Federal Mineral Royalties
The U.S. Department of the Interior’s Office of Natural Resources Revenue (ONRR) notified states in March of 2013 that as a result of the sequestration, the federal government would be withholding more than $109 million in mineral revenues from the states. These revenues are used by States to fund necessary items, such as public school systems, community colleges, emergency response activities and basic infrastructure projects. States have as much of a right to these revenues as the federal government. EPSC believes that this decision was solely meant to inflict as much harm to the American public as possible in order to score political points. EPSC adamantly opposed the ONRR decision.
EPSC submitted letters to the Senate Committee on Energy and Natural Resources, the House Energy and Commerce Committee, the Senate Appropriations Committee and the House Appropriations Committee expressing opposition to this decision. EPSC members also reached out to their state attorneys general encouraging them to seek legal remedies. EPSC lead the effort to educate elected officials and constituents on the negative impacts this decision would have.
EPSC worked with Congress on proposed legislation to eliminate the possibility of future state mineral revenue reductions through actions such as sequestration. EPSC supports the legislation introduced and supported by Rep. Cynthia M. Lummis (R, WY), Representative Rob Bishop (R, UT 1), Representative Jason Chaffetz (R, UT 3), Representative Kevin Cramer (R, ND), Representative Steve Pearce (R, NM 2), Representative Chris Stewart (R, UT 2), Senator Michael Enzi (R, WY), Senator John Barrasso (R, WY), Senator Tom Udall (D, NM) and Senator Heidi Heitkamp (D, ND). EPSC supports the State Mineral Revenue Protection Act, and will work to ensure its passage into law.
EPSC wrote to the Office of Management and Budget (OMB) requesting confirmation that the Department of Interior would apply existing law, Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985, which was cited in the notification to the states of the mineral revenue withholding. When sequestration happened in the mid-1980’s, the law required that withheld mineral revenues had to be returned to the states. EPSC expects that the withheld mineral revenue will be returned to the states in FY 2014. The letter to OMB follows a similar letter written by a bipartisan group of 10 Senators and 12 Representatives asking the same question.
In a letter received in late August, EPSC was notified by Interior Secretary Sally Jewell that, “I am pleased to let you know that based upon a legal review of the underlying MLA (Mineral Leasing Act) statutory authority, the amounts sequestered in FY 2013 from MLA payments will become available for payment in FY 2014.”
EPSC was encouraged by the decision by Secretary Jewell to follow historic precedence and return nearly $110 million in federal mineral revenues owed to the states early in FY 2014.
DOI notified states that they would be receiving their “sequestered” federal mineral revenues from FY 2013 on October 31, 2013. In addition to receiving the revenue, states were notified that for FY 2014, DOI would withhold 8 percent of federal mineral revenues, a position EPSC believes is unacceptable. EPSC will continue to work with Congressional allies in demanding that full amounts owed to the states are paid promptly to the states.
EPSC is still concerned that in future years, in the absence of the passage of the bipartisan supported, State Mineral Revenue Protection Act, states will once again have to deal with the federal government withholding a portion of their federal mineral revenues each year. This legislation would ensure that mineral revenue for natural resource development on public lands would be paid directly to those states it is owed. EPSC responded to Secretary Jewell with an offer to work together to ensure that similar situations to do not happen again in the future.EPSC will continue to monitor this issue and work with Congressional leaders to bring the State Mineral Revenue Protection Act to the floor for a vote.
The EPSC membership believes hydraulic fracturing is an essential well completion technology for the development of unconventional resources, such as natural gas that is trapped in shale rock formations. Hydraulic fracturing and horizontal drilling apply the latest technologies and make it commercially viable to recover shale gas and oil. Without it, we would lose 45 percent of domestic natural gas production and 17 percent of our oil production within 5 years.
Robust state and federal regulations for hydraulic fracturing already exist. A comprehensive set of state, local, and federal laws address nearly every aspect of exploration and production. These include well design, water use, waste management and disposal, air emissions, surface impacts, health, safety, location, spacing, and operation. State regulation of oil and gas activities pre-dated federal regulation, and is particularly important because it allows laws to be tailored to local geology and hydrology. Organizations like the State Review of Oil and Natural Gas Environment Regulations (STRONGER) are available to help assess the overall framework of environmental regulations supporting oil and gas operations in any given state.
The contents of fracturing fluids are now disclosed. The typical fracturing fluid is approximately 90% water and 9.5% sand, with the remainder being additives that aid well production. Industry voluntarily discloses the contents of its fluids on the website www.FracFocus.org, which is run by the Groundwater Protection Council. FracFocus provides a public database that can be searched by well or well location so that concerned individuals can easily identify the constituents used to fracture specific wells. As of early 2012, nearly one hundred companies have already provided information about approximately ten thousand wells and that number increases every day.
EPSC members have been active in working with authorities to reduce conflicts between local, state and regulatory agencies and citizens over hydraulic fracturing issues. Members have sent official letters on fracturing related issues with the goal of ensuring access to oil and gas resources and environmental protections. EPSC is also tracking state legislation related to fracking.
With the release of the Bureau of Land Management’s Notice of Proposed Rulemaking and Request for Comment: Oil and Gas; Well Stimulation, Including Hydraulic Fracturing, on Public and Indian Lands, EPSC sent a letter requesting an extension of the comment period. EPSC believes that the 30 day comment period is insufficient in providing adequate time for EPSC members and their constituents to evaluate the potential impacts of the new proposed rule, nor time to address issues that arise from their evaluation.
EPSC was encouraged by the sixty day extension of the comment period by the Department of the Interior. Prior to the conclusion of the comment period, EPSC submitted its own comments, stating, “EPSC opposes the revised proposed rule since state regulations related to hydraulic fracturing already exist and have proven to be successful, providing strong environmental, health and safety protections as well as regulatory certainty.”
EPSC requests that BLM not impose any new regulation related to hydraulic fracturing on Federal and Indian lands and instead defer to existing state regulations that are much more effective in securing economic growth without minimizing the need to protect the environment. Existing state regulations also prioritize local communities and geologies that a national standard could never do. The proposed rule also would further delay permitting, negating positive economic growth when the country can least afford it.
EPSC will continue to monitor proposed federal regulations and encourage the government to utilize existing state regulations that are effective.
Endangered Species Act
The Endangered Species Act (ESA) was signed into law by President Richard Nixon on December 28, 1973. The legislation was designed to protect critically imperiled species from extinction as a “consequence of economic growth and development, untempered by adequate concern and conservation.” The U.S. Supreme Court found that “the plain intent of Congress in enacting” the ESA “was to halt and reverse the trend toward species extinction, whatever the cost.”[i] The Act is administered by two federal agencies, the United States Fish and Wildlife Service (FWS) and the National Oceanic and Atmospheric Administration (NOAA).
ESA is a critically important subject, particularly within state legislative bodies. With the 40th anniversary of the legislation, it is necessary to remember the requirement for state cooperation in the implementation of ESA – Section 6 requires consultation between FWS/NMFS and states before any federal acquisition of land for species conservation. If conflicts arise between ESA and state law, ESA preempts state law regarding species conservation.
The ESA has impacted the lower wage earner disproportionally through significant increases in the cost of heat and light for homes, the price of goods and the price of transportation fuel. The ESA has increased the risk of wildfires, restricted access to public lands and jeopardized the ability of farmers, ranchers and resource producers to make a living. Once a species is listed, removing it from the listing is incredibly time consuming and nearly impossible. For example, it took nineteen years to get the Stellar Sea Lion de-listed, despite clear evidence of robust population numbers.
ESA should be modernized and updated to focus the law on true species recovery. Listing decisions must be based upon scientific evidence, not special interests, court deadlines or decisions. The rulemaking process is being usurped by a few favored special interest groups.
[i] Tennessee Valley Authority v. Hill, 437 U.S. 153, 184 (1978)
Settlement Agreements, also known as “Sue and Settle,” are when a federal agency settles a lawsuit filed by advocacy groups by agreeing to establish “court ordered” regulations, which are generally those being advocated by the plaintiff. This process ignores Congressional intent by imposing federal regulations based upon court action rather than Congressional action. This process is becoming a significant aspect of radical environmentalist’s legal strategy to restrict land use on hundreds of thousands of acres of private, state and public lands. The process circumvents the normal rulemaking process.
Settlement Agreements allow a federal agency to avoid normal protections built into rulemaking process. They often go beyond enforcing deadlines and agreements and become the legal authority for expansive regulatory action, typically with no participation by affected parties or the public.
Several environmental advocacy groups have made the Sue and Settle process a standard part of their legal strategy. By filing lawsuits covering significant EPA rulemakings and regulatory initiatives, and then quickly settling, these groups have been able to circumvent the normal rulemaking process and achieve immediate regulatory action with the consent of the agencies themselves. And then they feather their pockets by being paid with public funds available through the Equal Access to Justice Act. There are at least 60 instances between 2009 – 2012, where the Environmental Protection Agency has refused to fight litigation and settled. These settlements favored the action of the plaintiff.
On May 25, 2011, Sen. Barrasso (R, WY) and Sen. Hatch (R, UT) introduced S 1061, the “Government Litigation Savings Act” to reform the process. The legislation had thirteen co-sponsors and was referred to Senate Committee on the Judiciary. On August 2, 2013, Rep. Cynthia Lummis (R, WY) has introduced the House version, HR 3037 “Government Litigation Savings Act,” which has been assigned to the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice. The bill intends to prevent abuse of the Equal Access to Justice Act by radical environmental groups and others who frequently challenge the federal government in court. The legislation currently has seventeen co-sponsors.
EPSC supports this legislation, urges its passage and the elimination of frivolous lawsuits filed by radical environmentalists whose sole purpose is to pressure the federal government into settling the lawsuit in a manner favorable to the plaintiff.
The National Ocean Policy was established by Executive Order and overseas 27 different agencies. National Ocean Council in July released a “Marine Planning Handbook” that calls for marine plans in the Northeast and Mid-Atlantic to be completed by 2017; the Northeast Regional Planning Body has also conducted a comment period on draft regional ocean planning goals and objectives, and the Mid-Atlantic Regional Planning Body held its inaugural meeting in September, 2013.
Illustrating the need to remain vigilant regarding impacts to inland energy-producing states, during the Mid-Atlantic Regional Planning Body meeting, representatives of one environmental organization cited concerns with permitting new LNG facilities because they said it would lead to significant increases in hydraulic fracturing that would ultimately harm the oceans
The House has voted 8 times on amendments, legislation addressing in part the National Ocean Policy (Water Resources Reform & Development Act, Farm Bill, FY 2014 Energy & Water Appropriations Bill, Offshore Energy & Jobs Act)
The Executive Committee of EPSC joined other stakeholders in signing a letter drafted by the National Ocean Policy Coalition dealing with the potential conference committee being assembled related to the recently passed HR 3080, the Water Resources Reform & Development Act of 2013, and the Senate version, S 601.
EPA also has attempted to expand its jurisdiction with a study on connectivity of U.S. waters.
While the impact on downstream/ocean activities is unclear, it certainly seems evident from the initial report’s major conclusions (see below) that EPA is headed in a direction that could vastly expand federal jurisdiction over inland activities. As the agency’s charge states, “[f]indings from this Report will help inform EPA and the U.S. Army Corps of Engineers in their continuing policy work and efforts to clarify what waters are covered by the Clean Water Act.” Applying the initial report’s conclusions to areas including ponds (see #3 below) thus definitely raises a red flag.
1. The scientific literature demonstrates that streams, individually or cumulatively, exert a strong influence on the character and functioning of downstream waters. All tributary streams, including perennial, intermittent, and ephemeral streams, are physically, chemically, and biologically connected to downstream rivers via channels and associated alluvial deposits where water and other materials are concentrated, mixed, transformed, and transported. Headwater streams (headwaters) are the most abundant stream type in most river networks and supply most of the water in rivers. In addition to water, streams transport sediment, wood, organic matter, nutrients, chemical contaminants, and many of the organisms found in rivers. Streams are biologically connected to downstream waters by the dispersal and migration of aquatic and semiaquatic organisms, including fish, amphibians, plants, microorganisms, and invertebrates, that use both up- and downstream habitats during one or more stages of their life cycles, or provide food resources to downstream communities. Physical, chemical, and biological connections between streams and downstream waters interact via processes such as nutrient spiraling, in which stream communities assimilate and chemically transform large quantities of nitrogen (N) and other nutrients that would otherwise increase nutrient loading downstream.
2. Wetlands and open-waters in landscape settings that have bidirectional hydrologic exchanges with streams or rivers (e.g., wetlands and open-waters in riparian areas and floodplains) are physically, chemically, and biologically connected with rivers via the export of channel-forming sediment and woody debris, temporary storage of local groundwater that supports baseflow in rivers, and transport of stored organic matter. They remove and transform excess nutrients such as nitrogen and phosphorus (P). They provide nursery habitat for breeding fish, colonization opportunities for stream invertebrates, and maturation habitat for stream insects. Moreover, wetlands in this landscape setting serve an important role in the integrity of downstream waters because they also act as sinks by retaining floodwaters, sediment, nutrients, and contaminants that could otherwise negatively impact the condition or function of downstream waters.
3. Wetlands in landscape settings that lack bidirectional hydrologic exchanges with downstream waters (e.g., many prairie potholes, vernal pools, and playa lakes) provide numerous functions that can benefit downstream water quality and integrity. These functions include storage of floodwater; retention and transformation of nutrients, metals, and pesticides; and recharge of groundwater sources of river baseflow. The functions and effects of this diverse group of wetlands, which we refer to as “unidirectional wetlands,” affect the condition of downstream waters if a surface or shallow subsurface water connection to the river network is present. In unidirectional wetlands that are not connected to the river network through surface or shallow subsurface water, the type and degree of connectivity varies geographically within a watershed and over time. Because such wetlands occur on a gradient of connectivity, it is difficult to generalize about their effects on downstream waters from the currently available literature. This evaluation is further complicated by the fact that, for certain functions (e.g., sediment removal and water storage), downstream effects arise from wetland isolation rather than connectivity. The literature we reviewed does not provide sufficient information to evaluate or generalize about the degree of connectivity (absolute or relative) or the downstream effects of wetlands in unidirectional landscape settings. However, evaluations of individual wetlands or groups of wetlands could be possible through case-by-case analysis. Further, while our review did not specifically address other unidirectional water bodies, our conclusions apply to these water bodies (e.g., ponds and lakes that lack surface water inlets) as well, since the same principles govern hydrologic connectivity between these water bodies and downstream waters.
Emission Control Area
The Emission Control Area (ECA) impacts coastal communities across the country. EPA has imposed an ECA within a 200-mile limit around North America. Under this regulation, marine vessels, including freight ships, cruise ships and oil tankers, are restricted to use fuel with 1% sulfur content as of August 1, 2012. Beginning January 1, 2015, the limit will be further reduced to .01%. Low sulfur fuel is much more costly than projected. On August 1, 2012, ECA compliant fuel prices increased from $656 per metric ton to $930 per metric ton, representing a 46% increase in fuel costs. Today’s prices for .1% sulfur fuel (required on January 1, 2015) is $1,130 per metric ton, or 72% fuel increase from pre-ECA prices. This proposal would have devastating economic consequences on coastal areas. A comment letter was drafted to Alaska Senator Mark Begich, Chairman of the Senate Commerce Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard to encourage language to be inserted in the Coast Guard authorization bill that would include the ECA Pilot Project. Senator Giessel has already submitted her comment letter and encourages other EPSC members to do the same.