National Wildlife Refuges: Improvement Needed in the Management and Oversight of Oil and Gas Activities on Federal Lands
Published: 2003-10-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The 95-million acres in the National Wildlife Refuge System are the only federal lands primarily devoted to the conservation and management of fish, wildlife, and plant resources. While the federal government owns the surface lands in the system, in many cases private parties own the subsurface mineral rights and have the legal authority to explore for and extract oil and gas. This testimony is based on an August 2003 report (GAO-03-517) in which GAO determined the extent of oil and gas activity on refuges, identified the environmental effects, and assessed the Fish and Wildlife Service's management and oversight of those activities.
section_title: What GAO Found
paragraphs: About one-quarter (155 of 575) of all refuges have past or present oil and gas activities, some dating to at least the 1920s. Activities range from exploration to drilling and production to pipelines transiting refuge lands. One hundred five refuges contain a total of 4,406 oil and gas wells--2,600 inactive wells and 1,806 active wells. The 1,806 wells, located at 36 refuges, many around the Gulf Coast, produced oil and gas valued at $880 million during the last 12-month reporting period, roughly 1 percent of domestic production. Thirty-five refuges contain only pipelines. The Fish and Wildlife Service has not assessed the cumulative environmental effects of oil and gas activities on refuges. Available studies, anecdotal information, and GAO's observations show that the environmental effects of oil and gas activities vary from negligible, such as effects from buried pipelines, to substantial, such as effects from large oil spills or from large-scale infrastructure. These effects also vary from the temporary to the longer term. Some of the most detrimental effects of oil and gas activities have been reduced through environmental laws and improved practices and technology. Moreover, oil and gas operators have taken steps, in some cases voluntarily, to reverse damages resulting from oil and gas activities. Federal management and oversight of oil and gas activities varies widely among refuges--some refuges take extensive measures, while others exercise little control or enforcement. GAO found that this variation occurs because of differences in authority to oversee private mineral rights and because refuge managers lack enough guidance, resources, and training to properly manage and oversee oil and gas activities. Greater attention to oil and gas activities by the Fish and Wildlife Service would increase its understanding of associated environmental effects and contribute to more consistent use of practices and technologies that protect refuge resources.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our recent report on oil and gas  activities on national wildlife refuges, which we prepared at your request.The National Wildlife Refuge System is unique in that the 95 million acres  of land in the system are the only federal lands managed primarily for the  benefit of wildlife, providing habitat for native plants and animals,  including endangered or threatened species, as well as important way  points for migrating species, such as ducks, cranes, and eagles. While the  federal government owns almost all of the surface lands in the system, it  does not, in many cases, own the subsurface mineral rights. Subject to  some restriction, owners of subsurface mineral rights have the legal  authority to explore for mineral resources such as oil and gas and, if such  resources are found, to extract them. As you know, in our recent report,  we (1) determined the nature and full extent of oil and gas activities in the  National Wildlife Refuge System, (2) identified environmental effects of oil  and gas activities on refuge resources, and (3) assessed the Fish and  Wildlife Service’s management and oversight of these activities.
To obtain a more complete understanding of the extent of past and  present oil and gas activities within current wildlife refuge boundaries, we  used national geographic information databases to determine how many  documented oil and gas wells and transit pipelines were located within or  immediately proximate to refuge boundaries. We also used Fish and  Wildlife Service records to identify other evidence of oil and gas activities.  Premier Data Services, a firm with extensive experience in computer- based geographic information systems and oil and gas leasing, aided our  data acquisition and analysis.
In summary, we found the following:
About one-quarter (155 of 575) of all refuges have past or present oil and  gas activity, some dating to at least the 1920s. Activities range from  exploration to drilling and production to pipelines transiting refuge lands.  One hundred five refuges contain a total of 4,406 oil and gas wells—2,600  inactive wells and 1,806 active wells. The 1,806 wells, located at 36 refuges,  produced oil and gas valued at $880 million during the last 12-month  reporting period, roughly 1 percent of domestic production. In addition, oil  and gas exploration has occurred at 44 refuges since 1994, and 1 or more  active pipelines are present in at least 107 refuges, 35 of which do not have  any other oil and gas activity.
The Fish and Wildlife Service has not conducted any assessments of the  cumulative environmental effects of oil and gas activities on refuge  resources. Available studies, anecdotal information, and our observations  show that the environmental effects of oil and gas activities and the  associated construction, operation, and maintenance of the infrastructure  on wildlife and habitat vary in severity, duration, and visibility. For  example, the environmental effects range from infrequent small oil spills  and minimal debris from abandoned infrastructure to large and chronic  spills and large-scale industrial development. Some damage, such as  habitat loss from infrastructure development, may last indefinitely, while  other damage, such as wildlife disturbance from exploration, is of shorter  duration. While certain types of damages are readily visible, others, such  as changes in hydrology or habitat conditions, are more difficult to  quantify or to link solely to oil and gas activities. Over the years, new  environmental laws and industry practice and technology have reduced,  but not eliminated, some of the most detrimental effects of oil and gas  activities. In addition, oil and gas operators have taken steps, in some  cases voluntarily, to reverse damages resulting from oil and gas activities,  but operators have not consistently taken such steps, and the adequacy of  these steps is not known.  The Fish and Wildlife Service does not have a  complete and accurate record of spills and other damage resulting from  refuge-based oil and gas activities, has conducted few studies to quantify  the extent of damage, and therefore does not know its full extent or the  steps needed to reverse it.
Federal management and oversight of oil and gas activities varies widely  among refuges. Some refuges identify oil and gas activities and the risks  they pose to refuge resources, issue permits that direct operators to  minimize the effect of their activities on the refuge, monitor oil and gas  activities with trained personnel, and charge mitigation fees or pursue  legal remedies if damage occurs. Other refuges have fewer or none of  these controls in place. We identified two primary reasons for this  variation. First, the Fish and Wildlife Service’s legal authority to require  operators to obtain permits with conditions to protect refuge resources  varies considerably, depending upon the nature of the mineral rights.  Second, refuge managers lack sufficient guidance, resources, and training  to properly manage and oversee oil and gas activities.
subsections: section_title: Background
paragraphs: Over the years, we and others have examined the effects on the refuge  system of secondary activities, such as recreation, military activities, and  oil and gas activities—which include oil and gas exploration, drilling and  production, and transport. Exploring for oil and gas involves seismic  mapping of the subsurface topography. Seismic mapping requires surface  disturbance, often involving small dynamite charges placed in a series of  holes, typically in patterned grids. Oil and gas drilling and production often  requires constructing, operating, and maintaining industrial infrastructure,  including a network of access roads and canals, local pipelines to connect  well sites to production facilities and to dispose of drilling wastes, and  gravel pads to house the drilling and other equipment. In addition,  production may require storage tanks, separating facilities, and gas  compressors. Finally, transporting oil and gas to production facilities or to  users generally requires transit pipelines.
Department of the Interior regulations generally prohibit the leasing of  federal minerals underlying refuges. In addition, under the National  Wildlife Refuge System Administration Act of 1966, as amended, the Fish  and Wildlife Service (FWS) is responsible for regulating all activities  on refuges. The act requires FWS to determine the compatibility of  activities with the purposes of the particular refuge and the mission of the  refuge system and not allow those activities deemed incompatible. FWS  does not apply the compatibility requirement to the exercise of private  mineral rights on refuges. However, the activities of private mineral  owners on refuges are subject to a variety of other legal restrictions under  federal law. For example, the Endangered Species Act of 1973 prohibits  the “take” of any endangered or threatened species and provides for  penalties for violations of the act; the Migratory Bird Treaty Act prohibits  killing, hunting, possessing, or selling migratory birds, except in  accordance with a permit; and the Clean Water Act prohibits discharging  oil and other harmful substances into waters of the United States and  imposes liability for removal costs and damages resulting from a  discharge. Also, FWS regulations require that oil and gas activities be  performed in a way that minimizes the risk of damage to the land and  wildlife and disturbance to the operation of the refuge. The regulations  also require that land affected be reclaimed after operations have ceased.
section_title: One-Quarter of Refuges Have Past or Present Oil and Gas Activities
paragraphs: At least one-quarter, or 155, of the 575 refuges (538 refuges and 37 wetland  management districts) that constitute the National Wildlife Refuge System  have past or present oil and gas activities—exploration, drilling and  production, transit pipelines, or some combination of these (see table 1).Since 1994, FWS records show that 44 refuges have had some type of oil  and gas exploration activities—geologic study, survey, or seismic  mapping. We also identified at least 107 refuges with transit pipelines.  These pipelines are almost exclusively buried, vary in size, and carry a  variety of products, including crude oil, refined petroleum products, and  high-pressure natural gas. Transit pipelines may also have associated  storage facilities and pumping stations, but data are not available to  identify how many of these are on refuges.
Over 4,400 oil and gas wells are located within 105 refuges. Although  refuges with oil and gas wells are present in every FWS region, they are  more heavily concentrated near the Gulf Coast of the United States. About  4 out of 10 wells (41 percent) located on refuges were known to be  actively producing oil or gas or disposing of produced water during the  most recent 12-month reporting period, as of January 2003. Of the 105  refuges with oil and gas wells, 36 refuges have actively producing wells.  The remaining 2,600 wells did not produce oil, gas, or water during the last  12 months; many of these were plugged and abandoned or were dry  holes. During the most recent 12-month reporting period, the 1,806  active wells produced 23.7 million barrels of oil and 88,171 million cubic  feet of natural gas, about 1.1 and 0.4 percent of total domestic oil and gas  production, respectively. Based on 2001 average prices, refuge-based  production had an estimated total commercial value of $880 million.
Substantial oil and gas activities also occur outside but near refuge  boundaries. An additional 4,795 wells and 84 transit pipelines reside within  one-half mile of refuge boundaries. The 4,795 wells bound 123 refuges, 33  of which do not have any resident oil and gas wells. The 84 pipelines  border 42 different refuges. While FWS does not own the land outside  refuge boundaries, lands surrounding refuges may be designated for future  acquisition.
section_title: Overall Effects of Oil and Gas Activities Are Unknown, but Those Activities Have Diminished Some Refuge System Resources
paragraphs: The overall environmental effects of oil and gas activities on refuge  resources are unknown because FWS has conducted few cumulative  assessments and has no comprehensive data. Available studies, anecdotal  information, and our observations show that some refuge resources have  been diminished to varying degrees by spills of oil, gas, and brine and  through the construction, operation, and maintenance of the infrastructure  necessary to extract oil and gas. The damage varies widely in severity,  duration, and visibility, ranging from infrequent small oil spills and  industrial debris with no known effect on wildlife, to large and chronic  spills causing wildlife deaths and long-term soil and water contamination.  Some damage, such as habitat loss because of infrastructure development  and soil and water contamination, may last indefinitely while other  damage, such as wildlife disturbance during seismic mapping, is of shorter  duration. Also, while certain types of damage are readily visible, others,  such as groundwater contamination, changes in hydrology, and reduced  habitat quality from infrastructure development are difficult to observe,  quantify, and associate directly with oil and gas activities. Finally, oil and  gas activities on refuges may hinder public access to parts of the refuge or  FWS’s ability to manage or improve refuge habitat, such as by conducting  prescribed burns or creating seasonal wetlands.
The 16 refuges we visited reported oil, gas, or brine spills, although the  frequency and effects of the spills varied widely. Oil and gas spills can  injure or kill wildlife by destroying the insulating capacity of feathers and  fur, depleting oxygen available in water, or exposing wildlife to toxic  substances. Brine spills can be lethal to young waterfowl, damage birds’  feathers, kill vegetation, and decrease nutrients in water. Even small spills  may contaminate soil and sediments if they occur frequently. For instance,  a study of Atchafalaya and Delta National Wildlife Refuges in Louisiana  found that oil contamination present near oil and gas facilities is lethal to  most species of wildlife, even though refuge staff were not aware of any  large spills.
Constructing, operating, and maintaining the infrastructure necessary to  produce oil and gas can harm wildlife by reducing the quantity and quality  of habitat. Infrastructure development can reduce the quality of habitat  through fragmentation, which occurs when a network of roads, canals,  and other infrastructure is constructed in previously undeveloped areas of  a refuge. Fragmentation increases disturbances from human activities,  provides pathways for predators, and helps spread nonnative plant  species. For example, officials at Anahuac and McFaddin National Wildlife  Refuges in Texas said that disturbances from oil and gas activities are  likely significant and expressed concern that bird nesting may be  disrupted. However, no studies have been conducted at these refuges to  determine the effect of these disturbances. Infrastructure networks can  also damage refuge habitat by changing the hydrology of the refuge  ecosystem, particularly in coastal areas. In addition, industrial activities  associated with extracting oil and gas have been found to contaminate  wildlife refuges with toxic substances such as mercury and  polychlorinated biphenyls (PCBs). Mercury and PCBs were used in  equipment such as compressors, transformers, and well production  meters, although generally they are no longer used.
New environmental laws and industry practice and technology have  reduced, but not eliminated, some of the most detrimental effects of oil  and gas activities. For example, Louisiana now generally prohibits using  open pits to store production wastes and brine in coastal areas and  discharging brine into drainages or state waters. Also, improvements in  technology may allow operators to avoid placing wells in sensitive areas  such as wetlands. However, oil and gas infrastructure continues to  diminish the availability of refuge habitat for wildlife, and spills of oil, gas,  and brine that damage fish and wildlife continue to occur. In addition,  several refuge managers reported that operators do not always comply  with legal requirements or follow best industry practices, such as  constructing earthen barriers around tanks to contain spills, covering  tanks to protect wildlife, and removing pits that temporarily store fluids  used during well maintenance.
Oil and gas operators have taken steps, in some cases voluntarily, to  reverse damages resulting from oil and gas activities, but operators have  not consistently taken such steps, and the adequacy of these steps is not  known. For example, an operator at McFaddin National Wildlife Refuge  removed a road and a well pad that had been constructed to access a new  well site and restored the marsh damaged by construction after the well  was no longer needed. In contrast, in some cases, officials do not know if  remediation following spills is sufficient to protect refuge resources,  particularly for smaller oil spills or spills into wetlands.
FWS does not have a complete and accurate record of spills and other  damage resulting from refuge-based oil and gas activities, has conducted  few studies to quantify the extent of damage, and therefore does not know  its full extent or the steps needed to reverse it. The lack of information on  the effects of oil and gas activities on refuge wildlife hinders FWS’s ability  to identify and obtain appropriate mitigation measures and to require  responsible parties to address damages from past activities. Lack of  sufficient information has also hindered FWS’s efforts to identify all  locations with past oil and gas activities and to require responsible parties  to address damages. FWS does not know the number or location of all  abandoned wells and other oil and gas infrastructure or the threat of  contamination they pose and, therefore, its ability to require responsible  parties to address damages is limited. However, in cases where FWS has  performed studies, the information has proved valuable. For example,  FWS funded a study at some refuges in Oklahoma and Texas to inventory  locations containing oil and gas infrastructure, to determine if they were  closed legally, and to document their present condition. FWS intends to  use this information to identify cleanup options with state and federal  regulators. If this effort is successful, FWS may conduct similar studies on  other refuges.
section_title: FWS Management and Oversight of Oil and Gas Activities Varies Widely
paragraphs: FWS’s management and oversight of oil and gas activities varies widely  among refuges. Management control standards for federal agencies require  federal agencies to identify risks to their assets, provide guidance to  mitigate these risks, and monitor compliance. For FWS, effectively  managing oil and gas activities on refuges would entail, at a minimum,  identifying the extent of oil and gas activities and their attendant risks,  developing procedures to minimize damages by issuing permits with  conditions to protect refuge resources, and monitoring the activities with  trained staff to ensure compliance and accountability. However, the 16  refuges we visited varied widely in the extent to which these management  practices occur. Some refuges identify oil and gas activities and the risks  they pose to refuge resources, issue permits that direct operators to  minimize the effect of their activities on the refuge, monitor oil and gas  activities with trained personnel, and charge mitigation fees or pursue  legal remedies if damage occurs. For example, two refuges in Louisiana  collect mitigation fees from oil and gas operators that are then used to pay  for monitoring operator compliance with permits and state and federal  laws. In contrast, other refuges do not issue permits or collect fees, are not  aware of the extent of oil and gas activities or the attendant risks to refuge  resources, and provide little management and oversight.
Management and oversight of oil and gas activities varies for two primary  reasons. First, FWS’s legal authority to require oil and gas operators to  obtain access permits with conditions to protect refuge resources varies  considerably depending upon the nature of the mineral rights. For  reserved mineral rights—cases where the property owner retained the  mineral rights when selling the land to the federal government—FWS can  require permits only if the property deed subjects the rights to such  requirements. For outstanding mineral rights—cases where the mineral  rights were separated from the surface lands before the government  acquired the property—FWS has not formally determined its position  regarding its authority to require access permits. However, we believe,  based on statutory language and court decisions, that FWS has the  authority to require owners of outstanding mineral rights to obtain  permits. Second, refuge managers lack sufficient guidance, resources, and  training to properly monitor oil and gas operators. Current FWS guidance  regarding the management of oil and gas activities where there are private  mineral rights is unclear, according to refuge staff. Refuge staff said they  also lack sufficient resources to oversee oil and gas activities, which are  substantial at some refuges. Only three refuges in the system have staff  dedicated full-time to monitoring these activities, and some refuge staff  cite a lack of time as a reason for limited oversight. Staff also cite a lack of  training as limiting their capability to oversee oil and gas operators; FWS  has offered only one oil- and gas-related workshop in the last 10 years.
On a related management issue, FWS has not always thoroughly assessed  property for possible contamination from oil and gas activities prior to its  acquisition, even though FWS guidance requires an assessment of all  possible contamination. For example, FWS acquired one property that is  contaminated from oil and gas activities because staff did not adequately  assess the subsurface property before acquiring it. After acquiring the  property, FWS found that large amounts of soil were contaminated with  oil. FWS has thus far spent $15,000, and a local conservation group spent  another $43,000, to address the contamination. We found that the guidance  and oversight provided to FWS regional and refuge personnel were not  adequate to ensure that the requirements were being met.
section_title: Conclusions
paragraphs: The National Wildlife Refuge System is a national asset established  principally for the conservation of wildlife and habitat. While federally  owned mineral rights underlying refuge lands are generally not available  for oil and gas exploration and production, that prohibition does not  extend to the many private parties that own mineral rights underlying  refuge lands. The scale of these activities on refuges is such that some  refuge resources have been diminished, although the extent is unknown  without additional study.
Some refuges have adopted practices—for example, developing data on  the nature and extent of activities and their effects on the refuge,  overseeing oil and gas operators, and training refuge staff to better carry  out their management and oversight responsibilities—that limit the impact  of these activities on refuge resources. If these practices were  implemented throughout the agency, they could provide better assurance  that environmental effects from oil and gas activities are minimized. In  particular, in some cases, refuges have issued permits that establish  operating conditions for oil and gas activities, giving the refuges greater  control over these activities and protecting refuge resources before  damage occurs. However, FWS does not have a policy requiring owners of  outstanding mineral rights to obtain a permit, although we believe FWS  has this authority, and FWS can require owners of reserved mineral rights  to obtain a permit if the property deed subjects the rights to such  requirements. Confirming or expanding FWS’s authority to require  reasonable permit conditions and oversee oil and gas activities, including  cases where mineral rights have been reserved and the property deed does  not already subject the rights to permit requirements, would strengthen  and provide greater consistency in FWS’s management and oversight.  Such a step could be done without infringing on the rights of private  mineral owners. Finally, FWS’s land acquisition guidance is unclear and  oversight is inadequate, thereby exposing the federal government to  unexpected cleanup costs for properties acquired without adequately  assessing contamination from oil and gas activities.
In our report, we made several recommendations to improve the  framework for managing and overseeing oil and gas activities on national  wildlife refuges, including (1) collecting and maintaining better data on oil  and gas activities and their environmental effects, and ensuring that staff  resources, funding, and training are sufficient and (2) determining FWS’s  existing authority over outstanding mineral rights. We also recommended  that the Secretary of the Interior, in coordination with appropriate  Administration officials, seek from Congress any necessary additional  authority over outstanding mineral rights, and over reserved mineral  rights, to ensure that a consistent and reasonable set of regulatory and  management controls are in place for all oil and gas activities occurring on  national wildlife refuges.
The Department of the Interior’s response to our recommendations was  mixed. The department was silent on our recommendations that it should  collect and maintain better data on oil and gas activities and their effects  and that it should ensure that staff are adequately trained to oversee oil  and gas activities. Also, while the department was silent on whether it  should review FWS’s authority to regulate outstanding mineral rights, it  raised procedural concerns about our recommendation that it seek any  necessary additional authority from Congress to regulate private mineral  rights. We continue to believe that our recommendation is warranted. In  light of the department’s opposition, we suggested that the Congress  consider expanding the FWS’s authority to enable it to consistently  regulate the surface activities of private mineral owners on refuges.
Thank you Mr. Chairman and Members of the Subcommittee. That  concludes my prepared statement. I would be pleased to respond to any  questions that you may have.
section_title: Contacts and Acknowledgments
paragraphs: For further information on this testimony, please contact Barry T. Hill at  (202) 512-3841. Individuals making key contributions to this testimony included Paul Aussendorf, Robert Crystal, Jonathan Dent, Doreen  Feldman, and Bill Swick.
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