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. 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. 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. 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. 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. 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. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. 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Summary: 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. 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.