oversight

National Wildlife Refuges: Improvement Needed in the Management and Oversight of Oil and Gas Activities on Federal Lands

Published by the Government Accountability Office on 2003-10-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                               United States General Accounting Office

GAO                            Testimony
                               Before the Subcommittee on Fisheries
                               Conservation, Wildlife, and Oceans,
                               Committee on Resources, House of
                               Representatives
For Release on Delivery
Expected at 9:30 a.m. EST
Thursday, October 30, 2003 	   NATIONAL WILDLIFE
                               REFUGES
                               Improvement Needed in the
                               Management and Oversight
                               of Oil and Gas Activities on
                               Federal Lands
                               Statement of Barry T. Hill, Director
                               Natural Resources and Environment




GAO-04-192T 

                                                 October 30, 2003


                                                 NATIONAL WILDLIFE REFUGES

                                                 Improvement Needed in the Management
Highlights of GAO-04-192T, testimony             and Oversight of Oil and Gas Activities
before the Subcommittee on Fisheries
Conservation, Wildlife, and Oceans,              on Federal Lands
Committee on Resources, House of
Representatives




The 95-million acres in the National             About one-quarter (155 of 575) of all refuges have past or present oil and gas
Wildlife Refuge System are the only              activities, some dating to at least the 1920s. Activities range from
federal lands primarily devoted to               exploration to drilling and production to pipelines transiting refuge lands.
the conservation and management                  One hundred five refuges contain a total of 4,406 oil and gas wells—2,600
of fish, wildlife, and plant                     inactive wells and 1,806 active wells. The 1,806 wells, located at 36 refuges,
resources. While the federal                     many around the Gulf Coast (see figure), produced oil and gas valued at $880
government owns the surface lands                million during the last 12-month reporting period, roughly 1 percent of
in the system, in many cases                     domestic production. Thirty-five refuges contain only pipelines.
private parties own the subsurface
mineral rights and have the legal
authority to explore for and extract
                                                 The Fish and Wildlife Service has not assessed the cumulative environmental
oil and gas. This testimony is                   effects of oil and gas activities on refuges. Available studies, anecdotal
based on an August 2003 report                   information, and GAO’s observations show that the environmental effects of
(GAO-03-517) in which GAO                        oil and gas activities vary from negligible, such as effects from buried
determined the extent of oil and                 pipelines, to substantial, such as effects from large oil spills or from large-
gas activity on refuges, identified              scale infrastructure. These effects also vary from the temporary to the
the environmental effects, and                   longer term. Some of the most detrimental effects of oil and gas activities
assessed the Fish and Wildlife                   have been reduced through environmental laws and improved practices and
Service’s management and                         technology. Moreover, oil and gas operators have taken steps, in some cases
oversight of those activities.                   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
GAO's August 2003 report made                    exercise little control or enforcement. GAO found that this variation occurs
recommendations to improve                       because of differences in authority to oversee private mineral rights and
management and oversight of oil                  because refuge managers lack enough guidance, resources, and training to
and gas activities, including having             properly manage and oversee oil and gas activities. Greater attention to oil
the Department of the Interior seek
                                                 and gas activities by the Fish and Wildlife Service would increase its
from Congress any necessary
additional authority to ensure                   understanding of associated environmental effects and contribute to more
consistent and reasonable                        consistent use of practices and technologies that protect refuge resources.
management of all oil and gas
activities on refuges. In                        National Wildlife Refuges with Oil and Gas Wells
commenting on the report, the
department generally did not
address our recommendations, but
did raise procedural concerns
about GAO’s recommendation that
it seek additional authority from
Congress. Given these concerns,
GAO also raised this matter to
Congress for its consideration.


www.gao.gov/cgi-bin/getrpt?GAO-04-192T.

To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Barry T. Hill at
(202) 512-3841 or hillbt@gao.gov.
     Mr. Chairman and Members of the Subcommittee:

     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.1
     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


     1
      U.S. General Accounting Office, National Wildlife Refuges: Opportunities to Improve the
     Management and Oversight of Oil and Gas Activities on Federal Lands, GAO-03-517
     (Washington, D.C.: Aug. 28, 2003).



     Page 1                                   GAO-04-192T Oil and Gas Activities on Refuges
     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.




     Page 2                              GAO-04-192T Oil and Gas Activities on Refuges
               Over the years, we and others have examined the effects on the refuge
Background 	   system of secondary activities,2 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.3 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.4 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.5 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;6 the Migratory Bird Treaty Act prohibits
               killing, hunting, possessing, or selling migratory birds, except in



               2
                U.S. General Accounting Office, National Wildlife Refuges: Continuing Problems
               with Incompatible Uses Calls for Bold Action, GAO/RCED-89-196 (Washington, D.C.:
               Sept. 8, 1989).
               3
                Department of the Interior regulations allow leasing of federal minerals underlying refuges
               in the state of Alaska and in cases where federal minerals are being drained by operations
               on property adjacent to the refuge.
               4
               16 U.S.C. §§ 668dd(a), (d).
               5
               State laws also may affect the conduct of oil and gas activities.
               6
               16 U.S.C. §§ 1538, 1540. The term “take” means to harass, harm, pursue, hunt, shoot,
               wound, kills, trap, capture, or collect. 16 U.S.C. § 1532(19).



               Page 3                                      GAO-04-192T Oil and Gas Activities on Refuges
                       accordance with a permit;7 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.8 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.9


                       At least one-quarter, or 155, of the 575 refuges (538 refuges and 37 wetland
One-Quarter of         management districts) that constitute the National Wildlife Refuge System
Refuges Have Past or   have past or present oil and gas activities—exploration, drilling and
                       production, transit pipelines, or some combination of these (see table 1).10
Present Oil and Gas    Since 1994, FWS records show that 44 refuges have had some type of oil
Activities             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.




                       7
                       16 U.S.C. § 703.
                       8
                       33 U.S.C. § 1321(b).
                       9
                       50 C.F.R § 29.32.
                       10
                        This analysis does not include coordination areas, which are managed by states, or
                       conservation easements, which are not owned by FWS.



                       Page 4                                    GAO-04-192T Oil and Gas Activities on Refuges
Table 1: Number of Refuges with Oil and Gas Activities, by FWS Region

                                                      Number of refuges, by category                                  Unduplicated counts, by category group
                                   Exploration             Drilling and production Active pipelines                       Exploration      Exploration, drilling
                                   (survey and             (active and inactive oil (transiting refuge                  and/or drilling and production, and/or
 FWS region                     seismic work)a                      and gas wells)
                                                                                  b
                                                                                               lands)
                                                                                                      c
                                                                                                                       and production                pipelines
 1 (Pacific)                                         5                                 20                      9                      22                         24
 2 (Southwest)                                     10                                  22                    24                       22                         29
 3 (Great Lakes-
 Big Rivers                                          1                                 10                    14                       10                          19
 4 (Southeast)                                     14                                  28                    37                       34                         45
 5 (Northeast)                                       1                                   4                     6                       4                          6
 6 (Mountain –
 Prairie)                                            9                                 20                    15                       24                          27
 7 (Alaska)                                          4                                   1                     2                       4                          5
 Total                                             44                                 105                   107                     120                          155
Sources: FWS, Premier Data Services, and Office of Pipeline Safety.
                                                                 a
                                                                 Based on GAO’s analysis of refuge reported data to FWS’s Refuge Management Information
                                                                 System, 1994-2001.
                                                                 b
                                                                     Based on GAO’s analysis of Premier Data Services’ nationwide well database, January 2003.
                                                                 c
                                                                  Based on GAO’s analysis of the National Pipeline Mapping System and Refuge Management
                                                                 Information System data, 1994-2001.


                                                                 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.11 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.



                                                                 11
                                                                  Wells that are plugged and abandoned are permanently sealed by cementing the well
                                                                 bore. Improperly plugged wells can intrude on fresh water supplies or cause fires and
                                                                 seepage.


                                                                 Page 5                                            GAO-04-192T Oil and Gas Activities on Refuges
                         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
Overall Effects of Oil   resources are unknown because FWS has conducted few cumulative
and Gas Activities Are   assessments and has no comprehensive data. Available studies, anecdotal
                         information, and our observations show that some refuge resources have
Unknown, but Those       been diminished to varying degrees by spills of oil, gas, and brine12 and
Activities Have          through the construction, operation, and maintenance of the infrastructure
                         necessary to extract oil and gas. The damage varies widely in severity,
Diminished Some          duration, and visibility, ranging from infrequent small oil spills and
Refuge System            industrial debris with no known effect on wildlife, to large and chronic
Resources                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


                         12
                          Brine is water mixed with salts, other minerals, and oil.



                         Page 6                                      GAO-04-192T Oil and Gas Activities on Refuges
most species of wildlife, even though refuge staff were not aware of any
large spills.13

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.



13
 North Carolina State University, Department of Environmental and Molecular Toxicology,
Chemical Contamination at National Wildlife Refuges in the Lower Mississippi River
Ecosystem, February 2001, for the U.S. Department of the Interior.



Page 7                                   GAO-04-192T Oil and Gas Activities on Refuges
                        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
FWS Management and      among refuges. Management control standards for federal agencies require
Oversight of Oil and    federal agencies to identify risks to their assets, provide guidance to
                        mitigate these risks, and monitor compliance.14 For FWS, effectively
Gas Activities Varies   managing oil and gas activities on refuges would entail, at a minimum,
Widely                  identifying the extent of oil and gas activities and their attendant risks,



                        14
                         U.S. General Accounting Office, Standards for Internal Control in the Federal
                        Government, GAO/AIMD-00-2131 (Washington, D.C.: Nov. 1999).



                        Page 8                                   GAO-04-192T Oil and Gas Activities on Refuges
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

Page 9                               GAO-04-192T Oil and Gas Activities on Refuges
                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
Conclusions 
   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.




                Page 10                            GAO-04-192T Oil and Gas Activities on Refuges
                  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
Contacts and      (202) 512-3841. Individuals making key contributions to this testimony
Acknowledgments   included Paul Aussendorf, Robert Crystal, Jonathan Dent, Doreen
                  Feldman, and Bill Swick.




(360413)
                  Page 11                             GAO-04-192T Oil and Gas Activities on Refuges
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