WILDERNESS WORKSHOP NATURAL RESOURCES DEFENSE COUNCIL SIERRA CLUB

Transcription

1 WILDERNESS WORKSHOP NATURAL RESOURCES DEFENSE COUNCIL SIERRA CLUB Deciding Officer United States Forest Service Rocky Mountain Region 740 Simms Street Golden, CO Via Dear Forest Service Deciding Officer: Wilderness Workshop (WW), the Natural Resources Defense Council (NRDC), and Sierra Club (the Club) submit this response to objections filed to the White River National Forest (WRNF) Oil and Gas Leasing Final Environmental Impact Statement (FEIS) and Draft Record of Decision (draft ROD). 1 Our response focuses on objections submitted by SG Interests, Encana, WillSource, West Slope Colorado Oil and Gas Association (WSCOGA) et al., and Mesa County, collectively referred to as industry. Industry objections attack the FEIS and draft ROD as biased, unsupported by the record, and contrary to law. For reasons discussed in the following pages, the objections fail. Moreover, many of the industry claims should be dismissed for failure to comply with applicable regulations. For example, industry objectors attempt to raise issues that were not discussed in prior comments. 2 The Forest Service should dismiss issues not previously raised in comments and objections from parties that failed to participate in the process. 3 1 The project website is here: (click on Land & Resources Management, then click on Projects, scroll down and click on White River National Forest Oil and Gas Leasing Environmental Impact Statement ) (last accessed 4/25/15). 2 See e.g., SG objection at 1-2 (indicating that points raised in its objection are broader than those discussed in previously submitted comments). In fact, one of the industry objectors failed to even participate in prior comment periods. See e.g., WillSource objection at 2 (indicating that WillSource did not previously comment on the Oil and Gas Leasing EIS). 3 Forest Service regulations governing the objection process make it clear that issues raised in objections must be based on previously submitted substantive formal comments attributed to the objector unless the objection concerns an issue that arose after the opportunities for formal comment. 36 C.F.R (a). Regulations also provide that [t]he burden is on the objector to demonstrate compliance with requirements for objection. Objections that do not meet the requirements of this paragraph may not be accepted Id. The WillSource objection should be dismissed. See Note 2 supra (discussing WillSource s failure to comment earlier in the process). If the Forest Service fails to dismiss the objection entirely, most issues raised in WillSource s objection should be dismissed because they are not new (e.g., the proposal to close areas with high occurrence potential, the proposal to impose NSOs on future leases). 1

2 Several industry objections also attempt to incorporate by reference issues raised by other objectors. 4 Incorporation by reference is not allowed under applicable agency regulations. 5 In fact, aside from the targeted issues we raised in our objection, the Forest Service s analysis and proposed plan are balanced and well supported by the record. The proposed plan would leave open and available 70 percent of areas with high occurrence potential for oil and gas. The agency and industry agree that 99 percent of future drilling is likely to occur in that high occurrence potential area. 6 In addition, the plan would not impact valid existing rights and it would provide meaningful protections for other forest values that are not adequately protected under the current plan. In short, the Forest Service s proposed plan would protect opportunities to lease and develop in a large majority of the area where drilling is anticipated to occur while protecting other important resources on the forest. The decision is well within the agency s authority and it represents a meaningful step toward balance that does not currently exist on the WRNF or adjacent public lands. Industry s arguments basically boil down to a desire to lease anywhere and everywhere because someday, somehow, they might want to drill there. The Forest Service has no obligation to allow leasing everywhere. To do so would be an unbalanced policy and shortsighted. Especially on the White River National Forest, which is a crown jewel of the National Forest system. I. Industry s challenge to proposed closures fails. Industry objects to the decision to close areas to future leasing. 7 In making this point, objectors fail to acknowledge the Forest Service s broad discretion to close areas to certain uses, including oil and gas leasing. 8 Industry objections also overlook the fact that the proposed Forest Service decision leaves open the majority of land where agencies and industry anticipate future drilling will occur. 9 The industry objections also ignore the 4 See e.g., SG objection at 3; see also Mesa County objection at 1. 5 Aside from a number of inapplicable exceptions, incorporation by reference is prohibited by Forest Service objection regulations. See 36 C.F.R (b). 6 See Note 9 infra. 7 See e.g., WSCOGA et al, Objection at See e.g., Multiple Use Sustained Yield Act (MUSYA),16 U.S.C. 531 (recognizing that some land will be used for less than all resources ); Rocky Mountain Oil & Gas Ass n v. U.S. Forest Service, 157 F. Supp.2d 1142, (D. Mont. 2000), aff d 12 Fed. Appx. 498 (9 th Cir. 2001) (confirming that the Forest Service has discretion whether to authorize leasing for mineral exploration); Wind River Multiple-Use Advocates v. Espy, 835 F.Supp. 1362, (D. Wyo. 1993) (holding that the Forest Service has wide discretion to prioritize uses within an area); Bob Marshall Alliance v. Hodel, 852 F.3d 1223, 1230 (9 th Cir. 1988) (holding that NEPA required consideration of a no-leasing alternative because Secretary had discretion concerning whether or not to lease). See also Section II infra. 9 See DEIS, at 21 (indicating that [a]ccording to the BLM Glenwood Springs FO RFD, oil and gas development in the field office area, including lands administered by the WRNF, is expected 2

3 extensive future drilling and leasing opportunities that exist around the WRNF and which helped inform this decision and the process leading up to it. 10 The record makes clear that future leasing and development are anticipated to take place almost exclusively in areas with existing development. According to the draft ROD and supporting materials in the record, the proposed plan closes those portions of the WRNF that have little or no potential for development and/or are far from producing wells and areas of contemporary drilling, and where social, environmental and economic values weigh heavily against future leasing. 11 Despite what industry objections suggest, there is no contemporary drilling activity in or near those areas that the Forest Service is proposing to close, including portions of the Thompson Divide. 12 The record clearly to continue and even increase, in areas that are currently being developed Infill and step-out drilling in areas of proven reserves is anticipated to constitute the majority of future activity. ), 21 ( BLM estimates that 99 percent (99%) of projected drilling will occur in areas mapped as having high potential for the occurrence of oil and gas resources. This development potential distribution corresponds well with existing oil and gas field locations. The areas mapped as having medium and low occurrence potential have few leases, indicating low industry interest at the present time. ). The RFDS was undertaken with industry consultation. See id., at 1-30 (indicating that the oil and gas industry was consulted); see also RFDS, at 21 (indicating that BLM consulted with principal operators and current lessees). 10 There is an extraordinary amount of oil and gas development anticipated in northwest Colorado in the next 20 years. BLM alone anticipates that approximately 26,401 new wells will be drilled within the 5 northwest Colorado field offices (White River, Little Snake, Grand Junction, Kremmling, and Colorado River Valley) during that time period. That is roughly half again as many wells as exist statewide today and the estimate excludes potential development in the Roan Plateau Planning Area and the WRNF. See e.g., BLM, WRFO, White River RMP Oil and Gas Amendment FACT SHEET: Understanding Alternatives (2012) (projecting between 4,603 wells and 21,200 wells in Alternatives with a preferred Alternative projecting 15,042 wells over a 20- year period); see also CRVFO, Draft Resource Management Plan and Draft Environmental Impact Statement (Sept. 2011), Table 2-2, at 2-91 (projecting 4,198 new wells in the CRVFO proposed RMP over a 20-year period); see also Little Snake FO, Proposed RMP/Final EIS (August 2010), Chapter 4, at (projecting 3,031 wells would be drilled during the next 20 years); see also Kremmling Field Office Proposed RMP/Final EIS (February 2014), Chapter 3, at (projecting 370 wells through 2027; see also GJFO, RFDS (June 2012), at 4 (anticipating as many as 3,938 in the next 20 years). Additionally, there are more than 6.5 million acres of federal land still available for leasing in this part of the state. See diagram prepared by The Wilderness Society, Acreage Open to Leasing BLM Plans Around the West (add together the acreage open to leasing for the five BLM Field Offices in northwest Colorado), available at (last visited on 4/26/15). Extensive ongoing and anticipated development in northwest Colorado undoubtedly motivated a great deal of public interest in this plan and participation in the process. Because oil and gas development has been less extensive on the WRNF than other adjacent public lands, people see a need and an opportunity to protect it from impacts that are evident elsewhere in the region. 11 See e.g., map prepared by the WRNF, Reference-Natural Gas Development Map on the WRNF Oil and Gas Leasing project website; see also draft ROD at ROD Industry objections claim that there is a long history of development in the Thompson Divide and that the area [] remains essential to providing surrounding communities with necessary energy resources and jobs. See WSCOGA et al, Objection at 6-7; see also SG objection at 3, 6. Contrary to industry claims, Colorado Oil and Gas Conservation Commission records confirm 3

4 supports the agency s proposed closures. Several industry objections claim that the Forest Service decision would close the Thompson Divide area to future leasing and object to that closure. 13 In fact, the Forest Service decision would close only portions of the Thompson Divide. 14 As with other areas proposed for closure to future leasing, the record provides strong support for the proposed closures in the Thompson Divide. 15 Indeed the record would support additional closures within the Thompson Divide, including the East Divide Creek watershed because that area also remains far from contemporary drilling activities and retains other values that are not consistent with oil and gas development. 16 The ROD correctly states that the Divide retains its singularity as a special place in part because it remains unimpacted by contemporary drilling and because historic drilling never lead to extensive development there. 17 The record reveals the myriad of unique environmental, social, and economic resources that exist in the Thompson Divide. 18 The only current activity there involves a handful of gas storage wells in the Wolf Creek storage area. The storage field is substantially distinguishable from areas where drilling is occurring. 19 Also, the storage area would be unaffected by the Forest Service s proposed closure to future leasing. that there are no producing oil and gas wells in portions of the Thompson Divide overlapping the WRNF. Drilling in the Thompson Divide does not support any jobs today and drilling activity has been absent from the area for a long time. Despite the claims of industry objectors, the Divide remains quiet, remote, and unimpacted by contemporary development. 13 See e.g., SG objection at 4-5, 6-7 (claiming closure of the Divide is arbitrary and capricious). 14 In its objection, Mesa County protests closure of the Willow Creek area in the western-most Thompson Divide. See Mesa County objection at 1-2. The Forest Service decision does not, however, propose closure of the Willow Creek area. This Mesa County objection point should be dismissed. 15 See Note 11 (WRNF, Reference-Natural Gas Development Map ) supra; see also comments in the project record from Wilderness Workshop et al., Pitkin County, Towns of Carbondale and Glenwood Springs, Thompson Divide Coalition, Crystal Valley Environmental Protection Association, and thousands of members of the public providing supportive information and requesting closure of the Thompson Divide to future leasing. 16 WW, NRDC, and the Club protested the Forest Service s proposed decision to leave the East Divide creek area open to future leasing. The record strongly supports closure of the East Divide area. See WW et al., objection at See draft ROD at ROD-6, ROD-7; see also Notes 12 & 15 supra. Importantly, contemporary unconventional development is likely to be much more intensive and the Divide likely would not recover from that for generations, if at all. 18 See e.g., Wilderness Workshop et al., DEIS Comments (Nov. 30, 2012); see also comments in the project record from Pitkin County, Towns of Carbondale and Glenwood Springs, Thompson Divide Coalition, Crystal Valley Environmental Protection Association, grazing permittees, recreational users, and thousands of members of the public providing supportive information and requesting closure of the Thompson Divide to future leasing for the economic, social and environmental values that exist there. 19 The storage area has not produced gas since 1972 when it ran dry, and it is now used for storage but not drilling or production. The storage field requires only very limited surface operations, unlike what would be required for new drilling. 4

5 Additionally, experts retained by local governments concluded that areas in the Thompson Divide that were closed to future leasing by the WRNF s proposed decision do not have significant oil and gas resources. 20 These reports strongly support the Forest Service decision and conclusions of both the Forest Service and BLM regarding the likely location and extent of future leasing and development. Finally, industry objectors claim that the Thompson Divide s natural character could be maintained with drilling and production. Local communities in and around the Thompson Divide emphatically disagree, as do residents of the area, and people from across the nation. 21 Both the draft ROD and the record make it clear that there is an extraordinary amount of public support for closing the Thompson Divide to future leasing. 22 The large majority of public and expert comments in the record support the Forest Service s proposed closure to future leasing to protect natural values. 23 For these reasons, the record clearly supports the leasing closures proposed in the draft ROD, including closures in the Thompson Divide. In fact, the record and Forest Service authority would support additional closures, including the East Divide Creek area. II. Industry claims that the proposed plan violates Federal law or agency mineral policies fail. A. Industry claims that the WRNF decision does not comply with multi-use mandates fail. Industry objectors claim that the proposed plan is a violation of multiple use mandates. 24 The objections suggest that oil and gas should be given priority over other uses. 25 These arguments have been flatly rejected by courts. 20 See MHA Petroleum Consultants LLC, Thompson Divide Area: Geological & Economic Assessment (January 2014) (finding little to no economic viability for the drilling of oil and gas wells on the leases within the TDA [Thompson Divide area]. ); see also Economic Analysis of the Potential For Oil and Gas Development in the Thompson Divide Area, John D. Wright, February 11, 2014 (concluding that any attempts to develop leases [in the Thompson Divide area] would lead to a substantial loss of money for the operator ). 21 See e.g., comments in the record from Pitkin County, the Town of Carbondale, the Town of Glenwood Springs, the Thompson Divide Coalition, the Crystal River Valley Environmental Protection Ass., and Wilderness Workshop et al. See also WW et al., objection at Exhibit 12 (including a declaration from an East Divide resident articulating why that area is inappropriate for future leasing and development). 22 See e.g., ROD at ROD-5, ROD See project record generally. 24 See WSCOGA et al, Objection at 17 (characterizing the WRNF decision to leave 70% of the high occurrence potential areas open to oil and gas development as post-hoc rationalization and lip service to the agency s multi-use mandate). 25 See id., at 14, 16; see also SG objection at

6 Courts have been clear in saying that the Forest Service has broad discretion to prioritize certain uses over others as long as the agency gives the uses adequate consideration. See e.g., Sierra Club v. USDA, No. 94-CV-4061-JPG, (S.D. Ill. Sept. 25, 1995) ( As long as the Forest Service has given each use equal consideration, this Court has no authority to second-guess the precise weight that the agency has given to each use, at least as it relates to the relative values analysis of the MUSYA ); see also H.R. Rep. No. 1551, 86th Cong., 2d Sess. (1960), reprinted in 1960 U.S.C.C.A.N ( One of the basic concepts of multiple use is that all of these resources in general are entitled to equal consideration, but in particular or localized areas relative values of the various resources will be recognized.... ). Courts have consistently found that the Multiple Use Sustained Yield Act (MUSYA), 16 U.S.C , empowers the Forest Service with wide discretion to give due consideration, but not necessarily equal weight, to values. Wind River Multiple- Use Advocates v. Espy, 835 F. Supp. 1362, 1372 (D. Wyo. 1993). Indeed, since Congress has given no indication as to the weight to be assigned each value,... it must be assumed that the decision as to the proper mix of uses within any particular area is left to the sound discretion of the Forest Service. Id. (quoting Sierra Club v. Hardin, 325 F. Supp. 99, 123 (D. Alaska 1971); Bighole Ranchers Ass'n v. United States Forest Serv., 686 F. Supp. 256, 264 (D. Mont. 1988) (stating that the MUSYA grants the Forest Service wide discretion to weigh and decide the proper uses with any area. )). As long as the Forest Service considers competing uses, courts are reluctant to overrule its decisions. National Wildlife Fed n v. United States Forest Serv., 592 F.Supp 931, 938 (D. Or. 1984), appeal dismissed, 801 F.2d 360 (9th Cir. 1986). Industry objections also claim that the Federal Land Policy Management Act (FLPMA), 43 U.S.C et seq., makes oil and gas a primary use of public lands. 26 This argument fails as well. Nothing in the statutory framework elevates oil and gas development over other uses. Courts have said: It is past doubt that the principle of multiple use does not require BLM to prioritize development over other uses. Rocky Mtn. Oil & Gas Ass'n v. Watt, 696 F.2d 734, 738 n.4 (10th Cir. 1982). If all the competing demands reflected in FLPMA were focused on one particular piece of public land, in many instances only one set of demands could be satisfied. A parcel of land cannot both be preserved in its natural character and mined. Utah v. Andrus, 486 F. Supp. 995, 1003 (D. Utah 1979)); see also 43 U.S.C. 1701(a)(8) (stating, as a goal of FLPMA, the necessity to preserve and protect certain public lands in their natural condition ); Pub. Lands Council, 167 F.3d at 1299 (10th Cir. 1999) (citing 1701(a)(8)). Accordingly, FLPMA s obligation to manage for multiple use does not mean that oil and gas development must be allowed everywhere. Oil and gas development is one potential land use that must be weighed against other potential uses including conservation of environmental and other existing values. N.M. ex rel. Richardson v. BLM, 565 F.3d 683, 710 (10th Cir. 2009). 26 See WSCOGA et al, Objection at 14. Interestingly, WSCOGA makes this argument while also asserting that prioritizing or ranking resources is contrary to binding federal law. See id., at 16. 6

7 In this case the Forest Service gave due consideration to alternatives that would have allowed for more oil and gas leasing and development. In the end, the agency was well within its discretion to propose a plan that attempted to balance oil and gas leasing with other values. Nothing about the FEIS or the draft ROD violates multiple-use mandates. This is especially true given that the WRNF s proposed plan would leave more than 70 percent of the high occurrence potential area open and available to future leasing and development. B. Industry claims that the draft ROD and FEIS violate various other statutes and regulations fail. Industry objectors claim that the Forest Service decision violates the Mining and Mineral Policy Act of 1970 and implementation guidance outlined in the Forest Service Minerals Policy, the 2005 Energy Policy Act (2005 EPAct), and a 2006 Memorandum of Understanding (MOU) WO indicating that stipulations shall be only as restrictive as necessary to protect the resoures(s) for which they are applied. 27 In fact, the cited mineral policy does not support any kind of legal claim. 28 The industry objections simply identify selective quotes from the policy. For example, objectors quote language that the Forest Service should foster and encourage private mineral development and has an essential role in supplying energy, but they ignore other clear direction provided by the policy to sustain the long term health and biological diversity of ecosystems and continu[e] to sustain the land s productivity for other uses and it s capability to support biodiversity goals. As with other applicable laws and regulations, the cited mineral policy is about finding a balance which the Forest Service has done in this case. The 2005 EPAct was enacted to ensure consistency and collaboration between the Forest Service and BLM. The section of the 2005 EPAct cited in industry objections simply required the Forest Service and BLM to develop an MOU with provisions to ensure that lease stipulations are (a) coordinated and consistent between agencies, and (b) only as restrictive as necessary to protect the resource for which the stipulations are applied. The MOU was signed in The MOU expressly does not create any third party rights. 30 Nor does the MOU say anything about the Forest Service s authority to impose restrictive 27 See WSCOGA et al, Objection at FN 9, 17; see also SG objection at See Forest Service Minerals Program Policy available at ICY.pdf (last accessed 4/25/15). 29 See 2006 Memorandum of Understanding between BLM and the Forest Service Concerning Oil and Gas Leasing and Operations, BLM MOU WO , Forest Service Agreement No. 06-SU , available at ftp://ftp.consrv.ca.gov/pub/oil/sb4deir/docs/lu_blm_2006.pdf (last accessed 4/16/15). 30 See Id., at Section XIII ( This MOU is not intended to and does not create any right, benefit, or trust responsibility, substantive or procedural, enforceable at law or equity, by a person against the United States, its agencies, its officers, or any person. This MOU does not direct or apply to any person outside of the signatory parties. ). 7

8 closures. Nonetheless, the Forest Service discussed and considered the 2005 EPAct extensively throughout the FEIS, including an explicit explanation of the process undertaken to ensure that lease stipulations proposed in the plan were only as restrictive as necessary to protect the resource for which the stipulations are applied. 31 Industry objections further claim that the Forest Service must make it clear that oil and gas development cannot coexist with other uses before administratively withdrawing lands. 32 This purported requirement apparently comes from the Minerals Policy guidance document discussed above which does not give rise to a legal claim. 33 Further, the objectors ignore the difference between a closure through management direction, as is being proposed in this case, and an administrative withdrawal. 34 An administrative withdrawal is a more permanent step that requires BLM participation. 35 There is no mention of an administrative withdrawal in the draft ROD. The Forest Service may also be able to dispose of industry objections related to the agency s Minerals Policy by highlighting places in its analysis, the record, and/or its decision that address the criteria listed in the Policy. 36 For example, the agency could highlight places in the FEIS and the draft ROD that consider the national interest in rural and community development 37 ; consider the value of the mineral resource foregone 38 ; 31 See FEIS, at 27, 19 (discussing requirements of the Act that established the energy pilot office in Silt and development of MOUs), 21 (describing mandates of EPAct), 22 (describing MOUs), 27 (describing the agency s efforts to ensure consistency between proposed stipulations and those used by adjacent BLM offices), 538 (describing the need to amend the Forest Plan to ensure consistency with the 2005 EPAct), 598, 601, 606 (responding to comments clarifying that least restrictive measures were considered). The record also contains information that supports proposed stipulations as necessary to protect resources. See e.g., Wilderness Workshop et al., DEIS Comments (Nov. 30, 2012) (describing stipulations needed to protect resources); Letter from Ron Velarde, Northwest Regional Manager, Colorado Parks and Wildlife, to David Francomb, Leasable Minerals Program Manager/BLM Energy Pilot Office Forest Service Liaison, White River National Forest (February 3, 2012) (strongly supporting stipulations proposed in DEIS Alternative C and supporting the need to update the existing oil and gas leasing EIS) (in the project record). 32 See WSCOGA et al, Objection at See Note 28 supra. 34 The draft ROD proposes closure of acres to future oil and gas leasing Through Management Direction. See draft ROD at ROD See Forest Service Manual , See WSCOGA et al, Objection at See e.g., ROD-6 (discussing community concerns); see also FEIS at 269 (discussing impacts on communities from oil and gas development and transportation-related impacts on communities), 270, 282 (discussing socioeconomic impacts on communities), 285, 292 (discussing the value natural appearing landscapes to rural communities), 290, 292 (discussing the importance of recreation to rural communities), 307 (discussing cumulative impacts to communities, including tourism), 309 (indicating that cumulative impacts of drilling could result in incompatible settings for recreational activities), 328 (discussing Forest Plan direction related to local communities), as well as applicable citations from the bibliography). 38 See e.g., FEIS, Table 77, at

9 value the resource or improvement being protected 39 ; and discuss the risk that renewable resources cannot be adequately protected with Minerals Surface Use Regulations 40. III. The Forest Service should reject industry requests for a commitment not to add restrictions on existing leases. The industry objectors raise concerns that existing leases may be cancelled, further stipulated, or burdened with new conditions of approval (COAs) in the future. 41 The Forest Service has made clear that the proposed plan is prospective and respects valid existing rights. 42 To the extent that leaseholders on the WRNF have valid existing rights, this leasing decision will respect those. However, because the leasing decision is prospective, the Forest Service must not make any commitment which would purport to affect the existing leases of objectors. Importantly, many of the objectors do not have valid existing rights. For example, many Encana, WillSource, and SG leases were issued improperly and are thus subject to cancellation. Moreover leases owned by SG should have expired but for BLM decisions suspending them that are currently on appeal before the Interior Board of Land Appeals (IBLA). 43 BLM is in the process of considering what to do about the improperly issued leases. 44 That decision is independent of the Forest Service s oil and gas leasing plan. And the Forest Service has no power to alter the fact that many of these leases were issued illegally. The Forest Service should not attempt to address those existing leases at this stage because BLM has not completed its NEPA analysis and any decision about what to do with the improperly issued leases is outside of the scope of this Forest Service decision. In addition, federal oil and gas lease terms and agency regulations reserve authority in both the Forest Service and BLM to impose reasonable conditions on development at the APD stage. 45 Leaseholders took their leases with full notice of such authority and cannot 39 See e.g., FEIS at 1; see also BBC Research & Consulting, The Economic Contribution of Thompson Divide to Western Colorado (2013), in the record and available at (click on newsroom, then click on Studies and Reports, then click on Thompson Divide Economic Analysis ). 40 See e.g., FEIS at 309 (indicating that cumulative impacts of drilling could result in incompatible settings for recreational activities). 41 See e.g., Encana objection at See e.g., draft ROD at 4 ( This decision is valid for future leasing and does not change the status of existing leases... ), 8, See Wilderness Workshop et al., 2014 IBLA See e.g., BLM s webpage for the Existing Leases on the White River National Forest EIS, available at (last accessed 4/15/15). 45 See e.g., 43 C.F.R and 36 C.F.R (giving BLM and the Forest Service authority to require reasonable mitigation measures to ensure that proposed operations minimize adverse impacts to other resources, uses, and users); see also Onshore Oil and Gas Order Number 1, 72 Fed. Reg , at (March 7, 2007). 9

10 now request contrary assurances from the Forest Service. IV. Industry objectors claims that the proposed plan fails to adequately consider impacts on existing leases fail. Industry objectors claim that the plan fails to adequately consider the affect the decision will have on existing leases on the WRNF. 46 As a primary matter, industry objectors use this point to explain their failure to participate earlier in the planning process. 47 This is an obvious attempt to skirt participation requirements in Forest Service objection regulations and the agency could deny this objection point on the basis that it was not timely raised. 48 Alternatively, the Forest Service need only reiterate that this plan is prospective and does not impact existing rights. We do not disagree with industry objectors that the Forest Service s analysis and decision should have an impact on BLM s analysis of illegally issued leases on the WRNF. 49 Nonetheless, the two decisions are distinct. The subject Forest Service decision is prospective and the BLM decision will impact previously issued leases. 50 Furthermore, the Forest Service did adequately consider the potential impacts that various outcomes of BLM s process could have on future leasing and development within the planning area. By analyzing sub-alternatives along with Alternatives B and C, the Forest Service adequately considered different potential outcomes and impacts associated with 46 See WSCOGA et al, Objection at 9; see also SG objection at 4-5; WillSource objection at See e.g., WSCOGA et al, Objection at 9 ( member companies relied on the reassurances of Supervisor Fitzwilliams that this Plan would impact only future leasing and not existing leases in the Forest when weighing their participation in the planning process. ); see also WillSource objection at See Notes 2-5 supra. 49 Courts have held that NEPA obliges agencies to revisit alternatives analyses, including a true no action alternatives, whenever there are changed circumstances that affect the factors relevant to the development and evaluation of alternatives. See e.g., Or. Natural Res. Council Action v. U.S. Forest Serv., 445 F. Supp 2d 1211, 1224 (D. Or. 2006); Natural Res. Def. Council v. U.S. Forest Serv., 421 F.3d 797, 809, (9 th Cir. 2005); Alaska Wilderness Recreation & Tourism Ass. v. Morrison, 67 F.3d 723, (9 th Cir. 1995). 50 In its objection, WillSource objects to issuance of a Forest Service decision prior to issuance of a decision on the deficient leases by BLM. WillSource claims that issuance of this Forest Service decision will bias the BLM s analysis of the 65 illegal leases. WillSource wrongly calls this decision retroactive and says that the Forest Service is changing its mind. See WillSource objection at 4-5. These characterizations fail to acknowledge that this is an independent and prospective Forest Service analysis. The agency began this process because the existing analysis was outdated and stale. The Forest Service initiated this process several years before BLM even acknowledged the deficiency associated with 65 leases on the WRNF. Even if the Forest Service opted not to issue a decision on this Oil and Gas Leasing EIS, BLM would have to take into account most of the same information and would likely have to adopt many of the same decisions and stipulations. That is especially true as the proposed stipulations are the least restrictive necessary to protect resources and because of extensive coordination between BLM and the Forest Service during the process. See e.g., FEIS at

11 BLM s analysis of deficient leases. Industry also claims that new restrictions in the Plan could force operators to let valid, non-producing leases expire because of additional surface restrictions placed on the leasehold or inability to obtain connecting leaseholds. 51 This claim fails because: 1) as discussed elsewhere in this response, the Forest Service plan does not impose any new restrictions on existing leases; and 2) federal mineral leases do not convey a right to obtain adjacent leaseholds, nor do leaseholders have a reasonable expectation that those areas will remain open and available for leasing years after they acquire leaseholds. Rights conveyed by federal oil and gas leases are confined to lands described in the lease terms and, of course, limitations on the ability of leaseholders to buy more leases is not a violation of existing lease rights. V. Industry objections to the socioeconomic analysis fail. 52 Industry objectors claim that the FEIS and draft ROD fail to consider socio-economic impacts. 53 Specifically objectors claim that the FEIS fails to analyze: 1) categories of people the activity is likely to affect (40 CFR (a)(1)); 2) how the action compares with historical trends; and 3) the socioeconomic effects of the proposed action, including changes due to the action in income, employment, population, local revenues, and business activity. 54 In fact, there is an entire section of the FEIS dedicated to socioeconomics. 55 The FEIS specifically discusses the issues described in industry objections. 56 Jobs are discussed indepth, including estimates of jobs that would be created and/or lost with implementation of alternatives. 57 Revenues to local governments are also discussed in-depth See WSCOGA et al, Objection at Mesa County raises concerns that socio-economic impacts of the proposed action were not analyzed in the FEIS. While those impacts were within the range of alternatives analyzed by the Forest Service in the FEIS, it is true that the agency did not analyze the proposed plan as its own alternative. We agree that the agency ought to undertake an analysis of the proposed plan prior to issuing a final ROD. See WW et al., objection at See WSCOGA et al, Objection at 11, 17; see also Mesa County objection at See WSCOGA et al, Objection at See FEIS at See e.g., FEIS at 263 (discussing categories of people the activity is likely to affect, including the local workforce, population, age, and ethnicity), 269 (discussing racial and ethnic composition of the analysis area), 272 (discussing impacts to low-income families), 152 (indicating that revenues and employment are discussed in section 3.4.1), (discussing how FS analyzed income and employment across the alternatives), 263 (discussing how FS analyzed population across the alternatives), (discussing business activity and historical trends), 268 (discussing existing business conditions), 272 (discussing direct and indirect impacts to local revenues). This is just a smattering of relevant citations. 57 See e.g., FEIS at 69 (disclosing the total number of jobs from oil and gas activities projected to be generated by each alternative), 262 (discussing how jobs and labor income were used to determine economic impacts to local economies), 265 (discussing area employment by sector in 11

12 While these industry objections are unsupported by the record, the Forest Service could revise the FEIS or the draft ROD to reflect the broader context in which this decision is made and the fact that leasing and drilling are expected to continue at a rapid pace throughout the region regardless of what happens on the WRNF. As mentioned above, there is an extraordinary amount oil and gas development anticipated in northwest Colorado in the next 20 years. 59 The abundance of future drilling and leasing opportunities will ensure that local communities experience the socioeconomic benefits associated with continued oil and gas development regardless of this WRNF Oil and Gas Leasing Plan. Some industry objectors claim that closing 30% of the high potential areas will have adverse economic impacts. In response to this claim, the Forest Service should highlight information submitted by local communities in and around the Thompson Divide making the case that oil and gas development in that area may be more costly than beneficial to local revenues. 60 Moreover, unbalanced oil and gas leasing could have harmful effects on other industries. For instance the FEIS noted that [t]he Forest s recreation resources contribute to a significant share of local, state, and regional economies, 61 and highlights the fact that in some locations the quality and quantity of the recreation opportunities would likely change or diminish proportionately to the level of oil and gas development. 62 In addition, the Forest Service should respond by highlighting recent statistics showing the vast number of federal acres currently under lease by industry and confirming that most existing federal leases are not in production. 63 To a significant extent, this is because natural gas prices are currently at low levels relative to historical averages. Press 2012 to show baseline conditions), (discussing employment related to oil and gas extraction, drilling, and support activities), 268 (indicating that jobs and labor income associated with hunting and fishing are higher than those associated with oil and gas operations on the WRNF), (discussing impacts to jobs and labor income associated with alternatives). 58 See FEIS at 267 (indicating, for example, that oil and gas related distributions constitute.44 percent of Mesa County s general government revenues in 2013), 271, 272, 275, 276, 278, 279, 281, 283 (discussing local government revenue by alternative); see also the Forest Service s response to comments in the FEIS. 59 See Note 10 supra. 60 See e.g., Pitkin County Comments on WRNF Oil and Gas Leasing DEIS (November 30, 2012), at 3 (discussing the insignificance of projected revenues to local governments from oil and gas development relative to the costs), 17 (discussing inadequacy of bond amounts given the value of resources at-risk from oil and gas development), (discussing socioeconomics generally). 61 See FEIS at See FEIS at Statistics are available here: (indicating that industry has leased nearly 35 million acres of public land and is producing gas from only about 37% of those acres). 12

13 reports also provide reinforcement by highlighting the wealth of unused drilling opportunities that exist for industry in the area. 64 Even without changes to the FEIS, though, the Forest Service s analysis supports the proposed decision to leave 70 percent of the high occurrence potential area open to future leasing. The analysis makes it clear that the decision would ensure local communities dependent on oil and gas development experience socioeconomic benefits of continued leasing and development on the WRNF. The analysis also shows that the plan would simultaneously ensure communities dependent on other forest values and uses do not suffer dramatic socioeconomic impacts from oil and gas leasing and development that may be incompatible with existing economic drivers. VI. Industry objections to the use of NSO and CSU stipulations in the proposed plan fail. 65 Industry objectors claim the use of controlled surface use (CSU) and no surface occupancy (NSO) stipulations represent a defacto withdrawal. 66 These objections seem considerably overblown and contradict industry s own talking points, as well as industry s proven track record of successful development in areas with extensive restrictions on surface use. For example, industry consistently touts advancements in technology that allow it to access minerals horizontally and eliminate or significantly minimize environmental impacts associated with drilling. The WSCOGA objection even indicates that the reach of lateral wells is around two or three miles depending on the formation and the specific geology. 67 Additionally, there are numerous areas on the WRNF and nearby public lands where leaseholders have successfully developed acreage and held leases despite extensive NSO and CSU stipulations. Encana s operations in the Orchard Unit near Housetop Mountain are one good nearby example. Given industry s current and improving capability to access minerals using lateral and horizontal bores and its proven track record of developing and holding vast acreages encumbered by NSOs, stipulations proposed in the plan do not amount to a defacto withdrawal as claimed by the objectors. 64 See e.g., Denver Business Journal Colorado's Piceance Basin could draw overseas money (February 27, 2015) ( If you're looking to go really long on gas, the Piceance Basin is the best place to do it, said David Ludlum, the executive director of the West Slope Colorado Oil & Gas Association (COGA). We have the best pipeline capacity in the country, the lowest costs and the best production data. We have 35 years of production history, with replacement costs of that production and thousands and thousands of undrilled locations. ) (emphasis added), available at (last accessed 4/23/15). 65 We agree with objections raised by Encana about the absence of maps detailing stipulations in the draft ROD. The final ROD should include detailed maps showing where lease stipulations apply. 66 See WSCOGA et al, Objection at 17-18; see also WillSource objection at WSCOGA et al, Objection at

14 Furthermore, the objections cite no prohibition on the use of NSOs and CSUs. The Forest Service fully disclosed and analyzed the potential impacts that the proposed NSO and CSU stipulations would have on a myriad of resources. As discussed elsewhere in this response, the agency also clearly determined and documented that these stipulations were only as restrictive as necessary to protect the resource for which the stipulations are applied. 68 Our own comments, the comments from Colorado Parks and Wildlife (formerly the Colorado Division of Wildlife), and other experts in the project record, as well as Forest Service specialist reports support agency determinations that these stipulations were necessary to protect resources. 69 In light of all of the documentation in the record supporting the proposed stipulations and industry s proven track record of developing minerals despite surface use restrictions, as well as ever-evolving technological capabilities in this respect, these industry objections fail. VII. Industry s challenge to assumptions in the FEIS fails. Industry objectors criticize the Forest Service for relying on recent leasing and development trends to inform the FEIS and the draft ROD. 70 The objections fail to identify any other basis on which the agency could rely to make predictions about future development. Nor does it appear that industry objectors raised this point in earlier comments despite the fact that production data was clearly a basis for consideration throughout the process, including in the DEIS and the RFDS. 71 Also, this point fails to recognize that the assumptions are hugely favorable to industry. The last years include the most productive period for oil and gas the WRNF has experienced. 72 Industry also objects to the Forest Service s reliance on high, moderate, and low potential areas and suggests that there is no support in the record for those distinctions. 73 In fact, resource occurrence potential is a concept that has been discussed throughout this planning process See e.g., FEIS at See Note 31 supra. 70 See WSCOGA et al, Objection at See e.g., RFDS at (discussing production history on the WRNF to help inform the Reasonably Foreseeable Development Scenario). 72 Leasing and drilling in the most recent years has substantially stopped due to low gas prices, but the years considered by the Forest Service to inform this analysis include a period of more intense leasing, drilling, and development than has ever been experienced on the WRNF. See e.g., FEIS, Figure 27: Annual Drilling Permits in Northwest Colorado, at 264; DEIS at (indicating that more than half of the wells on the WRNF were drilled in recent years, but that no drilling has occurred there since 2008). 73 See WSCOGA et al, Objection at See e.g,. DEIS at 1-28 (discussing the fact that the RFDS is a technical report presenting a baseline scenario of unconstrained activity based on, among other things: resource occurrence potential ), 1-30 ( [t]he existing RFDSs prepared by the BLM field offices identify oil and gas 14

15 Additionally, while industry objectors do not appear to have raised this issue in prior comments, they object to the assumption that future development is most likely to be limited to those areas where development has occurred (and step-out from there). 75 This assumption is supported by the Forest Service RFDS as well as the RFDS prepared by BLM to inform the Colorado River Valley Resource Management Plan both of which were prepared with industry consultation. 76 The areas mapped as having medium and low occurrence potential have few leases, indicating low industry interest in those areas. 77 Industry objects to the Forest Service s reliance on oil and gas prices to justify conclusions in its analysis. 78 Again, the agency has an obligation to analyze potential impacts. Such analysis necessitates use of some assumptions because not all variables are known or static. Analysis of oil and gas prices is important to help estimate potential impacts to specific values, like socioeconomic impacts. 79 Historic oil and gas prices provide the only logical metric for comparing potential impacts. While commodity prices fluctuate, the agency s approach provided a reasonable basis upon which to analyze potential impacts. 80 As with many of the other issues raised in industry objections, it appears that concerns about the agency s reliance on oil and gas prices to inform analysis were not raised in previous comments. This is particularly problematic regarding this industry objection point due to the fact that the Forest Service made it abundantly clear throughout the process that prices and price trends would be considered among data sources in the analysis. 81 VIII. Industry claims that the draft ROD is biased fail. Industry objectors claim that this process was politically driven and resulted in a biased occurrence potential and development potential across all lands ), 1-30 (confirming that the use of high occurrence potential is common practice in developing RFDSs), and Figure 10, at 2-49 (portraying proposed Alternative C, which would have made available only the high occurrence potential lands and moderate potential lands bordering high potential lands with past or present interest either in leasing or exploration and development). There is an entire section dedicated to the concept of occurrence potential in the RFDS and the concept is discussed extensively throughout that document. See e.g., RFDS at See WSCOGA et al, Objection at See Note 9 supra. 77 See id. 78 See WSCOGA et al, Objection at 5. Again, industry objectors provide no other/alternative basis for analysis. 79 See e.g., DEIS at 3-279; FEIS at 267, The Forest Service admits that it cannot predict actual impacts, but utilizes prices to inform comparisons in the analysis. See e.g., DEIS at 3-282, FEIS at 275, 276, 278, 279, See e.g., DEIS, at 1-30, 1-31; FEIS at 43, 44 (citing Energy Information Agency price trends and Colorado Geological Survey price trends as sources used in preparation of the RFDS); RFDS at 3. 15