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1 Introduction ORIGIN OF THIS REPORT For much of the nation's history, the very size (Figure 1.1, Table 1.1) of our vast federal land estate fostered the impression that it could accommodate all manner of uses with minimum constraint or controversy. However, as our population and economy expanded and portions of the public domain were sold or granted into private ownership, convicts over the uses of the remaining federal lands multiplied. Society's increasing demand for materials and energy resources to support economic growth has contributed to these conflicts. They have been sustained, as well, by a growing recognition of and desire to protect the noneconomic values of wildlife, outdoor recreation, and open space values that are typically perceived to be greatest where development, including mineral extraction, is absent. These conflicts arise on the federal lands because large segments of these lands have remained relatively undeveloped and are dedicated by law to multiple-use management. Today, these lands constitute some 460 million acres administered by the Bureau of Land Management (BLM) in the Department of the Interior and the Forest Service in the Department of Agriculture, some 66.5 million acres of which was under lease for oil and gas exploration and development as of fiscal year 1988 (BLM, 1989a; Forest Service, 1989~. For many years, Congress enacted and the land management agencies implemented various discrete programs addressing individual uses of the federal lands. Early attention was paid to the commodity or economic 6

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9 TABLE 1.1 Percentage of Federal Lands Within States State Percentage Federal Lands Alabama Alaska Arizona Arkansas Califomia Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky . . . ,oulslana Maine Maryland Massachusetts Michigan Minnesota ~ ,. . . . MlSSISSlppl Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York Nonh Carolina Nonh Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee 1 exas Utah Vennant Virginia Washington West Virginia Wisconsin Wyoming 3.3 87.1 43.1 9.9 46.4 36.2 0.4 2.4 28.0 12.4 5.4 16.4 63.7 1.4 1.9 0.4 1.1 5.5 4.0 0.8 3.1 1.6 10.0 6.8 5.5 4.7 30.5 1.5 85.1 12.8 3.3 31.3 5.1 7.0 4.4 1.2 1.9 48.7 2.2 0.7 6.0 5.6 7.0 1.9 63.6 5.4 9.7 29.2 7.6 5.2 49.5 ,, SOURCE: Bureau of Land Management (1989a).

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9 TABLE 1.1 Percentage of Federal Lands Within States State Percentage Federal Lands Alabama Alaska Arizona Arkansas Califomia Colorado Connecticut Delaware Distnct of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky . . . LOUIslana Maine Maryland Massachusetts Michigan Minnesota ~ ,. . . . MlSSISSlppl Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Nonh Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 3.3 87.1 43.1 9.9 46.4 36.2 0.4 2.4 28.0 12.4 5.4 16.4 63.7 1.4 1.9 0.4 1.1 5.5 4.0 0.8 3.1 1.6 10.0 6.8 5.5 4.7 30.5 1.5 85.1 12.8 3.3 31.3 5.1 7.0 4.4 1.2 1.9 48.7 2.2 0.7 6.0 5.6 7.0 1.9 63.6 5.4 9.7 29.2 7.6 5.2 49.5 . . . ., SOURCE: Bureau of Land Management (1989a).

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11 This informational problem poses the question of whether the sur- face impacts of oil and gas exploration and development can be fairly and adequately identified during planning to ensure that those activities are afforded equitable consideration with other federal land uses and values that those activities are neither prematurely excluded from, or in- discriminately included on, federal lands by inadequately informed planning decisions. ~ the extent that such impacts cannot be properly identified dunug planning, the question becomes how the congeries of values served by the public lands can be identified and protected when the relevant infor- mation becomes available during the subsequent leasing, exploration, and development stages, particularly in those circumstances where the informa- tion discloses that prospective oil and gas activities will have unacceptable impacts on other uses and values. Originally through their own initiative, and now in response to statutory mandates, the BLM and the Forest Service prepare land use plans for the lands they manage. Under the multiple-use management requirements of the FLPMA and the NF~fA, these plans address the full panoply of federal land uses, including both economic uses (e.g., mineral development, timber production, livestock grazing, and ski resorts and other recreational facilities) and noneconomic uses (e.g., hiking and camping). The plans contain the decisions of the agencies as to which uses can be accommodated where and at what times in the planned area. Absent dramatic changes in conditions In the planned area, the life of a land use plan may span 15 years (the prescribed maximum period in NFMA (16 USC 1604(f)~5~), the projected standard period for BLM plans). Most of the surface uses authorized in a plan occur, and thus impact the environment, during the plan's term, and their levels of intensity and environmental impacts can be estimated with some degree of accuracy. The effects of oil and gas exploration and development are not neces- sarily as contemporaneous or predictable. Oil and gas activities are likely to occur well after the plan's term as illustrated in Figure 1.2. The resources may not be leased until the last year of the plan: the fifteenth year. The great majority of leases that result in any activity have the first significant ground-disturbing action the drilling of an exploratory well after the ap- proval by the agencies of an Application for Permit to Dril] (APD)-in the last year of the lease term: the fifth year for competitive leases and the tenth year for noncompetitive leases. If the well identifies oil or gas in commercial quantities, additional APDs for development wells are sub- mitted, and the field is developed after other permits and rights-of-way are issued by the agency over another generally lengthy span of time: perhaps a decade. Therefore the most significant impacts those associated with full field development may occur 30 to 35 years or more after issuance of the land use plan, 15 to 20 years or more after the plan's expiration.

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12 Years ~ 5 1 G 15 20 25 30 35 40 45 50 'I i 1 1 1 1 1 1 1 1 1 1 BLM or Forest Service Land Use Plan I:~:i~llilllllllllTTIIllllI Oil & Gas Lease (Primary Term) \\ Competitive a//,//////// N on com pet i t i ve APD Approval Exploration Drilling ho\\\\) competitive / /////: N on c om pe t i t i ve Development & Production .. ~//////~///////////////////////,//~ FIGURE 1.2 Duration and timing of venous oil and gas planning, leasing, and management actions. An equally significant distinction between the planning for oil and gas exploration and development and the planning for most other federal land uses is the problem encountered in projecting the level of the use s activities and. thus the magnitude of the use s impacts. Unlike most surface uses and even some mineral development such as coal mining, the volume and quality of the oil or gas resource are seldom known at the time land use planning is conducted, making projections of exploration and development activity levels and environmental impacts more difficult and less reliable. Even if all the land that might be identified for leasing in the planning process is leased during the plan s life, to attempt to identify during planning. where on the leased land surface-impacting activities may occur is problematic. Although statistics to make precise calculations are not available, the committee was generally informed by the federal agencies that, as a rough rule of thumb, approximately 10 percent of all oil and gas leases are ever subject to well drilling, and only about 10 percent of the leases upon which drilling occurs ultimately produce oil and gas in commercial quantities. The committee has. not attempted independent verification of this 10/10

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13 percent rule of thumb. While the committee suggests that most leases are never drilled, and few exploration.wells result in discovery,. it.is important to note thatia single tract of land may-have been leased, and then re-leased upon expiration. of the old lease, several. times since enactment of the Mineral Leasing Act of 1920. The rule of thumb does not, in other words, suggest that. only 10 percent of the land that is leased is ever subject to exploratory drilling. Furthermore, approximately one-quarter of the total leases currently in: effect (and one-fifth of the acreage currently under federal lease) are in reproducing status (see Figure 2.3, p. 24~. Finally, even if the assumption is made that exploration.and develop- ment Drill ensue, the type and level of impacts' from production are not known when planning ..~occurs. Producing fields vary wildly in size from: a few hundred acres and a handful of wells (e.g., North Pine~view, Wyoming) to more than 75,000 Acres And 21~..wells. (e.g., Riley Ridge, W3roming). Within the field' impacts will correspond to such? factors as whether the terrain is flat or hilly (whether drill pads and roads may be prepared with minimal earth disturbance or with.excavation of cut' and fill slopes3, what the wellhead. density and concomitant number of connecting service roads and gathering lines will be (oil wells typically ' are' spaced.eve~y 40 acres, gas wells every 640 acres, based on the wells' drainage capacity and the area's geology), and what additional facilities may be needed (e.g., dehydration plants, injection wells for disposal of produced- water or reinfection for pressure maintenance, or. preparation plants f~ r~.mou'~. hvflr^~^n Q'']~^ from sour gas). The Forest Service and the BLM have undertaken!signi~cant addi- tional planning and..en~ronmental analysis after completion of land use plans for some resources .that'~ when developed, may. have significant im- pacts on-.surface values. The planning and ana~s'is are conducted at the resource disposal (leasing, sale,.or rental) stage (e.g., :regional coal lease sales, environmental impact statements, timber sale plans,. and allotment management plans for livestock grazing.. permits), which permits analysis closer to the time the impacts. will occur and when more detailed sit'e- specific data are available. However? to attempt to duplicate such planning and analysis at the leasing stage for oil and gas presents a separate, and perhaps more difficult, set of.problems. - ' - " ' ' The conditions that permit additional planning and analysis at the leasing, selling, or renting stage for other resources generally do not exist for the leasing of onshore oil and gas. In the case of!coal' leasing, for example, a sufficiently limited number of leases are' offered at sufficiently lengthy intervals to permit site-specific analysis. ~ Oil and gas'' lease sales, on the other.hand, typically involve- several tines the number 'of lease tracts at much greater frequency than do regional coal lease sales. For example, the largest regional coal lease sale occurred in the Powder River Region r - - r ~ ~ Em_ ~ am., .v .~ ~ _~v ~ ~ z~ ~1 mill v UDIUO

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14 of Wyoming and Montana in 1982, where 13 lease tracts, totaling 23,000 acres, were offered. No Powder River federal coal lease sale has been held or scheduled since 1982. By contrast, federal oil and gas lease sales in Wyoming recently have been held on a bimonthly basis under the Reform Act (which requires sales to be held at least quarterly) and have to date involved an average of 800 competitive lease tracts totaling approximately 300,000 acres in each sale (BLM, 1989b). The frequency of oil and gas lease sales and the large number of lease tracts in each sale diminish the land management agencies' ability to conduct adequate site-specific analysis at the leasing stage. The additional planning conducted for timber sales and livestock graz- ing on federal lands also Is infeasible under the present process for leasing oil and gas. Again, these decisions lo sell timber and rent grazing rights are made on a less frequent basis than the decisions to offer oil and gas leases. More importantly, however, planning for timber sales and grazing management concerns specific geographical areas of relatively limited size, thus permitting meaningful data collection for, and analysis of, site-specific and cumulative impacts. In contrast, the lease tracts offered in the quarterby (or more frequent) federal oil and gas lease sales are scattered throughout each sate. Additionally, the committee estimates that one~uarter of the federal land available for oil and gas leasing is already leased. Pre-Reform Act leases still outstanding were issued at monthly lease sales or upon request and thus have many different expiation dates. The BI-M normally reoffers for lease expiring leases after their expiration dates. For all these reasons, the land management agencies do not assemble a number of tracts irk a discrete geographical area, limit a prospective sale to those tracts, and then plan the leasing and mitigation of impact in that area. These differences in the timing, duration, extent, and impacts of oil and gas leasing and subsequent exploration and development, compared to other public land uses, have raised questions as to (1) how the land use plans of the BLM and the Forest Service should address the oil and gas leasing and management processes, and (2) when during those processes environmental impacts should be analyzed and environmental constraints, including prohibitions, placed on the various exploration and- development activities. Stated more simply, the questions concern when and how the two land management agencies should be required to say yes or lose the right to say no to oil and gas exploration and development based on environmental concerns. This report provides recommendations for how oil and gas exploration and development should be further integrated with the federal land use planning process and where in the subsequent leasing and management process further environmentally related analysis and decisions should be made. Although the debate that led to the congressional directive for

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15 the study and the tasks identified for this report focuses on environmen- tal concerns, the committee was highly cognizant of the economic and social importance of oil and gas exploration and development on federal lands-from maintaining national security to sustaining the local economy. Underlying the committee's deliberations was a firm belief that orderly leasing and management of federal onshore oil and gas resources must result from any recommendations the committee makes. ORGANIZATION OF THIS REPORT Chapter 2 addresses the federal lands where multiple use planning occurs and considers the role of the oil and gas industry in leasing, exploring, and developing those lands. Chapter 3 presents the legal framework for land use planning and for oil and gas leasing and management. The judicial and administrative controversies that have framed the issues addressed in this report are discussed in Chapter 4. The planning process its evolution, its present status, and its likely future-and the analytical requirements of the National Environmental Policy Act and Endangered Species Act are presented in Chapter 5. This chapter also describes how oil and gas exploration and development are addressed in existing plans and how the agencies have proposed to treat such activities in future planning. Chapter 6 provides similar discussions of the oil and gas leasing and management process and how it relates to the various stages of exploration and development. Particular areas where conflicts between oil and gas exploration and development are most intense, and the reasons those areas are the source of such conflict, are the subject of Chapter 7. The final chapter, Chapter 8, presents the committee's conclusions and recommendations for "changes in agency procedures and regulations, and statutory requirements, for both the planning process and the oil and gas leasing and management process. There are three important limitations-' on the scope''of this report. First, the committee did not specifically address oil and gas planning issues on federal lands in Alaska because statutes, regulations, data availability, planning approaches, and actual conditions in that state differ considerably from those in the lower 48. Second, the committee did not address Indian lands for many of the same reasons. Multiple-use federal agency planning is not required on Indian lands, and the federal trust responsibility in the area of Indian resource development has no direct counterpart outside the Indian context. Third, on nearly 50 million acres of land, the United States owns the oil and gas (often along with other minerals) but does not' own the surface (BLM, 1989a, liable 9~. Planning for resource development where the surface is not owned or managed by the United States presents

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16 the agencies with somewhat different issues. The committee has not at- tempted to fashion special recommendations for this context, but most of the recommendations it does make are nevertheless applicable, in whole or in part, to this setting. it, REFERENCES Bureau of Land Management, Department of the Interior. 1989a. Public Land Statistics, 1988, Vol. 173. Bureau of Land Management, Department of the Interior. 1989b. Competitive Sales by BLM Offices, FY 1987 and FY 1988 (draft). Forest Service, Department of Agriculture. 1989. Report of the Forest Service, Fiscal Year 1988. U.S. Geological Survey and Bureau of Land Management. 1981. Federal Lands Subject to Restnctions of Mineral Development. Map NAS-R 0401-75M-1.