FR Doc E7-2617

From: Subject: FR Doc E7-2617 Date: Sun, 18 Feb 2007 17:56:50 -0800 MIME-Version: 1.0 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-2617.htm X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.3028 FR Doc E7-2617
[Federal Register: February 15, 2007 (Volume 72, Number 31)]
[Notices]              =20
[Page 7391-7402]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe07-29]                        =20

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DEPARTMENT OF AGRICULTURE

Forest Service

RIN 0596-AC34

=20
National Environmental Policy Act Documentation Needed for Oil=20
and Natural Gas Exploration and Development Activities (Categorical=20
Exclusion)

AGENCY: Forest Service, USDA.

ACTION: Notice of issuance of final directive.

-----------------------------------------------------------------------

SUMMARY: The Forest Service is revising procedures for implementing the=20
National Environmental Policy Act (NEPA) and Council on Environmental=20
Quality (CEQ) regulations. The procedures are being revised through=20
issuance of a final directive that amends Forest Service Handbook (FSH)=20
1909.15, chapter 30. This chapter describes categorical exclusions;=20
that is, categories of actions which do not individually or=20
cumulatively have a significant effect on the human environment, and=20
therefore, normally do not require further analysis

[[Page 7392]]

and documentation in either an environmental assessment (EA) or an=20
environmental impact statement (EIS). The amendment adds one such=20
category of actions to the Agency's NEPA procedures to facilitate=20
implementation of limited oil and gas projects on leases on National=20
Forest System lands that do not have significant effects on the human=20
environment.
    This categorical exclusion only applies to oil and gas leasing=20
activities on National Forest System lands when there are no=20
extraordinary circumstances. Use of this categorical exclusion will=20
allow for approval of a Surface Use Plan of Operations for oil and=20
natural gas exploratory operations and initial development activities=20
associated with or adjacent to a new oil and/or gas field or area so=20
long as the approval will not authorize activities in excess of any of=20
the following: (a) One mile of new road construction; (b) one mile of=20
road reconstruction; (c) three miles of individual or co-located=20
pipelines and/or utilities disturbance; (d) four drill sites. More than=20
a single action may be categorically excluded under this category in a=20
new field or associated area when the aforementioned constraints are=20
not surpassed.
    In response to comments on the proposed categorical exclusion, two=20
revisions were made to the original proposal: (1) The area in which the=20
category is applicable was clarified to allow for variations between=20
states on how a field is defined and determined; (2) utilities were=20
added to the pipeline provision to address a common practice of co-
locating pipelines and utilities in the same location or corridor.

EFFECTIVE DATE: This amendment is effective February 15, 2007.

ADDRESSES: The new Forest Service categorical exclusion is set out in=20
FSH 1909.15, chapter 30, which is available electronically via the=20
World Wide Web/Internet at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3D=
leavingFR.html&log=3Dlinklog&to=3Dhttp://fsweb.wo.fs.fed.us/direc=
tives/fsh/1909.15/.
 Single paper copies are available by contacting Peter Gaulke,=20

Forest Service, USDA, Ecosystem Management Coordination Staff (Mail=20
Stop 1104), 1400 Independence Avenue, SW., Washington, DC 20250-1104.=20
Additional information and analysis can be found at =
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html=
&log=3Dlinklog&to=3Dhttp://www.fs.fed.us/emc/nepa/oged/
.


FOR FURTHER INFORMATION CONTACT: Peter Gaulke, Ecosystem Management=20
Staff, (202) 205-1521, or Tony Ferguson, Minerals and Geology Staff,=20
(703) 605-4785, Forest Service, USDA.

SUPPLEMENTARY INFORMATION:

Background

    The Council on Environmental Quality (CEQ) regulations at 40 CFR=20
1507.3 provide that agency's National Environmental Policy Act (NEPA)=20
procedures, after notice and comment, may identify categories of=20
actions that do not have significant impacts on the human environment=20
and, consequently, do not require preparation of an environmental=20
assessment (EA) or an environmental impact statement (EIS). Current=20
Forest Service procedures for complying with and implementing NEPA are=20
set out in Forest Service Handbook (FSH) 1909.15, Environmental Policy=20
and Procedures, chapter 30. This chapter lists the categories of=20
actions that do not require preparation of an EA or an EIS by the=20
Forest Service absent extraordinary circumstances. The Forest Service=20
calls these ``categorical exclusions.''
    Oil and gas development is widespread throughout the National=20
Forest System (NFS). The Federal Onshore Oil and Gas Leasing Reform Act=20
of 1987, 30 U.S.C. 226 (FOOGLRA) grants both the Secretary of the=20
Interior (acting through the Bureau of Land Management) and the=20
Secretary of Agriculture (acting through the Forest Service) authority=20
and responsibility regarding oil and gas leases on NFS lands, and both=20
agencies have the authority to determine the stipulations under which=20
leasing will be permitted (30 U.S.C. 226(h); 43 CFR 3101.7-2(a)).=20
FOOGLRA provides that the Forest Service shall regulate all surface=20
disturbing activities relating to oil and gas leasing on NFS lands (30=20
U.S.C. 226(g)). No permit to drill on NFS lands may be granted without=20
the analysis and approval by the Forest Service of a Surface Use Plan=20
of Operations (SUPO) covering proposed surface disturbing activities=20
within the lease area.
    The Forest Service has established an incremental decisionmaking=20
framework for the consideration of oil and gas leasing activities on=20
NFS lands that is set out in 36 CFR 228.102. In general, the various=20
steps undertaken are as follows: (1) Forest Service leasing analysis;=20
(2) Forest Service notification to Bureau of Land Management (BLM) of=20
lands administratively available for leasing; (3) Forest Service review=20
and verification of BLM leasing proposals; (4) BLM assessment of Forest=20
Service conditions of surface occupancy; (5) BLM offers lease; (6) BLM=20
issues lease; (7) Forest Service review and approval of lessee's SUPO;=20
and (8) BLM review and approval of lessee's application for permit to=20
drill (APD). The categorical exclusion set out in this notice applies=20
exclusively to the Forest Service's review and approval of an=20
applicant's SUPO.
    In 2001, the President issued Executive Order (E.O.) 13212 to=20
expedite the increased supply and availability of energy to our Nation.=20
E.O. 13212 set forth ``For energy-related projects, agencies shall=20
expedite their review of permits or take other actions as necessary to=20
accelerate the completion of such projects, while maintaining safety,=20
public health, and environmental protections. The agencies shall take=20
such actions to the extent permitted by law and regulation, and where=20
appropriate.'' In response, the National Energy Policy and the Forest=20
Service Energy Implementation Plan were developed. These two=20
initiatives called for streamlining the processing of APDs and other=20
energy-related permits in an environmentally sound manner. This=20
categorical exclusion furthers the President's goals set forth in E.O.=20
13212.
    On August 8, 2005, the Energy Policy Act of 2005 was signed into=20
law. Section 390 of the Energy Policy Act of 2005 establishes=20
categorical exclusions under NEPA that apply to five categories of oil=20
and gas exploration and development activities conducted pursuant to=20
the Mineral Leasing Act (30 U.S.C. et seq., as amended). The=20
categorical exclusion in this notice is not intended to overlap or=20
duplicate the categories in Section 390 of the Energy Policy Act of=20
2005. Taken in concert, this categorical exclusion and the five=20
statutory categories discussed above further the goals set forth in=20
E.O. 13212.
    For decades, the Forest Service has analyzed, approved, and=20
administered SUPOs for oil and gas exploration and development on NFS=20
lands. As part of the Forest Service Energy Implementation Plan=20
process, the planning and environmental review process for oil and gas=20
leasing was reviewed by field personnel. This review indicated that the=20
Forest Service and BLM land management planning process, leasing=20
process, and SUPO and APD review processes for oil and gas exploration=20
and development frequently caused agency personnel to extend timelines=20
and expend undue staff, time, and funding in order to complete the=20
planning and environmental documentation for minor exploration and/or=20
development projects.
    The Agency reviewed 73 site-specific oil and natural gas projects=20
on National Forest System lands in development of the new categorical=20
exclusion and determined that the category of actions included does not=20
individually or cumulatively have a significant effect on the human=20
environment. The Agency

[[Page 7393]]

also considered peer-reviewed scientific literature identifying=20
potential effects of oil and gas development activities on wildlife and=20
fishery populations, soils, and groundwater. The combination of the=20
field review and literature review, available at =
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html=
&log=3Dlinklog&to=3Dhttp://www.fs.fed.us/emc/nepa/oged/
, gives the Agency confidence that the categorical=20

exclusion is appropriately defined. The Forest Service believes the=20
level of effects associated with future activities within the new=20
category would also be below the level of significant environmental=20
effects.

Response to Comments

    A 60-day comment period on the proposed category was initiated on=20
December 13, 2005 (70 FR 73722). A total of 108 responses in the form=20
of letters, e-mails, and faxes were received during the comment period.=20
These comments came from private citizens, elected officials, and=20
individuals and groups representing businesses, the oil and gas=20
industry, and conservation organizations.
    Public comment on the proposed category addressed a wide range of=20
topics, many of which were directed generally at use of categorical=20
exclusions under the National Environmental Policy Act. Many people=20
supported the proposal or favored further expansion, while many others=20
opposed the proposal or recommended further restrictions on oil and=20
natural gas exploration and development on National Forest System=20
lands.
    Comment: Some respondents voiced general agreement with the=20
proposed category. Some indicated that they thought current analysis=20
and documentation requirements for oil and gas exploration and=20
development are too burdensome and that the proposal would provide for=20
more efficient management. Others believed that the proposal had=20
appropriate limitations on the use of the categorical exclusions, and=20
that the Forest Service had done sufficient analysis to conclude that=20
this category of oil and gas activities normally does not individually=20
or cumulatively have significant effects on the quality of the human=20
environment.
    Response: These comments were in support of the proposal and need=20
no specific response. A summary of the remainder of public comments and=20
the agency's responses follows.
    Comment: Some respondents expressed concern and opposition to oil=20
and gas exploration and development on National Forest System lands=20
stating that these activities are inappropriate uses and incompatible=20
with the mission of the Forest Service. Some respondents suggest that=20
allowing for oil and gas development creates areas of ``single use'' on=20
National Forest System lands.
    Response: Oil and gas exploration and development is consistent=20
with the Forest Service mission. Lands administered by the agency are=20
managed by law for multiple- use (16 U.S.C. 528). The agency is=20
directed to manage the various renewable surface resources of the=20
National Forests to best meet the needs of the American people (16=20
U.S.C. 531). Under the Federal Onshore Oil and Gas Leasing Reform Act=20
of 1987, the Forest Service is charged with regulating surface-
disturbing activities conducted on agency lands pursuant to any lease=20
issued under that Act and determining reclamation and other actions as=20
required in interest of the conservation of surface resources (30=20
U.S.C. 226, 17(g)).
    Comment: Several respondents suggested the Forest Service focus its=20
efforts on alternative energy development.
    Response: Alternative and renewable energy supply and development=20
is included in the Energy Policy Act of 2005. The subject of this=20
category is the effective and efficient management of certain oil and=20
gas activities on NFS lands. The category appropriately responds to the=20
circumstances and needs associated with this task.
    Comment: Some respondents believe that the proposed category is=20
contrary to the State Petitions for Inventoried Roadless Area=20
Management Rule, and that inventoried roadless areas should, therefore,=20
be excluded from the category. Other respondents believed that=20
inventoried roadless areas should be included in the proposed category.
    Response: First, the category is not in conflict with the State=20
Petitions rule. The State Petitions for Inventoried Roadless Area=20
Management Rule (36 CFR part 294) is a procedural rule that allows=20
Governors to petition for State-specific rulemaking that may alter the=20
management direction for inventoried roadless areas contained in=20
existing land management plans. The Department has been clear that=20
during the petitioning process, the management of roadless lands is=20
governed by the applicable forest plan. The State Petitions Rule honors=20
valid existing rights, including existing permits, contracts or other=20
instruments authorizing occupancy and use of National Forest System=20
lands.
    The State Petitions Rule enables the Governors and Forest Service=20
to give oil and gas resources the same consideration that other=20
resources receive when considering alternatives for managing=20
inventoried roadless areas. The rule also requires the Forest Service=20
to inform the public of the consequences of foregone oil and gas=20
production possibilities.
    Second, it should be noted that this category would only be invoked=20
in instances where the BLM has already approved a lease. The category=20
is not a screening process for which lands should be available for=20
leasing. Rather, it is a mechanism for assuring efficient consideration=20
of environmental effects in certain situations. Additionally, the=20
proposed category would only be available for use where leasing=20
activities are consistent with the applicable forest plan and=20
regulation, and any regulation promulgated pursuant to the State=20
Petitions Rule. Importantly, neither the 2001 Roadless Rule, nor the=20
2005 State Petition Rule, prohibited the exercise of valid existing=20
rights.
    Finally, it should be noted that under the Forest Service's=20
categorical exclusion process, the agency does evaluate potential=20
impacts to inventoried roadless areas through its examination of=20
extraordinary circumstances. While the mere presence of an inventoried=20
roadless area does not disqualify use of the categorical exclusion, the=20
responsible official will evaluate potential impacts. Use of the=20
category would not be available where it is determined that the effect=20
of the action on a resource condition such as an inventoried roadless=20
area creates an extraordinary circumstance.
    Comment: One respondent suggested that Executive Order 13212 does=20
not support the proposed category.
    Response: The Forest Service disagrees that the proposed category=20
is inconsistent with Executive Order (E.O.) 13212. On May 18, 2001,=20
E.O. 13212 directed Federal agencies to expedite their review of=20
permits or take other actions as necessary to accelerate the completion=20
of such projects, while maintaining safety, public health, and=20
environmental protections. The Department conforms its policy to=20
Executive orders and believes that it is appropriate to take applicable=20
Executive orders, such as E.O. 13212, into account in promulgating=20
regulations and issuing directives.
    Comment: Some respondents commented that the proposed category was=20
an attempt by the Forest Service to circumvent compliance with the=20
National Environmental Policy Act (NEPA).
    Response: Categorical exclusions are an integral part of NEPA=20
compliance, and use of categorical exclusions in no way evades=20
compliance with NEPA. The Council on Environmental Quality (CEQ)=20
regulations for implementing the procedural provisions of NEPA direct

[[Page 7394]]

Federal agencies to identify those typical classes of actions which=20
normally do not require either an environmental impact statement or=20
environmental assessment (40 CFR 1507.3). CEQ defines such classes of=20
actions as categorical exclusions. ``Categorical exclusion'' means a=20
category of actions which do not individually or cumulatively have a=20
significant effect on the human environment and which have been found=20
to have no such effect in procedures adopted by a Federal agency in=20
implementation of these regulations (Sec.  1507.3), and for which,=20
therefore, neither an environmental assessment nor an environmental=20
impact statement is required.'' (40 CFR 1508.4).
    In subsequent guidance regarding NEPA regulations, CEQ explained=20
that the use of categorical exclusions avoids unnecessary documentation=20
of minor environmental effects in environmental assessments and allows=20
agencies to focus their environmental review efforts on the major=20
actions that will have a significant effect on the environment (48 FR=20
34263 (1983), also see 40 CFR 1500.4(p)). CEQ also encourages agencies=20
to identify categorical exclusions using broadly defined criteria that=20
characterize types of actions that normally do not have significant=20
environmental effects, including cumulative effects (48 FR 34263=20
(1983)).
    Comment: Several respondents suggested that the Forest Service=20
should set time limits for completing NEPA analysis, documentation, and=20
decisionmaking using the proposed categorical exclusion. It was also=20
suggested that the use of a categorical exclusion can frequently take=20
longer to approve than the more complex environmental assessments.
    Response: As noted above, The CEQ has explained that the use of=20
categorical exclusions avoids unnecessary documentation of minor=20
environmental effects in environmental assessments (48 FR 34263=20
(1983)).
    It is the experience of the Forest Service that the use of=20
categorical exclusions has resulted in more efficient and expedited=20
decisionmaking as compared to that of an environmental assessment.=20
Forest Service experience is that an environmental assessment typically=20
takes 4 to 6 months or longer to complete. A categorical exclusion=20
usually takes 1 month or less to complete, representing a time savings=20
of 3 to 5 months. This categorical exclusion is intended to improve=20
efficiency in planning activities that normally do not have significant=20
environmental effects.
    Comment: Some respondents said the role and application of=20
extraordinary circumstance screens is insufficient and open to abuse.=20
Other respondents suggested that, without NEPA analysis, categorically=20
excluded actions would not consider current information or surveys, and=20
managers would be unaware of extraordinary circumstances that preclude=20
the use of a categorical exclusion.
    Response: The NEPA procedures in Forest Service Handbook (FSH)=20
1909.15, chapter 30, list the categories of actions that the Agency has=20
found will not typically have individually or cumulatively significant=20
effects on the human environment. These procedures also provide for=20
extraordinary circumstances in which a normally excluded action may=20
have a significant environmental effect. This chapter includes a list=20
of ``[r]esource conditions that should be considered in determining=20
whether extraordinary circumstances related to the proposed action=20
warrant further analysis and documentation in an EA [environmental=20
assessment] or an EIS [environmental impact statement] * * *'' Section=20
30.3 also states, ``The mere presence of one or more of these resource=20
conditions does not preclude use of a categorical exclusion. It is (1)=20
the existence of a cause-effect relationship between a proposed action=20
and the potential effect on these resource conditions, and (2) if such=20
a relationship exists, the degree of the potential effect of a proposed=20
action on these resource conditions that determines whether=20
extraordinary circumstances exist.''
    The Forest Service has consistently considered best available=20
science and current information when approving the use of a categorical=20
exclusion. Pursuant to existing direction, the Forest Service must=20
conduct a sufficient review to determine that no extraordinary=20
circumstances preclude the use of categorical exclusions (FSH 1909.15,=20
sec. 30.3). This determination may include appropriate surveys,=20
consideration of the best available science, consultation with Tribes,=20
and coordination with agencies that have regulatory responsibilities=20
under other statues, such as the Endangered Species Act, National=20
Historic Preservation Act, Clean Water Act, and Clean Air Act.=20
Responsible officials will consider, on a project-by-project basis,=20
whether or not extraordinary circumstances exist.
    Comment: Several respondents asked that the Forest Service conduct=20
NEPA analysis for this proposal, including a cumulative effects=20
analysis on the impacts of the proposed category.
    Response: The CEQ does not require agencies to prepare a NEPA=20
analysis or document before establishing Forest Service procedures that=20
supplement the CEQ regulations for implementing NEPA (see Regulatory=20
Certifications section, titled ``Environmental Impact'').
    Comment: A considerable amount of comment revolved around public=20
notification and involvement when using the proposed categorical=20
exclusion and the effect on the public's role in decisionmaking. Some=20
respondents believed that the Forest Service's use of categorical=20
exclusions would allow the Forest Service to bypass important=20
procedural steps for project planning, such as public notification and=20
involvement. Other respondents stated that use of the proposed=20
categorical exclusion would restrict public involvement activities.=20
Still other respondents commented that scoping is not warranted for=20
actions that may be categorically excluded.
    Response: As directed by CEQ regulations (40 CFR 1507.3), the=20
Forest Service has developed Agency policy for implementing NEPA and=20
CEQ's regulations. As noted in Forest Service Handbook (FSH) 1909.15,=20
chapter 10, section 11: ``Although the Council on Environmental Quality=20
(CEQ) Regulations require scoping only for EIS [environmental impact=20
statement] preparation, the Forest Service has broadened the concept to=20
apply to all proposed actions.'' FSH 1909.15, chapter 30, section=20
30.3(3) further states: ``Scoping is required on all proposed actions,=20
including those that would appear to be categorically excluded.''
    As part of the scoping process for proposals potentially covered by=20
this categorical exclusion, the responsible official must determine the=20
extent of interest and invite the participation of affected Tribes,=20
Federal agencies, State agencies, local agencies, and other interested=20
parties, as appropriate. The Forest Service is committed to fulfilling=20
its public involvement responsibilities with all parties interested in=20
projects potentially qualifying for these categorical exclusions.
    Although not intended to be a substitute for scoping, the Forest=20
Service also provides notice of upcoming proposals through the use of a=20
Schedule of Proposed Actions (see FSH 1909.15, ch. Zero Code, sec. 07).=20
The schedule gives early and informal notice of proposals to make the=20
public aware of Forest Service activities and provide an opportunity=20
for the public to indicate their interest in specific proposals.=20
Schedules may be distributed in hard copy by the respective forest and=20
can be found at http://frw=
ebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html&log=3D=
linklog&to=3Dhttp://www.fs.fed.us/sopa.


[[Page 7395]]

    Pursuant to the Federal Onshore Oil and Gas Leasing Reform Act of=20
1987, the Bureau of Land Management and the surface management agency=20
are required to post for public review a notice of proposed activities=20
as found on the Application of Permit to Drill (APD).
    Comment: Some respondents commented that oil and gas development=20
activities are beyond the scope of what activities should be allowed=20
for under a categorical exclusion.
    Response: Based on site-specific project-level analysis of=20
environmental effects and the belief that the profile of projects=20
reviewed representing the Agency's past practices is indicative of its=20
future activities, the Forest Service concludes that the category of=20
action proposed does not individually or cumulatively have a=20
significant effect on the human environment. While confident of the=20
conclusion, the Agency, nevertheless, has established limitations on=20
the type and extent of activities to be approved under this categorical=20
exclusion.
    Comment: Some respondents stated that the proposed category is=20
inappropriate as it goes beyond congressional intent as expressed in=20
the Energy Policy Act of 2005, Section 390. Other respondents felt that=20
the proposed category is inconsistent with Section 390 and the intent=20
and activities of the two should be incorporated. Others suggested that=20
the effects of the Energy Policy Act of 2005 should be realized before=20
the Forest Service undertakes an effort of this type.
    Response: Section 390 of the Energy Policy Act of 2005 establishes=20
categorical exclusions under NEPA that apply to five categories of oil=20
and gas exploration and development activities conducted pursuant to=20
the Mineral Leasing Act (30 U.S.C. et seq., as amended). Independent of=20
the categorical exclusion in this directive, the Forest Service has=20
provided direction to the field on the use of Section 390. Nothing in=20
the Energy Policy Act of 2005, Section 390 precludes agencies from=20
adding additional categorical exclusions to their respective NEPA=20
procedures.
    The categorical exclusion in this directive does not, and is not=20
intended to, overlap or duplicate the activities contained in Section=20
390 of the Energy Policy Act of 2005. It is separate and independent of=20
the provisions of Section 390. It is based on historical use of=20
environmental assessments and field data that support the conclusion=20
that the category generally would not result in significant impacts. It=20
is complementary to Section 390 and meets the intent of Executive Order=20
(E.O.) 13212 that provides: ``For energy-related projects, agencies=20
shall expedite their review of permits or take other actions as=20
necessary to accelerate the completion of such projects, while=20
maintaining safety, public health, and environmental protections.''=20
Taken in concert, the categorical exclusion in the final directive and=20
the five statutory categories in Section 390 further the goals set=20
forth in E.O. 13212.
    Comment: One respondent encouraged the Forest Service to mitigate=20
skewed comments resulting from organized letter writing campaigns=20
focusing less on the number of comments and more on the quality and=20
substance of the comments.
    Response: Every comment received is considered for its substance=20
and contribution to informed decisionmaking, whether it is one comment=20
repeated by many people or a comment submitted by only one respondent.=20
The public comment process is not intended to serve as a survey process=20
to determine public opinion. The emphasis in reviewing public comment=20
is on the content of the comment rather than on the number of times a=20
comment was received. The comment analysis process is intended to=20
identify unique substantive comments relative to the proposal to=20
facilitate their consideration in the decisionmaking process. All=20
comments are considered, including comments that support and that=20
oppose the proposal. That people do not agree on how public lands=20
should be managed is a historical, as well as modern dilemma faced by=20
resource managers. However, public comment processes, while imperfect,=20
do provide a vital avenue for engaging a wide array of the public in=20
resource management processes and outcomes.
    Comment: Some respondents commented that the Forest Service should=20
track the use and progress of oil and gas exploration and development=20
projects under the proposed categorical exclusion and make this=20
information and associated NEPA documentation available for public=20
review.
    Response: The Forest Service tracks NEPA-related planning=20
information of projects, including those for oil- and gas-related=20
activities, whose decisions are expected to be documented in a Record=20
of Decision, Decision Notice, some Decision Memos, or Forest Plan=20
Approval Document. This tracking allows for an assessment use of=20
certain categorical exclusions and progress of individual projects.=20
Public viewing of this information is contained in the Schedule of=20
Proposed Actions which is distributed in hard copy and posted at http://frw=
ebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html&log=3D=
linklog&to=3Dhttp://www.fs.fed.us/sopa
 four times a year: January, April, July, and=20

October. The schedule contains a list of proposed actions that will=20
soon begin or are currently undergoing environmental analysis and=20
documentation. It provides information so that the public can become=20
aware of and indicate interest in specific proposals. Oil and gas=20
projects analyzed and documented per this categorical exclusion will be=20
included on the Schedule of Proposed Actions.
    Comment: A few respondents expressed opinions on subjecting=20
proposed actions under this categorical exclusion to the public notice,=20
comment, and appeal process requirement in the rules at 36 CFR part=20
215. Some respondents considered the public notice, comment, and appeal=20
process as absolutely essential for responsive decisionmaking.
    Response: In Earth Island Institute v. Ruthenbeck, the Federal=20
District Court for the Eastern District of California ordered that=20
categorically excluded timber sales and 10 specific categorically=20
excluded activities are subject to notice, comment, and appeal under=20
the 36 CFR part 215 rules. Therefore, if use of this categorical=20
exclusion includes activities specified by the court, then notice,=20
comment, and appeal are currently required. Conversely, if activities=20
specified by the court are not included, then notice, comment, and=20
appeal pursuant to 36 CFR part 215 does not apply.
    Comment: Some respondents opposed to the proposed categorical=20
exclusion feel that any increase in the use of categorical exclusions=20
represents a reduction in environmental review and the use of science=20
in decisionmaking. As a result, they feel that the proposed categorical=20
exclusion could result in adverse impacts to National Forest System=20
lands and resources including roadless areas, wilderness areas,=20
national recreation areas, threatened and endangered species, American=20
Indian sacred sites, and archeological sites.
    Response: Categorical exclusions are to be used for routine actions=20
that have been found by the Forest Service through experience and=20
environmental review to have no significant environmental effects=20
either individually or cumulatively (40 CFR 1508.4). On August 23,=20
2002, the Forest Service published a final interim directive to Forest=20
Service Handbook (FSH) 1909.15, chapter 30, which provided direction=20
regarding how actions, which may be categorically excluded, should be=20
considered to determine if they warrant further analysis and=20
documentation in an

[[Page 7396]]

environmental assessment or environmental impact statement (67 FR=20
54622).
    Forest Service NEPA procedures require that all proposed actions to=20
be categorically excluded from documentation in an environmental=20
assessment or environmental impact statement must be reviewed for=20
extraordinary circumstances, which may include appropriate surveys and=20
analyses, taking into account best available science, appropriate=20
consultation with Tribes and regulatory agencies, such as those=20
required by the Endangered Species Act, the National Historic=20
Preservation Act, Clean Water Act, and Clear Air Act. Accordingly, this=20
categorical exclusion does not apply where there are extraordinary=20
circumstances, such as potentially significant effects on the=20
following: Federally listed threatened or endangered species or=20
designated critical habitat, species proposed for Federal listing or=20
proposed critical habitat, or Forest Service sensitive species;=20
floodplains, wetlands or municipal watersheds; congressionally=20
designated areas such as wilderness, wilderness study areas, or=20
national recreation areas; inventoried roadless areas; research natural=20
areas; American Indian and Alaska Native religious or cultural sites;=20
archaeological sites, or historic properties or areas (FSH 1909.15, ch.=20
30, sec. 30.3, para. 2).
    Comment: A number of respondents raised issues related to the=20
possible significant cumulative impacts of projects under this proposed=20
categorical exclusion or the impacts of implementing such projects in=20
combination with other activities under other authorities or on other=20
Federal lands. Most of the statements were general, but some mentioned=20
specific impacts, such as those on wildlife or water quality.
    Response: For each of the 73 oil and gas projects considered in=20
defining this category, the question of whether there were significant=20
cumulative effects was specifically addressed. Reviewers examined the=20
possibility of significant cumulative effects from these activities and=20
all other activities within the appropriate boundaries for potential=20
resource effects. For example, based on an assessment of wildlife=20
conditions in the local habitat area, or water quality impacts relative=20
to a watershed, significant cumulative effects were not observed.
    Some public concerns with regard to environmental effects, both=20
individual and cumulative, include those regarding wildlife populations=20
and water quality. As examples, soil and water resources are protected=20
during oil and gas projects through implementation of State and=20
Environmental Protection Agency approved Best Management Practices and=20
lease level stipulations. For Surface Use Plan of Operations, the=20
Forest Service has the capacity to protect surface resources through=20
the development of conditions of approval.
    The Forest Service is required to consult with the U.S. Fish and=20
Wildlife Service (FWS) or National Oceanic and Atmospheric=20
Administration (NOAA) Fisheries whenever any proposed actions or=20
activities may affect an endangered or threatened species or adversely=20
modify designated critical habitat. The Forest Service regularly=20
coordinates and consults with the appropriate State wildlife agency,=20
FWS, and NOAA Fisheries on species protection and conservation efforts=20
to address potential individual and cumulative impacts of Forest=20
Service practices on threatened and endangered wildlife and fish=20
species and their habitat.
    It is important to note that if a proposed project may have a=20
significant effect on a species listed or proposed to be listed on the=20
List of Endangered and Threatened Species or on designated critical=20
habitat for these species, the Agency under existing Forest Service=20
NEPA procedures may not use a categorical exclusion.
    Concerns were raised regarding a cumulative effect of this=20
categorical exclusion combined with the Energy Policy Act Section 390=20
categories. This categorical exclusion is designed, in part, to be used=20
in new fields or areas at the preliminary stages of development, which=20
are designed to obtain data needed for planning potential subsequent=20
development and performing meaningful analysis of such development. The=20
use of Section 390 is for wells in existing fields where a site-
specific NEPA document for oil or gas exploration/development, or=20
analysis of drilling as a reasonably foreseeable activity has been=20
completed. These documents, in addition to the previously completed=20
leasing analysis, address the cumulative effects of field development.
    Comment: Some respondents commented that the impacts considered=20
when reviewing the 73 projects used to support the proposed categorical=20
exclusion did not include effects to subsurface resources or the=20
``subsurface footprint.'' Respondents centered their comments on=20
subsurface impacts, including the appearance of extraction-related=20
sinkholes, which are argued likely to become more evident after the 5-
year period following initiation of extraction activities.
    Response: Regardless of whether a well is analyzed and documented=20
in a categorical exclusion, environmental assessment, or environmental=20
impact statement, the BLM holds the primary responsibility for the=20
drilling plan portion of the APD and protecting the mineral estate of=20
the United States. As part of the drilling plan, the BLM requires=20
casing and cementing procedures to protect the ground water from=20
contamination from deeper aquifers and prevent the loss of oil or gas=20
from the well bore. The casing and cementing programs are also designed=20
to prevent the movement of fluid around the well bore that may result=20
in the rare occurrence of sink holes.
    Comment: Some respondents stated that the Forest Service should=20
perform a thorough economic evaluation that takes into account the loss=20
of economic benefits that will result from the proposed categorical=20
exclusion. Respondents say that such an evaluation should include=20
consideration of existing uses and functions of National Forest System=20
lands including recreation, flood control, pest control, carbon=20
sequestering, and many other ecosystem services. Much greater attention=20
to the costs and benefits of the proposed categorical exclusion is=20
necessary.
    Response: The primary economic effects of the proposed categorical=20
exclusion for oil and gas exploration and development are changes in=20
costs of conducting environmental analysis and documentation. Under=20
current NEPA procedures, the level of analysis and documentation=20
required for oil and gas exploration and development often required=20
agency personnel to extend processing timeframes and expend undue=20
resources and funding to complete minor exploration and development=20
projects in an environmental assessment. The purpose of the categorical=20
exclusion for oil and gas exploration and development on National=20
Forest System land under existing Federal leases is to streamline the=20
process of applications for permits to drill. In compliance with=20
Executive Order 12866, the Forest Service has prepared a cost-benefit=20
analysis and has determined that this categorical exclusion will not=20
have an annual effect of $100 million or more on the economy or=20
adversely affect productivity, competition, jobs, the environment,=20
public health or safety, or Tribal, State, or local governments. The=20
economic effect from this categorical exclusion is expected to result=20
in a reduction in the administrative burden of preparing

[[Page 7397]]

unnecessary environmental assessments and findings of no significant=20
impact.
    The economic analysis does not evaluate the loss of economic=20
benefits as a result of this change because the Forest Service does not=20
foresee that this new categorical exclusion will have a measurable=20
effect on the number of oil and gas projects approved by the agency.=20
Other factors, such as market forces resulting from fluctuations in=20
price due to weather, natural disasters, and demand, and available=20
industry infrastructure would likely have a more significant effect on=20
the pace of oil and gas exploration and development activities.=20
Additionally, the Forest Service's review and approval of an=20
applicant's surface use plan of operations is one step of an eight step=20
incremental decisionmaking process. Therefore, the agency has assumed=20
that the rule will not change the scope or types of projects being=20
approved, but only result in cost savings due to a more streamlined=20
process for approval.
    Comment: Numerous respondents questioned the sample size and the=20
procedures used in selecting the 73 projects evaluated in determining=20
that this is a category of actions which does not individually or=20
cumulatively have a significant effect on the human environment. Some=20
respondents stated that the methodology for establishing the category=20
was not publicly available and, therefore, not available for review.=20
Other respondents expressed concern that the time period in which the=20
data was collected was too short for the actual environmental effects=20
to be realized and, therefore, unfairly biased the sample data.
    Response: The Deputy Chief for the National Forest System=20
instructed field units to perform on-site monitoring and submit=20
corresponding data on 100 percent of oil and gas exploration and=20
development projects that had been assessed in an environmental=20
assessment and approved and constructed, or partially constructed,=20
between October 1, 1999, and September 30, 2004. The projects were=20
selected from this time frame because there have been substantial=20
improvements in technology and environmental protection requirements=20
for oil and gas exploration and development on NFS lands in the last 5=20
years. Therefore, the projects that were assessed during this period=20
are more representative of how future projects will be designed.
    The objective of the on-site monitoring was to determine if surface=20
operations for oil and gas activities approved in site-specific=20
environmental assessments did or did not have individual or=20
cumulatively significant effects on the human environment and,=20
therefore, could or could not qualify for a categorical exclusion in=20
accordance with the Council on Environmental Quality regulations for=20
implementing NEPA. The Forest Service's review of the 73 projects was=20
not intended to determine whether the projects had effects on the=20
environment, but to determine whether these types of activities had=20
significant effects.
    Upon publication of the December 13, 2005, Federal Register Notice=20
of the proposed category, the ``Methodology for Project Data Collection=20
And Results of Review'' paper was posted for public review, along with=20
other supporting documents, on the Forest Service Web site. The paper=20
and other documents remain posted at =
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html=
&log=3Dlinklog&to=3Dhttp://www.fs.fed.us/emc/nepa/oged/
.

    The Forest Service relied on the professional judgment of the=20
responsible officials, using the implementing regulations for NEPA (40=20
CFR 1500-1508) concerning the significance of environmental effects.=20
The Agency believes that resource specialists and agency-responsible=20
officials involved in the design and analysis of each specific on-the-
ground project were best qualified to identify resulting environmental=20
effects and determine whether extraordinary circumstances were present.
    Comment: Several respondents questioned why the proposed=20
categorical exclusion was limited to new fields and commented that no=20
rationale was given for why existing fields were excluded from the=20
categorical exclusion's use. Some respondents commented that limiting=20
the new categorical exclusion to new fields will unnecessarily prevent=20
expeditious processing of applications for permits to drill associated=20
with infill development and other activities that may have no=20
significant impact on the environment.
    Response: Parameters of the proposed categorical exclusion (miles=20
of road construction, road reconstruction, pipeline and utility=20
installation, and number of drill sites) were selected because they=20
were found in the site-specific project-level review to individually=20
have no significant impacts on the human environment. With the=20
exception of 25 projects monitored on the Jicarilla Ranger District=20
located in the San Juan Basin, an area that is already largely=20
developed, projects monitored were determined to not have individually=20
or cumulatively significant effects. Therefore, the scope of the=20
categorical exclusion was limited to a single new field to address the=20
inconclusive cumulative effects results from the Jicarilla Ranger=20
District where numerous production wells are located in single fields.
    It is expected that categorical exclusions identified in Section=20
390 of the Energy Policy Action of 2005 would assist in more=20
efficiently processing applications for permits to drill in existing=20
fields. This category complements Section 390 categorical exclusions=20
within new fields.
    Comment: Various respondents questioned the methodology used to=20
gather and interpret activity information used in the agency's=20
conclusion that the proposed categorical exclusion does not=20
individually or cumulatively have a significant environmental effect on=20
the quality of the human environment. Some do not believe the evidence=20
is sufficient for this conclusion because it does not adequately typify=20
all potential National Forest System lands that are or may be put under=20
lease and subject to potential development. Others suggest various=20
biases toward certain regions of the country are reflected in the oil=20
and gas projects selected for review.
    Response: The regional locations of the 73 projects were determined=20
by oil and gas development activities during the 60-month time period.=20
Geographic characteristics of the projects reviewed ranged from=20
relatively flat shrub and grass-covered prairie to rugged, timber-
covered mountainous terrain. Projects included in the sample were=20
located across the country from the Colorado Rockies to the eastern=20
broadleaf forests, covering nine different ecological subregions of the=20
United States. Subregions in the west included: Great Plains Palouse=20
Dry Steppe, Southern Rocky Mountain Steppe, Colorado Plateau Semi=20
Desert, and the Great Plains Steppe. Subregions in the southeast=20
included: The Ozark Broadleaf Forest, Outer Coast Plain Mixed Forest,=20
and Southeastern Mixed Forest. Subregions of the east included: Central=20
Appalachian Broadleaf Forest and Eastern Broadleaf Forest. The sample=20
of projects does not include every region with potential oil and gas=20
development activities. Yet, the Agency concluded that this sample size=20
was representative of future oil and gas development activity=20
locations, and the common activities associated with oil and gas=20
exploration and development were adequate to review for significant=20
environmental impacts.
    In Alaska, for example, of the 21,969,321 total acres of National=20
Forest System lands, only two areas are known to be geologically=20
permissible for oil and gas production that is, possessing a reasonable=20
probability of having oil and

[[Page 7398]]

gas resources. These are the Yakutat Forelands on the Tongass National=20
Forest and the Katalla area on the Chugach National Forest. No oil and=20
gas exploration interest or activities have taken place within the past=20
40 years on these areas, and no leases currently exist. Though no=20
interest or activities exist today, this categorical exclusion would=20
apply to National Forest System lands in Alaska. Oil and gas=20
exploration and development activities are generally the same whether=20
in the lower 48 states or Alaska, and the application of the category's=20
extraordinary circumstances provides for screens against significant=20
environmental impacts.
    Comment: Some respondents questioned whether the Forest Service=20
worked collaboratively with other Federal agencies, namely the Bureau=20
of Land Management and the Environmental Protection Agency, in=20
developing the proposed category. Others requested that the Federal=20
agencies work collaboratively on minerals management on Federal lands.
    Response: In the development and review of the proposed category,=20
the Forest Service coordinated with the Bureau of Land Management, the=20
Environmental Protection Agency, the Council on Environmental Quality,=20
and other Federal Agencies. In general, the Forest Service coordinates=20
with these agencies on all oil and gas activities on NFS lands, as well=20
as State, Tribal and local governments.
    In addition, the Forest Service and Bureau of Land Management have=20
coordinated their implementation efforts of the categorical exclusions=20
in Section 390 of the Energy Policy Act of 2005.
    Comment: Several respondents commented that the evidence provided=20
by the 73 projects reviewed is not sufficient to make conclusions on=20
coalbed methane development or in unconventional fields requiring=20
specialized development techniques. These respondents commented that=20
methodology used to support the Forest Service's conclusion that the=20
proposed category for oil and gas exploration and development actions=20
does not individually or cumulatively have a significant environmental=20
effect on the human environment was inadequate and, therefore, these=20
types of activities should be excluded from the proposed categorical=20
exclusion.
    Response: The 73 projects considered in defining this categorical=20
exclusion included ``conventional'' oil and gas operations and=20
``unconventional'' operations, including coalbed methane projects.=20
Approximately half of the projects monitored were oil projects with the=20
other half being gas projects. Of the gas projects, about 25 percent=20
were coalbed methane. Because coalbed methane projects often contain=20
multiple wells, approximately 60 percent of all wells studied were coal=20
bed methane. The projects monitored for development of this categorical=20
exclusion did show that oil and gas exploration and preliminary field=20
delineation activities, irrespective of the type of oil or gas=20
reservoir (limestone, sandstone, or coal), have similar environmental=20
effects.
    The type of equipment and nature and duration of oil and gas=20
operations that could potentially affect other resources are similar=20
for oil and gas exploration and initial field delineation activities=20
for many types of deposits, including exploration for and development=20
of coalbed methane.
    Comment: Some respondents commented that they would prefer to see=20
the limitations for road construction or reconstruction, miles of=20
pipeline installation, and number of drill sites of this category=20
decreased, while others would like to see these constraints increased.=20
Some respondents wanted geophysical activities included in this=20
category.
    Response: To determine the potential impacts of oil and gas=20
activities, data was gathered from 73 oil and gas projects that have=20
been implemented within the past 5 years. None of the projects=20
evaluated had significant impacts on the human environment. Rather than=20
setting any parameters at the limits of the range evaluated, the Forest=20
Service believes it is prudent and conservative not to exceed the mean=20
of each parameter within the proposed categorical exclusion.
    Statistical analysis was utilized to determine the mean (average),=20
median, and mode of all compiled data on all 73 projects on which data=20
was collected. While all three are statistically valid measures, the=20
mean values of the 73 projects on which the Forest Service collected=20
data were used in development of this categorical exclusion. The mean=20
resulted in thresholds which created reasonable operability for oil and=20
gas operators with limited environmental impacts on National Forest=20
System lands. Use of the median or mode provided threshold values which=20
were too low (below a value of 1.0) to provide a meaningful scope for=20
future projects.
    Limited mineral, energy, or geophysical investigations are=20
currently categorically excluded from documentation in an environmental=20
impact statement or environmental assessment by Forest Service NEPA=20
procedures in FSH 1909.19, 31.2(8) and, therefore, are not included in=20
this category.
    Comment: Some respondents commented that the definition of=20
``pipeline'' in the proposed category needed clarification. In=20
particular, some respondents believe that utilities, such as electric=20
lines should be included in the proposal, and others stated that=20
pipelines buried within an existing road or pipeline corridor should be=20
exempt.
    Response: Of the 73 oil and gas projects monitored for development=20
of the proposed categorical exclusion, 16 of 73 project highlighted=20
utilities in their decision, and 50 of 73 projects included pipelines=20
and/or utilities being placed adjacent to or within the previously=20
disturbed and unreclaimed road prism. Thirty-two of the 73 projects=20
specified that the utilities be buried. The category's language has=20
been expanded to include utilities as well as pipelines.
    It is common practice to co-locate pipelines, utilities, and roads=20
within the same corridor of disturbance. The BLM's Best Management=20
Practices For Oil & Gas Development on the Public Lands include co-
locating pipelines and utilities together to minimize surface=20
disturbance, including roads and utilities sharing common rights-of-
way. These Best Management Practices also state that to reduce visual=20
contrast in visually sensitive areas, flow lines and pipelines should=20
be buried, preferably in or adjacent to the roadway, particularly if=20
the lines are long-term. Where road, pipelines, and utilities share=20
common areas of disturbance, the disturbance will not be considered=20
cumulatively against the constraints of the categorical exclusion.
    Comment: Many respondents felt that the definition of ``drill=20
site'' was not adequately defined in the proposed category and needed=20
clarification. Other respondents felt that as currently defined,=20
``drill site'' allowed too much flexibility in the categorical=20
exclusion's implementation that would ultimately lead to abuse and=20
inconsistent application. Some of the respondents felt that the drill=20
sites should limited by acres.
    Response: A drill site, commonly referred to as a ``pad'', is a=20
location that is needed to accommodate the equipment used to drill a=20
well or wells. A drill site may contain more than one well. Not all=20
wells may ultimately be producers, at which case the drill site is=20
reclaimed. Productive well sites can often be reduced in size following=20
the drilling phase.
    The 73 oil and gas projects monitored included a spectrum of drill=20
site sizes from small coalbed methane

[[Page 7399]]

development sites, (0.5 acres per site on the Thunder Basin National=20
Grassland) up to 3.5 acres for deep, 10,000 feet well on the Dakota=20
Prairie National Grasslands. Since the sample included all=20
environmental assessments for a 5-year period and individually no=20
project identified significant environmental effects, actual pad size=20
did not correlate to the significance of effects. Therefore, no change=20
to the text of the category is required.
    Comment: Numerous respondents raised concerns that the Forest=20
Service could misuse the proposed categorical exclusion through the=20
definition of a ``field'', thereby segmenting larger projects into=20
sizes that qualify under the categorical exclusions. Some respondents=20
commented that such segmentation would violate Council on Environmental=20
Quality NEPA regulations. Other respondents stated they felt there is=20
not a clear process to establish the boundaries of a field. Some=20
respondents noted that a ``field'' is not established until production=20
is proven, therefore, exploration drill sites could not fall under this=20
categorical exclusion.
    Response: The Society of Petroleum Engineers defines a field as:=20
``An area consisting of a single reservoir or multiple reservoirs all=20
grouped on, or related to, the same individual geological structural=20
feature or stratigraphic condition.'' The field name refers to the=20
surface area, although it may refer to both the surface and the=20
underground productive formations.
    The comment about the establishment of fields only after the=20
discovery of oil or gas is correct. If an exploration well is drilled=20
in an area not previously classified as a field, and the well is=20
determined to be productive; then the applicable State oil and gas=20
regulatory agency follows procedures established for that State to=20
define the field. Some States may require more than one productive well=20
before they establish a field. If additional wells indicate that the=20
boundary defining the aerial extent of the field should be changed,=20
State agencies follow established procedures to change the field=20
boundaries. These procedures often include open, public hearings.=20
Information about the delineation of fields and the procedural process=20
for establishing and changing field boundaries vary and can be found on=20
the web pages of many States' oil and gas agencies.
    The language in the proposed category has been adjusted for=20
activities adjacent to a new oil and/or gas field to more correctly=20
reflect that certain exploratory proposals could be approved per this=20
categorical exclusion if they met the listed constraints. ``Adjacent=20
to'' is defined as within an adjacent spacing unit to a new field or to=20
a first productive well in a new area. Temporary spacing units are=20
determined by the State's oil and gas regulatory agency through an=20
established process based on the formation or pool most likely to be=20
productive. This categorical exclusion is designed for preliminary=20
operations that are necessary to gather both the surface and subsurface=20
resource information necessary to assess the potential for field=20
development.
    Regarding segmentation, the responsible official is required to=20
properly identify the characteristics of the proposed action (FSH=20
1909.15, ch. 10, sec. 11.2). The Forest Service follows the Council on=20
Environmental Quality (CEQ) regulations for all their proposals that=20
may undergo environmental review, including the documentation for=20
categorical exclusions; ``proposals or parts of proposals which are=20
related to each other closely enough to be, in effect, a single course=20
of action shall be evaluated in a single impact statement'' (40 CFR=20
1502.4(a)). The Forest Service also follows the CEQ definition for=20
determining the scope of a proposed action as defined at 40 CFR=20
1508.25, which discusses connected and related actions. Consequently,=20
segmenting a larger project into smaller projects in order to meet the=20
stated constraints and be considered under this categorical exclusion=20
is contrary to Forest Service guidance. Forest Service oversight of the=20
application of these categories through internal reviews such as=20
Chief's, regional, and forest reviews emphasizes these compliance=20
requirements and should prevent abuse.
    Comment: Some respondents assert that the proposed category wrongly=20
assumes that all existing forest plans have comprehensive and recently=20
updated pre-leasing information and, because the perceived intense=20
future oil and gas development on National Forest System lands was not=20
anticipated when most existing plans were written, local forests have=20
not appropriately analyzed the environmental impacts. Other respondents=20
characterized the proposed category as a shell-game where little or no=20
review takes place during general planning and leasing, and then when=20
the time comes for such input and review at the drilling stage, a=20
categorical exclusion might apply which offers little NEPA analysis.
    Response: The Forest Service has mechanisms for updating oil and=20
gas lease information. At the time a parcel is processed for leasing,=20
the parcel goes through a review to assure the stipulations are=20
correctly applied. As new information is identified, the Forest Service=20
reviews and determines if the information is of importance and=20
necessitates additional or adjusted stipulations.
    Conditions of Approval, applied to Surface Use Plan Operations, may=20
be adjusted or changed when warranted after a review of new=20
information. The Forest Service considers all relevant information when=20
evaluating Surface Use Plans of Operations.
    Regardless of the type of NEPA document used or the age or=20
complexity of prior analysis, the Forest Service develops mitigations=20
for each drill site per the terms of the lease. Minimum surface use=20
requirements are established in 36 CFR 228.108 and On-Shore Order=20
1. Directions for bonding requirements are in 36 CFR 228.109.
    Comment: Some respondent comments noted confusion over the staged=20
decisionmaking process involved with oil and gas development on Federal=20
lands. Some respondents stated that the proposal would frustrate the=20
staged decisionmaking approach established by Congress for onshore oil=20
and gas development. Other respondents commented that the proposed=20
categorical exclusion is inconsistent with Forest Service oil and gas=20
regulations in that the use of the proposed category would be the first=20
NEPA analysis conducted for the field.
    Response: The Department of the Interior, Bureau of Land Management=20
(BLM), acts as the onshore leasing agent for the Federal Government.=20
The BLM schedules and conducts competitive bid lease sales, collects=20
the bonus bids and issues leases to the successful bidders. As a land=20
management agency, the Forest Service makes initial determinations on=20
whether or not lands will be available for leasing, and under what=20
conditions (stipulations) the leases will be issued. Forest Service=20
decisions about leasing are made in conjunction with approved forest or=20
grassland land management plans, as well as in separate forest-wide or=20
area-specific leasing decisions. Oil and gas leasing availability=20
decisions are made in compliance with the National Environmental Policy=20
Act as well as other laws such as the Endangered Species Act and the=20
National Historic Preservation Act, and includes public notice and=20
opportunity for comment. The BLM may be a cooperating agency in these=20
efforts. Final determinations regarding lease offerings and=20
stipulations are ultimately made by the BLM.
    The Energy Policy and Conservation Act (EPCA) directed the BLM, in=20
cooperation with the Forest Service, to

[[Page 7400]]

summarize Forest Service and BLM plan leasing decisions. In two phases,=20
the highest potential onshore geologic basins were studied. The studies=20
show that for the National Forest System lands studied 47 percent are=20
off-limits to any surface exploration or development (due to legal and=20
administrative withdrawal, a ``no leasing'' decision or a ``no surface=20
occupancy'' lease), 19 percent are available to exploration and=20
development under standard lease terms and restrictions, and 34 percent=20
are subject to additional restrictions beyond the standard lease terms=20
and restrictions for additional protection of other forest or grassland=20
resources or uses. The study shows that oil and gas exploration or=20
development activity is not allowed or is restricted where such=20
activity would have significant adverse environmental effects or be=20
incompatible with other forest or grasslands uses or management=20
schemes. The screening that occurs at the leasing decision stage=20
contributes significantly to the findings of no significant=20
environmental impacts of the 73 projects studied.
    At the stage that this categorical exclusion would be used, Forest=20
Service and BLM leasing decisions have been made, and stipulations have=20
been determined and applied to the lease. The lease has been issued=20
with certain constraints, and development is subject to the terms of=20
the lease. When a review of a SUPO has been completed, the Forest=20
Service responsible official may approve the plan as submitted, approve=20
the plan with specified conditions, or disapprove the plan with stated=20
reason (36 CFR 228.107(b)(2)).
    Comment: Some respondents suggested that the Forest Service monitor=20
categorically excluded oil and gas exploration activities to ensure=20
that they do not have significant environmental impacts. Other=20
respondents expressed opinions over what is perceived as a poor track=20
record on the Forest Service's part in monitoring and; thus, it could=20
not be trusted to maintain their monitoring and enforcement=20
obligations.
    Response: Forest and land management plans already provide for=20
monitoring of management activities regarding applicable laws,=20
regulations, and standards and guidelines; effectiveness of project=20
implementation, including any specified mitigation measures; validation=20
of models and assumptions used in the planning processes; and=20
environmental impacts. Projects implemented under these categories will=20
be included in these ongoing monitoring efforts.
    In addition to forest plan determined monitoring, Forest Service=20
personnel regularly inspect oil and gas wells and facilities and=20
compliance with the respective permit terms and conditions in the=20
Surface Use Plan of Operations (SUPO) thus, minimizing or prohibiting=20
effects on other resources. Actions required in the SUPO to help=20
mitigate various resource concerns are monitored to ensure they are=20
appropriately implemented. Upon identifying operations not in=20
compliance with permit terms and conditions and/or contributing to=20
undesirable effects, Forest Service personnel take steps to ensure that=20
noncompliant activities are corrected. Such steps include, but are not=20
limited to, requiring the operator to take corrective actions and=20
requesting assistance from the Bureau of Land Management to enforce=20
lease terms and conditions.
    For oil and gas exploration and development on National Forest=20
System lands environmental protection is provided for in an element of=20
overlap or redundancy during the implementation of Best Management=20
Practices (BMPs) and mitigation measures. Individual NEPA analysis on=20
the SUPO, a component of the APDs, includes site-specific BMP and=20
mitigations measures, and implementation monitoring then occurs and=20
informs future development of BMPs, or mitigation measures.
    Further, respective State inspectors routinely enter Federal lands=20
and inspect wells and facilities for compliance with State laws,=20
regulations, and requirements.

Conclusion

    The Forest Service, U.S. Department of Agriculture (Forest Service)=20
finds that the category of action defined in the categorical exclusion=20
presented at the end of this notice does not individually or=20
cumulatively have a significant effect on the human environment. The=20
Agency's finding is first predicated on the reasoned expert judgment of=20
the responsible officials who made the original findings and=20
determinations in the oil and gas projects reviewed; the resource=20
specialists who validated the predicted effects of the reviewed=20
activities through monitoring or personal observation of the actual=20
effects; and, finally, the Agency's judgment that the profile of past=20
oil and natural gas exploration and development activities represents=20
the Agency's past practices and is indicative of the Agency's future=20
activities.
    This categorical exclusion will permit timely response to an=20
applicant's SUPO for limited oil and gas exploration and development=20
activities involving small areas of National Forest System land.=20
Additionally, it will conserve limited agency funds.
    The text of the final categorical exclusion is set out at the end=20
of this notice.

Regulatory Certifications

Environmental Impact

    The revision to Forest Service Handbook 1909.15 would add direction=20
to guide field employees in the Forest Service regarding requirements=20
for NEPA documentation for particular oil and gas exploration and=20
development activities. The Council on Environmental Quality does not=20
direct agencies to prepare a NEPA analysis or document before=20
establishing agency procedures that supplement the CEQ regulations for=20
implementing NEPA. Agencies are required to adopt NEPA procedures that=20
establish specific criteria for, and identification of, three classes=20
of actions: Those that require preparation of an environmental impact=20
statement; those that require preparation of an environmental=20
assessment; and those that are categorically excluded from further NEPA=20
review (40 CFR 1507.3(b)). Categorical exclusions are one part of those=20
agency procedures, and therefore, establishing categorical exclusions=20
does not require preparation of a NEPA analysis or document. Agency=20
NEPA procedures are internal procedural guidance to assist agencies in=20
the fulfillment of agency responsibilities under NEPA, but are not the=20
agency's final determination of what level of NEPA analysis is required=20
for a particular proposed action. The requirements for establishing=20
agency NEPA procedures are set forth at 40 CFR 1505.1 and 1507.3. The=20
determination that establishing categorical exclusions does not require=20
NEPA analysis and documentation has been upheld in Heartwood, Inc. v.=20
U.S. Forest Service, 73 F. Supp. 2d 962, 972-73 (S.D. Ill. 1999),=20
aff'd, 230 F.3d 947, 954-55 (7th Cir. 2000).

Regulatory Impact

    This directive has been reviewed under USDA procedures and=20
Executive Order 12866, as amended by 13422, on Regulatory Planning and=20
Review. The Office of Management and Budget (OMB) has determined that=20
this is a significant regulatory action as defined by the Executive=20
order. Accordingly, OMB has reviewed this directive.
    The primary economic effects of the categorical exclusion for=20
review of SUPO associated with oil and gas lease operations are changes=20
in costs of conducting environmental analysis and

[[Page 7401]]

preparing NEPA documents. The new categorical exclusion would reduce=20
agency costs by reducing the documentation requirements for certain oil=20
and gas exploration and development on National Forest System land=20
under existing Federal leases.
    Effects on local economies and small business entities are expected=20
to be nearly the same using either an environmental assessment or=20
categorical exclusion for oil and gas exploration and development=20
activities. There is potential for an increase in certain oil and gas=20
exploration and development projects, as well as an increase in site=20
administration since they would be faster and cheaper to prepare.
    Agency costs for categorical exclusions were discounted at 3=20
percent and 7 percent discount rates for 10-year period from 2006 to=20
2015. By using 3 percent discount rate, total discounted cost for=20
categorical exclusions were estimated at $7.1 million with an=20
annualized cost of $0.81 million, while the total discounted cost for=20
environmental assessments would be $42.7 million with an annualized=20
cost of $4.9 million. An annualized cost saving of $4.05 million for=20
categorical exclusions is estimated by using a 3 percent discount rate.=20
While using a 7 percent discount rate for the same timeframe, the=20
results show that total discounted cost for categorical exclusions were=20
estimated at $6 million with an annualized cost of $0.8 million, the=20
total discounted cost for environmental assessments would be $36=20
million with an annualized cost of $4.8 million. An annualized cost=20
saving of $4 million is estimated for categorical exclusions by using a=20
7 percent discount rate. This quantitative assessment indicates a cost=20
savings for the Agency using categorical exclusions for reviewing SUPO=20
for oil and gas exploration and development projects.
    The Cost-Benefit Analysis prepared for this categorical exclusion=20
can be found on the World Wide Web at =
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html=
&log=3Dlinklog&to=3Dhttp://www.fs.fed.us/emc/nepa/oged/
.


Federalism

    The Agency has considered this directive under the requirements of=20
Executive Order 13132 issued August 4, 1999, ``Federalism.'' The Agency=20
has made an assessment that the directive conforms with the Federalism=20
principles set out in this Executive order; would not impose any=20
compliance costs on the States; and would not have substantial direct=20
effects on the States, on the relationship between the National=20
Government and the States, nor on the distribution of power and=20
responsibilities among the various levels of government. Therefore, the=20
Agency concludes that the directive does not have Federalism=20
implications.

Consultation and Coordination With Indian Tribal Governments

    This directive has been reviewed under Executive Order 13175 of=20
November 6, 2000, ``Consultation and Coordination With Indian Tribal=20
Governments.'' This directive does not have substantial direct effects=20
on one or more Indian Tribes, on the relationship between the Federal=20
government and Indian Tribes, or on the distribution of power and=20
responsibilities between the Federal government and Indian Tribes. Nor=20
does this directive impose substantial direct compliance costs on=20
Indian Tribal governments or preempt Tribal law. Therefore, it has been=20
determined that this directive does not have Tribal implications=20
requiring advance consultation with Indian Tribes.

No Takings Implications

    This directive has been analyzed in accordance with the principles=20
and criteria contained in Executive Order 12630 on Governmental Actions=20
and Interference with Constitutionally Protected Property Rights, and=20
it has been determined that the directive does not pose the risk of a=20
taking of constitutionally protected private property.

Civil Justice Reform

    In accordance with Executive Order 12988, it has been determined=20
that the categorical exclusion in this final directive does not unduly=20
burden the judicial system, and that they meet the requirements of=20
sections 3(a) and 3(b)(2) of the order.

Unfunded Mandates

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2=20
U.S.C. 1531-1538), which the President signed into law on March 22,=20
1995, the Agency has assessed the effects of the categorical exclusion=20
in this final directive on State, local, and Tribal governments and the=20
private sector. This categorical exclusion does not compel the=20
expenditure of $100 million or more by any State, local, or Tribal=20
government or anyone in the private sector. Therefore, a statement=20
under section 202 of the Act is not required.

Energy Effects

    This directive has been reviewed under Executive Order 13211 on=20
Actions Concerning Regulations that Significantly Affect Energy Supply,=20
Distribution, or Use. It has been determined that this directive does=20
not constitute a significant energy action as defined in the executive=20
order.

Controlling Paperwork Burdens on the Public

    This directive does not contain any additional recordkeeping or=20
reporting requirements associated with onshore oil and gas exploration=20
and development or other information collection requirements as defined=20
in 5 CFR part 1320. Accordingly, the review provisions of the Paperwork=20
Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its implementing=20
regulations at 5 CFR part 1320 do not apply.

    Dated: February 9, 2007.
Abigail R. Kimbell,
Chief, Forest Service.

Text of Directive

    Note: The Forest Service organizes its directive system by=20
alpha-numeric codes and subject headings. Only the section of the=20
FSH 1909.15, Environmental Policy and Procedures Handbook, affected=20
by this directive is included in this notice. Please note, however,=20
that category 16 is reserved. A notice for comment was published for=20
category 16 on January 5, 2005, (70 FR 1062). A final directive for=20
this categorical exclusion has not been adopted as of the date of=20
publication of this Federal Register notice. The complete text of=20
FSH 1909.15, chapter 30 may obtained by contacting the individuals=20
listed in FOR FURTHER INFORMATION CONTACT or from the Forest Service=20
home page on the World Wide Web at http://frwebgat=
e.access.gpo.gov/cgi-bin/leaving.cgi?from=3DleavingFR.html&log=3Dlink=
log&to=3Dhttp://www.fs.fed.us[fxsp0]/im/

directives/[fxsp0]fsh/1909.15/1909.15--30.doc. The intended audience=20
for this direction is Forest Service employees charged with planning=20
and administering oil and gas exploration and development projects=20
on NFS lands under Federal lease.

FSH 1909.15--Environmental Policy and Procedures Handbook

CHAPTER 30--CATEGORICAL EXCLUSION FROM DOCUMENTATION

    Add new paragraph 17 as follows:
    31.2--Categories of Action for Which a Project or Case File and=20
Decision Memo Are Required.
    Routine, proposed actions within any of the following categories=20
may be excluded from documentation in an EIS or an EA; however, a=20
project or case file is required and the decision to proceed must be=20
documented in a decision memo (sec. 32). As a minimum, the project or=20
case file should include any records prepared, such as: The names of=20
interested and affected people, groups, and agencies contacted; the=20
determination that no extraordinary circumstances exist; a copy of the=20
decision memo (sec 05); and a list of the people notified of the=20
decision. Maintain a project or case file and

[[Page 7402]]

prepare a decision memo for routine, proposed actions within any of the=20
following categories:
* * * * *
    17. Approval of a Surface Use Plan of Operations for oil and=20
natural gas exploration and initial development activities, associated=20
with or adjacent to a new oil and/or gas field or area, so long as the=20
approval will not authorize activities in excess of any of the=20
following:
    a. One mile of new road construction.
    b. One mile of road reconstruction.
    c. Three miles of individual or co-located pipelines and/or=20
utilities disturbance.
    d. Four drill sites.
[FR Doc. E7-2617 Filed 2-14-07; 8:45 am]

BILLING CODE 3410-11-P