the ANF is one 
of few, perhaps the only National Forest which actually makes money for 
the Forest Service.
    Because we are blessed with abundant natural resources, 
Pennsylvania is again returning to its energy roots with the production 
of natural gas from the Marcellus shale field which many experts feel 
is one of the largest gas plays in the world.
    The Allegheny National Forest is part of that play.
    Through modern technology, especially horizontal drilling and 
hydraulic fracturing, production of oil and natural gas from our many 
shale formations are now possible.
    In plain English, no fracturing and horizontal drilling means no 
natural gas or oil from shale and no energy security.
    The Marcellus has brought upwards of 100,000 new jobs to 
Pennsylvania alone, significant new tax revenues to the state, over 
$200 million to build new roads, and an unimaginable amount of natural 
gas to the country.
    After only four years of production and being less than 10% 
developed, the Marcellus is already providing the entire northeast U.S. 
with over of ten percent of its natural gas.
    Aside from the jobs--both direct and indirect--and the public and 
private revenue it creates, the shale gas boom is helping to stabilize 
the natural gas market in the United States
    Access to affordable natural gas directly impacts consumers. 
Because of the production of shale gas brought about by horizontal 
drilling our citizens could afford to heat their homes this winter and 
the price of many goods produced from natural gas saw no increase in 
cost because of gas prices.
    Natural gas which sold four years ago for record prices of over $13 
per thousand cubic feet has been stabilized to around $4.50.
    Dow Chemical and other petrochemical companies were set to move 
offshore just a few years ago because of high and unstable natural gas 
prices in the Unites States.
    Fortunately, because of our ability to produce shale gas through 
horizontal drilling and hydro fracturing instead of moving off shore 
Dow is now planning to expand its operations in the U.S.
    Make no mistake: our affordable and predictable natural gas prices 
are a direct result of our ability to produce it though horizontal 
drilling and hydro fracturing.
    Without a doubt, development will have its challenges--but I am 
convinced that we can meet these challenges and do it effectively as we 
have for decades.
    Knowing of our need for affordable and reliable energy which we are 
blessed with in this country, I am extremely concerned about the Forest 
Service placing a moratorium on applications for permits to Drill any 
``horizontal well and associated hydraulic fracturing.''
    Not only does this undermine the Service's mission of multiple-use 
but it also comes at a time when we are becoming more dependent on 
foreign sources and when world energy consumption continues to 
increase, while the Federal government continues to stymie development 
of our own natural resources.
    Let's not forget that oil, gas, coal, all minerals and timber on 
federal lands are not owned by the Forest Service but by the citizens 
of our country who would greatly benefit from their production.
    Any action to prevent that development should be based on sound 
science and fact--not philosophy or political agendas.
    The basic question I have regarding the decision by the Department 
of Agriculture and Forest Service to place a moratorium on even 
processing a permit to drill utilizing horizontal drilling and 
hydraulic fracturing is when and why did they come to the conclusion 
that these processes should be banned in the forest?
    Did they perform environmental and economic analyses? Do they have 
any evidence that horizontal drilling and hydraulic fracturing are 
inherent threats to the forests, human health or our water supply?
    It appears to me that the Forest Service has no credible reason for 
moving in this direction.
    I assume the Forest Service witnesses think otherwise and they will 
present logical, science based facts for their moratorium.
    I want to thank our witnesses--Director Abbey, Deputy Chief 
Holtrop, Director Ferguson and Supervisor Hyzer. We look forward to 
your testimonies and the opportunity to have a productive dialogue.
                                 ______
                                 
    Mr. Lamborn. Thank you.
    I now recognize the gentleman from Pennsylvania and the 
Ranking Member of the Subcommittee on Conservation, Energy, and 
Forestry, Mr. Holden, for five minutes for his opening 
statement.

  STATEMENT OF THE HONORABLE TIM HOLDEN, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Holden. Thank you, Mr. Chairman. I would like to thank 
our witnesses and guests for being here this morning.
    In times of global economic instability, it is important 
that the United States continue to move toward a secure energy 
future that will have long-lasting economic benefits. This must 
include safe and responsible domestic oil and natural gas 
production as part of a broad energy portfolio.
    While there is currently no ban or moratorium on horizontal 
drilling on Federal lands, a draft management plan by the 
Forest Service proposes to not allow drilling on a parcel of 
land in the George Washington National Forest in Virginia and 
West Virginia. Following normal process for issuance of any 
forest management plan, this draft proposal is currently 
available for public comment and still open for revision.
    Drilling occurs on public lands every day, and over five 
million acres of National Forest lands are currently leased for 
oil, gas, coal and phosphate mining. Both the Forest Service 
and the Bureau of Land Management have responsibilities related 
to the approval of oil and gas leases.
    Though the Forest Service has the option to object and veto 
a plan for a forest plan, more than 7,200 applications for 
permits to drill on public lands and Indian lands are expected 
to be processed this year by BLM, up from approximately 5,000 
in 2010. America's public lands and their resources contributed 
more than $112 billion to the U.S. economy and supported more 
than a half million jobs in 2010, the bulk of which came from 
the management of mineral resources and recreation.
    The public lands managed by the BLM and the Forest Service 
are some of the nation's greatest assets, both environmentally 
and economically. I am hopeful that these agencies realize the 
economic importance of U.S. energy production.
    The natural gas industry has safely and responsibly been 
operating on taxpayer owned lands for years. This responsible 
production of domestic fuel creates tens of thousands of jobs, 
raises more revenue each year for American taxpayers than it 
spends and helps stimulate investment and innovation by 
businesses.
    I look forward to today's expert testimony and the 
opportunity to listen, learn and question those on the 
forefront of this important issue.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Holden follows:]

        Statement of The Honorable Tim Holden, Ranking Member, 
   Subcommittee on Conservation, Energy, and Forestry, Committee on 
                              Agriculture

    I would like to thank our witnesses and guests for coming today. In 
times of global economic instability, it is important that the United 
States continues to move toward a secure energy future that will have 
long-lasting economic benefits. This must include safe and responsible 
domestic oil and natural gas production as part of a broad energy 
portfolio.
    While there is currently no ban or moratorium of horizontal 
drilling on federal lands, a draft management plan by the Forest 
Service proposes to not allow drilling on a parcel of land in the 
George Washington National Forest in Virginia and West Virginia. 
Following normal process for issuance of any forest management plan, 
this draft proposal is currently available for public comment and still 
open for revision.
    Drilling occurs on public lands every day and over 5 million acres 
of National Forest Lands are currently leased for oil, gas, coal, and 
phosphate mining.
    Both the Forest Service and the Bureau of Land Management have 
responsibilities related to the approval of oil and gas leases. Though 
the Forest Service has the option to object and veto a plan for 
forestland, more than 7,200 applications for permit to drill on public 
lands and Indian lands are expected to be processed this year by BLM--
up from approximately 5,000 in 2010.
    America's public lands and their resources contributed more than 
$112 billion to the U.S. economy and supported more than a half-million 
American jobs in 2010, the bulk of which came from the management of 
mineral resources and recreation. The public lands managed by BLM and 
the Forest Service are some of the nation's greatest assets both 
environmentally and economically.
    I am hopeful that these agencies realize the economic importance of 
U.S. energy production. The natural gas industry has safely and 
responsibly been operating on taxpayer-owned lands for years. This 
responsible production of domestic fuel has created tens of thousands 
of jobs, raises more revenue each year for American taxpayers than it 
spends and helps stimulate investment and innovation by businesses.
    I look forward to today's expert testimony and the opportunity to 
listen, learn and question those on the forefront of this important 
issue.
                                 ______
                                 
    Mr. Lamborn. Thank you.
    As each of the Chairmen and Ranking Members of the full 
committees appear, they will be given an opportunity to make an 
opening statement.
    I would now recognize the gentleman from Massachusetts, the 
Ranking Member of the Committee on Natural Resources, Mr. 
Markey, for five minutes for an opening statement.

 STATEMENT OF THE HONORABLE EDWARD J. MARKEY, A REPRESENTATIVE 
          IN CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, very much. Recent 
advancements in natural gas drilling technologies have unlocked 
natural gas supplies in shale and other unconventional 
formations across the country, leading to a significant 
expansion of natural gas production, including on BLM-managed 
public lands. Currently 90 percent of all new wells on public 
lands are hydraulically fractured.
    To explain the hydraulic fracturing process, the Talisman 
Energy Corporation came up with a cartoon coloring book that 
follows the friendly Frackasaurus named Talisman Terry through 
the natural gas drilling process. The lovable dinosaur 
playfully promotes the benefits of natural gas and paints a 
picture of a magical world filled with smiling rocks and 
grinning animals. The problem is that unless you are a 
Frackasaurus named Talisman Terry, this world does not exist.
    In fact, the word talisman means lucky charm, which is what 
everyone else will need if you listen to Talisman Terry, 
because in the absence of real safety procedures put in place, 
everyone will need a talisman, a lucky charm, an object with 
magical powers. I understand why you would name your 
corporation that, but I don't think we should base our public 
health and safety laws upon that premise.
    For communities around this country, the expansion of 
natural gas drilling and hydraulic fracturing has meant 
contamination of water supplies, loss of property value, 
deteriorating health conditions, dead livestock and destruction 
of pristine forests and agricultural lands.
    A recent series of investigative reports in The New York 
Times have highlighted some of the potential risks of natural 
gas drilling and inconsistent efforts to regulate this booming 
industry. For example, The Times reported that wastewater from 
hydraulic fractured wells is often contaminated with toxic 
heavy metals, highly corrosive salts, cancer causing chemicals, 
such as benzine and radioactive elements.
    A large amount of this wastewater is disposed in municipal 
sewerage treatment plants that are not capable of removing the 
contaminants. This wastewater discharge can also enter into 
local waterways, and the equipment failure can cause tens of 
thousands of gallons of chemical wastewater to spew out of the 
well and into nearby creeks.
    These fluids are so toxic that a study by Forest Service 
researchers published earlier this week found that when 
fracturing fluids were spilled in the forest they killed all 
plants and trees in the area. Without proper oversight, the 
disposal of drilling wastewater poses threats to agricultural 
lands, aquatic life and human health, particularly when public 
drinking water systems rely on waterways where waste is being 
discharged.
    To further cloud the problem, the oil and gas industry 
enjoy exemptions or exclusions from key parts of at least seven 
of the 15 major Federal environmental laws designed to protect 
public health, air and water, including the Safe Drinking Water 
Act and the Clean Water Act. Many of these companies have also 
refused to disclose the contents of their fracturing fluids.
    A century ago when Congressman Weeks of Massachusetts 
guided into law the landmark legislation that allowed the lands 
that make up the George Washington National Forest to be 
purchased from private individuals, this protected forestland 
and habitat for hundreds of animals, which drives tourism for 
the local economy and provides a safe source of drinking water 
to almost 300,000 local residents. Even more so, although this 
forest is located in Virginia, it protects the source of water 
that feeds our faucets right here in Washington, D.C.
    While horizontal drilling has never occurred in the George 
Washington National Forest, expansion of these technologies 
without adequate safety and oversight could threaten natural 
resources and has the potential to turn stretches of forest 
into lifeless dunes, an environment that would only support the 
imaginary Terry the Frackasaurus.
    While the discovery of new gas resources creates a domestic 
energy and economic opportunity and we should try to capture 
that economic opportunity, we must also ensure that this 
exploration and production of natural gas is done safely and 
responsibly and leaves us with a forest full of trees for 
another century and not a chemical wasteland.
    I thank you, Mr. Chairman.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    Thank you Chairman Hastings.
    Recent advancements in natural gas drilling technologies have 
unlocked natural gas supplies in shale and other unconventional 
formations across the country leading to a significant expansion of 
natural gas production, including on BLM-managed public lands. 
Currently 90% of all new wells on public lands are hydraulically 
fractured.
    To explain the hydraulic fracturing process, Talisman Energy 
Corporation came up with a cartoon coloring book that follows the 
friendly FRACK-A-SAURUS named ``Talisman Terry'' through the natural 
gas drilling process. The loveable dinosaur playfully promotes the 
benefits of natural gas and paints a picture of a magical world filled 
with smiling rocks and grinning animals. The problem is that unless you 
are a ``FRACK-A-SAURUS'' named ``Talisman Terry,'' this world doesn't 
exist. For communities around this country the expansion of natural gas 
drilling and hydraulic fracturing has meant contamination of water 
supplies, loss of property value, deteriorating health conditions, dead 
livestock, and destruction of pristine forest and agricultural lands.
    A recent series of investigative reports in The New York Times have 
highlighted some of the potential risks of natural gas drilling and 
inconsistent efforts to regulate this booming industry.
    For example, The Times reported that wastewater from hydraulic 
fractured wells is often contaminated with toxic heavy metals, highly 
corrosive salts, cancer causing chemicals such as benzene, and 
radioactive elements. A large amount of this wastewater is disposed in 
municipal sewage treatment plants that are not capable of removing the 
contaminants. This wastewater discharge can also enter into local 
waterways as was the case in Pennsylvania, 3 months ago, when equipment 
failure caused tens of thousands of gallons of chemical-laced water to 
spew out of the well and into a nearby creek.
    These fluids are so toxic that a study by Forest Service 
researchers, published earlier this week, found that when fracturing 
fluids were spilled in the forest they killed all plants and trees in 
the area.
    Without proper oversight, the disposal of drilling wastewater poses 
threats to agricultural lands, aquatic life and human health, 
particularly when public drinking water systems rely on waterways where 
waste is being discharged.
    To further cloud the problem, the oil and gas industry enjoy 
exemptions or exclusions from key parts of at least 7 of the 15 major 
federal environmental laws designed to protect public health, air and 
water, including the Safe Drinking Water Act and the Clean Water Act. 
Many of these companies have also refused to disclose the contents of 
their fracturing fluids.
    A century ago, Rep. Weeks of Massachusetts guided into law the 
landmark legislation that allowed the lands that make up the George 
Washington National Forest to be purchased from private individuals. 
This protected forestland is habitat for hundreds of animals, drives 
tourism for the local economy, and provides a safe source of drinking 
water to almost 300,000 local residents. Even more so, although this 
forest is located in Virginia, it protects the source of water that 
feeds our faucets right here in Washington, DC.
    While horizontal drilling has never occurred in the George 
Washington National Forest expansion of these technologies without 
adequate safety and oversight could threaten natural resources and has 
the potential to turn stretches of forest into lifeless dunes--An 
environment that would only support the imaginary Terry the FRACK-A-
SAURUS.
    While the discovery of new gas resources creates a domestic energy 
and economic opportunity, we must ensure that this exploration and 
production for natural gas is done safely and responsibly and leaves us 
with a forest full of trees for another century and not a chemical 
wasteland.
                                 ______
                                 
    Mr. Lamborn. OK. Thank you.
    We will now hear from our witnesses. I would like to invite 
forward The Honorable Bob Abbey, Director of the Bureau of Land 
Management; The Honorable Joel Holtrop, Deputy Chief of the 
U.S. Forest Service, accompanied by Mr. Tony Ferguson, Director 
of Minerals and Geology Management, USDA Forest Service, and 
Ms. Maureen Hyzer, Forest Supervisor of the George Washington 
and Jefferson National Forests.
    Thank you all for being here. Like all our witnesses, your 
written testimony will appear in full in the hearing record, so 
I ask that you keep your oral statements to five minutes as 
outlined in our invitation letter to you and under Committee 
Rule 4(a). Our microphones are not automatic, so you need to 
turn them on when you are ready to begin talking.
    I also want to explain how the timing lights work. When you 
begin, the clerk will start the clock and a green light will 
appear. After four minutes a yellow light will appear, and 
after five minutes the red light comes on. At that point I 
would ask you to conclude.
    Mr. Abbey, you may begin. Thank you all for being here.

STATEMENT OF THE HONORABLE BOB ABBEY, DIRECTOR, BUREAU OF LAND 
          MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Abbey. Thank you. Chairman and Members of the 
Subcommittee, once again it is my honor to appear before the 
Members here to talk about the BLM's role in the responsible 
development of oil and gas resources from our public lands and 
the Federal onshore mineral estate.
    Because there is no BLM ban on directional drilling, my 
testimony today is intended to provide an overview of our oil 
and gas leasing program and policies, which include 
implementing leasing reforms, planning for development in the 
National Petroleum Reserve in Alaska, continuing timely 
processing of drilling permits, improving inspection, 
enforcement and production accountability and reviewing 
hydraulic fracturing policies and practices.
    Secretary of the Interior Salazar has emphasized that as we 
move toward the new energy frontier, conventional energy 
resources from BLM-managed public lands will continue to play a 
critical role in leading the nation's energy needs. 
Facilitating the efficient, responsible development of domestic 
oil and gas resources is part of this Administration's broad 
energy strategy that will protect consumers, help reduce our 
dependence on foreign oil, create well paying jobs and provide 
revenues and economic activity to communities.
    In Fiscal Year 2010, more than 114 million barrels of oil 
were produced from the BLM-managed mineral estate, the most 
since 1997. Also in 2010, the nearly three trillion cubic feet 
of natural gas produced from public lands made it the second 
most productive year on record. Federal oil and gas royalties 
in 2010 exceeded $2.5 billion, half of which were paid directly 
to the states where the development occurred.
    Leasing reforms that the Bureau of Land Management put in 
place in May of 2010 established an orderly, open and 
environmentally sound process for developing oil and gas 
resources on public lands. These reforms focused on making oil 
and gas leasing more predictable, increasing certainty for 
stakeholders, including the industry, and restoring needed 
balance with comprehensive, up-front analysis added to the 
process.
    In the 23 million acre National Petroleum Reserve in 
Alaska, the BLM has an active leasing program underway. Over 
1.6 million acres are currently under lease in that area. The 
BLM has offered six lease sales in the NPRA over the last 12 
years. We plan to hold a lease sale in December of 2011 and 
each year thereafter.
    Through careful planning, the BLM's leasing program in the 
National Petroleum Reserve in Alaska ensures that exploration 
and development of its oil and natural gas resource is done in 
a manner that protects wildlife and habitat and honors the 
subsistence values of Alaskan natives and rural residents. The 
BLM continues processing applications from industry for permits 
to drill on Federal and Indian lands. So far this year, the BLM 
received over 2,600 applications for permits to drill and 
processed over 2,800.
    We recognize that oil and gas development is a market 
driven activity. It is industry's choice as to when or even 
whether to start drilling a well within the two-year period 
after an application for drilling has been approved. As of June 
1, industry has not yet started drilling on nearly 7,100 
applications for permits to drill that have already been 
approved by the Bureau of Land Management.
    To improve inspection, enforcement and production 
accountability, we have developed a strong technical 
certification program for all of our oil and gas field 
inspectors. Our personnel completed over 31,000 inspections in 
Fiscal Year 2010. These inspections ensure that lessees meet 
environmental and safety requirements and that the reported oil 
and gas volumes match the actual production on the ground.
    Recently we have seen increasing interest in the use of 
hydraulic fracturing techniques to stimulate natural gas 
production. The BLM is proactively engaging the public, states 
and industry on this issue. In April of 2011, the BLM held a 
series of regional public forums on the use of hydraulic 
fracturing. Over 600 members of the public participated in 
these forums.
    Consistent with the framework presented by the President's 
Blueprint for a Secure Energy Future, the BLM is working to 
ensure that the potential oil and natural gas development on 
our public lands is realized.
    Mr. Chairman, again it is a pleasure for me to be here, and 
I would be happy to answer any questions that the Members might 
have.
    [The prepared statement of Mr. Abbey follows:]

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

    Mr. Chairmen and Members of the Subcommittees, thank you for the 
opportunity to appear here today to discuss the Bureau of Land 
Management's (BLM) role in the Administration's efforts to facilitate 
the responsible development of oil and gas resources from our public 
lands and Federal onshore mineral estate. With respect to the title of 
this oversight hearing, I note for the record that the BLM has no ban 
on directional drilling and, as a matter of policy, the Bureau 
generally encourages its use where appropriate to protect sensitive 
surface resources. Because there is no BLM ban on directional drilling, 
my testimony will provide an overview of the BLM's oil and gas program 
and policies.
    The BLM, an agency of the U.S. Department of the Interior 
(Department), is responsible for protecting the resources and managing 
the uses of our nation's public lands, which are located primarily in 
12 western states, including Alaska. The BLM administers more land--
over 245 million surface acres--than any other Federal agency. The BLM 
manages approximately 700 million acres of onshore subsurface mineral 
estate throughout the Nation, and provides Indian fiduciary services. 
We work closely with surface management agencies in the management of 
this subsurface mineral estate.
Background
    Secretary Salazar has emphasized that as we move toward the new 
energy frontier, the development of conventional energy resources from 
BLM-managed public lands will continue to play a critical role in 
meeting the Nation's energy needs. The BLM strives to achieve a balance 
between oil and gas production and protection of the environment. 
Facilitating the efficient, responsible development of domestic oil and 
gas resources is part of the Administration's broad energy strategy 
that will protect consumers and help reduce our dependence on foreign 
oil. Well-paying jobs are often associated with oil and gas exploration 
and development, and provide needed revenues and economic activity to 
communities. In Fiscal Year (FY) 2010, onshore Federal oil and gas 
royalties exceeded $2.5 billion, approximately half of which was paid 
directly to the states in which the development occurred.
    The BLM is working diligently to fulfill its part in securing 
America's energy future. In addition to actively supporting the 
development of renewable energy resources, the BLM currently manages 
more than 40 million acres of onshore oil and gas leases. In FY 2010, 
onshore oil production from public lands increased by 5 million barrels 
from the previous fiscal year as more than 114 million barrels of oil 
were produced from the BLM-managed mineral estate--the most since FY 
1997. Meanwhile, the nearly 3 trillion cubic feet of natural gas 
produced from public lands made 2010 the second-most productive year of 
natural gas production on record. In 2010, conventional energy 
development from public lands produced 14.1 percent of the Nation's 
natural gas, and 5.7 percent of its domestically produced oil.
    In achieving these production milestones, the BLM is working on a 
variety of fronts to ensure that development is done efficiently and 
responsibly--including implementing leasing reforms; carefully planning 
for development in the National Petroleum Reserve in Alaska (NPR-A); 
continuing to process drilling permits in a timely fashion; improving 
inspection, enforcement, and production accountability; pursuing 
royalty reforms; and reviewing hydraulic fracturing policies and 
practices.
Leasing Reforms
    Current and future lease sales are benefitting from much-needed 
reforms that the BLM put in place in May of 2010. In the decade between 
1998 and 2009, the percentage of leases protested jumped from 1 percent 
to 49 percent. The BLM was investing vast amounts of staff time and 
attention in defending time-consuming and costly lawsuits, and 
revisiting the leasing process after receiving direction from the 
courts. The result of these challenges was judicial restraints on 
development, job loss, and diminished access to energy resources.
    In our leasing reforms, the BLM decided to take a front-loaded 
approach, offering an increased opportunity for public participation 
and a more thorough environmental review process and documentation. The 
reforms enhance the BLM's ability to resolve protests prior to lease 
sales. Using these methodologies in Wyoming, the BLM in the first 
quarter of FY 2011 was able to resolve many protested leases and 
released monies held in escrow due to the protests.
    The BLM reforms established a more orderly, open, and 
environmentally sound process for developing oil and gas resources on 
public lands. They focus on making oil and gas leasing more 
predictable, increasing certainty for stakeholders including industry, 
and restoring needed balance with comprehensive up front analysis added 
to the development process. These reforms require adequate planning and 
analysis to identify potential areas where the leasing would not 
compromise the BLM's multiple-use land management mission, and include:
          Engaging the public in the development of Master 
        Leasing Plans prior to leasing in certain areas where resource 
        conflicts are known to exist and where significant new oil and 
        gas development is anticipated. The intent is to fully consider 
        other important natural resource values before making a 
        decision on leasing and development in an area;
          Ensuring potential lease sales are fully coordinated 
        both internally and externally, including public participation, 
        and interdisciplinary review of available information, as well 
        as on-site visits to parcels prior to leasing when necessary to 
        supplement or validate existing data; and
          Requiring an ``extraordinary circumstances'' review 
        screen before applying the categorical exclusions in the Energy 
        Policy Act of 2005 to oil and gas drilling activities on BLM 
        lands. This, as well as the other reforms identified above, are 
        helping to provide increased rigor on the front end of the 
        leasing process so that leases will be better able to withstand 
        outside scrutiny--ultimately making the development process 
        more efficient.
National Petroleum Reserve in Alaska (NPR-A)
    Through a careful public planning process, the BLM has in place an 
active leasing program in the National Petroleum Reserve in Alaska 
(NPR-A)--a nearly 23 million-acre area on the north slope of Alaska. In 
2010, the U.S. Geological Survey estimated that 896 million barrels of 
conventional, undiscovered oil and 53 trillion cubic feet of 
conventional, undiscovered gas were within NPR-A and adjacent State 
waters. The BLM has offered lease sales in the NPR-A in 1999, 2002, 
2004, 2006, 2008, and 2010, and over 1.6 million acres are currently 
under lease in the area. In December 2011, the BLM plans to conduct a 
lease sale of additional tracts, and expects to hold a lease sale in 
2012 and each year thereafter. The BLM's leasing program in the NPR-A 
ensures that safe and responsible exploration and development of 
domestic oil and natural gas resources can be done in a manner that 
also protects wildlife and habitat, and honors the subsistence values 
of Alaska Natives and rural residents. Further, the Bureau is engaged 
in a planning process for the entire NPRA that should help identify 
long-term leasing and infrastructure goals (to support both onshore and 
offshore oil and gas development) as well as resource conservation 
goals.
Permitting
    Prior to the drilling of a well, BLM is required to process 
applications for permit to drill (APDs). The BLM processed over 5,200 
such permits in Fiscal Year 2010. As of June 1, 2011, the BLM has 
received 2,688 APDs (Federal and Indian lands), and has processed 2,885 
APDs (Federal and Indian lands). About 7,080 APDs on BLM and Indian 
lands have been approved by BLM, but not yet drilled by industry. 
Historically, BLM's experience has been that that demand for drilling 
permits is a function of market conditions and national energy 
consumption, and we expect the numbers of APDs received to increase as 
the economy continues to improve.
Inspection, Enforcement, & Production Accountability
    Of paramount importance, the BLM is committed to ensuring oil and 
gas production is carried out in a responsible manner. We continue to 
work to strengthen our oil and gas inspection, enforcement, and 
production accountability program. As part of this effort, the BLM has 
developed a strong technical certification program for all of our oil 
and gas field inspectors, who completed over 31,000 inspections in FY 
2010. These inspections ensure that lessees meet important 
environmental and safety requirements, and that the reported oil and 
gas volumes match the actual production on-the-ground. The BLM also has 
begun using a risk-based inspection strategy for production 
inspections, inspecting first those leases that present the highest 
risk according to the strategy. The BLM plans to expand this risk-based 
strategy to the other types of inspections it performs with the goal of 
maximizing the efficient use of inspection staff to meet inspection 
goals and requirements.
Royalty Reform
    The Administration believes that American taxpayers should receive 
a fair return on the development of energy resources on their public 
lands. A 2008 Government Accountability Office (GAO) report suggests 
that taxpayers could be receiving a better return from Federal oil and 
gas resources in some areas. Subsequent GAO reports have reiterated 
this conclusion. The BLM and the Bureau of Ocean Energy Management, 
Regulation, and Enforcement are cooperating to pursue an international 
study of approaches to oil and gas revenue collection. The study should 
be completed and published later this year.
Hydraulic Fracturing
    The use of hydraulic fracturing techniques to stimulate natural gas 
production on Federal lands has been the subject of increasing interest 
in the past few years. The Department has been monitoring the 
developments around hydraulic fracturing and proactively engaging the 
public, states, and industry on this important topic.
    As part of the Department's proactive efforts to ensure that oil 
and gas development is taking place on public lands in a responsible 
and environmentally sustainable manner, the BLM held a series of 
regional public forums in April 2011 to discuss the use of hydraulic 
fracturing. The sessions were held in North Dakota, Colorado, and 
Arkansas--states that have experienced significant increases in natural 
gas development on Federal lands or on leases issued by the BLM.
    The forums provided attendees with an introduction to the hydraulic 
fracturing process and the relevant BLM regulatory authorities. 
Attendees also heard presentations from state oil and gas regulators, 
state water regulators, oil and gas industry representatives, 
environmental organizations, sportsmen's groups, landowner groups, 
tribal representatives, and academics. Over 600 members of the public 
attended and participated in the forums. Issues raised by members of 
the public and panel members included best management practices, 
disclosure of the chemicals used in hydraulic fracturing fluids, well 
construction and integrity, production wastewater management, and other 
techniques for protecting drinking water resources.
    As you may know, other agencies are also actively engaged on this 
issue. Earlier this year, the Environmental Protection Agency (EPA) 
commenced a four-year Congressionally-mandated study of hydraulic 
fracturing. In addition, the Secretary of Energy's Advisory Board 
Subcommittee on Hydraulic Fracturing is currently developing initial 
recommendations on hydraulic fracturing, and the BLM looks forward to 
reviewing its recommendations.
Conclusion
    Consistent with the framework presented by the President's 
Blueprint for a Secure Energy Future, the BLM is working to secure our 
energy future by ensuring the potential oil and natural gas development 
on our public lands is realized. We are pursuing the safe, responsible, 
and efficient development of these energy resources here at home.
    The BLM is committed to encouraging responsible energy development 
on the public lands and to ensuring that the American people receive a 
fair return for the public's resources. We are mindful of our 
responsibility for stewardship of natural resources and public assets 
that generate substantial revenue from Federal onshore oil and gas 
royalties directed to the U.S. Treasury and to the states. Mr. 
Chairmen, thank you for the opportunity to testify on the BLM's oil and 
gas program policies and activities. I will be pleased to answer any 
questions you may have.
                                 ______
                                 
    Mr. Lamborn. Thank you for your testimony. We would like to 
now hear from the next witness, Mr. Holtrop.

  STATEMENT OF THE HONORABLE JOEL HOLTROP, DEPUTY CHIEF, U.S. 
    FOREST SERVICE; ACCOMPANIED BY TONY FERGUSON, DIRECTOR, 
   MINERALS AND GEOLOGY MANAGEMENT, USDA FOREST SERVICE, AND 
  MAUREEN HYZER, SUPERVISOR, GEORGE WASHINGTON AND JEFFERSON 
                        NATIONAL FORESTS

    Mr. Holtrop. Thank you for the opportunity to provide 
testimony today on challenges facing domestic oil and gas 
development. Accompanying me today are Tony Ferguson, our 
Director of Minerals and Geology Management, and Maureen Hyzer, 
Supervisor of the George Washington and Jefferson National 
Forests.
    To begin, I want to be clear. The U.S. Forest Service has 
no policy, nor do we have any plans to develop any policy, to 
ban horizontal drilling and the associated hydraulic 
fracturing. I also want to emphasize that forest plans are 
place-based plans based on local community concerns which we 
take very seriously.
    The Forest Service is committed to doing our part to 
contribute to the nation's energy goals, while at the same time 
protecting the landscapes and watersheds that are precious to 
so many. The Forest Service and the BLM work closely in 
managing and delivering the mineral and energy programs in the 
United States. The agencies follow congressionally authorized 
mandates that allow for the responsible development of domestic 
energy and mineral resources.
    Generally speaking, the Forest Service manages the surface 
National Forest System lands while the BLM manages the 
subsurface. The BLM issues leases for exploration and 
development of energy minerals after receiving consent from the 
Forest Service for leasing those National Forest System lands.
    The Forest Service bases its decision on whether to consent 
to leasing on guidance provided in our forest plans. Forest 
plans guide the management of National Forest System lands and 
are developed in an open process gathering input from local and 
state government, interest groups and private citizens. In the 
forest planning process, the agency strives to balance resource 
development with protecting the landscapes and watersheds that 
communities depend upon.
    The current oil and gas production on National Forest 
System lands is sizable. 16.7 million barrels of oil and 194 
million cubic feet of natural gas were produced in 2010 from 
almost 3,200 Federal wells on National Forest System lands. In 
addition, there are almost 12,800 additional wells located on 
National Forest System lands where the subsurface is privately 
owned, the majority of which are located on the Allegheny 
National Forest in Pennsylvania.
    In Fiscal Year 2010, production from Federal wells alone 
generated an estimated $361 million in payments to the U.S. 
Treasury. A large portion of this revenue is returned to states 
and counties. The Forest Service is committed to providing 
these energy resources and their benefits to the American 
people in a way that is consistent with our mission to 
safeguard the health, diversity and productivity of our 
nation's forests and grasslands.
    We understand that some Members of the Subcommittees are 
concerned about the Draft Forest Plan for the George Washington 
National Forest in Northern Virginia and West Virginia that 
proposes several options for public comment. The preferred 
option provides for oil and gas leasing, but would prohibit 
horizontal drilling and associated hydraulic fracturing in 
certain areas of the forest. This draft plan includes several 
alternatives which would allow for horizontal drilling.
    We will carefully consider all public comments prior to the 
regional forester making a final decision in the George 
Washington National Forest plan. The Forest Service is 
accepting comments on the draft Forest Plan through September 
1. As with all our forest plans, this plan is place specific 
based on the particular circumstances of the George Washington 
National Forest and does not represent a broader policy with 
regard to hydraulic fracturing.
    There are no Forest Service discussions or efforts underway 
to develop a national policy to ban horizontal drilling. On the 
contrary, the Administration believes that the recent 
technological advances that have allowed industry to access 
abundant reserves of natural gas, particularly from shale 
formations, provides enormous potential benefits to the country 
as long as it is done in a way that protects public health and 
the environment.
    The Environmental Protection Agency is currently studying 
potential impacts to water resources from hydraulic fracturing, 
and a subcommittee of the Secretary of Energy Advisory Board is 
developing recommendations on practices and steps that can be 
taken to improve the safety and environmental performance of 
shale extraction. The Forest Service will move forward to allow 
the safe and responsible development of domestic oil and gas 
resources consistent with the expert recommendations from these 
and other efforts.
    Thank you for the opportunity to provide information about 
the oil and gas program on the National Forests and clarify the 
situation related to horizontal drilling and associated 
hydraulic fracturing. I look forward to answering any questions 
you may have.
    [The prepared statement of Mr. Holtrop follows:]

   Statement of Joel Holtrop, Deputy Chief, National Forest System, 
          U.S. Forest Service, U.S. Department of Agriculture

    Chairman Lamborn, Chairman Thompson, Ranking Member Holden, Ranking 
Member Holt and members of the Subcommittees, thank you for the 
opportunity to provide testimony today on ``Challenges Facing Domestic 
Oil and Gas Development: A Review of Bureau of Land Management/U.S. 
Forest Service Ban on Horizontal Drilling on Federal Lands.'' I am Joel 
Holtrop, Deputy Chief of the National Forest System. Accompanying me 
today is Tony Ferguson, Director of Minerals and Geology Management and 
Maureen Hyzer, Supervisor of the George Washington and Jefferson 
National Forests.
    To begin, I want to be clear, the U.S. Forest has no policy nor do 
we have any plans to develop any policy to ban horizontal drilling and 
the associated hydraulic fracturing. I also want to emphasize that 
Forest Plans are place based plans, based on local community concerns 
which we take very seriously.
    We would like to first describe the role of the U.S. Forest Service 
in oil and gas leasing and operations on National Forest System (NFS) 
Lands, then provide the committees with an overall scope of the oil and 
gas program on the NFS lands, and finally directly address concerns 
regarding horizontal drilling which have prompted this hearing. The 
Forest Service is committed to doing our part to contribute to the 
nation's energy goals while at the same time protecting the landscapes 
and watersheds that are precious to so many.
    The Forest Service and the Bureau of Land Management (BLM) work 
closely in managing and delivering the mineral and energy program in 
the United States. The agencies follow Congressionally authorized 
mandates that allow for the responsible development of domestic energy 
and mineral resources. Generally speaking, the Forest Service manages 
the surface of National Forest System lands while the BLM manages the 
subsurface. The BLM issues leases for exploration and development of 
energy minerals after receiving consent from the Forest Service for 
leasing those NFS lands. The Forest Service bases its decision on 
whether to consent to leasing on guidance provided in our Forest Plans. 
Forest Plans guide the management of NFS lands and are developed in an 
open process, gathering input from local and state government, interest 
groups and private citizens. In the Forest Planning process, the agency 
strives to balance resource development with protecting the landscapes 
and watersheds that communities depend upon. Subsequently, when a 
request for an oil and gas drilling permit is received by BLM on NFS 
lands where leasing has been approved, the Forest Service and BLM 
coordinate the development of the conditions for issuing the permit, 
using their separate authorities for surface and subsurface management.
    The current oil and gas production on NFS lands is sizeable. 16.7 
million barrels of oil and 194 million cubic feet of natural gas were 
produced in 2010 from almost 3,200 ``federal'' wells on NFS lands 
(lands where the subsurface is part of the federal estate). In 
addition, there are almost 12,800 additional wells located on NFS lands 
where the subsurface is privately owned, the majority of which are 
located on the Allegheny National Forest in Pennsylvania. In fiscal 
year (FY) 2010, production from ``federal wells'' generated an 
estimated $361 million in bonus and royalty payments to the U.S. 
Treasury. A large portion of this revenue will be returned to states 
and counties, specifically 25% of the revenue from Acquired Lands, 25% 
of the revenue from National Grasslands, and 50% of the revenue from 
Public Domain Lands will be returned to the states and counties. The 
Forest Service is committed to providing these energy resources and 
their benefits to the American people in a way that is consistent with 
our mission to safeguard the health, diversity and productivity of our 
nation's forests and grasslands.
    We understand that some members of the Subcommittees are concerned 
about direction in the draft Forest Plan for the George Washington 
National Forest (GWNF) in western Virginia that proposes several 
options for public comment, one of which is a preferred option that 
provides for oil and gas leasing but would prohibit horizontal drilling 
and associated hydraulic fracturing in certain areas of the forest. 
Specifically, we understand that members of the Subcommittee have 
concerns regarding agency jurisdiction, potential impacts of drilling 
to resources such as groundwater, and decisions which would restrict 
the ability of the Forest Service to contribute to meeting the nation's 
energy demands.
    This draft plan was developed through an open and collaborative 
process with a diversity of stakeholders, including local governments 
and private citizens. It includes several alternatives besides the 
draft plan, several of which would allow for horizontal drilling. We 
are currently working to clarify the roles of our respective agencies 
in oil and gas development and will carefully consider all public 
comments prior to making a final decision in the George Washington 
National Forest Plan. The Forest Service is accepting comments on the 
Draft Forest Plan through September 1, 2011. As I noted earlier, this 
plan is place-specific based on the particular circumstances of the 
GWNF, and does not represent a broader policy with regard to hydraulic 
fracturing. There are no Forest Service discussions or efforts underway 
to develop a national policy to ban horizontal drilling. On the 
contrary, the Administration believes that the recent technological 
advancements that have allowed industry to access abundant reserves of 
natural gas, particularly from shale formations, provides enormous 
potential benefits to the country, as long as it is done in a way that 
protects public health and the environment. The Environmental 
Protection Agency is currently studying potential impacts to water 
resources from hydraulic fracturing, and a subcommittee of the 
Secretary of Energy Advisory Board is developing recommendations on 
practices and steps that can be taken to improve the safety and 
environmental performance of shale extraction. The Forest Service will 
move forward to allow the safe and responsible development of domestic 
oil and gas resources consistent with the expert recommendations from 
these and other efforts.
    Thank you for the opportunity to provide information about the oil 
and gas program on the National Forests and clarify the situation 
related to horizontal drilling and associated hydraulic fracturing. I 
look forward to answering any questions you may have.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you both for your testimony.
    A housekeeping note. We will soon be going to the Floor as 
they call votes, and it will be a lengthy series of votes. So 
when that time happens, I will remind everyone that we will 
have to leave and I will set a time for us to come back, 
hopefully giving some certainty for everyone's schedule who are 
here today, especially those of you who are witnesses.
    In fact, they have just called votes. I think we have time 
to do the first couple sets of questions for approximately 10 
minutes, two sets of five-minute questions. Then we are going 
to recess the Subcommittee and we will set a time for coming 
back. So thank you for your patience. I wish this didn't 
happen, but we don't have any control over that part of our 
schedule.
    Ms. Hyzer, as we have all read this morning--by the way, 
each Member will be recognized for five minutes for questions, 
and I will open up.
    Ms. Hyzer, as we have read this morning, our national 
unemployment, unfortunately, has risen to 9.2 percent in June 
with only 18,000 jobs generated nationwide last month. When you 
decided to include a horizontal drilling ban in your draft 
Forest Plan, did you consult with the Commonwealth of Virginia, 
or anyone else for that matter, on the impact that that would 
have on existing and future job growth in the energy 
development sector?
    Ms. Hyzer. Congressman, first of all I would like to thank 
you for asking me to this hearing and giving me the opportunity 
to answer questions about the Forest Plan. We are in a draft 
comment period, and I want to let you know that the testimony 
and statements that are made today, the transcript will be 
taken into consideration as part of the planning record.
    In answer to your question, early on we understood and 
believed that energy development was very important in 
Virginia, and that is why we decided to go ahead and address 
the need to make lands available for oil and gas leasing, so 
that was a very important consideration for us.
    Mr. Lamborn. Specifically, I asked did job growth or job 
creation factor in at all to your decision-making process thus 
far?
    Ms. Hyzer. We understood the relationship of energy 
development and jobs in Virginia, yes.
    Mr. Lamborn. So you are saying you did take that into 
account?
    Ms. Hyzer. We will continue to take that into account, and 
we welcome additional information on that subject through the 
comment period that we can take into account in the final 
decision.
    Mr. Lamborn. OK. Did you seek to find out if there was any 
horizontal drilling or hydraulic fracturing in any nearby 
public lands that may have been done in a safe and proper 
manner?
    Ms. Hyzer. In Virginia, there has yet to be any hydraulic 
fracturing done in the Marcellus shale in Virginia, so we did 
not have information available to us as to what the impacts 
would be.
    Mr. Lamborn. And anywhere else in the country, even farther 
distances away? Did you look at----
    Ms. Hyzer. This was a local base.
    Mr. Lamborn.--what I think is a good safety record of 
hydraulic fracturing and horizontal drilling?
    Ms. Hyzer. This was a local base plan and so we focused our 
analysis and our information gathering on Virginia. That is 
what our focus was, a local base. It is a community-based plan.
    Mr. Lamborn. OK. Thank you.
    Chief Holtrop, a recent study estimated that development of 
the Marcellus shale added over 44,000 new jobs in Pennsylvania, 
$389 million in state and local tax revenue, over $1 billion in 
Federal tax revenue and nearly $4 billion in value added to the 
state's economy.
    Similarly, in West Virginia it created over 13,000 new jobs 
and contributed over $220 million in Federal, state and local 
tax revenue and almost $1 billion added to the state's economy.
    When proposing possible job-killing regulations or 
administrative actions, do you do a cost/benefit analysis on 
the outcomes of local job growth and revenues?
    Mr. Holtrop. We do take into account the economic impacts 
and the implications of decisions that we make. Again, I would 
like to stress there have been no decisions made in the George 
Washington National Forest plan. It is a draft that is open for 
public comment at this time.
    But in the analysis of that or any other forest plan 
process that we go through, yes, one of the things that we take 
into account are the economic opportunities that are presented 
by the opportunities to do resource extraction or recreational 
opportunities. That is one of the things that we take into 
account, just as we take into account the environmental 
consequences or the concerns over the use of water or the 
concerns with water, et cetera.
    I think another demonstration of the importance of the jobs 
and economics is in the draft Forest Plan for the George 
Washington. The proposal is to open nearly a million acres of 
the George Washington National Forest to oil and gas leasing.
    Mr. Lamborn. OK. Thank you.
    At this point I will yield back the remaining time and I 
will recognize the Ranking Member for any questions he may have 
for five minutes.
    Mr. Holt. Thank you, Mr. Chairman.
    Mr. Abbey, let me begin with you. Much of the concern about 
hydraulic fracturing fluids have related to the types of 
chemicals that are pumped into the ground and then come back 
out of the ground sometimes with added contaminants, including 
naturally occurring radioactive materials.
    It has been reported that wastewater from hydraulically 
fractured wells in Pennsylvania and West Virginia have been 
sent to sewage plants that were not able to remove the 
radioactive contaminants--even though the levels were as high 
as 2,000 times EPA's drinking water standards and the 
radioactive water was released into waterways as it was 
reported.
    As a requirement for drilling permits on Federal lands, 
does the BLM require assurance that radioactive wastewater will 
not be dumped into rivers or onto public lands?
    Mr. Abbey. Congressman Holt, certainly water management is 
a big concern for all of us when we are addressing----
    Mr. Holt. But specifically radioactivity as we are talking 
about here.
    Mr. Abbey. The Bureau of Land Management issues our 
authorizations based upon the applicant being able to produce a 
permit from the authorizing local community or the authorizing 
officials within----
    Mr. Holt. So it goes to the state or local officials?
    Mr. Abbey. We defer to the state.
    Mr. Holt. This is not a BLM criteria?
    Mr. Abbey. Exactly. Exactly.
    Mr. Holt. As a requirement for drilling permits on Federal 
lands, does the Bureau require any radiological monitoring of 
drilling wastes for protection of either the public or the 
workers?
    Mr. Abbey. Again, we would defer back to the state or local 
government officials who have that responsibility.
    Mr. Holt. OK. In light of recent developments, do you plan 
to revise your regulations to ensure that drilling wastes are 
handled in a manner that doesn't lead to public or worker 
exposures to radioactivity?
    Mr. Abbey. Our current regulations addressing hydraulic 
fracturing on public lands and Federal minerals are 30 years 
old. We are currently reviewing those regulations to determine 
what, if any, changes we would like to make and pursue any new 
rulemaking that may be required.
    Mr. Holt. Yes. I hope you pursue that aggressively because, 
yes, fracturing has been used for decades on a very small 
scale, but on this scale this is new and so I hope you will 
pursue that.
    Mr. Holtrop, NEPA. One of the best features of the 
environmental protection law is it provides for American 
citizens to have input into the planning process, which was 
something that was lacking in previous decades. How did the 
Forest Service engage local stakeholders in the planning 
process?
    In particular I am interested in the consideration. You 
were talking about economic considerations. I am particularly 
interested in the consideration of agricultural jobs. Are you 
getting good input on that aspect?
    Let me interrupt you for just a moment. In my opening 
statement I commented that several agriculturally intensive 
counties had issued public objections.
    Mr. Holtrop. The process that the George Washington 
National Forest has gone through, as well as the process that 
occurs across the country during these forest planning 
processes, is very much, as you indicated, a public process, 
and we consider that one of the real positive benefits of the 
approach that we take to get that type of input.
    In the case of the George Washington National Forest, we 
did have public meetings through the area, the communities 
affected and interested in the George Washington. There are 
letters that we have received from three of the counties in the 
George Washington and two of the cities associated with the 
George Washington all requesting that the Forest Service take a 
hard look at, or in some cases, ask us to not allow horizontal 
drilling or hydraulic fracturing, et cetera.
    So taking those into account is one of those. Not the only 
consideration, but certainly one of the considerations that we 
would expect our local managers to do as they are determining 
what is the right course of action on a forest planning 
process.
    Mr. Holt. OK. And just a quick question, Mr. Abbey. Under 
the Mineral Leasing Act, isn't it correct that no gas deposit 
shall be leased except with the consent of the surface managing 
agency?
    Mr. Abbey. That is true.
    Mr. Holt. And that would be who?
    Mr. Abbey. In the case of the George Washington it would be 
the U.S. Forest Service.
    Mr. Holt. Thank you very much.
    Mr. Lamborn. OK. Thank you, Mr. Ranking member. We now will 
be in recess until 12:30. I don't have a crystal ball to know 
exactly when our vote series will finish. It is a lengthy vote 
series. The good news? It is the only one of the day.
    But to give certainty for all of you who came here, and we 
appreciate it, to give your testimony, as well as any other 
concerned citizens, we thought it would be good to give a time 
certain for reconvening so that you will know we won't be here 
any time before that.
    So we will reconvene at 12:30, and the Subcommittee will 
now be in recess.
    [Recess.]
    Mr. Lamborn. The Subcommittee will please come back to 
order. Thank you all for your patience. We did finish that 
lengthy vote series, and we are ready to get back into this 
important topic.
    The first panel is still seated. We appreciate your being 
here. We will get to the second panel as soon as we can. The 
next set of questions for up to five minutes is with 
Representative Thompson of Pennsylvania.
    Mr. Thompson. Thank you, Chairman Lamborn. I appreciate 
your assistance in coordinating this hearing.
    First of all, I want to ask permission to submit for the 
record and peace of mind for the Ranking Member of the Natural 
Resource Committee, who made some remarks regarding the 
radioactivity in the region regarding Marcellus shale and 
horizontal drilling.
    This is an article, June 21, 2011, that reports on a March 
study that was done by the Department of Environmental 
Protection in Pennsylvania that showed no radioactive 
contaminants in water used and produced in western Pennsylvania 
where we do a lot of horizontal drilling, so with your 
permission I would like to submit that for the record.
    Mr. Lamborn. Without objection. So ordered.
    [The June 21, 2011, Pittsburgh Tribune-Review article 
follows:]

         Public water safe from radioactivity throughout region

By Timothy Puko,
PITTSBURGH TRIBUNE-REVIEW
Tuesday, June 21, 2011

    A battery of tests has showed no radioactive contaminants in the 
water used and produced at 12 of 14 drinking water suppliers in Western 
Pennsylvania, according to state environmental regulators.
    Wastewater treatment plants and drinking water suppliers performed 
extra tests throughout March, reacting to media reports that questioned 
whether an increase in Marcellus shale drilling had led to the 
introduction of radioactive chemicals into public water.
    Industry spokesmen said the negative tests are further proof this 
isn't happening and that water is safe.
    Of the 12 drinking water suppliers, only The Tri-County Joint 
Municipal Authority in Fredericktown reported any traces of radium-228 
at all, and it was 80 percent below the maximum amount allowed, said 
Katy Gresh, spokeswoman at the Pennsylvania Department of Environmental 
Protection.
    The department is still pursuing test results from two other 
suppliers, the Carmichaels and Newell municipal authorities, she added.
    ``These test results are confirmation that safe, clean drinking 
water and responsible shale gas development can and do coexist,'' said 
Patrick Creighton, spokesman at the Marcellus Shale Coalition.
    Only six of the 14 drinking water plants submitted test results on 
dissolved solids and other secondary contaminants. Levels did meet 
pollution standards, Gresh said, noting the department still is 
pursuing the other results. The state also has asked 25 wastewater 
treatment plants for results, which weren't immediately available.
                                 ______
                                 
    Mr. Thompson. I want to first of all thank the panel for 
being here and for your testimony. I want to start with Mr. 
Holtrop with Forest Service.
    Mr. Holtrop, on page 1 of your testimony you state that, 
and I am quoting, ``U.S. Forest Service has no policy, nor do 
we have any plans to develop any policy, to ban horizontal 
drilling and the associated hydraulic fracturing.''
    I am looking for a yes or no answer to the following 
question. Does the Forest Service have a draft EIS dated April 
2011 that states, ``The surface management agency (USDA-Forest 
Service) has a moratorium on processing surface use plan of 
operations of an application for permit to drill for any 
horizontal well and associated hydraulic fracturing. The 
moratorium will end May 1, 2013.'' Is that correct that that 
exists?
    Mr. Holtrop. Could you tell me what the title of that EIS 
is? I am not familiar with it by date.
    Mr. Thompson. I sure can. I am reading it from the Federal 
Oil and Gas Leasing Stipulations, Appendix 1, Draft EIS, George 
Washington National Forest, April 2011, Section 1. My quote 
comes from Section 1. It is very prominent in the document. 
Horizontal Drilling Moratorium Stipulation.
    Mr. Holtrop. So is this the George Washington Forest Plan 
document that you are referring to?
    Mr. Thompson. George Washington is noted on here in the 
heading.
    Mr. Holtrop. OK. So what that is, it is an alternative in 
our draft Forest Plan amongst several alternatives that we are 
considering.
    Mr. Thompson. I am trying to just figure out in my own mind 
then. So this wasn't an internal exercise? It was something 
that was a proposal being considered? And yet in your testimony 
you said, ``nor do we have any plans to develop any policy.''
    Mr. Holtrop. Correct. What I am referring to, there is no 
policy. The title of the hearing had to do with a policy on a 
Forest Service ban on horizontal drilling on Federal lands.
    My statement was intended to assure you that there is no 
intent for us to develop a policy nationwide, broadly. What we 
are talking about on the George Washington is a very site 
specific, locally driven analysis, and there are a range of 
alternatives that we are looking for on the George Washington.
    Mr. Thompson. It still sounds contradicting. I did take 
from your opening testimony and Mr. Abbey's that, frankly, 
horizontal drilling and hydraulic fracturing is something that 
is embraced, and I just find this--you know, I assume that even 
the consideration of this, which really is developing a policy. 
You know, you are developing alternatives for a policy you are 
in the process of developing, which really contradicts your 
testimony.
    The potential for a moratorium was prompted by a specific 
occurrence in the National Forests of environmental degradation 
or damage from horizontal drilling and hydraulic fracturing. 
That is what I am assuming. Were environmental and economic 
assessments conducted by the Forest Service prompting the 
proposed moratorium proposal or options or whatever we want to 
call it?
    Mr. Holtrop. Yes. There is environmental analysis. There 
has been public input. We looked at all the available science 
that we had available to us that led to the range of 
alternatives that we are looking at.
    Mr. Thompson. So based on the science then there was 
actually evidence of environmental degradation and damage from 
horizontal drilling and hydraulic fracturing?
    Mr. Holtrop. The concerns had to do with both the 
potential, whether there would possibly be potential effects on 
both surface water and groundwater resources, and there was 
concern over what might be the chemical makeup of the material 
following the use for hydrofracturing.
    There is a great deal of public input from a lot of 
interests asking us to take a good, hard look at this issue and 
so we are trying to be responsive to the public's request for 
us to do so.
    Mr. Thompson. I understand public input and I appreciate 
the Forest Service takes that option, but my question was what 
does the data show? I mean, the Forest Service is involved in 
providing resources and so obviously oil and natural gas, I 
know there is a lot of it pumped out of the Allegheny National 
Forest.
    Is there data? Is there a track record? Is there 
established environmental damage and degradation that you had 
in documentation, or were these concerns of what may happen?
    Mr. Holtrop. I think probably the best way of answering 
that is as we are looking at the full range of resources values 
that we have, that we are responsible for, that there were 
concerns that were raised that we felt it was important for us 
to consider a full range of alternatives that we ought to look 
at.
    We have every intention of using whatever data is available 
to us in that data. If that science tells us that this can 
operate safely with public health and resource values accounted 
for, that is the determination that we intend to make.
    I think what we have with National Forests across the 
United States, we have a recognition that there are great 
energy values on our National Forest System. There are great 
other values as well, and there is not going to be one solution 
in each one of those situations that is going to be the right 
solution. We are going to continue to look at all of the 
resource values and all of the opportunities that come 
associated with those.
    Mr. Thompson. I am just asking. I would ask actually if you 
would forward to my office--you know, I am looking for the 
facts in terms of on forestlands whether there has been 
environmental degradation versus speculation. Yes.
    Mr. Holtrop. We will provide that information. We will 
extract much of that from the environmental impact statement, 
and we will look for other things as well to forward to you.
    Mr. Thompson. Thank you, Mr. Chairman.
    Mr. Lamborn. OK. The gentleman from Colorado is recognized 
for up to five minutes.
    Mr. Tipton. Thank you, Mr. Chairman. I appreciate you 
holding this hearing. Gentlemen, lady, thank you so much for 
being here as well.
    I am a westerner and so there are a few things that are 
very important to us--our public lands, access to energy and 
truly to jobs. Just as an aside, Mr. Holtrop, when I read 
through your testimony you noted about the importance and just 
spoke to it again of public input coming in. I really want to 
encourage you when you are looking at closing off some of our 
forestlands that you do listen to that public testimony, 
particularly in Colorado.
    But to the points that we are dealing with in this 
particular hearing, we have some real confusion. Mr. Abbey and 
Mr. Holtrop, if you could maybe answer this? We recently had 
Secretary Salazar before the Natural Resources Committee. I had 
been traveling in Colorado and met with BLM officials. They 
said that when the now defunct wildlands policy was going to be 
in place that they were not going to allow lateral drilling. 
When we spoke to the state officers they didn't know what the 
policy was going to be. Then the Secretary indicated that no, 
lateral drilling was going to be allowed.
    Can you clear this up? It seems to me that we have no basis 
to make any kind of a determination, and you haven't decided.
    Mr. Abbey. Thank you for the question. First and foremost, 
we do not have a wildlands policy at this point in time. We are 
not pursuing such a policy.
    Mr. Tipton. We appreciate that.
    Mr. Abbey. The Bureau of Land Management certainly 
recognizes the importance of horizontal drilling on public 
lands. It does lessen the footprint of drilling on these lands. 
It allows more wells to be drilled from a single location than 
individual wells being drilled vertically down. So I think both 
the U.S. Forest Service, as well as the Bureau of Land 
Management, recognizes the advantage of horizontal drilling.
    At this point in time as it relates to the public lands, we 
will continue to look at all opportunities that we have in 
responding to requests for applications to drill to see how 
best we can lessen that surface disturbance, and we will look 
at those requests on a case-by-case basis. But, as we indicated 
earlier, there is no ban on horizontal drilling.
    Mr. Tipton. When we are talking about the depth, and maybe 
you can illustrate this for us, how far below the water table 
does fracking take place? How deep are those wells below the 
water table typically?
    Mr. Abbey. It could vary from proposal to proposal.
    Mr. Tipton. Just typically.
    Mr. Abbey. Most drilling that is being done using fracking 
technology is below the groundwater level.
    Mr. Tipton. Well below?
    Mr. Abbey. In many cases well below.
    Mr. Tipton. Well below.
    Mr. Abbey. In the East that might not be the case.
    Mr. Tipton. Sir, have we ever had any evidence of 
contamination of the water table from fracking?
    Mr. Abbey. The Bureau of Land Management has never seen any 
evidence of impacts to groundwater from fracking technology, 
from the use of fracking technology on wells that have been 
approved by the Bureau of Land Management.
    Mr. Tipton. So it appears to be safe?
    Mr. Abbey. Well, we have been using that technology for a 
number of years. As long as we are diligent relative to 
reviewing the proposals to ensure well casing integrity, to 
ensure that the design of the well borings are appropriate, to 
do the monitoring and work with the states and EPA to ensure 
that all the necessary permits are required and adhered to, 
again we believe that, based upon the track record so far, that 
it is safe.
    Mr. Tipton. Very good.
    Mr. Abbey. But that doesn't take away the need to continue 
to be diligent in reviewing each of the proposals and making 
sure that appropriate monitoring takes place.
    Mr. Tipton. Great. I really appreciate that to hear the 
endorsement that it is a safe process. We do have to have the 
policies in place to make sure that we meet those safety and 
environmental standards, but it is safe to be able to proceed, 
so I do appreciate that, Director Abbey.
    Gentlemen, I have listened to several questions so far, and 
I don't believe I have actually heard the answer. Have you done 
a cost/benefit analysis?
    Ms. Hyzer. An economic analysis is part of the EIS.
    Mr. Tipton. It has not been done?
    Ms. Hyzer. Pardon me?
    Mr. Tipton. It has not been done?
    Ms. Hyzer. There is a draft EIS available for public 
comment, and it includes a chapter on the economic analysis.
    Mr. Tipton. OK. And so that is in progress?
    Ms. Hyzer. It is available for public review right now.
    Mr. Tipton. OK. Great. You know, as we were going through 
you are establishing policy, and I think part of the concern is 
obviously going to be precedent that comes into some 
consideration here.
    Both the Forest Service and the BLM are moving under the 
authority that has actually been granted by the Congress of the 
United States in terms of the developing of these policies. 
Would you gentlemen be agreeable to coming back for this 
committee, the Agricultural Committee, the Natural Resources 
Committee, before going active with your proposed regulations 
to get them back to the authoritative body of Congress for 
their review before you go active?
    Mr. Abbey. Which regulations are you referring to?
    Mr. Tipton. Any regulation.
    Mr. Abbey. We believe that we have the administrative 
authority to pursue our own regulations and policies.
    Mr. Tipton. Was that granted by Congress, sir?
    Mr. Abbey. It would be consistent with the laws that have 
been granted by Congress.
    Mr. Tipton. So would it be appropriate to bring that back 
to Congress for approval?
    Mr. Abbey. We would be happy to report back to you on our 
plans. I am not sure we would be seeking approval.
    Mr. Tipton. I think that is curious. This body has been 
elected to represent the people of the United States, and you 
are acting under the authority of Congress. I think you might 
want to maybe actually consider allowing Congress to have some 
actual input as well ultimately when we get down to some of the 
regulations.
    As I think probably every Member has heard, we are spending 
$1.75 trillion a year right now in regulatory costs in this 
country. All regulations are not bad, but I think it would be 
very appropriate for your consideration to come back to the 
body that authorized your agencies to be able to review those 
regulations rather than assuming that you have absolute 
authority.
    I yield back the balance of my time, sir.
    Mr. Lamborn. OK. Thank you.
    The next person in the order of questions is Mr. Fleming of 
Louisiana.
    Mr. Fleming. Thank you, Mr. Chairman.
    Panel, I am from the 4th District of Louisiana--Shreveport, 
Bossier City, DeSoto Parish. That is where the Haynesville 
shale is. Only three short years ago we had no idea really what 
the Haynesville shale is, was or would be in the future, and it 
has turned out that it has had a tremendous impact on our 
economy.
    $11 billion so far entering the economy, jobs, poor 
parishes that are now doing tremendously well economically. We 
see police departments, sheriff departments, infrastructure, 
all of these things being improved, local government. As I say, 
high paying jobs with good income. And we are beginning to meet 
the country's needs in terms of natural gas which, as you know, 
is the cleanest form of hydrocarbon that is now available.
    I can tell you that we have not seen any significant 
problems and so it really is beyond me to wonder now with a 9.2 
percent unemployment rate, with energy costs as high as it has 
ever been and the country in such a desperate economic 
situation and a technology which is 50, 60 years old and is 
proven safe and even the EPA in 2004 said was perfectly safe, 
why in the world would we even be thinking about banning this 
type of technology, which is so essential not just for gas, but 
probably for the future of oil as well domestically?
    So my question. For instance, Ms. Hyzer, what is the 
typical depth of drilling in the horizontal drilling process?
    Ms. Hyzer. I am not aware of that. We have no wells that 
have been drilled on the George Washington and Jefferson or the 
George Washington.
    Mr. Fleming. But I mean in a typical gas well, gas shale?
    Ms. Hyzer. I am not familiar with that.
    Mr. Fleming. Anyone else?
    Mr. Ferguson. I think it depends on what part of the 
country you are in. It is a real specific, geologic formation 
specific.
    As a general rule of thumb, most of the shale gas 
development that I have read about and not necessarily 
witnessed firsthand, there is usually a vertical well that is 
drilled anywhere from 4,000 to 5,000--
    Mr. Fleming. Just real quickly.
    Mr. Ferguson. Four to five thousand feet.
    Mr. Fleming. Four to five thousand feet. OK.
    Mr. Ferguson. And then they----
    Mr. Fleming. And where is the water table?
    Mr. Ferguson. Again, that varies from different parts of 
the country. It can be in the first couple of hundred feet, or 
it could be down as low as maybe a thousand feet.
    Mr. Fleming. All right.
    Mr. Ferguson. But near surface.
    Mr. Fleming. So the horizontal drilling--in fact usually--
is five times the depth.
    Ms. Hyzer, how many layers of casing is there as you bore 
down in the ground to get down to the horizontal level?
    Ms. Hyzer. I am not familiar with that information.
    Mr. Fleming. OK. Anyone else?
    Mr. Ferguson. It can be a number of layers, depending on 
the depth.
    Mr. Fleming. Typical.
    Mr. Ferguson. Three to four with cement. I describe it as 
the old collapsible cup concept where you start with the larger 
surface and as you go down there is more and more.
    Mr. Fleming. All right. I would say in our shale formation 
typical is six. And how many episodes are you aware where 
hydrofracking fluid has leaked into the water table through the 
casing?
    Mr. Ferguson. I am not aware of any----
    Mr. Fleming. Anybody?
    Mr. Ferguson.--that I can point to.
    Mr. Fleming. Anybody?
    [No response.]
    Mr. Fleming. Can anybody specify a single incidence of 
death as a result of a hydrofracking process and the 
hydrofracking fluid somehow contaminating the water supply? 
Anyone?
    Mr. Ferguson. I am not aware of that.
    Mr. Fleming. Serious injury?
    Mr. Ferguson. I am not aware of any.
    Mr. Fleming. So if we are talking about billions of dollars 
of impact and the possibility of transforming our energy from 
an oil-based system that we have today to at least in part 
natural gas--and, by the way, we in the United States have more 
natural gas than any place in the world as it turns out, and 
this is a fact we only found out just in the last few years.
    If we have all of this potential available to us and no 
harm to anyone, why in the world would we be considering 
banning this process? Anyone on the panel willing to answer 
that question?
    Mr. Holtrop. The purpose of us looking at the restrictions 
on the use of horizontal drilling on the George Washington 
National Forest have to do with issues around water use, the 
volumes of water that are associated with that, what would be 
the potential effects on surface water resources.
    Mr. Fleming. But we have been doing it for 60 years, sir, 
and we have no evidence that there is a problem. Why do we want 
to ban it first and then ask questions later when we have 60 
years of experience?
    Mr. Holtrop. One of the things that I think are the input 
that we are getting through this draft environmental impact 
process is going to allow us to have additional information, 
helpful information for us to make that decision.
    Mr. Fleming. You have 60 years, sir. How much do you need?
    Mr. Holtrop. I believe the horizontal drilling technology 
is more recent than 60 years, but----
    Mr. Fleming. Hydrofracking is.
    Mr. Holtrop. Hydrofracking has been around for 60 years.
    Mr. Fleming. Well, that is what we are talking about here.
    Mr. Holtrop. Well, actually we are talking----
    Mr. Fleming. And 90 percent of wells today require 
hydrofracking. We have 60 years of experience, not one single 
death, no injuries even that I know of, and yet we are going to 
ban or potentially ban the use of hydrofracking and/or 
horizontal drilling.
    Mr. Holtrop. The preferred alternative in the plan that we 
are talking about allows hydrofracking with vertical wells. It 
is the horizontal drilling is what was----
    Mr. Fleming. It is no good without horizontal drilling, 
sir.
    Mr. Holtrop. It has been used for 60 or 70 years.
    Mr. Fleming. Well, yes, but the type of shale formations 
that we have today you are going to get very little yield out 
of vertical wells. We have to go horizontal, and we are 
horizontal at two miles down so you are already below the water 
table. You hit that through the vertical drill, so if anything 
it would be safer at the horizontal level.
    Thank you. I yield back.
    Mr. Lamborn. Mr. Flores of Texas?
    Mr. Flores. Thank you, Mr. Chairman. I thank the panel for 
being here today.
    The jobs report that we got today confirms the impact of a 
couple of things. One is an out-of-control fiscal situation in 
our Federal Government and also very importantly, and I think 
taking more precedence over the economy today, is the 
regulatory overreach of our administrative agencies.
    In that regard, there seems to be a process here that is 
out of control, and I want to dig into that a little bit more, 
but before I go there I would like to ask the three witnesses 
from the Forest Service. What was the target? Was it fracking 
or was it horizontal drilling or was it both? What was it you 
were trying to shoot?
    Ms. Hyzer. We were trying to address the local government 
and community concerns with horizontal drilling and the 
excessive amount of water used in hydrofracking and the 
totality of the impacts of that--where the water comes from, 
what water comes back out again, what do you do with that 
water, the effect on the infrastructure, potential impacts on 
the infrastructure.
    Mr. Flores. OK.
    Ms. Hyzer. So we looked at a full range of seven different 
alternatives with the full range so that we could explore 
different possibilities on how to address the issue, and that 
is what we are asking comment on.
    Mr. Flores. What sort of facts and science did you use in 
coming up with that option? I mean, so you heard the local 
community say we are worried about it.
    You have people like The New York Times writing about 
fracking, and I guarantee you they don't know anything about 
fracking. You have close to two million wells worldwide that 
have been fracked successfully without any problems, yet we are 
trying to go after a problem when I am not sure there is a 
problem. What were the facts and science that you used?
    Mr. Holtrop. If I could, I think that some of the science 
that was used was the recognition that we had different 
geologic features on the George Washington than places where 
hydrofracking has already been successfully used with 
horizontal drilling, so we have a different geological 
situation in terms of the configuration of the shale and so 
that was part of what went into the analysis.
    Also what went into the analysis is there has been very 
little demand for this activity in that area because there 
seems to be more limited opportunities there, and as we are 
looking for ways that we can be responsive to the full range of 
public desires--which included no leasing, which included no 
oil and gas development from some of the local governments--
what the Forest came up with was a range of alternatives that 
looked at that full range so that we would have this type of a 
dialogue that we would be able to make a final decision from.
    Mr. Flores. Was there going to be a dialogue? What I have 
seen from a lot of the rulemaking today is they will get 
substantial numbers of substantive comments back, and those are 
all ignored and the rules become final without change. I mean, 
are you different than the other agencies we are seeing these 
days?
    Mr. Holtrop. I will not say that we are different from the 
other agencies. I suspect many of the agencies are like us in 
that we pay a great deal of attention to the public input that 
we get. We analyze the input. I would be happy to show you the 
type of analysis that we do when we do that type of public 
input.
    I can also tell you every time that we do a draft Forest 
Plan when we come out with a final Forest Plan it is different 
than what was in the draft based largely on that public 
comment.
    Mr. Flores. OK. So as I understand the option for the ban 
of horizontal drilling, vertical drilling is still an 
acceptable option. Is that correct?
    Mr. Holtrop. In the alternative, yes.
    Mr. Flores. But you do understand that the surface 
footprint of vertical drilling is much, much more invasive by a 
factor of anywhere from two to 10 times more invasive than 
horizontal?
    Mr. Holtrop. Or more. We are aware of that. That is one of 
the reasons why we do recognize the values of horizontal 
drilling when the situation calls for it, and if that is the 
right situation here we will continue to consider that.
    Mr. Flores. And as I understand it, your primary mission is 
to protect the surface, right? I mean, BLM is responsible for 
subsurface. Am I correct?
    Mr. Holtrop. Both. Well, the BLM has authority subsurface. 
We have authority for the surface. But our shared 
responsibility and our shared desire is to protect water 
resources, both surface and subsurface, as well as all the 
other resource values.
    Mr. Flores. OK. I hope that you pay lots of attention to 
the comments you get because I assume that you are going to 
receive a lot of comments.
    This ban, if it is the direction you would like to go, is 
the wrong thing to do for this economic--it is wrong for the 
country from an economic standpoint, from a job standpoint and 
from an energy standpoint. Thank you.
    Mr. Holtrop. Thanks for the input.
    Mr. Flores. I yield back.
    Mr. Lamborn. Thank you.
    I recognize the gentleman from Maryland for up to five 
minutes.
    Mr. Sarbanes. I appreciate it, Mr. Chairman. Thank you all 
for your patience and also for your testimony today. I 
appreciate your efforts to explain that moving with some 
prudence and careful thought with respect to this hydraulic 
fracturing and horizontal drilling does not constitute a ban de 
facto or any other kind of ban. I think that you have described 
very well the broad activity that continues to happen on 
Federal lands with respect to development and production of our 
natural resources in terms of oil, in terms of gas and so 
forth.
    I don't want any audience that is watching or listening to 
this hearing to go away with the impression that your caution, 
your willingness or your desire to move in a kind of deliberate 
way in considering the potential harm from this doesn't have 
any support in reality out there and so I am aware, because I 
am bringing particular attention to this as a representative 
who cares very deeply about the Chesapeake Bay and the 
Chesapeake Bay watershed, that there have been incidents and 
recent incidents that point to the potential harm that can come 
from the fracking process.
    Not too long ago, there was a blowout in Pennsylvania of 
one of these hydrofracking wells that resulted in a discharge 
of thousands of gallons of fracking fluids, which--I think the 
record ought to at this point stipulate--can contain a lot of 
toxic material. My understanding is that even in those areas of 
the country that are cited as having 60 years of experience and 
it was pointed out that you have to distinguish where this 
experience has happened because you have different geology 
implicated in places like the Chesapeake watershed than you do 
in places like Oklahoma and Texas and so forth.
    So we shouldn't borrow lock, stock and barrel the lessons 
from one part of the country and try to impose them on others, 
but even in those parts of the country my understanding is that 
there was a discharge line installed in connection with a 
fracking process operated by Chesapeake operating in Oklahoma 
and Texas that resulted in discharge fluid into the Washita 
River.
    Can you speak to the fact that there are instances out 
there that you are taking note of that suggest that there is 
potential harm that can come from the process, from the 
beginning to the end process, that is a good reason for you to 
want to step carefully in terms of whether you open these kinds 
of public lands to horizontal drilling? Mr. Abbey and then any 
others who want to speak to it.
    Mr. Abbey. Well again, I think that is an excellent 
question and comments that you raise. The increased use of 
hydraulic fracturing on both public and private lands has 
certainly generated concern among the public regarding its 
potential effects on water quality and availability. As I 
mentioned before, as far as the Bureau of Land Management, in 
our experience we have not seen impacts to groundwater as a 
result of using the fracking technology on wells that we have 
approved. That does not take away the need to be diligent, as I 
mentioned before.
    You know, that is why we focus on the integrity of the well 
and also to make sure that the well itself is well engineered 
and designed because if there is going to be a leak, it would 
be as part of that drilling process, and there is potential for 
the fracking chemicals to get into groundwater. That is why we 
put most of our focus on the casings and again the well bore, 
the integrity of that.
    At the same time, it behooves all of us to maintain 
diligence on the monitoring so that we are cognizant of any 
potential impact that might be occurring so that we could take 
immediate steps to rectify those impacts. I have read about 
some of the impacts that have been associated with fracking in 
the eastern United States. I am not familiar with those 
particular cases, but it does again raise our awareness that we 
need to be very, very careful as we review these proposals.
    Mr. Holtrop. If I could just add to that? The part of your 
question thinking from the very beginning of the process to the 
end of the process, those are things that we are also 
continuing to pay attention to and think about; not only the 
source of the water and where the water is coming from in order 
to provide the material for the fracking and what would be the 
implications of the water coming from that source, but then the 
material afterwards.
    There are ways, and there is a lot of success, in 
successfully disposing of that material, but it has to be--as 
Mr. Abbey has been saying, we have to be diligent in paying 
attention to how we dispose of the material following the 
hydrofracturing as well.
    Mr. Sarbanes. Thank you.
    Mr. Lamborn. OK. Now the gentleman from Virginia, Mr. 
Goodlatte?
    Mr. Goodlatte. Thank you, Mr. Chairman. I want to thank you 
and Chairman Thompson for holding this hearing. My 
congressional district in the beautiful Shenandoah Valley of 
Virginia seems to be the focal point of it, so I appreciate the 
attention brought to the matter.
    I have long been, as I think most people here have been, a 
supporter of the use of natural gas. For those who are 
concerned about greenhouse gas emissions, it has fewer 
emissions than some other carbon-based sources of energy. I am 
also a big advocate of local input into decisions made by the 
Federal Government, particularly in the case of the management 
of the George Washington and Jefferson National Forests, which 
are both primarily located in my congressional district.
    I commend them for doing that. They have heard from some of 
my local governments on the issue. I think that is important, 
but my understanding is that the Forest Service would have 
other ways to stop horizontal drilling in the National Forest 
should a permit be requested, and I don't know that that has 
been received at this point in time, but should one be filed in 
the George Washington National Forest would there be other ways 
of stopping horizontal drilling from taking place if you found 
that there were not the correct procedures or precautions being 
taken?
    Mr. Sarbanes and Mr. Abbey talked about the necessity, 
which I think is absolutely true, that you have to deploy good, 
safe technology to do this. On the other hand, the preferred 
plan of the Forest Service for the George Washington imposes a 
15 year ban as the preferential way to address the concerns.
    So what I would ask you, Mr. Holtrop, is why did the Forest 
Service feel that a 15 year ban was the appropriate way to go 
in their preferred plan, as opposed to looking at the science, 
looking at the technology that Mr. Abbey referred to, making 
sure that the drilling goes well below the groundwater?
    You are right. Geological formations are different 
everywhere, but it is my understanding that there is horizontal 
drilling that takes place right now in the Jefferson National 
Forest to the south of the George Washington National Forest. 
Why a 15 year ban, as opposed to taking other measures that 
would assure my constituents that this is being done in a safe 
way that will not disturb the drinking water that my local 
governments are concerned about or other degradation of the 
land that certainly some of my constituents are also concerned 
about?
    Mr. Holtrop. Thank you for that question and thank you for 
your continuing interest and help in the management of the 
George Washington National Forest.
    I believe the best way to answer that direct question, and 
I would just like to add a little bit, is that I think as the 
Forest weighed the variety of information that they had in 
terms of the local input, in terms of the recognition of the 
high values of the water resources from the George Washington 
National Forest for millions of people, that as they weighed 
all of those in order to generate the kind of input and the 
kind of interest in the topic that that was the right, 
preferred alternative.
    But again, not a decision. It was to make sure that there 
was the appropriate type of continuing public input into the 
decision-making process, which is----
    Mr. Goodlatte. Was there a safety or scientific reason for 
the Forest Service to place the ban, to propose placing the 
ban?
    Mr. Holtrop. Again, the science. We used the best science 
that is available to us at this time. I would like to express 
again there has not been a decision made, so there is not a 
ban. There is a proposed preferred alternative that considers 
that.
    Mr. Goodlatte. Let me ask you. I understand that. Let me 
ask you another question. Is there a difference in the shale 
formation in the George Washington Forest different than the 
Jefferson National Forest that would require such an absolute 
difference in approach?
    Mr. Holtrop. Maybe somebody else can answer and I can fill 
in.
    Ms. Hyzer. OK. The Marcellus shale formation under the 
George Washington is very folded and fractured, and over the 
last 30 years there have been hundreds of thousands of acres 
there leased, but only five wells have been drilled, 
conventional wells, and they were not successful.
    On the Jefferson it is a different kind of formation. It is 
more accessible. There are a number of wells there now, active 
wells that have been leased over many years.
    Mr. Goodlatte. So that makes it more attractive maybe. I 
mean, that might also provide more assurance to my constituents 
that there may not be the activity that they are concerned 
about because the formation may be different for that reason.
    But is there a safety difference between the two? That I 
think should be the basis on which you would make a decision on 
whether to impose different regulations for drilling there as 
opposed to an outright ban there.
    Ms. Hyzer. That is a point that we need to look into and 
consider.
    Mr. Goodlatte. I also understand that public input is 
important. It is important to us as Representatives. It is 
certainly important for government agencies to take that into 
account, so I commend you for doing that.
    Yet some of the same localities that came out in opposition 
to wilderness, which is included in the plan, they came out in 
opposition to wilderness and yet you have included wilderness 
in those same jurisdictions. Do you have a comment on why you 
responded to the localities on one issue, but not the other?
    Ms. Hyzer. We have been working with the counties on that 
issue also, and we have looked at what the potential is for 
wilderness in there and what is most suitable.
    We did not recommend a great deal of wilderness at this 
point. Again, we were concerned that we needed to have a real 
balance of uses and development activities on the National 
Forest. We were concerned about jobs. We were concerned about 
energy development. So we looked at the broad range, and we 
have continued to work with the counties and will continue to 
work with them on that issue.
    Mr. Goodlatte. Good. Well, we appreciate that. Could I 
just----
    Mr. Holtrop. Could I just add to that one question if I 
might, Mr. Chairman? I am sorry.
    Mr. Goodlatte. Mr. Holtrop?
    Mr. Holtrop. Thank you. If I could just very briefly just 
add the range of public input in those communities of interest 
that were providing input, some of them requested no leasing. 
Some of them requested no hydrofracturing whatsoever. The 
preferred alternative that was selected does allow, does open 
up 900,000 plus acres of the forest to leasing that was not 
previously available. It does allow hydrofracturing for 
vertical wells.
    Again, there was a consideration of all those inputs, so I 
would say that what we have come up with in the preferred 
doesn't totally meet the----
    Mr. Goodlatte. Sure. I think one of my colleagues made the 
point that with vertical wells if you are going to go ahead 
that route it first of all requires more drilling, more surface 
disturbance than horizontal drilling.
    But also if you allow hydrofracking with a vertical well 
the issue there is even greater in terms of groundwater 
contamination, so I am not sure your position is consistent in 
that regard.
    Mr. Holtrop. I agree with what you just said. If the 
concern was the impact, the surface impact, that would drive 
the decision more when the concern is the water quality. That 
is the determination we are making.
    Mr. Goodlatte. Mr. Chairman, if I might have permission to 
ask one more question?
    Prior to proposing this ban in your preferred plan, had any 
companies approached the Forest Service about the possibility 
of obtaining permits for horizontal drilling?
    Ms. Hyzer. Not to my knowledge. BLM? Any?
    Mr. Goodlatte. My recommendation would be that you 
anticipate that that could happen and that you have good 
regulations that put in place the kind of protections that Mr. 
Abbey referred to because this is a very common practice that 
takes place all over the country. Millions of wells have been 
drilled, and it is by far the most efficient way to extract a 
very important source of energy.
    I would hope that you would take into account that a simple 
15 year ban doesn't address. It just simply punts. It doesn't 
take into account the need to have good technology deployed if 
you were to receive applications and that that might be the 
better route to go. Thank you.
    Mr. Lamborn. OK. Thank you. I want to thank the panel for 
their testimony. That concludes our questions. Sorry for the 
delay earlier. Thank you for your patience on that as well.
    I now invite the second panel to come forward. On that 
panel will be Maureen Matsen, Deputy Director of Natural 
Resources and Senior Advisor on Energy for the Commonwealth of 
Virginia, accompanied by David Spears, the State Geologist of 
Virginia; Mr. David Miller, Director of Standards for the 
American Petroleum Institute;
    Mr. Lee Fuller, Vice President of Government Relations for 
the Independent Petroleum Association of America; Mr. Craig 
Mayer, General Counsel for Pennsylvania General Energy, LLC; 
Ms. Kate Wofford, Executive Director of Shenandoah Valley 
Network; and Ms. Amy Mall, Senior Policy Analyst for the 
Natural Resources Defense Council.
    [Pause.]
    Mr. Lamborn. Now, before we seat this panel I want to 
clarify an issue. Under Committee Rule 4(a) and House Rule 
12.2(g)(5), witnesses appearing in a nongovernmental capacity 
are required to file with their testimony a completed 
disclosure form describing their education, employment and 
experience and provide other background information pertinent 
to their testimony. The purpose of this information is to help 
the Members of the committee judge the testimony in context.
    Rule 4(a) of the committee indicates that failure to comply 
with these requirements may result in the exclusion of the 
written testimony from the hearing record and/or the barring of 
an oral presentation of the testimony.
    Ms. Mall, recognizing that your invitation was extended 
late your disclosure statement indicates a statement where you 
admit that it remains incomplete and that the information will 
be forthcoming. So before the committee seats you on this 
panel, will you orally commit to us that you will provide a 
completed disclosure form to this committee no later than close 
of business Tuesday, July 12 of this year?
    Ms. Mall. We absolutely will commit to providing the 
disclosure form. I would not be providing the information 
myself--it would be our legal and financial staff--so I am 
assuming they can do it by that time on the 12th.
    Mr. Lamborn. Thank you so much.
    Ms. Mall. Thank you.
    Mr. Lamborn. Like all our witnesses, your written testimony 
will appear in full in the hearing record, so I ask you to keep 
your oral statements to five minutes as outlined in our 
invitation letter.
    Our microphones are not automatic, so you have to press the 
button to begin. The green light comes on with five minutes, a 
yellow light will come on with one minute, and a red light at 
the conclusion of five minutes.
    We will just jump right in. Ms. Matsen, you may begin.

    STATEMENT OF MAUREEN MATSEN, DEPUTY DIRECTOR OF NATURAL 
    RESOURCES AND SENIOR ADVISOR ON ENERGY, COMMONWEALTH OF 
VIRGINIA; ACCOMPANIED BY DAVID SPEARS, VIRGINIA STATE GEOLOGIST

    Ms. Matsen. Thank you, Mr. Chairman, Members of the 
Subcommittee. It really is a pleasure to be here.
    Since taking office 18 months ago, Governor Bob McDonnell 
has had a singular focus on rebuilding Virginia's economy. The 
citizens of Virginia, like the citizens of every state around 
the country, need jobs first and foremost.
    To make certain that we grow our economy and create jobs in 
ways that are safe and environmentally responsible, we have 
made our state environmental regulators an integral part of our 
economic development teams so that we can successfully allow 
the development and use of Virginia's natural resources without 
sacrificing our clean air and our clean water.
    The focus on bringing new jobs to Virginia goes hand in 
hand with the Governor's determination to make Virginia the 
energy capital of the East Coast. We are working every day to 
make Virginia's valuable energy resources, both onshore and 
offshore, available to meet growing energy needs and to secure 
high paying jobs in energy development and in the supply chains 
that support that development.
    Since adoption of the 1990 version of Virginia's Gas and 
Oil Act, natural gas production has meant more than $2 billion 
in capital investment in Virginia, over $630 million in 
royalties, over $150 million in severance taxes paid, and all 
of that is in addition to mineral, payroll and sales taxes paid 
to Virginia. Most important of all, the industry has created 
more than 3,000 jobs.
    Virginia has been effectively balancing our economy and our 
environment for decades. Hydrofracturing has been used in 
approximately 1,800 wells, producing natural gas from shale, 
sandstone and limestone formations in Southwest Virginia since 
the 1950s. We are today, as it has been noted, drilling wells 
in the Jefferson National Forest.
    Natural gas wells in Virginia are permitted through the 
Division of Oil and Gas of Virginia's Department of Mines, 
Minerals and Energy. This group works closely in all well 
permitting with the Virginia Department of Environmental 
Quality to ensure that water withdrawals and disposal of 
produced fluids do not harm surface or groundwater.
    I have with me today in fact a technical expert, Mr. David 
Spears, who is our State Geologist and a former Director of the 
Oil and Gas Division, to answer any questions you might have 
about our regulatory model and its enforcement, but I will 
share with you a few of its important attributes.
    Our permit review process begins at the very beginning with 
research concerning the specific proposed well site. Our 
regulations do not allow any offsite impacts or discharges to 
surface waters. Our inspectors are on-site for every critical 
operation leading to production and for reclamation. Our 
comprehensive regulatory scheme has protected Virginians and 
Virginia's environment for decades. Over those years there have 
been no documented instances of surface water or groundwater 
degradation from fracking in Virginia.
    In short, Virginia has long experience with effectively 
regulating hydrofracturing. We are doing it safely, and we are 
protecting the environment and the health of our citizens. 
Virginia appreciates and values its spectacular National 
Forests. Indeed, no one cares more for the preservation of 
Virginia's magnificent landscapes and the quality of Virginia's 
waters than Virginians do. Our regulators protect the water 
that they, their families and their neighbors enjoy and depend 
on every day.
    The proposed ban on horizontal drilling included in the 
draft revised land and resource management plan for the George 
Washington National Forest, if adopted, would represent an 
unprecedented interference with development of underground 
resources on Federal lands. Restricting drilling in an area the 
same size as the current Virginia producing area will limit 
jobs and economic growth.
    We know of no justification, scientific or otherwise, for 
ending the effective collaboration between Virginia and the 
Bureau of Land Management and other Federal agencies to provide 
access to those resources. In fact, horizontal drilling would 
allow access to the important energy resource under the forest 
with fewer wells and far less construction and disruption above 
ground than comes with the traditional vertical wells that have 
historically been allowed in the forest.
    Virginia is home to a valuable natural gas resource that 
ought not be put on the shelf and off limits. The proposed ban 
would harm Virginia and Virginians by burdening business and 
preventing job growth. It would undermine the nation's energy 
security by placing domestic resources out of reach at a time 
when global competition for energy resources is rapidly 
increasing, and it would do so without justification and 
without any identifiable or tangible benefit beyond the 
protections already accomplished by Virginia's well-established 
regulation of natural gas development.
    I thank you for this opportunity to be with you today, and 
I am happy to respond to your questions.
    [The prepared statement of Ms. Matsen follows:]

   Statement of Maureen Matsen, Deputy Director of Natural Resources 
         and Senior Advisor on Energy, Commonwealth of Virginia

    Since taking office 18 months ago, Governor Bob McDonnell has had a 
singular focus on rebuilding Virginia's economy. The citizens of 
Virginia, like the citizens of every state around the country need 
jobs, first and foremost.
    For Governor McDonnell that means that his most important job is 
recruiting new businesses to locate in Virginia, and facilitating the 
expansion of our existing businesses.
    And to make certain that we grow our economy and create jobs in 
ways that are safe and environmentally responsible, we have made sure 
that our state environmental regulators are an integral part of our 
economic development teams, so that we can successfully allow the 
development and use of Virginia's natural resources, without 
sacrificing our clean air or our clean water.
    The focus on bringing new jobs to Virginia goes hand in hand with 
the Governor's determination to make Virginia the Energy Capital of the 
East Coast.
    We are working every day to make Virginia's valuable energy 
resources--on shore and offshore--available to support Virginia's 
energy needs, to the nation, and to the world.
    The development of Virginia's coal, offshore and onshore wind, 
biomass, nuclear, solar, oil and natural gas resources, offers secure, 
high paying jobs both in development and in the supply chains that 
support that development.
    Virginia businesses depend on access to our natural resources, and 
our citizens depend on the jobs those businesses provide, as well as 
the direct and indirect revenues that flow from them.
    Indeed, since adoption of Virginia's Gas and Oil Act, natural gas 
production has meant more that $2 billion in capital investment, $630 
million in royalties, $150 million in severance taxes paid, in addition 
to mineral, payroll and sales taxes, to Virginia. And the industry has 
created more than 3000 jobs.
    Specifically with regard to natural gas development in Virginia, we 
have been effectively balancing our economy and our environment for 
decades.
    Fracing has been used in approximately 1800 wells, producing 
natural gas from shale, sandstone and limestone formation drilled in 
Southwest Virginia since the 1950s.
    We are--today--drilling wells in the Jefferson National Forest. 
There have been wells drilled in the George Washington National Forest, 
though none of them are active any longer.
    Natural gas wells are permitted through our Division of Oil and 
Gas, of our Department of Mines Minerals and Energy. This group works 
closely, in all well permitting, with the Virginia Department of 
Environmental Quality to ensure that water withdrawals and disposal of 
produced fluids do not harm surface or ground waters.
    Our permit review process includes: research concerning the 
specific proposed well site; water used during the drilling process is 
required to meet state water quality standards by region; Virginia's 
well casing/cementing program is a multi-casing and cementing program 
designed to prevent contamination of groundwater; our regulations do 
not allow off-site impacts or discharges to surface waters; independent 
lab tests of water wells and springs within 500 feet of a proposed well 
are required before drilling can begin; waste water can only be land 
applied if the fluids meet water quality standards, if not, it must be 
transported to an approved Class II EPA waste disposal well or other 
properly permitted facility. Our inspectors are on site for every 
critical operation leading to production, and for reclamation. And 
those are just the highlights of a comprehensive regulatory scheme that 
has protected Virginians, and Virginia's environment for fifty years. 
There have been no documented instances of surface water or groundwater 
degradation from fracing in Virginia.
    In short, Virginia has long experience with effectively regulating 
hydro fracturing, and in working with the U.S. Forest Service and the 
Bureau of Land Management to safely develop the resources available 
under federal lands, including our national forests.
    We are doing it safely, and we are protecting the environment--our 
water and our air--at the same time.
    Virginia appreciates and values its spectacular national forests.
    Indeed, no one cares more for the preservation of Virginia's 
magnificent landscapes and the quality of Virginia's waters, than 
Virginians do.
    Our regulators protect what they, and their neighbors, enjoy and 
depend on every day.
    The Draft Revised Land & Resource Management Plan for the George 
Washington National Forest--by virtue of its proposed ban on horizontal 
drilling -
    If adopted, would represent an unprecedented interference with 
development of underground resources on federal lands, that ought to be 
available to meet the nation's growing energy needs.
    Restricting drilling in an area the same size as the current 
Virginia producing area limits jobs and economic growth.
    We know of no justification, scientific or otherwise, for ending 
the effective collaboration between Virginia and the Bureau of Land 
Management and other federal agencies to provide access to those 
resources.
    In fact, horizontal drilling would allow access to the important 
energy resource under the forest with few wells, and far less 
construction and disruption above ground than comes with the 
traditional vertical wells that have historically been permitted in the 
forest.
    Virginia is home to a valuable natural gas resource that ought not 
be put on the shelf, and off limits.
    The proposed ban would harm Virginia, and Virginians by burdening 
business and preventing job growth;
    It would undermine the nation's energy security by placing domestic 
resources out of reach at a time when the global competition for energy 
resources is rapidly increasing.
    And it would do so without justification, and without any 
identifiable and tangible benefit that we can see, beyond what is 
already accomplished by our well established regulation of natural gas 
development.
                                 ______
                                 
    Mr. Thompson [presiding]. Thank you for your testimony.
    Mr. Miller, if you will proceed with your testimony, 
please?

         STATEMENT OF DAVID MILLER, P.E., F.A.S.C.E., 
        STANDARDS DIRECTOR, AMERICAN PETROLEUM INSTITUTE

    Mr. Miller. Good afternoon, Chairman Lamborn and Chairman 
Thompson, Ranking Members and Members of the Subcommittee. 
Thank you for the opportunity to address challenges facing 
domestic oil and gas development.
    My name is David Miller. I am the Standards Director for 
the American Petroleum Institute. You may know that API has 
more than 470 member companies that represent all sectors of 
America's oil and natural gas industry and that our industry 
supports 9.2 million American jobs and provides most of the 
energy America needs.
    What you may not know is that API has been the leader for 
nearly nine decades in developing voluntary industry standards 
that promote reliability and safety through proven engineering 
practices. Our industry's top priority is to provide energy in 
a safe, technologically sound and environmentally responsible 
manner. We therefore take seriously our responsibility to work 
in cooperation with government to develop practices and 
equipment that improve the operational and regulatory process 
across the board.
    The API standards program is accredited by the American 
National Standards Institute, ANSI, the authority on U.S. 
standards and the same organization that accredits programs in 
several national laboratories. API undergoes regular third 
party program audits to ensure compliance with ANSI's essential 
requirements for standards development.
    API standards are developed through a collaborative effort 
with industry experts, as well as the best and brightest 
technical experts from government, academia and other relevant 
stakeholders. For that reason, API standards are widely cited 
by both Federal and state regulators.
    The committees that develop and maintain these standards 
represent API's largest program, with over 4,800 volunteers 
working on 380 committees and task groups. API standards are 
normally reviewed every five years to ensure that they remain 
current, but some are reviewed more frequently based on need.
    Overall, API maintains some 600 standards, recommended 
practices, specifications, codes, technical publications, 
reports and studies that cover all aspects of the industry, 
including five guidance documents focused on hydraulic 
fracturing operations. These documents provide the blueprint 
for the environmentally sound development of natural gas.
    We have shared these documents with nongovernmental 
organizations, state regulators, the Bureau of Land Management 
and the Department of Energy. In particular, API has presented 
an overview of these documents to the Public Health, Safety and 
Environmental Protection Work Group of the Pennsylvania 
Governor's Marcellus Shale Advisory Commission.
    API has also given presentations to industry conferences 
and provided training on these documents to staff members of 
the Pennsylvania Department of Environmental Protection. We are 
available to provide similar educational opportunities to other 
interested stakeholders, and the documents are publicly 
available on our website at www.api.org under the Hydraulic 
Fracturing page.
    Well construction practices covered in these documents are 
standard in the industry and enforced by virtually all states 
to effectively protect underground sources of drinking water 
from potential impacts related to oil and gas exploration of 
production activities, including hydraulic fracturing.
    The great majority of hydraulic fracturing activities take 
place at depths far below existing groundwater sources that 
could reasonably be considered underground sources of drinking 
water. Contemporary well design practices--still pipes cemented 
to the rock through which the well is drilled--ensure multiple 
levels of protection between any sources of drinking water and 
the production zone of an oil and gas well.
    We look forward to providing constructive input as the 
Subcommittees, the Congress and the Administration consider the 
challenges facing domestic oil and gas development.
    That concludes my statement. I welcome questions from you 
and your colleagues. Thank you.
    [The prepared statement of Mr. Miller follows:]

            Statement of David Miller, Standards Director, 
                      American Petroleum Institute

    Good morning, Chairman Lamborn and Chairman Thompson, Ranking 
Member Holt and Ranking Member Holden, and members of the 
subcommittees. Thank you for the opportunity to address challenges 
facing Domestic Oil and Gas Development.
    My name is David Miller. I am the standards director for the 
American Petroleum Institute. You may know that API has more than 470 
member companies that represent all sectors of America's oil and 
natural gas industry, and that our industry supports 9.2 million 
American jobs and provides most of the energy America needs. What you 
may not know is that API has been the leader for nearly nine decades in 
developing voluntary industry standards that promote reliability and 
safety through proven engineering practices.
    Our industry's top priority is to provide energy in a safe, 
technologically sound and environmentally responsible manner. We 
therefore take seriously our responsibility to work in cooperation with 
government to develop practices and equipment that improve the 
operational and regulatory process across the board.
    API's standards program is accredited by the American National 
Standards Institute, ANSI, the authority on U.S. standards, and the 
same organization that accredits programs at several national 
laboratories. API undergoes regular third-party program audits to 
ensure compliance with ANSI's Essential Requirements for standards 
development.
    API's standards are developed through a collaborative effort with 
industry experts, as well as the best and brightest technical experts 
from government, academia and other relevant stakeholders. For this 
reason API standards are widely cited by both Federal and State 
regulators.
    The committees that develop and maintain these standards represent 
API's largest program, with 4,800 volunteers working on 380 committees 
and task groups. API standards are normally reviewed every five years 
to ensure they remain current, but some are reviewed more frequently, 
based on need.
    Overall, API maintains more than 600 standards--recommended 
practices, specifications, codes, technical publications, reports and 
studies--that cover all aspects of the industry, including five 
guidance documents focused on hydraulic fracturing operations. These 
documents provide the blueprint for the environmentally sound 
development of natural gas. We have shared these documents with Non-
Governmental Organizations, State Regulators, the Bureau of Land 
Management and the Department of Energy.
    In particular, API has presented an overview of these documents to 
the Public Health, Safety, and Environmental Protection Work Group of 
the Pennsylvania Governor's Marcellus Shale Advisory Commission. API 
has also given presentations to industry conferences and provided 
training on the documents to staff members of the Pennsylvania 
Department of Environmental Protection. We are available to provide 
similar educational opportunities to other interested stakeholders, and 
the documents are publically available on our website at www.api.org 
under the ``Hydraulic Fracturing'' page.
    Well construction practices covered in these documents are standard 
in the industry and are enforced by virtually all states to effectively 
protect underground sources of drinking water from potential impacts 
related to oil and gas exploration and production activities, including 
hydraulic fracturing. The great majority of hydraulic fracturing 
activities take place at depths far below existing groundwater sources 
that could reasonably be considered underground sources of drinking 
water. And contemporary well design practices--steel pipe cemented to 
the rock through which a well is drilled--ensure multiple levels of 
protection between any sources of drinking water and the production 
zone of an oil and gas well.
    We look forward to providing constructive input as the 
Subcommittees; the Congress and the Administration consider the 
challenges facing Domestic Oil and Gas Development.
    This concludes my statement, Messrs. Chairman. I welcome questions 
from you and your colleagues. Thank you.
                                 ______
                                 
    Mr. Thompson. Thank you, Mr. Miller.
    Mr. Fuller, go ahead and proceed with your testimony, 
please.

     STATEMENT OF LEE FULLER, VICE PRESIDENT OF GOVERNMENT 
 RELATIONS, INDEPENDENT PETROLEUM ASSOCIATION OF AMERICA (IPAA)

    Mr. Fuller. Mr. Chairman and Members of the Committee on 
Natural Resources and the Committee on Agriculture, while 
today's hearing has been triggered by the draft environmental 
impact statement related to the George Washington National 
Forest, IPAA believes that the draft EIS presents broader 
issues.
    First, it reflects an inconsistency within the 
Administration. While publicly emphasizing the importance of 
American natural gas, its regulatory positions in this draft 
EIS and other venues seek to limit the access and production of 
these resources.
    In the draft EIS, the Forest Service seeks to limit the use 
of the horizontal drilling technology. It rationalizes these 
limitations based on surface disruption and water issues. 
Horizontal drilling technology is recognized as an option that 
reduces the surface footprint. The water issues are couched in 
the context of comparing the impacts of one horizontally 
drilled well to one vertical well rather than one horizontally 
drilled well to the several vertical wells it replaces.
    The draft EIS clearly anticipates that a portion of the 
resource play underlying the forest is shale gas. Development 
of shale gas hinges on the use of two pivotal technologies, 
horizontal drilling and hydraulic fracturing. The draft EIS 
proposes a horizontal drilling ban that would prevent the 
economic development of this shale gas resource. If this type 
of rationale is applied to Federal lands nationally, it will 
clearly limit America's access to its resource base. It is 
completely unjustified.
    Second, the draft EIS follows a path of targeting 
longstanding, well-regarded technologies as the basis for 
limiting development. Over the past several years, there has 
been a national effort to thwart the development of American 
resources by attacking various technologies, principally 
hydraulic fracturing, to create anxieties in communities and to 
shift the decision-making process from managing environmental 
risks to prohibitions of technologies.
    Developing American resources is not easy. Drilling natural 
gas and oil wells is a capital intensive process that involves 
sophisticated equipment. Equally important, it is a regulated 
action. Oil and natural gas drilling regulations have been 
developed since before horizontal drilling or hydraulic 
fracturing existed.
    Drinking water protections that require the use of steel 
casing cemented in place when the well bore passes through 
water supplies were developed to protect these resources from 
exposure to oil and hence produced water. Those protections 
remain in place and are regularly revised. They are the 
fundamental protections that apply to the use of hydraulic 
fracturing with or without horizontal drilling.
    Other environmental risks must also be managed. Produced 
water, water that is present in natural gas and oil formations, 
can be a significant environmental hazard generally because it 
is extremely salty. State regulatory programs have been created 
to manage this risk, and both the Federal Clean Water Act and 
Safe Drinking Water Act regulate produced water management.
    If decisions on development of American natural gas and oil 
are based on managing the environmental risk, history 
demonstrates that regulatory systems effectively address the 
risks associated with oil and natural gas production. 
Consequently, the tactics of those opposing development have 
shifted.
    First, the technologies used to produce natural gas and oil 
are distorted. Second, the regulatory process and the 
regulators are demeaned. Third, Federalization of the 
regulatory process or expanded Federal regulations demand it.
    Hydraulic fracturing is an illustrative example. Recurring 
studies have included that fracturing is safe as currently 
regulated, but since it is a linchpin to developing America's 
large shale gas and shale oil formations, fracturing has been 
mischaracterized, distorted and demonized.
    Because the regulatory systems create a barrier to movement 
of fracturing fluids from the well bore to drinking water, the 
environment is protected from the fracturing fluids that are 
used, mixtures that are 99.5 percent water and sand. 
Consequently, rather than address the management of the 
fracturing process, production opponents have focused on the 
chemicals used in the one-half percent of the fluids.
    Producers do not oppose disclosing the chemicals used in 
the fracturing process, but because confidential business 
information is involved the execution of disclosure is not 
straightforward. Weaving through these complexities, the state 
regulators have developed a national registry, Frac Focus, that 
producers strongly endorse. It will provide well-by-well 
information on chemicals, but production opponents will not 
endorse it. They demand Federalization.
    This disagreement will continue with the key point that the 
regulatory process protects groundwater resources since 
chemicals will always be a part of the production of oil and 
natural gas, a casualty to the antiproduction rhetoric. Equally 
clear, production opponents regularly attribute any produced 
water problem to hydraulic fracturing. In recent years, 
produced waters are characterized as fracturing fluids. They 
are not.
    If a rational debate on production is to take place, it 
must be based on a fair characterization of the issue instead 
of the distorted rhetoric that has become so prevalent. Thank 
you very much. I will be happy to answer any questions.
    [The prepared statement of Mr. Fuller follows:]

     Statement of The Independent Petroleum Association of America

    This testimony is submitted by the Independent Petroleum 
Association of America (IPAA). IPAA represents the thousands of 
independent natural gas and oil explorers and producers, as well as the 
service and supply industries that support their efforts. Independent 
producers drill about 95 percent of American oil and natural gas wells, 
produce over 56 percent of American oil and more than 85 percent of 
American natural gas.
    This hearing examines issues associated with the development of 
American oil and natural gas resources, principally with respect to 
access to federal lands. In part, the hearing addresses a proposed plan 
for the development of the George Washington National Forest. But, IPAA 
believes that this proposed plan presents a far larger issue--the 
reluctance of the cut-rent Administration to support the development of 
the full spectrum of American resources. More specifically, the issues 
that seem to represent the Administration's positions related to its 
approach to technologies that are essential to develop these American 
resources--technologies that have been proven safe over years of 
operation but are now, without evidence, called into question. This 
tactic has been regularly used by various environmental groups that 
oppose the development of all fossil fuels as part of a strategy to 
create community anxiety over oil and natural gas development, demean 
the regulatory process and agencies that manage the environmental risk 
associated with these technologies, and demand a federalization of the 
regulatory process to inhibit resource development.
    Most of this effort has been directed at the use of advanced 
hydraulic fracturing. In the George Washington National Forest 
proposal, the tactic has expanded to include the use of horizontal 
drilling. This testimony will address both technologies.
    The Draft Environmental Impact Statement for the Revised Land and 
Resource Management Plan for the George Washington National Forest 
(DEIS) includes as its preferred alternative the prohibition of 
horizontal drilling for oil and natural gas. Astonishingly, it 
justifies this preference on the basis of limiting surface disruption 
and water demand. A fundamental benefit of horizontal drilling is its 
reduction of the surface footprint of oil and natural gas development. 
During the debates over the Arctic National Wildlife Refuge, it was the 
use of horizontal drilling to tap distant reservoirs that reduced the 
surface impact of oil development. Horizontal drilling technology 
allows the well bore to turn from its vertical orientation in order to 
develop resources that are inaccessible from the well's surface site or 
that are deposited in horizontal formations such as shale gas and shale 
oil. Horizontal drilling rapidly increased in the mid-1970s to become a 
mainstay of drilling options to access a variety of different resource 
plays. Highlighted in the Department of Energy 1999 document, 
``ENVIRONMENTAL BENEFITS of ADVANCED OIL and GAS EXPLORATION and 
PRODUCTION TECHNOLOGY'', horizontal drilling provides both more 
efficient drilling and less surface disruption.
    IPAA believes that the DE1S follows a common pattern of overstating 
implications of oil and natural gas development on water demand. This 
pattern builds on two perceptions--the demand for water in oil and 
natural gas development is high and the demand for its use in 
fracturing in the context of horizontal drilling is particularly large. 
Significantly, the DEIS use of the water demand issue demonstrates that 
the real issue relates to hydraulic fracturing. But, by examining the 
issue in context, the perceived impact is overstated. Numerous 
assessments of the demand for water in oil and natural gas development 
demonstrate that it falls well below other water demands. For example, 
the FracFocus website, developed by the Ground Water Protection Council 
(GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC), 
provides a breakdown of water demand demonstrating that oil and natural 
gas development falls in the mining category--approximately one percent 
of the total (http://fracfocus.org/water-protection/hydraulic-
fracturing-usage). Certainly, specific areas will differ in the mix of 
demand, but clearly water use for oil and natural gas development is 
manageable. Similarly, the DEIS proposes to prohibit horizontal drilled 
wells while allowing vertical wells that would be hydraulically 
fractured. In part, it rationalizes this distinction by stating:
        Some level of hydrofracturing is used in nearly all gas well 
        drilling. Conventional drilling has occurred on the Jefferson 
        NF for many years without incident. It is the unconventional 
        drilling technique of horizontal drilling and its 
        unconventional use of hvdrofracturing that has raised concerns. 
        Horizontal drilling uses repeated hvdrofracturing at intervals 
        throughout the horizontal shaft over long distances, and so, 
        requires very large amounts of water and has the potential for 
        affecting water quality that goes far beyond hydrofracturing 
        associated with conventional (vertical) drilling. Rather than 
        restricting all hvdrofracturing, the Forest decided to prohibit 
        horizontal drilling and its associated hydrofracturing.
    Setting aside that neither horizontal drilling nor hydraulic 
fracturing is an unconventional technology, the statement fails to 
recognize that horizontal drilling allows for the development of the 
same amount of resource that would require far more vertical wells. The 
2009 Department of Energy document, Modern Shale Gas Development in the 
United States: A Primer, sets out the impact well:
        Modern shale gas development is a technologically driven 
        process for the production of natural gas resources. Currently, 
        the drilling and completion of shale gas wells includes both 
        vertical and horizontal wells. In both kinds of wells, casing 
        and cement are installed to protect fresh and treatable water 
        aquifers. The emerging shale gas basins are expected to follow 
        a trend similar to the Barnett Shale play with increasing 
        numbers of horizontal wells as the plays mature. Shale gas 
        operators are increasingly relying on horizontal well 
        completions to optimize recovery and well economics. Horizontal 
        drilling provides more exposure to a formation than does a 
        vertical well. This increase in reservoir exposure creates a 
        number of advantages over vertical wells drilling. Six to eight 
        horizontal wells drilled from only one well pad can access the 
        same reservoir volume as sixteen vertical wells. Using multi-
        well pads can also significantly reduce the overall number of 
        well pads, access roads, pipeline routes, and production 
        facilities required, thus minimizing habitat disturbance, 
        impacts to the public, and the overall environmental footprint.
    The Primer explains the issue more precisely:
        Analysis performed in 2008 for the U.S. Department of the 
        Interior estimated that a shallow vertical gas well completed 
        in the Fayetteville Shale in Arkansas would have a 2.0-acre 
        well pad, 0.10 miles of road and 0.55 miles of utility 
        corridor, resulting in a total of 4.8 acres of disturbance per 
        well. The same source identified a horizontal well pad in 
        Arkansas as occupying, approximately 3.5 acres plus roads and 
        utilities, resulting in a total of 6.9 acres. If multiple 
        horizontal wells are completed from a single well pad it may 
        require the pad to be enlarged slightly. Estimating that this 
        enlargement will result in a 0.5-acre increase, the 4-well 
        horizontal pad with roads and utilities would disturb an 
        estimated total of 7.4 acres, while the 16 vertical wells would 
        disturb approximately 77 acres. In this example, 16 vertical 
        wells would disturb more than 10 times the area of 4 horizontal 
        wells to produce the same resource volume. This difference in 
        development footprint when considered in terms of both rural 
        and urban development scenarios highlights the desire for 
        operators to move towards horizontal development of gas shale 
        plays.
    From an environmental standpoint, the advantages are obvious. The 
surface impact is one-tenth or less than its historic impact. The 
amount of land used to manage drilling fluids and produced water is 
dramatically reduced. The environmental risks are more directly and 
easily managed. Moreover, as the use of advanced techniques like 
horizontal drilling technology increases, fewer wells will be needed to 
generate the same amount of production. For example, prior to 2008, 
more than 31,000 annual new gas wells were required to sustain 58 BCF/d 
of gas production; now it is possible to produce almost 63 BCF/d with 
the drilling of only 19,000 new gas wells per year.
    As described above, the DEIS justifications suggest that the 
underlying issue associated with the preferred alternative of no 
horizontal drilling is the use of hydraulic fracturing. Clearly, the 
development of shale gas and shale oil resources hinges on the use of 
horizontal drilling and hydraulic fracturing. The DEIS supporting 
documents demonstrate that there are no indications that hydraulic 
fracturing has caused any issues of environmental harm, that its 
regulated use protects against its environmental risk. Consequently, it 
turns the other linchpin of shale gas development--horizontal drilling. 
In reality, these technologies and the attendant regulatory structures 
or their use are proven, effective controls. In reality, the 
environmental groups opposing the development of American fossil fuels 
are the driving force in creating anxieties about both technologies and 
the regulatory programs managing their use.
    The history of the hydraulic fracturing issue is illustrative. 
Hydraulic fracturing is a technique used to allow natural gas and oil 
to move more freely from the rock pores where they are trapped to a 
producing well that can bring them to the surface. The technology was 
developed in the late 1940s and has been continuously improved and 
applied since that time. In a hydraulic fracturing job, the fluid 
pumped into the well contains a proppant (usually sand) to keep the 
fracture open. This proppant collects inside the created fracture, so 
when the fracture tries to close, it cannot. The proppant holds it 
open.
    State ground water regulation was developed long before hydraulic 
fracturing began. These regulations established well construction 
standards including steel casing and cementing requirements. They were 
designed to protect ground water from contamination by oil and its 
produced water. The environmental risks from oil and produced water are 
far more significant than those from a hydraulic fracturing solution 
that is 99.5 percent water and sand. These regulations created a 
control svstem that has effectively prevented contamination of drinking 
water, effective in the more than a million times that hydraulic 
fracturing has been used.
    Years after state regulations protecting ground water were 
implemented, Congress enacted the Safe Drinking Water Act (SDWA) in 
1974. By then, hydraulic fracturing had been used for 25 years with no 
environmental problems. Under the SDWA, states developed extensive 
Underground Injection Control (UIC) programs to manage liquid wastes 
and the reinjection of produced waters. These programs addressed 
liquids intended to be injected--and to remain--in underground geologic 
formations. By 1980 Congress--recognizing the need for further state 
flexibility--modified the SDWA to give states federal ``primacy'' based 
on comparable state oil and gas UIC programs.
    At no time during these debates was there any suggestion of 
including hydraulic fracturing in the UIC waste management 
requirements. In the mid-1990s the Legal Environmental Assistance 
Foundation (LEAF), after years of failing to make an environmental case 
against coalbed methane development, petitioned the Environmental 
Protection Agency (EPA) to require Alabama to regulate hydraulic 
fracturing under the UIC program. EPA rejected LEAF, arguing that 
Congress never intended UIC to cover hydraulic fracturing. LEAF 
appealed to the 11th Circuit Court of Appeals.
    In 1997, the 11th Circuit Court decided the LEAF v EPA case. The 
Court never addressed the environmental risks of hydraulic fracturing; 
it merely decided that the plain language of the statute included 
hydraulic fracturing as underground injection.
    Not an issue at the time the SDWA passed, Congress did not 
specifically exclude hydraulic fracturing. Two decades later, a court 
ignored the facts of the issue and changed the scope of the law on a 
technicality.
    However, in response to public concerns, EPA initiated a study of 
coalbed methane hydraulic fracturing environmental risks because these 
formations are situated closest to ground water. EPA released the 
competed study in June 2004. No environmental risks of proper hydraulic 
fracturing were identified.
    Analysis of the environmental risks of the technology showed it to 
be safe, but the nation's ability to develop its critical oil and 
natural gas was at risk because of the LEAF cases. Recognizing the need 
to provide legislative clarity and that the existing state regulatory 
system provided effective environmental protection, Congress addressed 
the issue of hydraulic fracturing under the SDWA in the Energy Policy 
Act of 2005.
    The Energy Policy Act preserved the state regulatory system that 
has worked so effectively for the past half century. It clarified that 
the SDWA was not the appropriate regulatory law for hydraulic 
fracturing with one exception. During the analysis of environmental 
risk from hydraulic fracturing, EPA hypothesized that the use of diesel 
fuel as a solvent in the fracturing process of coalbeds might pose a 
risk. While no incidents of damage have occurred, Congress preserved 
the option for the application of the SDWA for regulation if diesel 
fuel was utilized. For five years following the 2005 SDWA amendments, 
EPA took no action under this new authority. Then, in 2010, without 
notice and comment, EPA posted on its website an interpretation that 
wells fractured using diesel fuel would he considered as Class II UIC 
wells-a position it had argued against in the LEAF cases. IPAA and 
others have challenged EPA's website rulemaking and court action is 
pending.
    Meanwhile, in 2009, the Ground Water Protection Council reviewed 
state regulations designed to protect water resources. It again 
concluded that these regulations were adequately designed to protect 
water resources. Yet, later that year, Congress requested another EPA 
study of hydraulic fracturing; it is underway.
    Emerging from the 2005 debate, a number of environmental groups 
initiated efforts throughout the country to create opposition to the 
use of hydraulic fracturing. Since no incidents of drinking water 
contamination have occurred from the use of hydraulic fracturing, these 
efforts could not credibly raise arguments of unmanaged environmental 
risk. Instead, the focus became an aggressive three pronged strategy. 
First, communities were inundated with allegations about the chemicals 
in the fracturing solutions--not that exposure had occurred, just that 
chemicals were used. Second, the existing regulatory process and the 
regulators were demeaned. Third, federalization is presented as the 
only acceptable solution.
    The most visible aspect of this strategy is the recurring focus on 
disclosure of the chemicals used in the fracturing process. Natural gas 
and oil producers do not oppose the disclosure of the chemicals used in 
fracturing. However, because the chemical mixtures involve confidential 
business information, the execution of disclosure is not 
straightforward. Several states have initiated disclosure requirements. 
Recently, the GWPC and IOGCC started FracFocus--a website that will 
provide detailed information on the chemicals used in the fracturing 
process on a well by well basis. IPAA and other national oil and 
natural gas production trade associations have strongly endorsed 
FracFocus as the best approach to deal with a national registry on 
fracturing chemical disclosure. The primary issue, however, continues 
to be whether the regulatory process protects ground water resources 
since chemicals will always be a part of the production of oil and 
natural gas. With about one million operating oil and natural gas wells 
in the United States, tens of thousands of wells being drilled annually 
and only a small number of problem incidents, it is clear that the 
process is sound and effective.
    Equally clear, the drumbeat of opposition to developing American 
oil and natural is taking a toll. Faced with a history of effective 
regulation, the opposition's principal strategy remains distorting the 
risks, demeaning the regulators and demanding federalization. Despite a 
record of supporting the development of both horizontal drilling and 
hydraulic fracturing through the Department of Energy over the past 
several decades, the current Administration now sends mixed and 
uncertain signals regarding the development of these American 
resources. Having primarily supported green energy paths that cannot 
grow fast enough to meet America's energy demand, it cannot now decide 
if it is willing to embrace the opportunities presented by American 
natural gas as a clean, abundant and affordable resource and the 
potential of expanding American oil production for the first time in 
decades. The George Washington National Forest Draft Environmental 
Impact Statement for the Revised Land and Resource Management Plan 
reflects this underlying Administration indecision.
                                 ______
                                 
    Mr. Lamborn [presiding]. All right. Thank you.
    Mr. Mayer?

      STATEMENT OF CRAIG L. MAYER, ESQ., GENERAL COUNSEL, 
                PENNSYLVANIA GENERAL ENERGY, LLC

    Mr. Mayer. Chairman Thompson, Chairman Lamborn, thank you 
for inviting me to appear. By way of background, the Allegheny 
National Forest is located in Northwest Pennsylvania, and it 
shares 93 percent of its 513,000 acres with owners of private 
oil, gas and mineral estates and has done so since the 
forestlands were first acquired in the 1920s and 1930s.
    The mineral development on this acreage is competently and 
rigorously regulated by the Pennsylvania Department of 
Environmental Protection. When the Forest Service acquired 
these acres, as well as most of the 20 million acres of Weeks 
Act lands now found in 42 states, it purposely did not purchase 
the oil, gas and mineral estates.
    At the very heart of the matter is Section 9 of the 1911 
Weeks Act. It, along with other safeguards in the Act, severely 
restricts or precludes the Forest Service from controlling the 
exercise of mineral rights or any other property rights that it 
did not acquire when it bought the surface lands from private 
citizens. Because it now desires to control and even extinguish 
these rights, the Forest Service wants to effectively repeal 
and reverse the effect of Section 9 and has been attempting 
through various administrative maneuvers and artifices to do 
so.
    With respect to the Allegheny National Forest, this began 
in early 2007. To date, its actions have spawned seven 
lawsuits, one administrative appeal of a Forest Plan, threats 
by armed Forest Service personnel to prosecute and arrest 
producers, one wholly baseless criminal charge, unwarranted and 
increasing delays in reviewing drilling notifications, 
decreased oil and gas production and economic hardship for 
hundreds of individuals, families and small businesses.
    Forest Service efforts to impede development activities 
have been persistent and hostile. The string of actions even 
include, and I am not making this up, the Regional Forester for 
the Eastern Region organizing and appointing an Allegheny Oil 
and Gas Strike Team.
    In March 2007, in a Forest Plan revision, Forest Service 
officers secretly crafted and then imposed a regulatory regime 
on private mineral estates. Only costly administrative appeals 
forced the Forest Service to acknowledge it had acted illegally 
in concealing this and not providing for public notice and 
comment and then to suspend application of its rules.
    In March 2008, to stop mineral owners from quarrying road 
surfacing the Forest Supervisor, noting remarkably that the 
laws, regulations and policies had simply been misapplied for 
the previous 85 years, asserted United States ownership of all 
sandstone and shale rock found on the forest.
    In December 2008, specifically in support of then pending 
litigation--by this point in time three cases had been filed--
the national office initiated a rulemaking to impose a Federal 
regulatory regime on private oil and gas estates.
    In April 2009, incredibly at the height of the most severe 
economic recession since the 1930s and again behind closed 
doors, it entered into an agreement with activist 
environmentalist groups to shut down new drilling across the 
entire forest. This was done in a sweetheart settlement 
agreement that included a very unusual clause, noting that the 
Forest Service just happened to possess unrestricted regulatory 
authority over private mineral estates.
    Fortunately, a Federal Judge finding that the Forest 
Service did not possess such authority issued a preliminary 
injunction on December 15, 2009, blocking any further 
implementation of the agreement and lifting the drilling ban.
    In early 2011, the Forest Service renewed its 2008 
rulemaking effort. Again behind closed doors, it is once again 
taking action to grant itself regulatory authority along with 
drafting rules aimed at evading the December 2009 injunction by 
imposing costly and interminably lengthy NEPA requirements on 
wholly private development activities.
    In closing, I believe that all stakeholders can use our 
natural resources in a way that effectively provides for jobs, 
energy security and environmental protection. Your 
Subcommittees are in the perfect place to help us achieve that. 
This is not the time for the Forest Service to continue its 
efforts and to increase the regulatory burdens on our citizens 
and small businesses.
    Thank you very much for taking your interest in these 
issues, and I am prepared to respond to any questions.
    [The prepared statement of Mr. Mayer follows:]

             Statement of Craig L. Mayer, General Counsel, 
               Pennsylvania General Energy Company L.L.C.

I. Background and Introduction
    1. Since 2004, I have been the chief legal counsel for Pennsylvania 
General Energy Company L.L.C (``PGE''), which is headquartered in 
Warren, Pennsylvania. I also serve as a Secretary of the Pennsylvania 
Independent Oil and Gas Association (``PIOGA''). PGE is a member of 
PIOGA. PGE has approximately 150 employees and is engaged in oil and 
gas exploration and production, primarily in Pennsylvania, and it 
currently produces oil and gas from over 850 wells in the Allegheny 
National Forest (``ANF'') that have been developed over the past 25 
years in an oil and gas field that was first discovered shortly after 
the Civil War. PGE owns approximately 40,000 acres of oil and gas lands 
in the ANF, and substantial oil and gas acreage elsewhere.
    2. By way of personal background, I obtained a Juris Doctor degree 
from Duquesne University Law School in 1974, and am a graduate of the 
Pennsylvania State University (1968). From 1968 to 1992, I served in 
the U.S. Marine Corps in various command and staff postings, and I was 
honorably discharged with the rank of Lt. Colonel. As a civilian from 
2000 to 2002, I served in association with seconded State Department 
personnel in Egypt and Israel as an International Observer and Team 
Leader with the U.S. Observer Unit of the Multi-National Force and 
Observers (``MFO''). The MFO monitors Egyptian and Israeli compliance 
with the Camp David Peace Treaty Accords.
    3. The ANF encompasses approximately 513,000 acres which cover 
major parts of four counties in northwestern Pennsylvania, i.e., Elk, 
Forest, Warren and McKean Counties. Notably, 93% of the ANF lands are 
underlain by private severed oil and gas mineral estates. When the ANF 
lands were acquired by the federal government in the 1920s and 1930s, 
the Forest Service purposely did not acquire the private oil and gas 
estates. In fact, under Section 9 of the 1911 Weeks Act, 16 U.S.C. 
Sec. 518, before the United States could even purchase surface lands 
that had been severed from oil and gas estates before the time of the 
United States purchase, both the Secretary of Agriculture and the 
National Forest Reservation Commission had to find that such estates 
``from their nature'' would ``in no manner interfere'' with the use of 
the land for the purposes of the Act. The Forest Service viewed oil and 
gas production as not in conflict with forestry management purposes, 
and that view continued until recently.
    4. The ANF region is the birthplace of the oil and gas industry in 
Pennsylvania, the United States, and the world. The first oil well in 
the world, the Drake Well, was drilled in 1859, about 15 miles from the 
current southwestern ANF boundary. Oil and gas production has occurred 
in this region for well over a century, including on the ANF lands. It 
is a vital part of the culture of the communities in the region and our 
economic base. For example, PIOGA estimates that annually approximately 
25% of the oil produced in Pennsylvania comes from estates within the 
ANF. There are approximately 60 producers and, at least, an equal 
number of supporting businesses who rely on natural resource 
development within the ANF, these groups being composed almost 
exclusively of individuals, families, and small companies. 
Traditionally, the U.S. Forest Service respected multiple use of the 
ANF and cooperated with oil and gas producers. This all changed 
beginning in 2007 and particularly so in early 2009, as I will 
describe. For the past few years, the people, municipalities and small 
businesses of northwestern Pennsylvania have been in a battle with the 
U.S. Forest Service for their livelihoods and economic survival. That 
battle is unfortunately ongoing.
II. The U.S. Forest Service's 2009 Effort to Shut-Down Drilling and 
        Economic Activity in the ANF
    5. At the height of the most severe national recession since the 
1930s, the U.S. Forest Service incredibly agreed behind closed doors in 
a ``sweetheart'' Settlement Agreement with the Sierra Club and other 
activist groups to shut-down new drilling across the entire 513,000-
acre ANF. I am keenly familiar with the 2009 Settlement Agreement 
between the U.S. Forest Service and the Sierra Club, filed on April 9, 
2009 in the case of Forest Service Employees for Environmental Ethics 
(``FSEEE'') and the Sierra Club et al. v. U.S. Forest Service, No. 
1:08-cv-323-SJM (W.D. Pa.). PIOGA's predecessor association and the 
Allegheny Forest Alliance (``AFA''), a group of municipalities and 
school districts, were intervenors in the case, but had no knowledge of 
the terms of this harmful Settlement Agreement until the day it was 
filed in court, despite our prior requests made through our legal 
counsel to participate in settlement discussions. A Statement by ANF 
Supervisor Leanne Marten on April 10, 2009 (``Marten Statement'') 
implemented the Settlement Agreement. Fortunately, as I explain later, 
on December 15, 2009, a federal judge granted a preliminary injunction 
to block the Settlement Agreement, and save our region from economic 
ruin.
    6. The 2009 Settlement Agreement adopted without any public input, 
particularly from elected officials of the ANF region, radically 
changed the legal regime applicable to oil and gas exploration and 
development activities in the ANF, by subjecting the Forest Service's 
issuances of ``Notices to Proceed'' for oil and gas wells to burdensome 
compliance with the National Environmental Policy Act of 1969, 42 
U.S.C. Sec. 4332 (``NEPA''). Section 102(2)(C) of NEPA requires federal 
agencies to prepare an Environmental Impact Statement before carrying 
out ``major Federal actions significantly affecting the quality of the 
human environment.'' Under the Settlement Agreement, the Forest Service 
sought to bind itself to apply NEPA to each individual Notice to 
Proceed, which had previously been a mere notice of the conclusion of a 
60-day consultation process, not a federal permit document.
    3. A 1991 U.S. Congressional hearing fortunately documented the 
past cooperative practices of the U.S. Forest Service regarding oil and 
gas activities in the ANF, which viewed NEPA as inapplicable to the 
exercise of private mineral estates. In the 1991 House Oversight 
Hearing, Subcommittee Chairman Kostmayer reviewed the Forest Service's 
practices regarding ANF mineral development. See Oil and Gas Operations 
in the Allegheny National Forest, Northwestern Pennsylvania, Oversight 
Hearing Before the Subcomm. on Energy of the House Comm. on Interior 
and Insular Affairs, 102d Cong., 1st Sess. (1991), at 1-6 (``1991 
Oversight Hearing''). At the hearing, the Forest Service stressed its 
limited legal authority as a matter of property law, agency practice, 
and a 1980 federal court ruling in United States v. Minard Run Oil Co., 
No. 80-129, 1980 LEXIS 9570 (W.D.Pa. Dec. 16, 1980). 1991 Oversight 
Hearing at 50-128, 138-255. For example, former ANF Forest Supervisor 
Wright's written statement said that:
        Our land management decisions cannot preclude the ability of 
        private mineral owners to make reasonable use of the surface 
        for mineral exploration and development activities, since such 
        rights are defined by the private mineral deed and public law. 
        Our challenge is to protect the rights of the Federal 
        Government, while respecting private mineral rights, and 
        ensuring that private mineral owners and operators take 
        reasonable and prudent measures to prevent unnecessary 
        disturbance to the surface....
1991 Oversight Hearing at 54-55 (emphasis added). He added: ``We do not 
give people permission to drill. That is their right. It is not a 
Federal action. . .. We review the plan and negotiate a plan with them. 
We do not approve a plan.... 1991 Oversight Hearing at 75-79, 113 
(emphasis added).
    4. The 1991 Oversight Hearing record on the ANF provided an 
official summary of a U.S. Agriculture Department Office of General 
Counsel opinion, dated October 1991, concluding that NEPA does not 
apply to exercise of ``outstanding'' mineral rights:
        [W]e do not find that exercise of such rights on National 
        Forest land in Pennsylvania to be a federal action for NEPA 
        purposes. This is so, in part, because Forest Service approval 
        is not a legal condition precedent to the exercise of such 
        rights under either state law, current federal law or 
        regulation, or Forest Service Policy. See for example FSM 2832.

                                  ***

        The question of whether the right can be exercised, and the 
        ability to deny that right, is simply not left to the surface 
        owner under Pennsylvania law! A ``reasonable use'' standard 
        does govern the exercise of such rights, but it also recognizes 
        the limited role of the surface owner in the process. In other 
        words, if the exercise of such rights extends beyond what is 
        reasonable, as was the situation some years ago in the instance 
        of Minard Run, then your recourse is to move to protect your 
        rights as surface owner, to reach a reasonable accommodation so 
        that each may enjoy their respective rights.... That practice 
        does not elevate your involvement to a federal action for NEPA 
        purposes.''
1991 Oversight Hearing at 192-93 (emphasis added). This was the way 
things worked for decades on a cooperative basis in the ANF, and on the 
other 22 million acres of land of National Forests with private mineral 
estates acquired under the 1911 Weeks Act, 16 U.S.C. Sec. 518.
    5. The 2009 Settlement Agreement sought to change entirely the 
governing legal regime and practices without any corresponding change 
in the applicable law and regulations. This is confirmed by the 
Statement from Forest Supervisor Leanne Marten, dated April 10, 2009, 
which declares that ``All remaining pending, and all future, oil and 
gas proposals on the Allegheny National Forest will be processed after 
the appropriate level of environmental analysis has been conducted 
under NEPA.'' Forest Service officials publicly confirmed that new oil 
and gas drilling activities could not be carried out until a full 
Forest-wide EIS under NEPA is completed and a Notice to Proceed is 
issued. Of course, we understood that a forest-wide EIS would be a 
multi-year process, likely taking at least four to five years, and more 
before appeals were resolved.
    6. Accordingly, the Settlement Agreement imposed a de facto 
drilling ban in 2009 on future oil and gas exploration and development 
across the entire 513,000-acre ANF for years into the future. The U.S. 
Forest Service sought to enforce the drilling ban with a heavy hand. 
Within two weeks of announcing the Settlement Agreement, it created 
what was called an ``Allegheny Oil and Gas Strike Team'' and issued 
unlawful ``requests'' for information from oil and gas operators and 
imposed processing delays if they did not respond. In early 2009, 
shortly after the FSEEE case was commenced, the Forest Service charged 
at least one individual officer of an oil and gas company with a 
misdemeanor, a case the government never ultimately pursued. As a 
former military and federal prosecutor, and being well versed in the 
applicable law, this misdemeanor matter appeared to me to be a 
deliberate abuse of Forest Service petty offense enforcement authority. 
It was perfectly clear from the fact situation that there was no basis 
upon which to allege a criminal offense. To protect PIOGA members from 
the abuse of the criminal process, I took the measure of preparing a 
legal memorandum strongly objecting to this behavior and sent it to 
both the U.S. Attorney's Office and the Pennsylvania Attorney General's 
Office. Sadly, in the past four years, employees and owners of oil and 
gas businesses have been threatened by the Forest Service with criminal 
prosecution if they proceeded with their ordinary business activities 
in the ANF. To my knowledge, the Forest Service threatened at least 
four individuals. It was particularly troubling for me to learn of 
Armed Forest Service personnel confronting citizens, prominent leaders 
in our communities, engaged in lawful oil and gas development 
activities and directing them to cease, or face arrest.
    7. Notably, the April 10, 2009 Statement by Forest Supervisor 
Marten admitted the severe adverse economic impact which the Settlement 
Agreement would have on the local communities surrounding the ANF. The 
Marten Statement (at p. 1) stated in part as follows: ``we acknowledge 
the impact this will have on families and businesses, especially at a 
time when our nation is facing such a difficult economic downturn.'' 
The Marten Statement (at p. 1) makes the following additional points: 
``There is no easy explanation of why this is occurring....For some, 
this impact may be short-term and for others it may be a lifetime.''
    8. I firmly believe the 2009 Settlement Agreement was punitive, 
even retaliatory, in nature. If it remained in force, it would have had 
an irrevocable, profound, massive, and devastating adverse impact on 
oil and gas production activity in the ANF and upon the economy, 
communities, and people of the surrounding region dependant on this 
development activity. Fortunately, a federal court intervened in late 
2009 and blocked the unlawful drilling ban, as I will now explain.
III. The December 15, 2009 Judicial Relief Granted by Federal Judge 
        Sean McLaughlin
    9. On December 15, 2009, a federal judge in western Pennsylvania, 
the Honorable Sean J. McLaughlin, granted a preliminary injunction 
against the U.S. Forest Service and the Sierra Club, barring the 
implementation of the 2009 Settlement Agreement. See Minard Run Oil Co. 
and Pennsylvania Oil and Gas Association. v. U.S. Forest Service, et 
al., 2009 WL 4937785 (W.D. Pa. 2009). Judge McLaughlin wrote a detailed 
opinion finding that the Settlement Agreement was likely contrary to 
law, contrary to the Forest Service's past practices, and causing 
irreparable harm to oil and gas businesses in the ANF region. He issued 
his ruling following a three-day evidentiary hearing where he heard 
testimony from approximately 15 witnesses, including PGE's President 
Douglas Kuntz, all subject to cross-examination.
    10. Judge McLaughlin's opinion concluded that the ``Forest Service 
does not possess the regulatory authority that it asserts relative to 
the processing of oil and gas drilling proposals.'' He added that 
consequently, ``its involvement in the approval process does not 
constitute a major federal action requiring NEPA compliance.'' Judge 
McLaughlin found that the ``continued denial of access to privately 
held property rights and the irreparable harm flowing therefrom if the 
injunction is denied, imposes a far more significant hardship on...[the 
oil and gas companies] than would a return to the status quo on the 
Forest Service.'' Judge McLaughlin also stated that there was a ``clear 
public interest in preventing unreasonable interference with private 
property rights.'' Accordingly, he granted a preliminary injunction, 
barring implementation of the Settlement Agreement and directed an 
immediate return to prior practices which had been the status quo.
    11. We are very grateful for the judicial relief provided by Judge 
McLaughlin, but the U.S. Forest Service still resisted and moved for 
reconsideration of his ruling, which he denied on March 9, 2010, 
following an additional hearing in his court. Not content with adhering 
to the Judge's preliminary injunction ruling, both the U.S. Forest 
Service and the Sierra Club appealed the preliminary injunction order 
to the U.S. Court of Appeals for the Third Circuit, which heard 
argument on the appeal sitting in Philadelphia in late January, 2011. 
Fortunately, the judicial relief provided by Judge McLaughlin has 
remained in force while that appeal is pending, and we expect a ruling 
any time now.
IV. Forest Service Actions in 2007 and 2008 Leading up to the 
        Settlement Agreement
    12. Sometime between publication of ANF's draft revised Forest Plan 
in 2006 and approval of the final plan in March 2007 the Forest Service 
attempted to insert a regulatory scheme into its Forest Plan. This was 
done under the guise of modifying planning ``standards'' and 
``guidelines,'' that included, among other things, a new and 
unprecedented federal permit requirement for regulating the conduct of 
privately owned and state regulated oil and gas development. PIOGA and 
many of its individual members promptly appealed this action through 
administrative channels. As the regulatory scheme was clearly added to 
the Plan secretly and concealed from the public the Forest Service was 
forced to acknowledge that it had acted illegally. To remedy its 
failings it issued an Appeal decision in February 2008 that suspended 
application of the scheme until public notice and comment requirements 
were satisfied and the Forest Service's authority for imposing a new 
layer of regulations in the first place was ``clarified.'' As the PIOGA 
objected to approval and imposition of a federal regulatory scheme in 
the first instance, and the Forest Service appeal decision formally 
approved the regulatory scheme, it was no comfort to learn that all the 
Forest Service's was going to do was paper-over its illegal conduct by 
providing a meaningless public comment period and giving itself the 
opportunity to clean-up (i.e., ``clarify'') language found in the Plan 
that was inconsistent with its new found regulatory authority. PIOGA 
challenged this conduct in the case of Pennsylvania Oil and Gas 
Association v. U.S. Forest Service, No. 1:08-cv-162-SJM (W.D. Pa.). 
That case has been stayed pending issuance of the Third Circuit 
decision noted above.
    13. While directing itself to suspend application of its regulatory 
scheme on the ANF the Forest Service was still committed to impeding 
private oil and gas development. On March 28, 2008, and within six 
weeks of the Appeal decision Forest Supervisor Marten, repudiating over 
85 years of practice and legal precedent, issued a letter decision 
prohibiting oil, gas, and mineral owners from using certain ``mineral 
materials'' found on their private mineral estates. Remarkable in its 
denouncement it proclaimed that ``It has come to my attention that the 
application of the laws, regulations, and policies governing the 
disposal of mineral materials off of National Forest System lands have 
not been appropriately applied on the Allegheny National Forest.'' It 
then proceeded, by reference to a long-existent Forest Service 
regulation that applies only to a certain category of federally owned 
minerals, to claim ownership of all minerals in that same category that 
were, as well, found on privately owned mineral estates. This was done 
regardless of what deeds or state property laws prescribed to the 
contrary. Effectively, the Forest Service attempted to confiscate as 
many as 483,000 acres of certain privately owned minerals with nothing 
more than a bureaucratic edict. The purpose of the edict was to prevent 
mineral owners from using stone for the surfacing of oil and gas roads 
and well pads.
    14. In the fall of 2008 When PGE advised Forest Supervisor Marten 
that it was going to explore for and take sandstone and shale on lands 
for those purposes and where PGE had been conveyed the named minerals 
PGE was invited to file a ``claim'' under the federal Quiet Title Act. 
In 2008, when one mineral owner indeed did file an action under the 
Quiet Title Act regarding stone ownership, the Forest Service promptly 
invoked the twelve year (12) statute of limitations that accompanies 
the Act and asserted that it had somehow managed to have notified the 
owner of its claim to the stone over 12 years before the mineral owner 
filed suit. As a consequence, certainly not lost on the Forest Service, 
if the District Court concludes that the statute of limitations applies 
and has run, the mineral owner could not maintain a claim and would 
forfeit his mineral rights. This would be so even if it was perfectly 
clear from the deeds and Pennsylvania law that the mineral owner owned 
the stone. I am confident that this legal ruse was not one of the 
methods of land acquisition to which the state of Pennsylvania 
consented when it authorized the United States to acquire private lands 
from its citizens. The case I referred to is PAPCO v. U.S. Forest 
Service, No. 1:08-cv-253-MBC (W.D. Pa). The District Court decision in 
that case is pending.
    15. While the ANF was adjusting to the suspension of its regulatory 
scheme the processing time for Forest Service responses to drilling 
notifications was showing little improvement from what producers had 
experienced in 2007. Following the approval of the Forest Plan in March 
2007 processing response times had quickly expanded from 60 days or 
less to five and six months. In short, even with the suspension, there 
was continued resistance and opposition to accommodating oil and gas 
development. In the lead-up to the filing of the FSEEE case this found 
expression in an internal Forest Service e-mail dated October 8, 2008 
where Forest Service Officers were considering, among other things, 
notifying ``recreational stakeholders'' of oil and gas developments 
that the ANF objected to such that it might result in a suit against 
the Forest Service ``based upon a failure to perform NEPA analysis.'' 
Within six weeks, such a suit just happened to materialize when the 
FSEEE filed against the Forest Service on November 20, 2008.
V. Continued and Increasing U.S. Forest Service Slow-Down of Processing 
        Drilling Proposals and new Obstructions
    16. Judge McLaughlin's opinion of December 15, 2009 found that 60 
days was the traditional timeframe allowed for the Forest Service to 
process well drilling proposals and consult with operators about 
desired surface mitigation measures. Since shortly after the entering 
of the Court's preliminary injunction in December 2009, the Forest 
Service has provided me (in response to FOIA requests) with bi-weekly 
or monthly reports showing statistics related to the processing of 
private oil and gas development (``OGD'') notifications on the ANF. We 
have tabulated the data to calculate the time it is taking for the ANF 
to process the OGD notifications that the ANF has received since the 
issuance of the court's injunction on December 15, 2009. The statistics 
show that on average it is now taking over seven months for the ANF to 
process or deal with notifications before it issues a ``Notice to 
Proceed,'' and that since July 15, 2010 the processing time has 
expanded from four months to the current seven months.
    17. Simply put, these continuing and increasing delays by the U.S. 
Forest Service are excessive and not consistent with past procedures 
and the 60-day timeframe that was previously adhered to by the ANF. 
Apparently, the timely processing of drilling proposals to enable job 
creating activity is not a priority with this U.S. Forest Service, even 
when a federal court order directs that this be done.
VI. The U.S. Forest Service Rulemaking Effort
    18. Beyond this, the Forest Service has been seeking ways through a 
rulemaking process to evade the Judge McLaughlin's ruling which granted 
critically needed relief to us. Specifically, they have initiated a 
rulemaking process which would seek to grant themselves regulatory 
authority which the Judge has found they lacked. The Forest Service 
first started this process back in December 2008 with the initiation of 
an Advance Notice of Proposed Rulemaking in the Federal Register. See 
73 Fed. Reg. 79,424 (Dec. 29, 2008) (re ``Management of National Forest 
System Surface Resources with Privately Held Mineral Estates''). That 
notice and comment rulemaking would specifically address the ANF, and 
other National Forests. Any such rulemaking would have to comply with 
the Administrative Procedure Act, 5 U.S.C. Sec. 551 et seq., and other 
procedural and substantive requirements, such as the Regulatory 
Flexibility Act, 5 U.S.C. Sec. 601 et seq., which requires federal 
agencies to assess the adverse economic impacts of their actions on 
small businesses, and the Paperwork Reduction Act, 44 U.S.C. Sec. 3501, 
et seq., which aims to minimize paperwork burdens on those who must 
respond to federal government requests for information. By seeking to 
adopt a new command and control regulatory approval process and impose 
burdensome NEPA review requirements, the Forest Service is effectively 
seeking to evade the ruling of the federal court.
    19. By way of a FOIA request we obtained a copy of the Forest 
Service's internal Regulatory Review Workplan that was used as 
justification for issuance of the ``Non-Significant'' designation that 
accompanied the December 29, 2008 Advance Notice of Proposed 
Rulemaking. The entire Workplan consists of a five page form with fill-
in the blank and check the box styled entries or statements. It has no 
supporting documentation. After a careful review, on January 5, 2011, 
PIOGA requested the USDA Office of Inspector General to investigate the 
preparation of this document as it appeared to contain false 
statements. I understand that that investigation is now in progress.
    20. As recently as the fall of 2010 in the Unified Agenda of 
Federal Regulatory Actions, the Forest Service identified this private 
mineral estate rulemaking as still proceeding, and incredibly claimed 
that it would not cause adverse economic impacts on small business 
entities. We have obtained through FOIA requests a copy of a Forest 
Service summary of the rulemaking that was underway as of early 2011 
when the Forest Service was consulting with hundreds of Native American 
tribes about the rulemaking. A copy of that U.S. Forest Service 
summary, dated February 9, 2011, along with U.S. Forest Service letters 
dated January 27, 2011 and March 21, 2011, are attached to this 
testimony and establish that draft proposed rules have been in 
existence since at least January 27, 2011. Yet, the Forest Service has 
not consulted with the Congress, the Commonwealth of Pennsylvania, and 
PIOGA, about the rulemaking.
    21. At the April 5, 2011 hearing of the House Sub-committee on 
Energy and Natural Resources Congressman Thompson asked a testifying 
Forest Service Official, the Director of Minerals and Geology 
Management, the status of the regulation that the Forest Service was 
drafting about private mineral estates. Remarkably and dishearteningly, 
the witness denied that there was a draft of the proposed rules.
    22. As the Forest Service summary dated February 9, 2011, reveals, 
the draft rulemaking would seek to impose the NEPA process on the 
exercise of private mineral estates in National Forest lands, something 
which the federal court has declared unlawful. Furthermore, this 
rulemaking would apply to mineral estates nationwide, not merely in 
Pennsylvania, and would impose widespread multi-year prohibitions on 
oil and gas activity while costly NEPA studies were prepared. This 
would include National Forests with prospective oil and gas interest in 
the States of Pennsylvania, Ohio, West Virginia, Virginia, Kentucky, 
Tennessee, Louisiana, Texas, Indiana, Michigan, and North Dakota, among 
others.
    23. The Governor of Pennsylvania, Tom Corbett, has recently 
expressed his strong concerns about this U.S. Forest Service rulemaking 
in a letter dated June 14, 2011 to the Chief of the U.S. Forest 
Service, and a copy of that letter is attached to my testimony. In 
addition, Pennsylvania State Senator Mary Jo White, who is Chair of the 
Pennsylvania Senate Environmental Resources and Energy Committee, has 
expressed her strong concern about this rulemaking to Secretary of 
Agriculture Vilsack and Forest Service Chief Tidwell in a letter dated 
March 31, 2011, a copy of which is attached to this testimony as well.
    24. Finally, in closing, I would be remiss if I didn't refer the 
Sub-committees to language penned 100 years ago that speaks loudly and 
clearly to us today. On April 15, 1910 in what would be the last in a 
decade-long line of proposed forest reserve bills and Congressional 
reports leading up to the passage of the Weeks Act the House Committee 
on Agriculture issued a warning and as we know now--a prophecy. 
Following brief descriptions of each of the 15 sections of the act the 
Committee noted: ``It will be observed from this review of the 
provisions of the bill that the interests of the people are carefully 
safeguarded at every point beyond any possibility of invasion, except 
by collusion of highest officials of the legislative, executive, and 
administrative branches of the Government.'' House Report # 1036, 
Committee on Agriculture, April 15, 1910, to accompany H.R. 11798, at 
page 2.
    On behalf of PGE and PIOGA and in furtherance of seeing that the 
interests of the people of Pennsylvania are not further invaded, I 
thank the members of the subcommittees here today for your interest and 
help on these issues which are of vital importance to northwestern 
Pennsylvania, and many other regions of our nation.
Attachments:
        1.  Forest Service Proposed Rulemaking Summary, dated February 
        9, 2011.
        2.  Pennsylvania Governor Tom Corbett Letter to U.S. Forest 
        Service Chief Tidwell, dated June 14, 2011.
        3.  Pennsylvania Senator Mary Jo White Letter to USDA Secretary 
        Vilsack and U.S. Forest Service Chief Tidwell, dated March 31, 
        2011.
                                 ______
                                 
    [NOTE: Attachments have been retained in the Committee's official 
files.]

    Mr. Lamborn. Thank you.
    Ms. Wofford?

               STATEMENT OF KATE GIESE WOFFORD, 
         EXECUTIVE DIRECTOR, SHENANDOAH VALLEY NETWORK

    Ms. Wofford. Thank you for the opportunity to comment. It 
is truly an honor for me to have the chance to be a witness 
this afternoon.
    My name is Kate Wofford, and I serve as Director of the 
Shenandoah Valley Network. We work with local citizens groups 
to preserve rural lands and communities in the Shenandoah 
Valley. The Network is a very small nonprofit. I am the only 
full-time staff member.
    I hope today to provide the Valley's unique perspective on 
natural gas drilling, particularly the strong support among 
elected officials and area residents for a ban on horizontal 
drilling in the George Washington National Forest.
    Public lands on the George Washington make up a quarter of 
the land in three Valley counties and serve as a source of 
local drinking water for a quarter of a million people in and 
around the Valley. The forest provides many benefits to the 
region and to the country, traditional uses like hunting, 
fishing and hiking, as well as wildlife habitat and timber 
resources.
    Since 2007, long before natural gas drilling emerged as a 
possibility, the Valley's elected officials and residents 
started asking forest planners to formally identify and protect 
the public drinking water source on the forest. Seven counties, 
plus numerous towns, cities and civic groups, adopted formal 
resolutions urging the Forest Service to carefully manage 
drinking water quality and supply.
    Later, in 2010 when the Valley was faced with its first 
proposal for a Marcellus shale natural gas well, the local 
leaders took a conservative and cautious approach. Rockingham 
County officials drove five hours each way to visit Wetzel 
County, West Virginia, where this type of gas drilling is in 
full swing. They took along one of the citizen leaders I work 
with, Kim Sandum.
    Not one person on the trip came back to Rockingham County 
and said this is an industry we would like to develop here. In 
fact, local governments in the farm community have concerns 
that horizontal drilling may be incompatible with the 
investments of our region's traditional rural sectors and could 
actually do more harm than good.
    The Rockingham County Farm Bureau adopted a resolution this 
spring supporting natural gas development, but opposing high 
volume hydraulic fracturing. Not surprisingly, when the 
opportunity to influence management of the public forestlands 
came up again last fall, localities in the Valley asked the 
Forest Service to limit or ban hydraulic fracturing.
    Rockingham, Augusta and Shenandoah Counties, as well as 
city councils in Harrisonburg and Staunton, all wrote letters 
or passed resolutions. Numerous local citizens expressed 
similar concerns. Thankfully, the forest planners carefully 
studied the issue and responded with a proposal that reflects 
local concerns, a prohibition on horizontal drilling on Federal 
lands, oil and gas leases.
    We have a landowner at the hearing here this morning in the 
audience, Mr. Everett May, Jr., from Rockingham County. His 
family has farmed land next to the George Washington for 
several generations. Mr. May signed a lease for gas drilling in 
2006 thinking it would be a simple vertical well. Then he found 
out about the potential impacts of Marcellus shale gas 
drilling, and he told me that he would give that lease back if 
he could. But he can't.
    So Mr. May and many of his neighbors asked the county 
supervisors to see that a conservative approach is taken on 
private lands, and they asked the Forest Service to make sure 
that this kind of gas drilling didn't happen on the George 
Washington.
    I believe that the local government and the landowner 
messages from the Valley on horizontal drilling were not 
intended to be political statements on oil and gas production 
on public lands elsewhere. They were directed to the George 
Washington, and they ought to be taken at face value. Citizens 
in the Shenandoah Valley have observed the impacts of Marcellus 
shale gas development in other communities and have decided 
that a cautious approach is warranted.
    That concludes my statement, and I welcome questions. 
Again, thank you for the opportunity to be here.
    [The prepared statement of Ms. Wofford follows:]

            Statement of Kate Wofford, Executive Director, 
                       Shenandoah Valley Network

    Thank you for the opportunity to comment. It is an honor to be here 
this morning.
    My name is Kate Giese Wofford and I serve as executive director of 
the Shenandoah Valley Network of citizens groups in the Valley's six 
northern counties. I work with residents and their elected officials to 
preserve rural lands and communities, and to strengthen the Valley's 
rural economy. The Network is a non-profit group and I am the only 
staff member.
    I am here today to provide the Valley's unique perspective on 
natural gas drilling; particularly the strong support among elected 
officials and area residents in Rockingham, Shenandoah and Augusta 
Counties and the cities of Harrisonburg and Staunton for a ban on 
horizontal drilling in the George Washington National Forest.
    I'd like to cover several points:
          The northern Shenandoah Valley is conservative, 
        cautious and, at times, skeptical. I find that residents and 
        local elected officials take their time and do their homework 
        before they come to a decision or embrace anything new.
          The George Washington National Forest represents 29 
        percent of all the land in Augusta County and 24 percent in 
        Rockingham and Shenandoah County and provides public drinking 
        water to 260,000 residents in and around the Shenandoah Valley. 
        Therefore the Forest Management Plan will have a major impact 
        on local land use and water supplies for at least 15 years.
          Since 2007, long before natural gas drilling emerged 
        as a possibility, the Valley's elected officials and residents 
        started asking forest planners to formally identify and protect 
        the public drinking water sources on the George Washington 
        National Forest. In total, 40 local governments and civic 
        organizations adopted formal resolutions urging the Forest 
        Service to specifically manage public drinking water quality 
        and supply. Supervisors in seven Shenandoah Valley counties and 
        council members in four town and two cities, representing over 
        340,000 citizens, submitted such resolutions. These requests 
        were heard, and drinking water resource identification and some 
        new protections are included in the draft forest plan.
          The northern Shenandoah Valley has not sought to 
        embrace and has no history of intensive energy development on 
        its rural lands. In fact, local governments have long-supported 
        rural economic development based on productive working farm and 
        forest lands and robust tourism and recreation sectors.
          Last fall, elected officials in the three northern 
        Shenandoah Valley counties and on the two city councils 
        specifically asked the U.S. Forest Service to ban or place a 
        moratorium on horizontal natural gas drilling to protect both 
        public drinking water and/or rural lands. This spring, 
        Rockingham County Farm Bureau adopted a resolution supporting 
        natural gas development, but opposing high volume hydraulic 
        fracturing until its impacts on agriculture are well 
        understood. Many local citizens groups and conservation 
        organizations have expressed similar concerns.
          The draft George Washington National Forest 
        Management Plan, with the ban on horizontal natural gas 
        drilling, reflects both the careful analysis conducted by the 
        forest and the policies and priorities of local governments and 
        residents in these counties. It is not a precedent for other 
        parts of our nation.
    The Shenandoah Valley has a strong base of traditional rural 
businesses like farming, timber, tourism and recreation. Small-scale 
natural gas production has been minimal, with conventional vertical 
wells that had little impact on local farms or forests.
    Therefore, in 2010, when the Valley was faced with its first 
proposal for a Marcellus Shale natural gas well, the local officials 
took a thoughtful and cautious approach. Rockingham County officials 
drove five hours each way to visit Wetzel County, WVA where this type 
of gas drilling is in full swing. They took along one of the citizen 
leaders I work with, Kim Sandum.
    In Wetzel County, they saw farm land bulldozed for wastewater 
holding ponds and drilling pads, narrow rural roads chewed up by heavy 
truck traffic, extensive pipeline development on farm and forest land, 
compressors that run all night and mountain streams sucked dry to 
provide millions of gallons of water used for drilling.
    Rockingham officials talked to landowners and emergency response 
crews. Not one person on the trip came back from to Rockingham County 
and said ``This is an industry we'd like to develop in the Shenandoah 
Valley.'' Later, when the possibility for shale gas drilling on public 
lands came up, local officials remained skeptical.
    I've brought with me the letters sent to the U.S. Forest Service 
last fall, requesting a moratorium or ban on horizontal drilling by the 
three counties and two cities. To quote from a Sept, 16, 2010 letter 
from the county:
        ``Rockingham County is supportive of the development of 
        alternative energy resources located at a site that is 
        appropriate for its use, with appropriate levels of regulation 
        and oversight, and on private lands. The Board does not support 
        the commercialization of natural resources in the National 
        Forest or National Park lands, other than the limited timber 
        sales program, through mining, extraction and other industrial 
        means.''
    As I said earlier, the Valley's local governments and private 
sector have been investing for generations in traditional rural land 
uses based on its extraordinary natural, historic and cultural 
resources: farming, forestry, tourism and recreation. They have no 
history of, or strategy for, economic development based on heavy energy 
development on rural lands.
    In fact, local governments and the farm community have concerns 
that horizontal drilling is incompatible with the investments made in 
our region's traditional rural sectors and could actually do more harm 
than good. The Rockingham County Farm Bureau adopted a resolution in 
the spring supporting natural gas development, but opposing high-volume 
hydraulic fracturing. Our tourism folks are looking to fill local 
restaurants and hotels with visitors enjoying the national forest, 
Shenandoah National Park and our world-famous rivers and Civil War 
battlefields.
    Thankfully, the Forest planners carefully studied the issue and 
responded with a proposal that respects local concerns--a prohibition 
on horizontal drilling on federal lands oil and gas leases. This 
restriction is viewed in the Valley as a middle-of-the-road proposal.
    It does not impact the potential for vertical gas drilling on 
almost 1 million acres of the Forest, nor does it affect the potential 
for natural gas drilling on private lands or privately held mineral 
rights on the forest. And the ban would not be permanent. It's part of 
a 10-15 year management plan. Forest planners have made it very clear 
that if gas drilling on private land demonstrates that our local 
natural gas resource is developable and can be done without impact to 
water quality, the Forest would reconsider the issue.
    We have a landowner at the hearing this morning, Mr. Everett May, 
Jr. from Rockingham County, whose family has farmed land next to the 
George Washington National Forest in Virginia and West Virginia for 
several generations. Mr. May signed a lease for Marcellus shale gas 
drilling in 2006, thinking it would be a simple vertical well. Then he 
learned about impacts of this industry in other communities. He told me 
that he would give that lease back if he could. But he can't. So he, 
and many of his neighbors, asked the County Supervisors to see that a 
conservative approach is taken on private lands and asked the Forest 
Service to make sure that this kind of gas drilling didn't happen on 
public lands.
    From a personal perspective, I got to know the Shenandoah Valley 
well when I went to college at Washington & Lee University in 
Lexington. Before returning to the Valley three years ago, my family 
and I lived in Idaho for 5 years. I worked with coalitions of 
landowners, ranchers, and government officials on public lands 
policies. Out west, I saw first hand the frustration among local people 
and elected officials over public land managers' lack of responsiveness 
to the priorities of local communities.
    In this plan from the George Washington National Forest, the Forest 
Service listened and, in large part, followed the requests of nearby 
localities. There are new provisions to identify and monitor source 
areas for public water supply, a high priority for Valley communities 
and a topic that was not addressed in the 1993 Plan. And, of course, 
the ban on horizontal drilling is also consistent with citizen concerns 
about a new industry.
    I believe that the local governments and landowner messages from 
the Valley on horizontal drilling were not intended to be political 
statements on oil and gas production on public lands elsewhere. They 
were directed to the George Washington National Forest and ought to be 
taken at face value. Citizens in the Shenandoah Valley have observed 
the impacts of Marcellus shale gas development in other communities and 
have decided that a cautious approach is warranted.
    Again, thank you for the opportunity to provide a perspective from 
the Shenandoah Valley.
Attachments for the record, submitted by email:
    Rockingham County letter to Ms. Hyzer
    Augusta County letter to Ms. Hyzer
    Shenandoah County resolution
    City of Harrisonburg letter to Ms. Hyzer
    City of Staunton resolution
    Rockingham County Farm Bureau resolution

    [NOTE: Attachments have been retained in the Committee's official 
files.]
                                 ______
                                 
    Mr. Lamborn. All right. Thank you.
    Ms. Mall?

STATEMENT OF AMY MALL, SENIOR POLICY ANALYST, NATURAL RESOURCES 
                        DEFENSE COUNCIL

    Ms. Mall. Thank you, Mr. Chairman and Members of the 
committee. I am Amy Mall, a Senior Policy Analyst with the 
Natural Resources Defense Council or NRDC.
    NRDC is not opposed to natural gas as a fuel. Natural gas 
is cleaner burning than other fossil fuels and can help in a 
transitional role as our nation shifts to a cleaner energy 
future. But the nation's use of natural gas must be efficient, 
and natural gas must be produced by methods that best protect 
clean water, clean air, land, the climate, human health and 
sensitive ecosystems.
    Cases of contaminated water, unhealthy air pollution and 
scarred landscapes are too common in the rush to develop 
natural gas. Some say this industry is mature and has 
sufficient safety and environmental standards in place, but 
today's oil and gas well is not your grandfather's oil and gas 
well. Wells are deeper, drilling is more intensive and there 
are growing concerns about impacts to wildlife, human health, 
communities and public lands.
    The George Washington National Forest is an extremely 
popular location for hunting, fishing, hiking, camping and 
other outdoor pursuits and, as was mentioned earlier, it is 
home to the headwaters of the Potomac River, which help supply 
drinking water here in Washington, D.C. It appears that the 
U.S. Forest Service has correctly taken a precautionary 
approach in assessing the potential impacts from natural gas 
production on water and other natural resources in the George 
Washington National Forest before moving forward to approve any 
new drilling.
    While there is growing understanding of the environmental 
impacts of oil and gas development, much remains unknown. There 
has been little scientific investigation into the wide range of 
potential environmental impacts from this very complex 
industry. Federal agencies therefore have begun conducting 
their own inquiries into various aspects of oil and natural gas 
operations.
    For example, Forest Service research in West Virginia found 
that forests suffer permanent changes from drilling operations, 
including ineffective erosion controls and toxic waste disposal 
methods that kill vegetation. The researchers found that 
unexpected impacts could not be carefully controlled, planned 
for or mitigated.
    The U.S. Geological Survey (USGS) has found that the 
knowledge of how horizontal drilling and hydraulic fracturing 
might affect water resources has not kept pace with the 
expanded use of these technologies. The USGS stated that, and 
this is a quote, ``Agencies that manage and protect water 
resources could benefit from a better understanding of the 
impacts that drilling and stimulating Marcellus shale wells 
might have on water supplies.''
    Clearly many uncertainties remain, but drilling on Federal 
lands continues to proceed apace across the country. The Bureau 
of Land Management has been approving permits, and there are 
more than 38 million acres of land onshore leased for oil and 
gas by the BLM. While some places may be appropriately 
protected, this is a small minority of parcels.
    We are concerned that current regulations, as well as 
enforcement capabilities, are insufficient. Federal 
environmental laws, including the Clean Air Act, Safe Drinking 
Water Act and Clean Water Act, have gaping loopholes for the 
oil and gas industry that need to be closed. For example, the 
Clean Water Act definition of pollutant excludes hydraulic 
fracturing fluids under certain circumstances, and hydraulic 
fracturing is also exempt from the Safe Drinking Water Act.
    While the Department of the Interior has announced some new 
procedures to improve review of parcels proposed for leasing, 
something that we strongly support, the agency has not put the 
strong rules we need into place to require new practices that 
best minimize environmental impacts.
    Drilling on Federal lands must also abide by state rules, 
but state rules are also woefully inadequate in most locations. 
For example, the West Virginia Secretary of Environmental 
Protection recently said that the state's regulations for 
Marcellus gas wells is ``inadequate'' and that the agency 
hasn't fully considered drilling's aggregate effects on water, 
air, roads, public health and safety.
    This is not a partisan issue. A Republican candidate for 
Governor in West Virginia recently stated that West Virginia 
needs new regulations to protect communities, state roads and 
the environment, and it is clear from blowouts during frac jobs 
in Pennsylvania recently--there have been several in the last I 
think two years--that the industry does not always use the 
safest practices.
    States and Federal agencies are also not staffed to fully 
enforce the current laws on the books. Virginia had less than 
10 enforcement staff in 2008 for 6,000 wells. West Virginia, 
the most recent report was that there are 12 inspectors for 
59,000 wells. The GAO reported earlier this year that the 
Department of the Interior continues to experience problems in 
hiring, training and retaining sufficient staff to provide 
oversight and management of oil and gas operations on Federal 
lands and waters.
    In conclusion, it is clear to us that we need more science 
and research, stronger rules and better enforcement to protect 
the public health and our natural resources from the risks of 
natural gas development. We urge the committees to work with 
others in Congress and make sufficient funds available to 
Federal agencies to ensure they have the resources they need 
for these essential activities. Thank you.
    [The prepared statement of Ms. Mall follows:]

             Statement of Amy Mall, Senior Policy Analyst, 
                   Natural Resources Defense Council

    Chairmen and Members of the Committees, thank you for inviting me 
to testify today. I am Amy Mall, a Senior Policy Analyst with the 
Natural Resources Defense Council, or NRDC. NRDC is a non-profit 
organization of scientists, lawyers, and environmental specialists 
founded in 1970 and dedicated to protecting public health and the 
environment, supported by more than 1.2 million members and on-line 
activists.
    I want to state up front that NRDC is not opposed to natural gas. 
Natural gas is cleaner burning than other fossil fuels and can help in 
a transitional role as our nation shills to a cleaner energy future. 
But the nation's use of natural gas must be efficient, and natural gas 
must be produced by methods that best protect clean water, clean air, 
land, the climate, human health and sensitive ecosystems. More needs to 
be done in order to approve oil and gas exploration and production. 
Cases of contaminated water sources, unhealthy air pollution and 
scarred landscapes are too common in the rush to develop natural gas 
resources.
    Oil and natural gas exploration and production have been going on 
in the United States for almost 200 years. Some say that this history 
means the industry is mature and has sufficient safety and 
environmental standards in place. But today's oil and gas industry is 
not your grandfather's oil and gas industry. Wells are deeper, drilling 
is more intensive, hydraulic fracturing introduces more pressure into 
wells, a lot more resources are used such as water and chemicals, 
enormous amounts of toxic waste are generated and must be managed, 
extensive heavy industrial machinery and equipment generates noise and 
toxic air pollutants, and there are growing concerns about impacts to 
wildlife, human health, communities and public lands.
    As a resident of Washington, D.C., I have visited the George 
Washington National Forest many times. So have millions of other 
people, including many from urban areas seeking fresh air and nature; 
the national forest hosts more than one million people per year, with 
more than 9 million people living within 75 miles. It is an extremely 
popular location for hunting, fishing, hiking, camping, and other 
outdoor pursuits.
    The George Washington National Forest is also home to the 
headwaters of the Potomac and James Rivers, which help supply drinking 
water for many communities, including Washington, D.C. and Richmond. 
Virginia. The U.S. Forest Service has correctly taken a precautionary 
approach in assessing potential impacts from hydraulic fracturing on 
water and other natural resources in the George Washington National 
Forest before moving forward to approve new drilling. The Forest 
Service has also engaged in a very robust public process for the 
revision of its management plan, with the first public meeting held in 
2007 and six scheduled for this summer. All parties have had an 
opportunity for input into this plan.
    While there is growing understanding of the environmental impacts 
of oil and gas development, much remains unknown. There has been very 
little scientific investigation into the wide range of potential 
environmental impacts from this very complex industry. That is one 
reason why at least five federal agencies--the U.S. Environmental 
Protection Agency, the Department of the Interior, the Department of 
Energy, the U.S. Geological Survey (USGS), and the Forest Service have 
begun conducting some of their own inquiries into various aspects of 
oil and natural gas operations. In addition, the scientific resources 
of the Health and Human Services Department and others should also be 
brought to bear on these questions.
    For example, Forest Service research in West Virginia has found 
that forests suffer permanent changes from drilling operations, 
including more than 200 trees cut down or harmed for only one wellpad, 
ineffective erosion controls, and toxic waste disposal methods that 
killed vegetation. The researchers found that unexpected impacts could 
not be carefully controlled, planned for, or mitigated.\1\
---------------------------------------------------------------------------
    \1\ Adams. Mary Beth et al.-Effects of development of a natural gas 
well and associated pipeline on the natural and scientific resources of 
the Fernow Experimental Forest,'' Gen. Tech. Rep. NRS-76. Newtown 
Square. PA: U.S. Depannient of Agriculture. Forest Service. Northern 
Research Station. 2011; and Adams, Mary Beth et a1, ``Effects of 
natural gas development on forest ecosystems'' Gen. Tech. Rep. NRS-P-
78. Newtown Square. PA: U.S. Department of Agriculture. Forest Service. 
Northern Research Station. 2010
---------------------------------------------------------------------------
    Duke University researchers recently documented what they describe 
as ``systematic evidence for methane contamination of drinking water 
associated with shalegas extraction'' and called for more data and 
research.\2\
---------------------------------------------------------------------------
    \2\ Osborn. Stephen G. et al. ``Methane contamination of drinking 
water accompanying gas-well drilling and hydraulic fracturing.'' 
Proceedings of the National Academy of Sciences. May 17. 2011, vol. 
108, no. 20. 8172-8176.
---------------------------------------------------------------------------
    The USGS found that the knowledge of how horizontal drilling and 
hydraulic fracturing might affect water resources has not kept pace'' 
with the expanded use of these technologies. The USGS has stated that 
``Agencies that manage and protect water resources could benefit from a 
better understanding of the impacts that drilling and stimulating 
Marcellus Shale wells might have on water supplies, and a clearer idea 
of the options for wastewater disposal.'' \3\
---------------------------------------------------------------------------
    \3\ Soeder- Daniel J. and William M. Kappel. ``Water 
Resources and Natural Gas Production from the Marcellus Shale,'' U.S. 
Geological Survey. Fact Sheet 2009-3032. May 2009.
---------------------------------------------------------------------------
    Clearly, many uncertainties remain. Despite these uncertainties, 
federal agencies have for years proposed oil and gas projects that do 
not fully comply with our environmental laws, and continue to do so. 
Many courts have overturned agency oil and gas approvals because of a 
lack of compliance; these decisions have led to improved projects on 
the ground, with better protection for valued resources. Drilling on 
federal lands continued to proceed apace. The Bureau of Land Management 
(BLM) has been approving permits and there are more than 38 million 
acres of land onshore leased for oil and gas by the BLM.\4\ It has been 
determined that price, not policy, is the biggest determining factor 
for drilling.
---------------------------------------------------------------------------
    \4\ Oil and Gas Lease Utilization--Onshore and Offshore: Report to 
the President. U.S. Department of the Interior. March. 2011.
---------------------------------------------------------------------------
    Not only is there limited scientific knowledge about the impacts of 
oil and natural gas production, but current regulations, as well as 
enforcement capabilities, are insufficient. Federal environmental laws, 
including the Clean Air Act, Safe Drinking Water Act, and Clean Water 
Act, have gaping loopholes for the oil and gas industry that need to be 
closed. For example, the Clean Water Act definition of ``pollutant'' 
excludes hydraulic fracturing fluids under certain circumstances.\5\ 
Hydraulic fracturing is also exempt from the Safe Drinking Water 
Act,\6\ emissions of toxic air pollutants by certain oil and gas 
operations are exempt from National Emission Standards for Hazardous 
Air Pollutants,\7\ and toxic oil and gas waste is exempt from federal 
hazardous waste provisions.\8\
---------------------------------------------------------------------------
    \5\ 33USC1362(6)(B)
    \6\ Energy Policy Act of 2005. Section 322
    \7\ 42USC7412(n)(4)
    \8\ 42USC6921(b)(2)
---------------------------------------------------------------------------
    While the Department of the Interior has announced new procedures 
to improve review of parcels proposed for leasing, something that NRDC 
strongly supports, the agency has not put strong rules in place to 
require new practices to best minimize environmental impacts. State 
rules are also woefully inadequate. For example, the Secretary of West 
Virginia's Department of Environmental Protection (DEP) was recently 
quoted in a news article as stating that ``....the DEP regulatory 
process for Marcellus gas wells is inadequate.'' He also stated that 
West Virginia's regulatory structure ``isn't prepared'' and that the 
DEP hasn't fully considered drilling's aggregate effects on water, air, 
roads, public health and safety.\9\
---------------------------------------------------------------------------
    \9\ . David. ``DEP: System 'isn't prepared'.'' The Dominion Post, 
June 3, 2011.
---------------------------------------------------------------------------
    This fact is not a partisan issue. A Republican candidate for 
Governor in West Virginia was recently quoted as stating that West 
Virginia needs new regulations to protect communities, state roads and 
the environment.\10\ Virginia has not seen any significant updating of 
its rules in more than a decade. Inadequate state rules are a concern 
in other states across the country.
---------------------------------------------------------------------------
    \10\ Rivard. Ry, ``Republican Bill Maloney urges Marcellus shale 
regulations.'' Charleston Daily Hail. July 4. 2011.
---------------------------------------------------------------------------
    States and federal agencies are also not staffed to fully enforce 
current laws on the books. It has been reported that Virginia had less 
than 10 enforcement staff in 2008 to oversee approximately 6,000 
wells,\11\ and that West Virginia has only 12 inspectors for 59,000 
wells.\12\ And in February of this year, the GAO reported the 
Department of the Interior (DOI) ``continues to experience problems in 
hiring, training, and retaining sufficient staff to provide oversight 
and management of oil and gas operations on federal lands and waters.'' 
\13\
---------------------------------------------------------------------------
    \11\ ProPublica,''How Big is the Gas Drilling Regulatory Staff in 
Your State?'' Available at:
    http://projects.propublica.org/gas-drilling-regulatory-staffing/
    \12\ Junkins. Casey. ``Drilling Fees Would Increase.' The 
Intelligencer/Wheeling.News Register. February 1, 2011.
    \13\ U.S. Government Accountabilty Office, ``High-Risk Series: An 
Update.'' February. 2011. GAO-11-278.
---------------------------------------------------------------------------
    In conclusion, we need more science and research, stronger rules, 
and better enforcement to protect the public's health and our natural 
resources from the risks of oil and natural gas development. We urge 
the Committees to work with others in Congress and make sufficient 
funds available federal agencies to ensure they have the resources 
needed for these essential activities.
                                 ______
                                 
    Mr. Lamborn. OK. Thank you.
    Now we will have questions from the Members of the 
committee. Members are limited to five minutes for their 
questions. I now recognize myself for five minutes.
    Ms. Wofford, you talked about wanting a ban on horizontal 
drilling, and I am sure you understand that when you drill down 
and then go laterally with horizontal drilling you can go great 
distances. In fact, I think recently a record was set of nine 
miles from the vertical well itself. But you can go at least 
thousands of feet, sometimes miles.
    So you can have a single pad with multiple wells on it, as 
opposed to 10 or 20 or more vertical wells scattered throughout 
the surrounding countryside. Wouldn't you prefer one pad, as 
opposed to 10 or 20?
    Ms. Wofford. Thanks for the question. I would say from the 
perspective of communities in the Shenandoah Valley the concern 
isn't necessarily just the single footprint of a well pad. The 
concern really is the whole process that is associated with 
shale gas drilling, starting from the exploration all the way 
through to the wastewater treatment.
    I mentioned the field trip that officials took to Wetzel 
County, Pennsylvania. Some of the impacts that they saw there 
go well beyond the footprint of a well pad. It is the impact on 
the landscape from well pads and compressor stations, but also 
the pipeline infrastructure, the heavy truck traffic carting 
chemicals and sand and cement in and out of sites.
    Mr. Lamborn. OK. But your objection is to the horizontal 
process?
    Ms. Wofford. I think the concern in the Shenandoah Valley, 
sir, is really toward the entire process of shale gas drilling.
    Mr. Lamborn. OK. All right. Thank you for your honesty.
    Ms. Matsen, I would like to ask you a question or two. You 
say that Virginia is interested in becoming the energy capital 
of the East Coast, and job creation here in Congress is a huge 
concern of ours, especially given the abysmal and discouraging 
job report that we heard this morning.
    If the proposed horizontal ban on Forest Service lands was 
finalized, what would that do to future energy jobs in the 
Commonwealth of Virginia?
    Ms. Matsen. Thank you, Mr. Chairman, for that question. We 
don't have precise numbers, of course. It is speculative to 
know what would happen.
    But I think we can look at the more than 3,000 jobs that 
the industry is supporting in Southwest Virginia today and 
understand that the area being produced in Southwest Virginia 
is about the same size as the area in which production would be 
banned in the forest and perhaps extrapolate from those facts 
that we are looking at the missed opportunity, shall we say, 
for thousands of additional jobs in Virginia.
    Mr. Lamborn. OK. Thank you. And could you respond to a 
statement made by one of the other witnesses that the states 
playing a role in regulation have a poor record in most cases 
according to one of the witnesses?
    I am not sure I agree with that. Could you respond to that 
in the case of the Virginia perspective?
    Ms. Matsen. Absolutely, sir. I certainly can't agree with 
that. We have, as I said in my remarks, no experience with 
water quality degradation in Virginia through decades of 
hydrofracturing and even the, perhaps, single decade of the 
high volume hydrofracturing in Southwest Virginia. Not a single 
experience.
    Now, not to jinx our luck, and I can certainly turn to my 
expert to my right, but we are diligent. There has been a lot 
of discussion today about being cautious and being conservative 
and being diligent. Virginia and its regulators are all of 
those things, and we have a comprehensive regulatory scheme 
that goes from site examination to casing plans all the way to 
reclamation to make sure that the interests and resources of 
Virginia and Virginians are well protected.
    Mr. Lamborn. OK. Thank you.
    Mr. Miller, I will conclude with you. Interestingly, and I 
have a quote here from the Director of Natural Resources 
Defense Council, Mr. Ralph Cavanaugh, ``If the industry could 
meet high standards of environmental performance for extracting 
and delivering the fuel, we are looking here at very good news 
for America's economy and industrial competitiveness, the 
environment and our nation's energy security.''
    Can the industry meet those high standards that will lead 
to the good news that Mr. Cavanaugh says in his quote?
    Mr. Miller. Thank you very much for the question. We 
certainly believe we can. We have a long history of developing 
these industry standards and best practices. They are widely 
used throughout the country. They are widely cited not only in 
the state regulations, but also in the Federal regulations many 
times over.
    And we have a large community of experts that develop these 
documents, as I mentioned in my testimony. So we feel that this 
strong foundation of technical work provides the blueprint that 
we are all looking for.
    Mr. Lamborn. OK. Thank you very much. My time is up. I will 
yield to the Ranking Member for five minutes.
    Mr. Holt. Thanks, Mr. Chairman.
    Ms. Matsen, what is the largest industry in the 
Commonwealth of Virginia?
    Ms. Matsen. Agriculture, sir.
    Mr. Holt. Yes. As I understand it, about 350,000 jobs in 
the Commonwealth?
    Ms. Matsen. Yes, sir.
    Mr. Holt. Do you know the top five agricultural counties in 
the state?
    Ms. Matsen. They are right there in the Valley. Yes, sir. 
Of course.
    Mr. Holt. Yes. Three of the top five have actually 
commented on this subject. Let me mention a few things that I 
have here.
    The County of Shenandoah, if I may quote here, in the 
revised management plan the Board of Supervisors asks that the 
Forest Service act to aggressively protect drinking water 
resources by prohibiting hydraulic fracturing natural gas 
wells. Do you disagree with the elected officials of Shenandoah 
County?
    Ms. Matsen. I certainly do not disagree with their caution.
    Mr. Holt. OK.
    Ms. Matsen. It is understandable that they would want to 
proceed carefully. However, I am not aware----
    Mr. Holt. Rockingham County.
    Ms. Matsen.--of any threat to their drinking water from 
this practice.
    Mr. Holt. OK. Rockingham County has also commented 
similarly, does not support these activities. Do you disagree 
with Rockingham County, the leaders?
    Ms. Matsen. Well, we do, sir.
    Mr. Holt. You do?
    Ms. Matsen. As I say, we agree with their desire to proceed 
with caution. This is an unfamiliar practice to the folks in 
the county. It has been going on in Southwest Virginia for a 
long time, though not in the northern part of the state.
    Mr. Holt. OK.
    Ms. Matsen. We look forward to engaging with our public 
officials in----
    Mr. Holt. Thanks. Now, Augusta County Board of Supervisors 
``does not support hydrofracking'' as has been proposed. Do you 
disagree with the elected officials of the County of Augusta?
    Ms. Matsen. We do support hydrofracking in the forest.
    Mr. Holt. You do. And the City of Harrisonburg, Virginia? 
You disagree with the Council there when they say the Forest 
Service should act aggressively to protect drinking water by--
--
    Ms. Matsen. Again, we are not aware that this will pose any 
risk.
    Mr. Holt. And you support or do not support the declaration 
of the Town of Staunton I believe this is--yes, the Staunton 
City Council--asking the Forest Service to act aggressively to 
protect the drinking water by prohibiting the horizontal 
hydraulic fracturing?
    Ms. Matsen. If acting aggressively means a ban, sir, we 
would not support.
    Mr. Holt. I see. All right. Thank you. Now, these are not 
what you would call politically liberal bastions. We are not 
talking about Berkeley, California, or Cambridge, 
Massachusetts, are we here?
    Ms. Matsen. No, sir.
    Mr. Holt. No? OK. All right. Thank you.
    Ms. Mall, you mentioned that the USGS found that knowledge 
of how horizontal drilling and hydraulic fracturing might 
affect water supplies has not kept pace with the expanded use.
    You go on further to say that the problems in hiring, 
training, retaining sufficient staff to provide oversight and 
management exist and that we need more understanding and better 
enforcement in the area. So it sounds like you see some lack of 
knowledge on how to proceed.
    Given that, do you think the Forest Service should move 
ahead with the horizontal drilling/hydraulic fracturing in the 
absence of this understanding and in the absence of this kind 
of enforcement?
    Ms. Mall. Yes. Absolutely. We think a lot more science and 
research is needed. That is why we support the EPA's 
investigation into the potential risks of hydraulic fracturing 
on drinking water. Also, the Department of Energy is looking 
into this and, as we heard earlier, the----
    Mr. Holt. But the question is do you think they should 
allow these technologies to proceed in the absence of this 
knowledge?
    Ms. Mall. We think there are places that absolutely should 
be off limits because the risk is too great and the unknowns 
are great, and that would include drinking watersheds for 
significant populations like the headwaters of the Potomac 
River.
    It sounds like the Forest Service--I have not read the 
complete draft environmental impact statement. As was stated 
earlier, these are place-based and they are specific to 
location, but the discussion of the fractures and the faults 
underground, the drinking water sources that are there and the 
other important values in the forest, it sounds like they are 
on the right track.
    Mr. Holt. Thanks very much. My time has expired. Thank you, 
Mr. Chairman.
    Mr. Lamborn. OK. You are welcome. We will now take one of 
the Members of the committee out of order because he has a 
funeral to get to. Mr. Goodlatte of Virginia is next.
    Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your 
forbearance. One of my constituents from the Shenandoah Valley 
who gave his life in Afghanistan is being buried at Arlington 
National Cemetery later this afternoon and I do want to be 
there, so I appreciate the opportunity to ask questions of the 
witnesses before I depart.
    Let me start with Ms. Matsen. I have heard from these 
counties as well, expressing their concern about what takes 
place in the National Forest. It is my understanding that not 
to the same degree that we have in the Allegheny National 
Forest in Pennsylvania where 97 percent of the mineral rights 
are owned by private individuals and only 3 percent by the 
Forest, so the forest land is owned by the government, but the 
subsurface rights are primarily not owned there.
    But in the George Washington National Forest it is my 
understanding from the National Forest that 16 percent of the 
land or about 180,000 acres are owned by private entities in 
terms of the subsurface mineral rights. So if one were to 
proceed in those portions of the National Forest, that land 
would be subject to your regulation, would it not, and not to 
the Forest Service's regulation?
    Ms. Matsen. I will look to my expert to confirm, sir, but 
as far as my understanding is that that would be true. Yes, 
sir.
    Mr. Goodlatte. OK. So you would impose the state's 
requirements. And I share your concern and I share the concern 
of the local governments that good standards be imposed before 
any kind of drilling takes place. We haven't seen this in the 
Shenandoah Valley. We have in other parts of Virginia.
    And I suspect that is in part because there is a lot of 
uncertainty about whether there is an economically viable 
deposit in the area, but if there were determined to be one for 
that 180,000 acres this process that we are talking about here 
where they are banning it would not apply to those acres.
    So the question I have for you is do you think that it 
would make good sense for the Forest Service to work on good 
technology and procedures that would be applied on their 
portion of the land and to work with the state and to the 
extent the Federal Government has input here on making sure 
that good practices are imposed because they can't stop it on 
those 180,000 acres anyway?
    Ms. Matsen. Yes, sir. I absolutely agree that there is a 
path short of a ban that allows us to develop those resources 
carefully and cautiously that would protect the interests in 
the forest.
    Mr. Goodlatte. And I share the concern of those local 
governments with regard to the quality of their drinking water 
and making sure that any chemicals used in the hydrofracking 
process wouldn't be allowed to get into the drinking water 
systems of those governments.
    But they have jurisdiction over the remaining private land 
in their area with regard to certain zoning regulations and so 
on that they can impose. Have you heard from any of those 
jurisdictions that they have banned horizontal drilling or 
attempted to ban it in their jurisdiction on those private 
lands?
    Ms. Matsen. No, sir, I have not. They have declined to act 
on some interest that has been expressed, but in terms of 
adopting a ban going forward, no, sir. I have not.
    Mr. Goodlatte. So they have taken a case-by-case approach? 
They want to be cautious. I know that, for example, there was 
one application in a floodplain, and obviously that would 
generate some concern with regard to how those chemicals might 
get into drinking water if you had a flood or some other event 
like that.
    But they have not taken the position that there would be no 
county-wide ban on horizontal drilling on private lands. Their 
focus has been imposing this ban strictly on Federal lands. As 
we have just pointed out, it wouldn't be an entire ban anyway 
because there would be land where the subsurface mineral rights 
are still retained by private landowners.
    So again, my question to you is given the desire on the 
part of some, including myself, to make sure that we are using 
the newest and best technology and that we are making sure that 
there is not degradation of the land or the water resources of 
the counties that I represent, would it not make more sense to 
have a progressive approach to looking to using those newest 
technologies, as opposed to a 15 year ban which would not be 
100 percent effective to begin with, but also would not allow 
for the same kind of considerations that they are making on 
private lands in the rest of the county on these public lands 
in the National Forest?
    Ms. Matsen. Yes, sir. Absolutely.
    Mr. Goodlatte. Thank you. Those are the only questions I 
have, Mr. Chairman.
    Mr. Lamborn. Thank you. We will now revert to the regular 
order of Members of the committee. Mr. Thompson of 
Pennsylvania?
    Mr. Thompson. Thank you, Chairman. One of the witnesses 
noted that this isn't your grandfather's oil and gas industry. 
I couldn't agree more.
    In my congressional district I have Drake Well, 1859, and I 
have been there. In fact, my district office is I won't say it 
is within a walk, but it is within a hike of that. Frankly, I 
have been on a lot of Marcellus well sites as well. How many of 
the panels have been to a Marcellus well site?
    [A show of hands.]
    Mr. Thompson. Great. I encourage those of you who haven't 
to do that. If you don't get that far just walk to 124 Cannon. 
We will show you a picture of the Drake Well and a 2010 
Pennsylvania General Energy Well as well there. It is 
different. The science, the technology, the standards, the 
oversight by the states. It is absolutely different.
    I want to just share in terms of the EPA, Administrator 
Lisa Jackson stated that there is no evidence that suggests the 
process of hydrofracking contaminates water. Just some 
assurance. My friend from Maryland is not here. He didn't 
allude. He specifically said that I guess those of us in 
Pennsylvania are contaminating the Chesapeake Bay.
    I want to be very clear about that. The blowout that he was 
talking about is specifically the environmental testing after 
the incident found that there was ``limited and very localized 
environmental impact with no adverse effects on aquatic life in 
Towanda Creek.'' So I assure you if there is no adverse impact 
on Towanda Creek, there is nothing in the Susquehanna River and 
nothing hundreds of miles away in the Chesapeake Bay as a 
result of that.
    The previous panel mentioned a lot about the importance of 
public input from the Forest Service, and I can't agree with 
that more. Mr. Mayer, public input within the communities of 
the National Forest obviously is important. What has been your 
experience living and working within the Allegheny National 
Forest, the ability to provide input and how they receive or 
use that input?
    Mr. Mayer. With respect to oil and gas development, Mr. 
Chairman?
    Mr. Thompson. Yes.
    Mr. Mayer. Well, at this point in time, because of the 
litigation and the injunction, the officers on the Allegheny 
National Forest are really not inclined to engage in dialogues. 
They simply participate in the course of the individual 
notifications that come from the companies in order to work 
through the consultation process, which has been the practice 
for the last 85 years and has been so done successfully.
    So on a broad scheme in terms of talking like on a program 
basis, for example, with the Oil and Gas Association there 
really isn't engagement, but on the individual level with 
regard to a particular project there is, and it is typically 
very constructive because you are working usually with 
professional gas and oil administrators from the Forest Service 
at that level.
    Mr. Thompson. It is my understanding that the production of 
shale gas is subject to eight Federal laws and 11 state laws. 
Mr. Mayer, is that true from your perspective?
    Mr. Mayer. I couldn't begin to count the numbers of laws, 
the numbers of agencies and people with oversight frankly, Mr. 
Chairman, but I would feel confident that eight is certainly a 
confident number to rely on.
    Mr. Thompson. Thanks. Mr. Fuller, what, in your opinion, 
would be the net effect on our domestic energy supply if a ban 
on horizontal drilling were carried out across the National 
Forest System?
    Mr. Fuller. Well, it is difficult to know without knowing 
exactly the extent of resources in the National Forest System, 
but in those places where shale gas or shale oil underlies 
National Forest lands essentially the economics of developing 
those types of resources hinges on the use of horizontal 
drilling and hydraulic fracturing.
    That technology has evolved particularly over the past five 
to seven years to allow us to now have the prolific development 
we have in the Marcellus shale and other shales around the 
country, so to suggest that limiting access to vertical wells 
would allow for the same type of development I think is 
inconsistent with the reality that it takes the combination of 
the two to really develop these new and very extensive shale 
formations.
    Mr. Thompson. Thank you, Mr. Chairman.
    Mr. Lamborn. OK. Mr. Fleming of Louisiana?
    Mr. Fleming. Thank you, Mr. Chairman.
    Ms. Wofford, you are here today. I get a sense that you are 
speaking for the people of Shenandoah Valley. Do you speak for 
them here today?
    Ms. Wofford. No, sir. I think I am here to provide a 
perspective that I have observed from the Valley.
    Mr. Fleming. OK. So really you are speaking for yourself?
    Ms. Wofford. Yes, and I feel confident speaking for the 
Shenandoah Valley Network and our member organizations that 
work in the local----
    Mr. Fleming. OK. But you haven't brought any surveys or 
data? There have been no votes on the issue?
    Ms. Wofford. I have brought with me five resolutions from 
local government----
    Mr. Fleming. No, no. I am talking----
    Ms. Wofford.--and a resolution from the Farm Bureau.
    Mr. Fleming. I am not talking about governments or 
government officials. I am talking about the people. I assume 
hundreds, thousands, maybe hundreds of thousands of people. 
There has been no survey.
    Ms. Wofford. Sir, I am comfortable--I am sorry. Go ahead.
    Mr. Fleming. Has there been any survey? I mean, I would 
love to have that data if you have it here today.
    Ms. Wofford. I am confident that the elected officials in 
the communities----
    Mr. Fleming. No. I don't want to hear what you are 
confident about. I want to know the data. Do you have any data? 
Yes or no?
    Ms. Wofford. No, sir.
    Mr. Fleming. OK.
    Ms. Wofford. No survey has been done.
    Mr. Fleming. You have no data.
    OK. Ms. Mall? I can't see your name completely from here so 
I apologize. Now, you indicate that there is inadequate data on 
safety. Now again, we have established that this is a 
technology that has been going on 60 years. It does come under 
the EPA. EPA in 2004 said it is perfectly safe.
    Again, I have asked the question before. I have asked it 
many times in this committee room. Not one, single person has 
been injured or killed from hydrofracking or horizontal 
drilling that I am aware of and nobody else, so it would seem 
to me that the burden is on you to tell us what is the 
technology where--I am sorry. Where is the science that it is 
damaging the environment or is damaging or hurting people? Do 
you have that data here today?
    Ms. Mall. Congressman, I do want to mention one case in 
Ohio where the state----
    Mr. Fleming. Excuse me. I want to get plenty of questions 
in. I don't want anecdotal information.
    Ms. Mall. No. This is a state investigation that found 
groundwater was contaminated due to three contributing factors, 
one of which was a frac job which, what they called, went out 
of zone.
    There are other cases around the country where the state 
regulators have clearly found that oil and gas operations 
contaminated groundwater. We feel that they never asked the 
right questions to answer whether or not fracking was a 
contributing factor in those other cases.
    Mr. Fleming. OK. Have you brought the science on that, the 
study, the engineers evaluating? I mean, obviously for instance 
there is this video that is going around, or I guess it is a 
quasi-documentary about natural gas seeping into water 
supplies. We find out when you actually apply science to it 
that that is something that happens naturally in nature.
    Ms. Mall. It does happen naturally in some cases, but state 
agencies have found that some methane in groundwater was caused 
by oil and gas operations----
    Mr. Fleming. OK. I would love to have----
    Ms. Mall.--in Colorado and in Pennsylvania.
    Mr. Fleming. Let me throw this to the rest of the panel. 
Can anyone here answer that? My understanding is there is not a 
single proven case. I would love to hear your response.
    Mr. Fuller. It depends on whether you are talking about 
fracturing or you are talking about methane. Fracturing there 
have been no cases indicating that the fracturing process has 
caused a problem with contamination to drinking water or 
groundwater.
    Mr. Fleming. Yes.
    Mr. Fuller. Methane contamination is something that can 
occur as a result of the structure of a well. It is an 
important factor that as you are casing and cementing the well 
in place and as you are drilling through formations that you 
have to isolate those zones.
    That is not a static process. Wells have to be maintained. 
Wells have to be carefully constructed. If there is a flaw in 
the steel, if there is a flaw in the cementing, that allows a 
pathway to occur that can bring methane into groundwater. It is 
equally certain that methane can be there naturally and can 
come from other types of formations.
    So the issue at hand is always trying to determine what is 
the source of the methane. If the source of the methane is from 
an oil and gas operator's well, he is responsible for fixing 
it, for stopping that from occurring. It does occur. It has 
been investigated by state regulators. They do occasionally 
find the problem, but in most of the cases that have been 
publicized extensively those have generally been from non oil 
and gas well sources.
    Put it in this context. We have around a million oil and 
gas wells operating in the country right now. We are drilling 
about 20,000 to 35,000 a year. We have a few of these anecdotal 
cases that show up, and they all are investigated by the state 
regulators and they make a determination as to what remedy has 
to be made to fix them.
    Mr. Fleming. All right. And are you aware, sir, of anyone 
who has been harmed or even fatally harmed as a result of 
leakage of methane?
    Mr. Fuller. I am not aware of anyone that has been harmed 
by the leakage of methane associated with oil and gas 
operations. Now, obviously methane is also natural gas, and 
natural gas has been----
    Mr. Fleming. Right. I mean, obviously this does happen 
naturally. You know, we talk about oil spills in oceans, but 
the truth of that matter is that most of the oil that is in the 
ocean seeps through the ocean floor naturally so we have to 
keep all of that in context.
    And the last thing. Ms. Matsen, you indicate that wells are 
regulated on a state level. In my state, at least in North 
Louisiana we have 12 full-time regulators from DEQ who are 
monitoring what is going on in all these wells. So is it 
correct to say that this is an unregulated industry?
    Ms. Matsen. No, sir, it is not.
    Mr. Fleming. OK.
    Ms. Matsen. And in fact, I would say that Louisiana does a 
wonderful job of regulating their industry. I have had the 
opportunity to meet with and talk with your Secretary of 
Natural Resources, and we think very similarly about the 
balance and the important balance between protecting our 
environment, our economy and our energy resources.
    Mr. Fleming. And you are subject to Federal laws in your 
state----
    Ms. Matsen. Yes, sir.
    Mr. Fleming.--as all our states?
    Ms. Matsen. Just like you are.
    Mr. Fleming. Yes. Thank you. Thank you. I am done.
    Mr. Lamborn. OK. I recognize the gentleman from California 
for up to five minutes.
    Mr. Costa. Thank you very much, Mr. Chairman. I know we are 
on the second panel and a lot of the questions have been asked.
    I think it is appropriate that the two committees do spend 
some time, especially in light of the fact that I think we are 
going to utilize more and more natural gas as a cleaner source 
of energy and clearly with the abundance of the Marcellus shale 
and the reserves that now seem to be proven to be over 100 
years will provide a lot of benefit to this country, and it is 
incumbent upon us to ensure that we do it as safely as we can.
    As some of you know, I represent a significant portion of 
Kern County, and if it were ranked as a state in the Nation--
people don't often think about this from California--it would 
be the fourth largest producing oil production in the nation.
    As a matter of fact, I know a lot of my colleagues have 
various views on offshore drilling, but we have 25 platforms 
offshore, and we have a lot of spent drilling in California. 
And California, with 38 million people, produces 47 percent of 
its own oil needs. That gets overlooked. If we didn't do that, 
we would be obviously in a much more difficult situation. We 
also have 20 percent of our energy as renewable, and we are 
trying to by the year 2020 strive to 30 percent as renewable 
energy, so we are trying to balance our portfolio.
    It is my understanding that the Bureau of Land Management 
earlier today and the Forest Service testified that they have 
no intention of banning horizontal drilling or hydraulic 
fracturing on Federal lands. Is that clear, Mr. Chairman? I 
guess I will ask that question through you since that was on 
the previous panel.
    Mr. Chairman? I am asking a question through the Chair 
since I missed the first panel. I understand that BLM testified 
and the Forest Service that they have no intention on banning 
horizontal drilling or hydraulic fracturing on Federal lands. 
Was that testified today?
    Mr. Lamborn. Well, Mr. Abbey indicated that, but 
nevertheless we have this preferred alternative sitting there 
right now in the George Washington Forest where that exact----
    Mr. Costa. No. This Administration, like every previous 
Administration, I think sometimes finds itself in contradictory 
sort of positions. I have been made aware of the Washington 
situation and the proposals there.
    But I think as a policy we are going to have to continue 
slant drilling and fracturization if we are going to take 
advantage of these energy sources and use all the energy tools 
in our energy toolbox as the bipartisan legislation that 
Congressman Murphy and I and others have introduced.
    I think that while you from time to time have problems with 
wells, that is why we have regulations. That is why we need to 
always be scrutinizing this process to ensure that we can 
convince the public that we do this as safely as we possibly 
can. That is a responsibility that I think government has at 
the Federal and state level, as well as the energy companies 
have to ensure that they are using state-of-the-art, best 
management practices.
    Mr. Fuller, would you say that is the case today?
    Mr. Fuller. I think the industry--a combination of things. 
One, the industry's regulatory structure that it operates in 
imposes a substantial set of requirements to assure that the 
protection of environment and public health are undertaken in 
the course of developing processes.
    Mr. Costa. As it should be.
    Mr. Fuller. As it should be. Absolutely.
    Mr. Costa. Right. And it has been longstanding. And we are 
doing this in the shadow of the massive spill in the Gulf----
    Mr. Fuller. Right.
    Mr. Costa.--in which there is a lot of skepticism.
    Mr. Fuller. There is skepticism. There is always going to 
be some skepticism. There are always going to be questions 
about any regulatory system, but it is a system that has arisen 
over multiple decades, long before there was hydraulic 
fracturing, long before there was----
    Mr. Costa. Right.
    Mr. Fuller.--horizontal drilling, that has put in place a 
series of particular protections that are imposed on each 
driller. In addition to that----
    Mr. Costa. My time is running out though, so----
    Mr. Fuller. In addition to that you have efforts like the 
ones that have been undertaken by the American Petroleum 
Institute for nine decades I think said that create technical 
guidance documents and industry standards that the industry 
also tries to adhere to.
    Mr. Costa. And we need to continue to update those to 
ensure that they are the best that they can possibly be in the 
world.
    Mr. Fuller. Absolutely. In fact, the API has just done five 
of them, updated five of them.
    Mr. Costa. One quick question. I don't know if the Chair 
will allow me the time because mine has expired.
    I don't know if it was stated in earlier testimony, but the 
potential we have talked about with the discovery of the 
significance of the Marcellus shale and other finds, the 
potential impacts for natural gas. It is the energy de jour, as 
I like to say in California these days, because we have a lot 
of air quality problems in closed air basins.
    But I am still at a bit of a loss as to why we won't have 
greater utilization, notwithstanding the resource of natural 
gas throughout the country. Could you try to explain why?
    Mr. Fuller. Well, historically natural gas really grew 
after World War II.
    Mr. Costa. I understand that.
    Mr. Fuller. And as that growth expanded you did see a huge 
extension of natural gas into residential or commercial 
operations. At that time there were wellhead controls on gas, 
and it eventually suppressed its development. Now, those came 
off during the 1980s principally, and we saw an increase in 
natural gas.
    At that point in time we were dealing principally with 
conventional formations, to some degree unconventional 
formations like tight sands and coal bed methane, and as we hit 
about 2000 we started seeing a real challenge in being able to 
grow the natural gas market, given the kinds of natural 
depletion rates we were having in the conventional formations.
    Along about 2005, we really saw the emergence, the 
beginning emergence of the development of shale gas. So for now 
the next five, six years we have seen the identification of 
shale gas formations across the country, a wide number of 
formations. We are seeing the development of those formations.
    I think two things. One, as analysts are looking at those 
formations they are now projecting that we have about 100 years 
of potential natural gas supply in this country.
    Mr. Costa. That is based upon the current use?
    Mr. Fuller. Based on current use, which would also allow 
increased----
    Mr. Costa. So if we doubled the use then we would have a 50 
year?
    Mr. Fuller. We would have a 50 year supply. The second 
aspect of that is I think the using industries--manufacturing, 
chemicals--are now realizing that this is a real source of 
supply.
    After watching supply being somewhat constrained in early 
2000, the price going up, you saw the chemical industry in 
particular and other manufacturers being very concerned about 
the reliability of the resource. I think that is changing. We 
are now starting to see chemical companies looking at building 
new operations in areas like West Virginia to take advantage of 
the natural gases.
    Mr. Costa. Thank you very much, Mr. Chairman. You have been 
generous with your time. The witness obviously could be pretty 
good at filibustering if he needed to be.
    Mr. Fuller. I worked in the Senate at one time.
    Mr. Lamborn. This is not a Senate hearing, so----
    Mr. Costa. No, I don't think so, but he has obviously had 
some practice.
    Mr. Fuller. I did work in the Senate at one time.
    Mr. Lamborn. As we start to conclude here, the gentleman 
from Colorado?
    Mr. Tipton. Mr. Chairman, I would like to yield my time to 
Congressman Flores.
    Mr. Lamborn. Mr. Flores?
    Mr. Flores. Thank you, Mr. Tipton. Thank you, Mr. Chairman. 
Witnesses, thank you for joining us today. I know it is not 
something you would like to be doing on a Friday afternoon.
    First of all, Ms. Matsen, what is the unemployment rate in 
Virginia today?
    Ms. Matsen. Golly. Those new numbers just came in, so if I 
don't get the new number forgive me, but I know that we are 
about two points under the national average, and I want to say 
just about 7 percent unemployment.
    Mr. Flores. And how about the Shenandoah Valley? Do you 
have those metrics?
    Ms. Matsen. I am afraid I do not.
    Mr. Flores. OK. Thank you.
    Mr. Mayer, can you tell me about the process that the 
Forest Service used to develop these seven options, if you know 
what it is? If you don't, just say you don't know.
    Mr. Mayer. Well, they are using the forest plan process as 
their planning process----
    Mr. Flores. OK.
    Mr. Mayer.--wherein various options are put forward for 
purposes of being assessed or evaluated.
    Mr. Flores. I mean, how were they developed? Did they hold 
hearings or did they go to each community and say tell us what 
you think about drilling in the George Washington National 
Forest?
    Mr. Mayer. Well, all I can speak to is my familiarity with 
what they did in the Allegheny National Forest in revising the 
Forest Plan there. I would assume it is the very same process.
    And they simply go about seeking public input and conduct a 
series of public meetings, as well as getting data and so forth 
and periodically through of course the technology with the 
Internet are able to update and keep people informed of what is 
going on in the----
    Mr. Flores. OK. I am going to move on. Ms. Wofford, did the 
Forest Service come into the Shenandoah Valley to the counties 
you mentioned and the communities and hold public input 
meetings?
    Ms. Wofford. Yes, sir. There were a series of public 
meetings.
    Mr. Flores. They did? OK. And did you participate in those?
    Ms. Wofford. Yes, sir, I did.
    Mr. Flores. And, Ms. Mall, did you participate in those as 
well?
    Ms. Mall. No, I did not.
    Mr. Flores. OK. Did you provide testimony, Ms. Wofford?
    Ms. Wofford. Yes, sir. We have commented several times on 
the Forest Plan.
    Mr. Flores. OK. Can this committee get copies of that 
testimony?
    Ms. Wofford. Certainly. I would be happy to provide it.
    Mr. Flores. OK. That would be great if you could do that.
    Ms. Mall, is your organization involved in any litigation 
with the Forest Service on drilling?
    Ms. Mall. Yes, sir.
    Mr. Flores. They are? OK. One lawsuit? Several lawsuits? 
How many?
    Ms. Mall. I am not a lawyer. I am not involved in the 
litigation myself. I would say probably several at any time.
    Mr. Flores. OK. How many with respect to the George 
Washington National Forest?
    Ms. Mall. Actually none that I know of with the George 
Washington National Forest.
    Mr. Flores. OK. And, Ms. Wofford, your organization? Is it 
involved in any litigation with respect to the George 
Washington National Forest?
    Ms. Wofford. No, sir.
    Mr. Flores. OK. I am glad to hear that. The issue that was 
raised by the last panel seemed to be more related toward 
water. Even though one of the options was a ban on horizontal 
drilling, instead of trying to address the problem they shot 
another innocent bystander.
    Ms. Wofford, what do you think the problem is here? Is it 
water or is it something broader?
    Ms. Wofford. I think it is both. I think water is certainly 
part of the concern, but I think the concerns are broader. 
Rockingham County, for example----
    Mr. Flores. Short answers, too.
    Ms. Wofford. Sure.--said that they would be open to seeing 
this type of energy development on private lands if it is done 
in the appropriate place with appropriate regulations, but, 
please, not on our public lands, the forestlands that provide 
so many other uses and benefits like water supply to the local 
communities.
    Mr. Flores. OK. Ms. Mall, you made several claims regarding 
the USGS saying that the science wasn't there, which I 
wholeheartedly disagree with. You said that there weren't 
enough regulators in various states. I don't know what 
scientific basis you have to make that claim.
    But just hypothetically, under what circumstances would you 
find drilling for oil and gas in the George Washington National 
Forest to be acceptable?
    Ms. Mall. Well, I think there are probably some places 
where we would think it is not acceptable due to the risks.
    Mr. Flores. Is that the case here?
    Ms. Mall. In some locations. Now, there are many 
technologies that are available to the industry that allow it 
to operate in much cleaner and safer ways than it generally 
does. In most cases we see----
    Mr. Flores. Such as?
    Ms. Mall. For example, using the most stringent well 
construction standards. That is typically stronger than what 
most states require and, in most cases, my understanding is the 
companies tend to comply with the state rules at a minimum--and 
not always go beyond what we know they can do that is safer.
    Capturing air emissions during a frac job, because there 
can be very toxic air emissions. That is another thing we know 
companies can do, but they don't always do.
    So there are a list of things, in addition to how they 
manage the waste that comes out of the frac job, which can be 
quite toxic. There are a list of things we know companies can 
do that they don't adopt uniformly across every operation. That 
would be a starting point to really know that the absolute 
safest practices were in place.
    Mr. Flores. So just theoretically, if a company or an 
organization did do all of these things that you are talking 
about, would you find it acceptable to drill in the George 
Washington National Forest?
    Ms. Mall. I think it would depend on location. Every spot 
is different. How close it is to a water body, whether it is a 
steep slope, whether it is the middle of a hunting ground. 
There are lots of different criteria to take into account, but 
certainly we are not opposed to all drilling every place.
    Mr. Flores. I am glad to hear that. OK. I yield back.
    Mr. Lamborn. Thank you. That concludes our questions. I 
want to thank each of the members of the panel for being here. 
Thank you for putting up with our delay earlier. Members of the 
committee may have additional questions for the record, and I 
would ask you to respond to these in writing.
    Is there any further business before we conclude?
    Mr. Holt. Mr. Chair?
    Mr. Lamborn. Mr. Holt?
    Mr. Holt. I would like to ask unanimous consent to include 
in the record two articles written by Ian Urbina of The New 
York Times about wastewater quality issues associated with 
hydraulic fracturing.
    Before my colleagues jump to ridicule these as not being 
scientific, peer-reviewed articles, I would comment that they 
appear to be well researched and well documented about, for 
example, radioactivity detected in the water.
    I thought it was important to include them in the record 
because in response to some comments I made earlier one of my 
colleagues asked to have included in the record an article from 
the Pittsburgh Tribune-Review saying that in a small selection 
of wells there was no radioactivity found, even though only six 
of the 14 drinking water plants submitted test results, the 
state had asked 25 wastewater treatment plants for results 
which were not included.
    So my point is this is also a newspaper article that 
doesn't have----
    Mr. Lamborn. OK.
    Mr. Holt.--a thorough scientific basis, which only goes to 
illustrate the point that Witness Mall was making that there is 
a great deal to be learned yet. Thank you.
    Mr. Lamborn. OK. Without any objection, so ordered.
    [The two New York Times articles follow:]
Drilling Down
Insiders Sound an Alarm Amid a Natural Gas Rush

By IAN URBINA

The New York Times

Published: June 25, 2011

    Natural gas companies have been placing enormous bets on the wells 
they are drilling, saying they will deliver big profits and provide a 
vast new source of energy for the United States.
    But the gas may not be as easy and cheap to extract from shale 
formations deep underground as the companies are saying, according to 
hundreds of industry e-mails and internal documents and an analysis of 
data from thousands of wells.
    In the e-mails, energy executives, industry lawyers, state 
geologists and market analysts voice skepticism about lofty forecasts 
and question whether companies are intentionally, and even illegally, 
overstating the productivity of their wells and the size of their 
reserves. Many of these e-mails also suggest a view that is in stark 
contrast to more bullish public comments made by the industry, in much 
the same way that insiders have raised doubts about previous financial 
bubbles.
    ``Money is pouring in'' from investors even though shale gas is 
``inherently unprofitable,'' an analyst from PNC Wealth Management, an 
investment company, wrote to a contractor in a February e-mail. 
``Reminds you of dot-coms.''
    ``The word in the world of independents is that the shale plays are 
just giant Ponzi schemes and the economics just do not work,'' an 
analyst from IHS Drilling Data, an energy research company, wrote in an 
e-mail on Aug. 28, 2009.
    Company data for more than 10,000 wells in three major shale gas 
formations raise further questions about the industry's prospects. 
There is undoubtedly a vast amount of gas in the formations. The 
question remains how affordably it can be extracted.
    The data show that while there are some very active wells, they are 
often surrounded by vast zones of less-productive wells that in some 
cases cost more to drill and operate than the gas they produce is 
worth. Also, the amount of gas produced by many of the successful wells 
is falling much faster than initially predicted by energy companies, 
making it more difficult for them to turn a profit over the long run.
    If the industry does not live up to expectations, the impact will 
be felt widely. Federal and state lawmakers are considering drastically 
increasing subsidies for the natural gas business in the hope that it 
will provide low-cost energy for decades to come.
    But if natural gas ultimately proves more expensive to extract from 
the ground than has been predicted, landowners, investors and lenders 
could see their investments falter, while consumers will pay a price in 
higher electricity and home heating bills.
    There are implications for the environment, too. The technology 
used to get gas flowing out of the ground--called hydraulic fracturing, 
or hydrofracking--can require over a million gallons of water per well, 
and some of that water must be disposed of because it becomes 
contaminated by the process. If shale gas wells fade faster than 
expected, energy companies will have to drill more wells or hydrofrack 
them more often, resulting in more toxic waste.
    The e-mails were obtained through open-records requests or provided 
to The New York Times by industry consultants and analysts who say they 
believe that the public perception of shale gas does not match reality; 
names and identifying information were redacted to protect these 
people, who were not authorized to communicate publicly. In the e-
mails, some people within the industry voice grave concerns.
    ``And now these corporate giants are having an Enron moment,'' a 
retired geologist from a major oil and gas company wrote in a February 
e-mail about other companies invested in shale gas. ``They want to bend 
light to hide the truth.''
    Others within the industry remain optimistic. They argue that shale 
gas economics will improve as the price of gas rises, technology 
evolves and demand for gas grows with help from increased federal 
subsidies being considered by Congress. ``Shale gas supply is only 
going to increase,'' Steven C. Dixon, executive vice president of 
Chesapeake Energy, said at an energy industry conference in April in 
response to skepticism about well performance.
Studying the Data
    ``I think we have a big problem.''
    Deborah Rogers, a member of the advisory committee of the Federal 
Reserve Bank of Dallas, recalled saying that in a May 2010 conversation 
with a senior economist at the Reserve, Mine K. Yucel. ``We need to 
take a close look at this right away,'' she added.
    A former stockbroker with Merrill Lynch, Ms. Rogers said she 
started studying well data from shale companies in October 2009 after 
attending a speech by the chief executive of Chesapeake, Aubrey K. 
McClendon. The math was not adding up, Ms. Rogers said. Her research 
showed that wells were petering out faster than expected.
Robbie Brown contributed reporting from Atlanta
                                 ______
                                 
Behind Veneer, Doubt on Future of Natural Gas

By IAN URBINA

The New York Times

June 26, 2011

    Energy companies have worked hard to promote the idea that natural 
gas is the fossil fuel of tomorrow, and they have found reliable allies 
among policy makers in Washington.
    ``The potential for natural gas is enormous,'' President Obama said 
in a speech this year, having cited it as an issue on which Democrats 
and Republicans can agree.
    The Department of Energy boasts in news releases about helping 
jump-start the boom in drilling by financing some research that made it 
possible to tap the gas trapped in shale formations deep underground.
    In its annual forecasting reports, the United States Energy 
Information Administration, a division of the Energy Department, has 
steadily increased its estimates of domestic supplies of natural gas, 
and investors and the oil and gas industry have repeated them widely to 
make their case about a prosperous future.
    But not everyone in the Energy Information Administration agrees. 
In scores of internal e-mails and documents, officials within the 
Energy Information Administration, or E.I.A., voice skepticism about 
the shale gas industry.
    One official says the shale industry may be ``set up for failure.'' 
``It is quite likely that many of these companies will go bankrupt,'' a 
senior adviser to the Energy Information Administration administrator 
predicts. Several officials echo concerns raised during previous 
bubbles, in housing and in technology stocks, for example, that ended 
in a bust.
    Energy Information Administration employees also explain in e-mails 
and documents, copies of which were obtained by The New York Times, 
that industry estimates might overstate the amount of gas that 
companies can affordably get out of the ground.
    They discuss the uncertainties about how long the wells will be 
productive as well as the high prices some companies paid during the 
land rush to lease mineral rights. They also raise concerns about the 
unpredictability of shale gas drilling.
    One senior Energy Information Administration official describes an 
``irrational exuberance'' around shale gas. An internal Energy 
Information Administration document says companies have exaggerated 
``the appearance of shale gas well profitability,'' are highlighting 
the performance of only their best wells and may be using overly 
optimistic models for projecting the wells' productivity over the next 
several decades.
    While there are environmental and economic benefits to natural gas 
compared with other fossil fuels, its widespread popularity as an 
energy source is relatively new. As a result, it has not received the 
same level of scrutiny, according to some environmentalists and energy 
economists.
    The Energy Information Administration e-mails indicate that some of 
these difficult questions are being raised.
    ``Am I just totally crazy, or does it seem like everyone and their 
mothers are endorsing shale gas without getting a really good 
understanding of the economics at the business level?'' an energy 
analyst at the Energy Information Administration wrote in an April 27 
e-mail to a colleague.
    Another e-mail expresses similar doubts. ``I agree with your 
concerns regarding the euphoria for shale gas and oil,''wrote a senior 
officialin the forecasting division of the Energy Information 
Administration in an April 13 e-mail to a colleague at the 
administration.
    ``We might be in a `gold rush' wherein a few folks have developed 
`monster' wells,'' he wrote, ``so everyone assumes that all the wells 
will be `monsters.' ''
    The Energy Information Administration's annual reports are widely 
followed by investors, companies and policy makers because they are 
considered scientifically rigorous and independent from industry. They 
also inform legislators' initiatives. Congress, for example, has been 
considering major subsidies to promote vehicles fueled by natural gas 
and cutting taxes for the industry.
    In any organization as big as the Energy Information 
Administration, with its 370 or so employees, there inevitably will be 
differences of opinion, particularly in private e-mails shared among 
colleagues. A spokesman for the agency said that it stands by its 
reports, and that it has been clear about the uncertainties of shale 
gas production.
    ``One guiding principle that we employ is, `look at the data,' '' 
said Michael Schaal, director of the Office of Petroleum, Natural Gas 
and Biofuels Analysis within the Energy Information Administration. 
``It is clear the data shows that shale gas has become a significant 
source of domestic natural gas supply.''
    But the doubts and concerns expressed in the e-mails and 
correspondence obtained by The Times are noteworthy because they are 
shared by many employees, some of them in senior roles. The documents 
and e-mails, which were provided to The Times by industry consultants, 
federal energy officials and Congressional researchers, show skepticism 
about shale gas economics, sometimes even from senior agency officials.
    The e-mails were provided by several people to The Times under the 
condition that the names of those sending and receiving them would not 
be used.
    Some of the e-mails suggest frustrations among the staff members in 
their attempt to push for a more accurate discussion of shale gas. One 
federal analyst, describing an Energy Information Administration 
publication on shale gas, complained that the administration shared the 
industry's optimism. ``It seems that science is pointing in one 
direction and industry PR is pointing in another,'' wrote the analyst 
about shale gas drilling in an e-mail. ``We still have to present the 
middle, even if the middle neglects to point out the strengths of 
scientific evidence over PR.''
    The Energy Information Administration, with its mission of 
providing ``independent and impartial energy information to promote 
sound policymaking'' and ``efficient markets,'' was created in response 
to the energy crisis of the 1970s because lawmakers believed that sound 
data could help the country avoid similar crises in the future.
    As a protection from industry or political pressure, the Energy 
Information Administration's reports, by law, are supposed to be 
independent and do not require approval by any other arm of government.
    Its administrator, Richard G. Newell, who announced this month his 
plans to resign to take a job at Duke University, has hailed the 
prospects for shale gas, calling it a ``game changer'' in the United 
States energy mix. ``The energy outlook for natural gas has changed 
dramatically over the past several years,'' Mr. Newell told the Natural 
Gas Roundtable, a nonprofit group tied to the American Gas Association. 
``The most significant story is the transformative role played by shale 
gas.''
    A number of factors have also helped create more interest in shale 
gas. The nuclear disaster in Japan in March has focused attention on 
the promise of natural gas as a safer energy source.
    And last year, as energy market analysts warned about tougher 
federal regulations on oil and coal, particularly after the BP oil 
spill and the Massey coal mining accident, they also pointed to natural 
gas as a more attractive investment.
    But a look at the Energy Information Administration's methods 
raises questions about its independence from energy companies, since 
the industry lends a helping hand to the government to compile those 
bullish reports.
    The Energy Information Administration, for example, relies on 
research from outside consultants with ties to the industry. And some 
of those consultants pull the data they supply to the government from 
energy company news releases, according to Energy Information 
Administration e-mails. Projections about future supplies of natural 
gas are based not just on science but also some guesswork and modeling.
    Two of the primary contractors, Intek and Advanced Resources 
International, provided shale gas estimates and data for the Energy 
Information Administration's major annual forecasting reports on 
domestic and foreign oil and gas resources. Both of them have major 
clients in the oil and gas industry, according to corporate tax records 
from the contractors. The president of Advanced Resources, Vello A. 
Kuuskraa, is also a stockholder and board member of Southwestern 
Energy, an energy company heavily involved in drilling for gas in the 
Fayetteville shale formation in Arkansas.
    The contractors said they did not see any conflict of interest. 
``Firstly, the report is an extremely transparent assessment,'' said 
Tyler Van Leeuwen, an analyst at Advanced Resources, adding that many 
experts agreed with its conclusions and that by identifying promising 
areas, the report heightened competition for Southwestern.
    Intek verified that it produced data for Energy Information 
Administration reports but declined to comment on questions about 
whether, given its ties to industry, it had a conflict of interest.
    Some government watchdog groups, however, faulted the Energy 
Information Administration for not maintaining more independence from 
industry.
    ``E.I.A.'s heavy reliance on industry for their analysis 
fundamentally undermines the agency's mission to provide independent 
expertise,'' said Danielle Brian, the executive director of the Project 
on Government Oversight, a group that investigates federal agencies and 
Congress.
    ``The Chemical Safety Board and the National Transportation Safety 
Board both show that government agencies can conduct complex, niche 
analysis without being captured or heavily relying upon industry 
expertise,'' Ms. Brian added, referring to two independent federal 
agencies that conduct investigations of accidents.
    These sorts of concerns have also led to complaints within the 
administration itself.
    In an April 27 e-mail, a senior petroleum geologist who works for 
the Energy Information Administration wrote that upper management 
relied too heavily on outside contractors and used ``incomplete/
selective and all too often unreal data,'' much of which comes from 
industry news releases
    ``E.I.A., irrespective of what or how many `specialty' contractors 
are hired, is NOT TECHNICALLY COMPETENT to estimate the undiscovered 
resources of anything made by Mother Nature, period,'' he wrote.
    Energy officials have also quietly criticized in internal e-mails 
the department's shale gas primer, a source of information for the 
public, saying it may be ``on the rosy side.''
    The primer is written by the Ground Water Protection Council, a 
research group that, according to tax records, is partly financed by 
industry.
    The Ground Water Protection Council declined to respond to 
questions.
    Tiffany Edwards, a spokeswoman for the Department of Energy, said 
that the shale gas primer was never intended as a comprehensive review 
and that further study was continuing.
    Asked about the views expressed in the internal e-mails, Mr. Schaal 
says his administration has been very explicit in acknowledging the 
uncertainties surrounding shale gas development.
    He said news reports and company presentations were included among 
a range of information sources used in Energy Information 
Administration studies. Though the administration depends on 
contractors with specialized expertise, he added, it conforms with all 
relevant federal rules.
    And while production from shale gas has not slowed down and may not 
any time soon, he said, a lively debate continues within the 
administration about shale gas prospects.
 Robbie Brown contributed reporting from Atlanta. Kitty Bennett 
        contributed research.
                                 ______
                                 
    Mr. Lamborn. If there is no further business--Mr. Flores?
    Mr. Flores. I meant to ask one more question. This may be 
grossly out of order, but I was wondering if Ms. Mall could 
provide her testimony that she provided to the Forest Service 
when talking about drilling on the George Washington National 
Forest.
    Ms. Mall. That would be probably her testimony? I am sorry.
    Mr. Flores. Did your organization provide testimony at 
these public input----
    Ms. Mall. Comments?
    Mr. Flores. Yes.
    Ms. Mall. No. We have not commented.
    Mr. Flores. You didn't. OK.
    Ms. Mall. No. Sorry.
    Mr. Flores. Disregard.
    Mr. Lamborn. OK. The committee will be adjourned.
    [Whereupon, at 2:30 p.m., the Subcommittees were 
adjourned.]

    [Additional material submitted for the record follows:]

    [A letter submitted for the record by Peter C. Walton 
follows:]

5/5/2011

7/6/2011

To the House Committees on Agriculture & Natural Resources,

    I am a citizen of Rockingham County, Virginia. My concern, along 
with my fellow citizens, is hydro-fracking. Gas companies already have 
leases in our county, and we are not ok with what they intend to do on 
that land. We are all appalled that such a practice has ever been 
allowed to take place anywhere in this country, and are incredibly 
disappointed that our government could show such little concern forthe 
people.
    Everyone is on the same page: Fracking and other harmful mining 
procedures are no longer acceptable. Oil and Coal are no longer 
working. We MUST move forward immediately with new solar and wind 
technologies, before we have permanently ruined thousands of people's 
drinking water. We cannot wait around for studies to be conducted on 
the effects of hydro-fracking; there is already enough evidence out 
there that proves its harmfulness. Far too much is at stake for this to 
continue. The rape of Mother Nature must end, now.
    I understand Natural Gas may seem like some sort of economic 
solution. However, it is not. Allowing innocent people's water to be 
toxically polluted in order for temporary economic relief makes no 
sense at all. These people are being exploited for profit, and have no 
say in the matter. Exploitation without Representation.
    It seems obvious to me; shift all those billions and billions of 
dollars in the coal and gas industry into new energy sources. The 
potential negative consequences of not doing this are something that no 
human being wants to see. If fracking is allowed to go on in the US, 
and soon the rest of the world, we will no doubt have a global war for 
water on our hands. No amount of money can solve that problem.
    As far as creating jobs go, this time presents an excellent 
opportunity. Thousands of jobs can be created, if the money is moved 
away from the harmful oil and gas industries and put into Sustainable 
Housing projects. We need the unemployed portion of society more than 
ever right now. Jobs can be created in which people will go into homes, 
assess how energy efficient the home is, and then make it as ``green'' 
as it possibly can be. No need to create more mining and oil drilling 
jobs, which are hazardous to the health of workers anyway.
    My personal belief is that we must return to a way of life similar 
to that of the Native American people. The things mentioned above are a 
transition for those who are too scared to be one with nature again; 
the way humans were supposed to be.
    I hope you are on the same page, and I look forward to hearing what 
steps you take to ensure a bright future for Virginia and the rest of 
the Country.

Respectfully,

Peter C. Walton

    I currently have around 150 signatures (and counting) on the 
following petition:

              We Citizens Agree to the Following Concerns

                       June 25, 2011 Bergton, VA

    Over a million people are served by the purification of their 
drinking water by the George Washington National Forest. Our health, 
prosperity and livelihood are dependent upon the wise management of 
these lands. We, the citizens, are opposed to hydraulic fracturing and 
any other harmful gas drilling methods that may be allowed in the 
George Washington National Forest and on both federal and private 
lands.
    We suggest a 15 year moratorium in VA and West VA on any drilling 
permit approval until the EPA conducts its studies on fracking and the 
numerous complaints about air and water contamination, other hydro-
geological studies are fully evaluated for the ecological ramifications 
of such drilling, gas companies full disclose chemicals and perfect 
their technologies, and that we have sufficient regulations in place 
and competent regulators for oversight of drilling operations.
Whereas,
 1.  Horizontal drilling and hydrofracking pose an unacceptable risk to 
our drinking water and the quality of wells, groundwater, aquifers, 
ponds, streams, rivers. Also such activity seriously impacts our air 
basin by toxic chemical emissions, and pollutants.
 2.  Drilling will introduce over millions of gallons of undisclosed 
chemicals into our land, air and water, placing local residents, 
wildlife, and critical agriculture resources and watershed areas at 
risk.
 3.  Communities where hydrofracking has occurred have experienced 
explosions, flammable drinking water, fracking fluid spills, stream 
contamination, fish kills, public health problems, and more.
 4.  We do not have emergency services for such disasters and the cost 
of having them in place would mean additional financial strain on 
taxpayers.
 5.  Gas drilling in Virginia will involve construction of a massive 
infrastructure of wellheads, pipelines, compressing stations, and 
processing centers spread across much of rural Rockingham County and 
Hardy County, West Virginia. Drilling on this scale will turn our 
forest area into industrial wastelands.
 6.  Infrastructure development would likely involve extensive clearing 
of forest trees, 24-hour noise and light pollution, huge increases of 
truck traffic, damage to roads, and disruption to a quiet lifestyle 
that attract people to live here. Also drilling and related development 
are incompatible with agriculture, tourism, recreation; that will 
significantly alter current economic development including severe 
stresses on roadways.
 7.  We want to protect those citizens who own land, homes, and their 
health from the potential dangers of drilling for natural gas.
 8.  In view of these problems Rockingham County, and Hardy County is 
seriously understaffed and underfunded, and is in no position to 
regulate and effectively monitor drilling in Bergton and Criders area 
of Virginia.
 9.  Natural gas is not ``clean energy'' but rather just another 
polluting, non-renewable fossil fuel contributing to atmospheric CO2 
and Methane.
10.  We respect the rights of property owners to exploit or lease the 
mineral rights under their land so long as that use does not diminish 
the value of others' property. Hyrdrofracking cannot be accomplished 
without permanently injuring the rights of adjoining, nearby and 
downstream landowners, in ways described above.
        ``We can't solve problems by using the same kind of thinking we 
        used when we created them.'' -Einstein
    Would George Washington be proud if we destroy the forest named in 
his memory? I think not.

                                 

```