Document 5LJL1nMmvZ7mbDDDDb7mq5VNV

From: To: Subject: Date: Attachments: gregory sheehan@fws.gov on behalf of Sheehan, Greg Gary Lawkowski Fwd: SO 3349 Friday, May 11, 2018 4:50:50 PM 2631 170426104300 001 (1).pdf -----------Forwarded message-----------From: Morris, Charisa <charisa_morris@fws.gov> Date: Fri, May 11, 2018 at 4:00 PM Subject: Re: SO 3349 To: "Lawkowski, Gary" <gary_lawkowski@ios.doi.gov> Cc: "Guertin, Stephen" <stephen_guertin@fws.gov>. Greg Sheehan <greg_j_sheehan@fws.gov> Signed version, attached. On Fri, May 11, 2018 at 1:40 PM, Lawkowski, Gary <gary_lawkowski@ios.doi.gov> wrote: Is it possible to confirm whether this memo was signed/finalized? Sincerely, Gary Lawkowski On Fri, May 11, 2018 at 9:36 AM, Guertin, Stephen <stephen_guertin@fws.gov> wrote: -----------Forwarded message-----------From: Martinez, Cynthia <cynthia_martinez@fws.gov> Date: Fri, May 11, 2018 at 9:05 AM Subject: Re: SO 3349 To: "Guertin, Stephen" <stephen_guertin@fws.gov> Cc: Bud Cribley <bud_cribley@fws.gov> Sanchez Shaun <shaun_sanchez@fws.gov> Gary Frazer <gary_frazer@fws.gov> Gina Shultz <Gina_Shultz@fws.gov>- Charisa Morris <charisa_morris@fws.gov> Steve, Attached is the response prepared in April 2017 to SO 3349 "Management of Non-Federal Oil and Gas Rights," 81 Fed. Reg. 79948 (Nov. 14, 2016)." that was submitted into DTS on April 24, 2017, and I believe signed by the Directors office on April 25, 2017. Please let me know if you need anything else. Thanks Cynthia Chief National Wildlife Refuge System U.S. Fish and Wildlife Service On Fri, May 11, 2018 at 5:15 AM, Guertin, Stephen <stephen_guertin@fws.gov> wrote: Can we get an update on this deliverable from SO 3349? Thanks. Steve -----------Forwarded message-----------From: Lawkowski, Gary <gary_lawkowski@ios.doi.gov> Date: Thu, May 10, 2018 at 5:13 PM Subject: SO 3349 To: Susan Combs <susan_combs@ios.doi.gov> "Paul (Dan) Smith" <paul_smith@nps.gov> "Sheehan, Gregory" <greg_j_sheehan@fws.gov> I hate to ask, but I'm working on tracking down where we stand with some past Secretary's Orders. SO 3349 (from last March) (attached) asked the Directors of the National Park Service and Fish and Wildlife Service, respectively, to review the following rules and report to the Assistant Secretary for Fish and Wildlife and Parks on whether the rule is fully consistent with the President's policy: NPS: "General Provisions and Non-Federal Oil and Gas Rights," 81 Fed. Reg. 77972 (Nov. 4, 2016); and FWS: "Management of Non-Federal Oil and Gas Rights," 81 Fed. Reg. 79948 (Nov. 14, 2016). Do you know where that assessment stands? Thank you very much for your time and help! Sincerely, Gary Lawkowski Counselor to the Deputy Secretary U.S. Department of the Interior Gary_Lawkowski@ios.doi.gov 202-208-7340 Greg Sheehan Principal Deputy Director US Fish and Wildlife Service 1849 C Street NW, Room 3358 Washington, DC 20240 Office 202-208-4545 Cell 202-676-7675 Charisa Morri.s@fws.gov | Chief of Staff, Office of the Director | u.s. Fish & Wildlife Service | 1849 C Street NW, Room 3348 | Washington, DC 20240 | (202) 208-3843 | For urgent matters, please dial cell: 301-875-8937 Gary Lawkowski Counselor to the Deputy Secretary U.S. Department of the Interior Gary_Lawkowski@ios.doi.gov 202-208-7340 Charisa Morris@fws.gov | Chief of Staff, Office of the Director | u.s. Fish & Wildlife Service | 1849 C Street NW, Room 3348 | Washington, DC 20240 | (202) 208-3843 | For urgent matters, please dial cell: 301-875-8937 Greg Sheehan Principal Deputy Director US Fish and Wildlife Service 1849 C Street NW, Room 3358 Washington, DC 20240 Office 202-208-4545 Cell 202-676-7675 mm In Reply Refer To: FWS/ANRS/065545 United States Department of the Interior FISH AND WILDLIFE SERVICE Washington, D.C 20240 APR 2 5 2017 To: Assistant Secretary for Fish and Wildlife ajid Parks From: ^ctinSDirector vj Ck/mSUi W, Subject: Response to the deliverable Section 5.c. (iv) of Secretary's Order 3349 - "American Energy Independence" I. Introduction In 1960, the U.S. Fish and Wildlife Service (Service) first promulgated regulations to govern the exercise of non-Federal mineral rights on lands and waters in |he National Wildlife Refuge System (NWRS). These regulations lacked a specific consistent process for providing operators access and use of refuge surface to conduct operations while also minimi; ing impacts to refuge resources and uses. Reports from the Government Accountability Office (2003 and 2007) and the Office of Inspector General (2015) identified these deficiencies in the Service management of non-Federal oil and gas operations and recommended promulgating regulations to clarify and improve the process. In 2013, the Service began a rulemaking effort to resolve these deficieijcie that culminated in the finalization of the oil and gas rule (Rule) entitled, "Management of Non-Federal Oil and Gas Rights," 81 Fed. Reg. 79948 (Nov. 14, 2016). II. Background The March 28, 2017, Presidential Executive Order (EO) etitl| d "Promoting Energy Independence and Economic Growth" instructed the Secretary of Interior to review the Service's Rule to ensure it is consistent with the policy set forth in section 1 of the EO. On March 29, 2017, the Secretary signed Secretary's Orde (Sp) 3349, "American Energy Independence," which required the Service to conduct a pc licy review, within 21 days of the SO, of the Rule and report on whether the Rule is fully consistent with that policy. III. Discussion The Service has reviewed the Rule and concludes that its inten is consistent with the policy set forth in Section 1 of the March 28, 2017 EO because it aimed to pr Dvicfe clarity to producers and ensure access to NWRS land was consistent across the system. Before this Rule was put in place a single producer working on two different NWRS Units was often required o coordinate access through very different processes and meet varying standards resulting in unnecessary delays for operators. During the National Environmental Policy Act (NEPA) environmental impact s atement analysis an alternative was selected with the goal to balance reasonable environmental protection while not unduly burdening oil and gas producers. This approach was selected over the even more restrictive alternative. Nevertheless, there are beneficial enhancements that can be made without further regulatory delays to operators, and to make it consistent with the EO, allowing operators to fully exercise' their rights. These options include: 1. Further streamline permitting by developing new CatEx categories to cover activities and reduce permitting time from 180 days to 60 days. 2. Evaluate cost recovery fees in the rule. 3. Emphasize use of initial in-kind reclamation and examine the amount of financial assurances needed for reclamation. 4. Ensure rules are not duplicative of existing local, state, or other federal regulations. 5. aM/io__n__i_t_o__r:iim___p__l_e__m__e__n__t_a__t_i_o__n__t_o___e_v__ai.lua.te .t1h. e positive or negative impact.s t. o permi.t appil>icants In order to facilitate the review, the EO policy is shown ve batim, with Service answers noted below in bulleted and italicized text: (a) It is in the national interest to promote clean and safe de velopment of our Nation's vast energy resources, while at the same time avoiding regulatory burde ns that unnecessarily encumber energy production, constrain economic growth, and prevent job ereation. Moreover, the prudent development of these natural resources is essential to ensuring the Nation's geopolitical security. The intent ofthe Service Rule is consistent with E.O. policy. Access is provided to operators to exercise non-Federal oil and gas rights on National Wildlife Refuges, and their associated activities, are performed in a clean and safe manner wifh due regardfor refuge resources and uses. The Final Environmental Impact Statement (FEIS), and Cost Benefit Analysis and Regulatory Flexibility Threshold Analyses (CBA/RFA) found the Rule avoids regulatory burdens and should have no discernable effects on rates ofexploration and development, rates ofproduction, or rates ofemployment. The Service does not have the authority to prohibit oil and gas development on NWRS lands, but the Rule introduces a permit process for new opera ions centered on flexible, site-specific performance-based standards that improves oil and gas management efficiency and consistency onfederally owned lands and resources ofthe NWR.S. In drafting the Rule, the Service sought direction to achieve goals that would avoid or minimize impacts to wildlife in balance with the costs to the regulated community. The Rule was designed to avoid regulating activities suqh as down hole drilling standards or hydraulic fracturing more appropriately addressed by other entities. The focus in developing the Rule was protecting the Service 's interest as the surface^ land manager as compared to a private "surface use agreement " between a landowner and an operator. The Service did not select a particular alternative from the FEIS specifically because costs (to operators) outweighed the benefits. Gains in refuge Resource and visitor use protections were not high enough to justify the costs (Alternative C in FELS, lylodified Rule in CBA/RFA) associated with: A new permit requirement for operators already conducting production activities on NWRS lands; Any regulation ofoperators that use directional drillingfrom private property to reach targets beneath Service-administered areas and Any regulation on inholdings (private surface estate within boundaries ofa refuge). (b) It is further in the national interest to ensure that the Nat ion's electricity is affordable, reliable, safe, secure, and clean, and that it can be produced from coal, natural gas, nuclear material, flowing water, and other domestic sources, including renewable sources. As described in the CBA/RFA analyses, one ofthe most important factor in determining whether an operator will drill wells is the risk assessment that exploration and drilling will lead to successful and economical oil and gas production, and ifso, at what level. The regulatory cost of complying with this rule should not be the determining factor on whether an operator decides to explore for or develop their oil and gas resources. As described in the CBA/RFA analyses, implementedion ofthe Rule will not have a discernable effect on the pace ofnew exploration and developm ent within units ofthe NWRS or noticeably affect the amount ofoil and gas productionfrom covered wells. Therefore, the reliability and affordability ofthe Nation's electricity producedfrom natural gas should not be affected by this rule. Operators should experience benefits that serve to ffset expenditures. Operators proposing new operations should benefitfrom the efficiencies ofa uniform, consistent process, clearly defined operating standards, andflexibility in the means to achieve them, and greater predictability in the length oftime needed to secure approval compared to the current condition. The Rule's permit process involves early coordination between the Service and the regulated community. This benefits operators because the Ser 'ice'can provide operators with information that will be useful in planning oil and gas activities and operations on a refuge. Due to the undeveloped conditions ofmany National Wildlife Refuges, the surface ofthe land that an operator needs to access can be covered with forest and other thick vegetation with moist or saturated soil conditions that make operations difficult and costly. Refuge staffare very knowledgeable about conditions on the refuge. The) efore, by engaging with the Service early, the Service can provide operators with invaluable information that will streamline oil and gas operations saving time and costs. For example, utilizing existing roads on a refuge and site planning results in easier and cheaper accessfor an operator. Early andfrequent coordination also minimizes conflicts between operators and wildlifedependent recreational users ofthe refuge, such as hunters, hikers, and birders. Not only can the Service inform operators about timing and areas of) he refuge where these other uses occur, but it also establishes safeguards to ensure that refuge vJsitQrs do not interfere with an operation (50 CFR29.il 4). (c) Accordingly, it is the policy of the United States that executive departments and agencies (agencies) immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law. * The Rule promotes cooperation between Refuge Managers and operators in developing preventative measures to avoid or minimize impacts from oil and gas activities. This practice is consistent with state law regarding mineral rights holders that are allowed to use only what is reasonably necessary ofthe surface estate to explore and develop their minerals, and that operators accommodate surface uses to the maximum extent practicable. * One ofthe main issuesfor operators is a lack ofclarity ofaction necessary to comply with the law. Before this rule, operators did not have a clear or consistent processfor receiving permission to operate on a National Wildlife Refuge. The Rule shouldprovide consistent guidance for the regulated community in operating on any refuge across the country (except Alaska where the Rule does not apply), as well as timelinesfor Service review and approval of permits, which minimizes unnecessary delaysfor operators (50 CFR 29.91). * The Ride's regulatory process facilitates coordination between Federal and Slate agencies to assist an operator in complying with other applicable Federal and State laws. For example, if there are listed species in the area ofoperation, the Service coordinates consultation required under Section 7 ofthe Endangered Species Act with Ecological Services. This saves operators time and money in lieu ofthem meeting their Endangered Species Act requirements on their own. The same can be saidfor ensuring consultation requirements are metfor compliance with the National Historic Preservation Act's protection ofcultural resources by coordinating with the Slate '.s' Historic Preservation Office. Recently in reviewing a permit for a new well at Delta NWR, Refuges consulted with Ecological Services and the State Historic Preservation Office over the proposed operations, taking the burden offthe operator to do so independently, greatly speeding up the time to for the operator to drill their well. (d) It further is the policy of the United States that, to the extent permitted by law, all agencies should take appropriate actions to promote clean air and clean wate r for the American people, while also respecting the proper roles of the Congress and the States concerning these matters in our constitutional republic. The Rule seeks to minimize impacts on refuge air or water quality by addressing fugitive dust, using good air pollution control practices, maintaining hydrologic movement andfunctions, and implementing erosion control measures. Where existing State or Federal standards meet the Service's surface use goals, the Service defers to those agencies (See 50 CFR 29.11 l(d-f) and 29.113 ofthe Rule). For example, there are existing Federal and State standards for air and water quality. An operator can meet the Rule's reporting requirements that include hydraulic fracturing simply by following State-required or voluntary use ofFracFocus. (See 50 CFR 29.121(f)). (e) It is also the policy of the United States that necessary and appropriate environmental regulations comply with the law, are of greater benefit than cost, when permissible, achieve environmental improvements for the American people, and are developed through transparent processes that employ the best available peer-reviewed science and economics. The necessity and appropriateness ofthe Rule was informed by reportsfrom the U.S. Government Accountability Office (GAO) (GAO, Report No. GAO-03-517, National Wildlife Refuges; Opportunities to Improve the Management and Oversight of Oil and Gas Activities on Federal Lands, (2003); GAO, Report No. GAO-07-829R, Opportunities Remain to Improve Oversight and Management of Oil and Gas Activities on National Wildlife Refuges, (2007)) and the Office ofInspector General (Office ofInspector General, Report No. CR-EV-FWS-0022014: Oil and Gas Development on U.S. Fish and Wildlife Service Refuges). The reports identified deficiencies in the Service's management ofnon-Federal oil and gas operations. A common theme was the notable lack ofclear and consistent management guidance to protect refuge resources and uses. Each report identified unnecessary impacts resultingfrom under managed oil and gas activities. The Rule is a necessary exercise of the Service's authority to ensure that we are meeting our responsibilities under the National Wildlife Refuge System Administration Act (NWRSAA), as amended by the National Wildlife Refuge System Improvement Act (NWRSIA) (16 U.S.C. 668dd et seq.), to protect refuge resources and uses while ensuring that mineral rights holders have reasonable access to develop their non-Federal oil and gas. As previously described, the Rule's costs on operate rs are justified by equal or greater benefits in the form ofenvironmental improvementsfor the American people. The rulemakingfollowed a public processfor deter,mining the scope ofissues and various regulatory avenues to address them. Public participation in the scoping process officially began through publication ofan Advance Notice ofPropo ed Rulemaking and Notice ofIntent to Prepare an Environmental Impact Statement (ANPR/NOI/EIS) in the Federal Register (79 FR 10080) on February 24, 2014. The Service developed the Rule by specifically seeking, substantive public comments regarding the methodologies, assumptions, cost estimates, or environmental benefits used or described in its analyses. Peer reviewed scientific literature as w ell as the expertise ofa Service economist were used in developing the Rule (See FEIS, CBA/RFA). IV. Next Steps Pending Departmental review, the Service stands ready to proceed with additional reviews or information collection as needed.