Senate Hearing, 109TH Congress - Oversight Hearing To Review The Permitting of Energy Projects

S. HRG.
109856
OVERSIGHT HEARING TO REVIEW THE

PERMITTING OF ENERGY PROJECTS
HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
MAY 25, 2005
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(
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED NINTH CONGRESS
FIRST SESSION
JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia
JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri
MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio
JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island
BARBARA BOXER, California
LISA MURKOWSKI, Alaska
THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota
HILLARY RODHAM CLINTON, New York
JIM DEMINT, South Carolina
FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia
BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
ANDREW WHEELER, Majority Staff Director
KEN CONNOLLY, Minority Staff Director
(II)
C O N T E N T S
Page
MAY 25, 2005

OPENING STATEMENTS
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island, prepared
statement ..............................................................................................................
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma ....................
Jeffords, Hon. James M., U.S. Senator from the State of Vermont, prepared
statement ..............................................................................................................
Obama, Hon. Barack, U.S. Senator from the State of Illinois, prepared
statement .......................................................................................................
Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................
Warner, Hon. John W., U.S. Senator from the Commonwealth of Virginia,
prepared statement ..............................................................................................
17
3
26
33
1
15
WITNESSES
Buccino, Sharon, senior attorney, Natural Resources, Defense Council .............
Prepared statement ..........................................................................................
Duffy, Dennis, vice president of Regulatory Affairs, Cape Wind Associates,
LLC ........................................................................................................................
Hogan, Ronald E., general manager, Questar Exploration and Production
Company ...............................................................................................................
Robinson, J. Mark, Director of the Office of Energy Projects, Federal Energy
Regulatory Commission .......................................................................................
17
120
9
43
19
125
7
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ADDITIONAL MATERIAL
Article from USA Today entitled, Oil projects may get less scrutiny ..............
Letters:
Senator John Warner to Karen Adams, U.S. Corps of Engineers,
March 25, 2005 ..............................................................................................
Senator John Warner to Hon. John Rumsfeld, Secretary of Defense,
April 27, 2005 ................................................................................................
Report entitled, The Effects of Wind Turbine Farms on Air Defence Radars .
Schematic site map of the Cape Wind project .......................................................
Statements:
Independent Petroleum Association of America ............................................
Nickerson, Susan, director, Alliance To Protect Nantucket Sound ..............
Table entitled, Federal, State, and Local Permits and Approvals Required
for the Construction of an LNG terminal .........................................................
(III)
124
85
88
89
46
128
130
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OVERSIGHT HEARING TO REVIEW THE

PERMITTING OF ENERGY PROJECTS
WEDNESDAY, MAY 25, 2005
U.S. SENATE,
PUBLIC WORKS,
Washington, DC.
The committee met, pursuant to notice, at 9:30 a.m. in room 406,
Senate Dirksen Building, Hon. James Inhofe (chairman of the
committee) presiding.
Present: Senators Inhofe, Warner, Chafee, Isakson, Vitter,
Jeffords, Carper, Clinton, and Obama.
Senator INHOFE. The committee will come to order.
Let me start by recognizing Senator Vitter. He has to preside in
just a few minutes. So if you would like to do an opening statement, I will defer to you for that purpose.
COMMITTEE
ON
ENVIRONMENT
AND
OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR

FROM THE STATE OF LOUISIANA
Senator VITTER. Thank you very much, Mr. Chairman, and

thank you for holding the hearing today. I think this is very important. I also want to thank all of our witnesses for coming to testify
today about this very important issue.
As our economy continues to grow and create more opportunities
for more Americans, clearly our energy consumption continues to
grow, even as efficiency grows significantly. So improving our permitting process and making it more efficient is very important. It
is important to develop new energy sources, and that is critical to
fuel the growth of jobs and the economy.
By refining the permitting process, our Nation could focus on
producing more energy domestically and reducing our reliance on
foreign energy sources. Unfortunately, the way it is structured
now, the National Environmental Policy Act, NEPA, has created
obstacles that are very costly and slow progressing and even block
projects rather than assess their environmental impact and move
them forward.
Again, in saying this, I do not quarrel with the stated goals of
NEPA; I quarrel with how it is achieved in practice, which is very
cumbersome, very inefficient, very uncoordinated, and that tends to
not achieve the stated goals of NEPA, but simply slow down all
projects that must go through that process. So the permitting process needs to be realistic and achievable if we intend to reduce our
Nations dependence on foreign energy sources and increase our domestic energy productivity.
(1)
2
Cooperation among all involved Federal and State agencies could
simplify the permitting process by focusing on common energy objectives that would eliminate conflicting agendas that hold up the
approval and review process. Participating agencies working together can improve factors such as certainty and timeliness that
impact that permitting process.
However, a definite time line would provide greater certainty for
the review process since it is frustrating when not all of the participating agencies respond in a timely manner when issuing permits.
Without processing the permits in a timely manner, development
of necessary energy infrastructure is delayed and even financially
crippled in many cases. In Louisiana this has significant impact.
We need to take advantage of advancements in technology to increase domestic production of our natural gas reserves, and that
has a big impact in Louisiana.
So once again, Mr. Chairman, I applaud you for bringing a lot
of focus and resources to bear on this very important project. I
think the bottom line is really this: it is fair and reasonable and
necessary to set these environmental and other permitting processes, but once we establish those goals, it should be all of our goal
to get that done in an efficient and coordinated manner. Once we
establish the policy, folks should not then go and make the process
as complicated and inefficient as possible, quite frankly, to frustrate that policy and to essentially reopen the policy debate. We
should make the process efficient once we set the parameters and
the policy. I think the White Houses efforts at streamlining the
process and your efforts in terms of your leadership position as
Chairman are moving us in that direction. I thank you.
[The prepared statement of Senator Vitter follows:]
STATEMENT
OF
HON. DAVID VITTER, U.S. SENATOR

THE STATE OF LOUISIANA
FROM
Chairman Inhofe, thank you for holding this hearing today. I also want to thank
our witnesses for coming to testify about this very important issue on reviewing energy project permitting.
As our economy continues to grow, so does our energy consumption. Improving the
permitting process for developing energy sources is critical if we are going to meet
our nations increasing energy demands. By refining the permitting process, our nation could focus on producing more energy domestically and reducing our reliance
on foreign energy sources.
Unfortunately, the National Environmental Policy Act (NEPA) process has created obstacles that are costly, slow progress and even block projects rather than assess their environmental impact and move forward. The permitting process needs
to be realistic and achievable if we intend to reduce our nations dependence on foreign energy sources and increase our domestic energy productivity.
Cooperation among Federal and state agencies could simplify the permitting process by focusing on common energy objectives that would eliminate conflicting agendas that hold up the approval and review process. Participating agencies working
together could improve factors such as certainty and timeliness that impact the permitting process. However, a definite timeline would provide greater certainty for the
review process since it is frustrating when not all of the participating agencies respond in a timely manner when issuing permits. Without processing the permits in
a timely manner, development of necessary energy infrastructure could be delayed
and even financially cripple the project.
In Louisiana, we need to take advantage of advancements in technology to increase domestic production of our natural gas reserves. Increasing domestic production will reduce our dependence on foreign energy sources and create jobs for a
stronger economy.
3
I look forward to hearing from our witnesses about their experiences and suggestions for improving the permitting process. Once again, thank you, Mr. Chairman
for your efforts to organize this hearing.
Senator INHOFE. Thank you, Senator Vitter, and thank you for
your loyal attendance here.
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
This is a very significant committee hearing. Before you leave, I

will tell you one story. Back in real life I was a developer and I
can remember building down in South Texas on the coast. At one
time, I actually had to go to 26 governmental agencies to get a doc
permit for a condo development. I got to thinking, in this information age, it is just not necessary, it should not be necessary. So I
come, I am afraid to say, Ms. Buccino, with a little bit of a bias
toward over-regulation as a general principle.
I believe that this Nation really needs an energy policy. It is
ironic that we are having this meeting right now when the Energy
Committee is in the process of working on the energy bill in a different room. The lack of a comprehensive energy policy has detrimentally impacted the country in several ways, and ultimately
slowed down economic recovery.
I have long said and I maintain that having a strong energy policy is a national security issue. I can remember when many years
ago, back during the Reagan administration, Don Hodell, who
served as both Secretary of Interior and then also as Energy Secretary, he and I had a song and dance where we would go around
and try to explain to consumption States that our dependence upon
foreign countries for our ability to fight a war is not an energy
issue, it is a national security issue. Nobody believed it at that
time. I was alarmed because we were dependent upon foreign countries for 33 percent of our oil. Today, it is twice that. So we have
been moving in the wrong direction.
Environmental policies have had a significant and varying effect
on many of the energy problems this country facesthe high natural gas prices, the lack of refining capacity, which we have dealt
with here in this committee at several hearings over a number of
years, and the insufficient energy infrastructure, just to name a
few.
With great foresight, President Bush recognized the need for a
comprehensive national energy plan some 4 years ago this month,
but implementation of many of his recommendations has been frustrated in Congress. Environmental concerns are among the principal reasons for Congress failure to address Americas energy
needs.
Even the Federal Reserve Board Chairman Alan Greenspan
noted as much, stating, We have been struggling to reach an
agreeable tradeoff between environment and energy concerns for
decades . . . it is essential that our policies be consistent. Chairman Greenspan delivered this warning 2 years ago before another
Senate committee.
I would ask my friends to remember that the Senate has been
trying unsuccessfully to move an energy bill since the 107th Con-
4
gress. I am hopeful that we will be able to develop the needed consistency and send an energy bill to the President this year.
The purpose of todays hearing is to review the permitting of energy projects, and to consider whether permitting has incorporated
the consistent approach Chairman Greenspan referred to; that is,
balancing the needs of the environment and the energy needs. As
an Oklahoman and someone very familiar with the oil and gas industry, it might surprise my friends that this hearing is energy
source neutral. We are not here to discuss the environmental merits of one type of energy over another.
Rather than focusing on any one energy source, I am concerned
about the entire process. I think that the following quote from an
energy interest summarizes the issues permit, Review needs to be
completed in a timely manner and Slippage undermines the
credibility of the process and drains the energy and resources of
the members of the public; indefinite delay harms not only the
project proponent and those who see the benefits flowing from the
project, but also damages stakeholders.
The fact of the matter is that the country needs all forms of energy and requires a diverse fuel mix to maintain economic progress
and ensure a clean environment.
Regardless of the type of energy, producers cannot find, harness,
extract, or transport energy unless they can secure the necessary
environment-related permits. The collective energy industries consistently claim that the requisite Federal permits and legal challenges from special interest opposition groups have prevented them
from producing energy or delivering it to consumers and businesses.
President Bush recognized the complexities involved in the permitting process in issuing Executive Order 13212, which called for
Federal agencies to expedite permitting and established a White
House Task Force on Energy Project Streamlining. The Federal
agencies have improved their permitting, but a lot more can be
done.
I am not a bird expert. I do not know how much bird research
should be done before building electricity-generating wind turbines.
Is 6 months of state-of-the-art radar research sufficient, or is 3
years too much? I do not know.
However, I am confident that the projects proponents would like
to know with certainty the proper reasonable approach at the beginning, not at the end of the Federal permitting process. A lot of
you do not understand that it is predictability that is necessary.
You cannot make the necessary investments and do the necessary
things, very similar to our highway bill that we are doing right
now, you cannot just operate on 6 months extensions, you have to
have a 5- or 6-year bill where you can plan in advance what to do
and you can venture your capital and sell your story.
Environmental regulations have increased demand for natural
gas. Several special interest environmental groups celebrated natural gas over other energy fuels. Indeed, nearly all new electricity
generation is fueled by gas over coal. Yet today, some of these same
groups have worked against building the necessary infrastructure
to transport their clean-burning bridge fuel.
5
For example, the California and Nevada chapters of the Sierra
Club voted to oppose both on the offshore LNG facilities even
though the club favors gas over coal and nuclear energy. Similarly,
some of the States that have the greatest demand for gas have not
increased the infrastructure to deliver it. California, for example,
has opposed the permitting of Liquefied Natural Gas and pipeline
infrastructure even though, according to Californias Energy Commission, local air quality regulations require natural gas generation.
California certainly is not alone in contributing to or facing a
regulatory paradox. According to a report from the New England
ISO, the nonprofit operator of New Englands power grid, natural
gas in the region was increased from 16 percent in 1999 to a projected 45 percent in 2005; however, the States lacked the needed
infrastructure to transport and distribute the gas. The ISO Chairman Berry stated that, The long and complicated Federal permitting process for building new interstate pipelines is a greater obstacle than the technical construction work.
Some special interest groups would like oil and gas companies to
go above and beyond what is required by environmental regulations. They would also like for operators to monitor potential environmental impacts. Council on Environmental Quality Chairman
Jim Connaughton has suggested incorporating adaptive management, which includes monitoring to a wide variety of projects.
These are fine goals in concept, but how do current permitting requirements provide for and encourage such a flexible approach?
Lastly, I would like to recall Chairman Greenspans warning. He
framed the issue as a tradeoff between energy and the environment. It is unfortunate that anyone describes balancing these two
critical interests in terms of a tradeoff, sometimes that is thought
of in disparaging ways.
So I look forward to hearing from both sides of those individuals
who are here representing environmental concerns, as well as for
those who are involved in the permitting process and those trying
to get permits.
[The prepared statement of Chairman Inhofe follows:]
STATEMENT
OF
HON. JAMES M. INHOFE, U.S. SENATOR

THE STATE OF OKLAHOMA
FROM
The nation needs an energy policy today more than ever. The lack of a comprehensive energy policy has detrimentally impacted this country in several ways,
and ultimately slowed economic recovery. I have long said and I maintain that having a strong energy policy is a national security issue.
Environmental policies have had a significant and varying effect on many of the
energy problems the country faces; unsustainably high natural gas prices, lack of
refining capacity, and insufficient energy infrastructure to name just a few.
With great foresight, President Bush recognized the need for a comprehensive national energy plan some 4 years ago this month but implementation of many of his
recommendations have been frustrated in Congress. Environmental concerns are
among the principal reasons for Congress failure to address Americas energy needs.
Even Federal Reserve Board Chairman Alan Greenspan noted as much stating,
[w]e have been struggling to reach an agreeable tradeoff between environmental
and energy concerns for decades. . . it is essential that our policies be consistent.
Chairman Greenspan delivered his warning 2 years ago before another Senate Committee. I would ask my friends to remember that the Senate has been trying unsuccessfully to move an energy bill since the 107th Congress. I am hopeful that we will
be able to develop the needed consistency and send an energy bill to the President
this year.
6
The purpose of todays hearing is to review the permitting of energy projects, and
to consider whether permitting has incorporated the consistent approach Chairman
Greenspan referred to. As an Oklahoman and someone very familiar with the oil
and gas industry, it might surprise my friends that this hearing is energy source
neutral. We are not here to discuss the environmental merits of one type of energy
over another.
Rather than focusing on any one energy source, I am concerned about the entire
process. I think that the following quote from an energy interest summarizes the
issues permit: review needs to be completed in a timely manner and slippage undermines the credibility of the process and drains the energy and resources of the
members of the public; Indefinite delay harms not only the project proponent and
those who see the benefits flowing from the project . . . but also damages stakeholders.
The fact of the matter is that the country needs all forms of energy and requires
a diverse fuel mix to maintain economic progress and ensure a clean environment.
Regardless of the type of energy, producers cannot find, harness, extract or transport energy unless they can secure the necessary environment-related permits. The
collective energy industries consistently claim that the requisite Federal permits
and legal challenges from special interest opposition groups have prevented them
from producing energy or delivering it to consumers and businesses.
President Bush recognized the complexities involved in the permitting process in
issuing Executive Order 13212, which called for Federal agencies to expedite permitting and established a White House Task Force on Energy Project Streamlining. The
Federal agencies have improved their permitting but more can be done.
I am not a bird expert. I do not know how much bird research should be done
before building electricity-generating wind turbines; is 6 months of state-of-the-art
radar research sufficient or is 3 years too much? I dont know. However, I am confident that the projects proponent would like to know with certainty the proper reasonable approach at the beginning not the end of the Federal permitting process.
Environmental regulations have increased demand for natural gas. Several special interest environmental groups celebrated natural gas over other energy fuels.
Indeed nearly all new electricity generation is fueled by gas over coal. Yet, today,
some of these same groups have worked against building the necessary infrastructure to transport their clean-burning bridge fuel. For example, the California and
Nevada chapters of the Sierra Club voted to oppose both on and offshore LNG facilities even though the Club favors gas over coal and nuclear energy.
Similarly, some of the states that have the greatest demand for gas have not increased the infrastructure to deliver it. California for example has opposed the permitting of Liquefied Natural Gas and pipeline infrastructure even though, according
to Californias Energy Commission, local air quality regulations require natural-gas
generation.
California certainly is not alone in contributing to or facing a regulatory paradox.
According to a report from the New England ISO, the nonprofit operator of New
Englands power grid, natural gas in the region was increasing from 16 percent in
1999 to a projected 45 percent in 2005, however the states lacked the needed infrastructure to transport and distribute the gas.
The ISO Chairman Berry stated that the long and complicated Federal permitting process for building new interstate pipelines is a greater obstacle than the technical construction work.
Some special interest groups would like oil and gas companies to go above and
beyond what are required by environmental regulations. They would also like for
operators to monitor potential environmental impacts. Council on Environmental
Quality Chairman Jim Connaughton has suggested incorporating adaptive management, which includes monitoring, to a wide variety of projects. These are fine goals
in concept, but how do current permitting requirements provide for and encourage
such a flexible approach?
Lastly, I would like to recall Chairman Greenspans warninghe framed the issue
as a tradeoff between energy and the environmentit is unfortunate that anyone
describes balancing these two critical interests in terms as a tradeoff. A tradeoff was
not what the nations first environmental law considered; in fact one of the stated
goals of the National Environmental Policy Act goal is to create and maintain conditions under which man and nature can exist in productive harmony. A tradeoff
was never intended.
I look forward to hearing from the witnesses about the permitting challenges I
described and other issues.
Senator INHOFE. With that, let me just go over who we have

here. Mark Robinson, a Federal non-partial witness, is the director
7
of Office of Energy Projects, permitting pipelines and liquefied natural gas, the Federal Energy Regulatory Commission. Dennis Duffy
is the vice president of Cape Wind. Mr. Duffy will discuss how the
permitting process of the proposed wind farm off Cape Cod has
been overly burdened and allowing opponents to use stall and delay
tactics. Sharon Buccinois that pronounced rightis the attorney
for the NRDC, and she will testify that existing Federal permitting
process is adequate, and we will be looking forward to her testimony. Then Ron Hogan is the general manager of Questar, another
one who has been involved in the permitting process.
Why not start, Mr. Robinson, with you. Let me tell you, even
though we do not have many members now, members will be coming in and out, and all members are represented by staff. So there
will be questions that will be submitted to you for the record.
We will go ahead and start with you, Mr. Robinson.
STATEMENT OF J. MARK ROBINSON, DIRECTOR OF THE
OFFICE OF ENERGY PROJECTS, FEDERAL ENERGY
REGULATORY COMMISSION
Mr. ROBINSON. Mr. Chairman, thank you very much. My name

is Mark Robinson and I am the director of the Office of Energy
Projects at FERC. We are responsible in our office for 1,600 hydroelectric projects, their licensing, inspections, safety and security of
those projects. We also are responsible for certificating about 500
to 2,000 miles of interstate natural gas pipelines per year and storage facilities, and also the authorization, safety and security of
LNG terminals.
I would like to make sure that I identify my bias, I think we all
have those. I have been involved with siting energy infrastructure
for the Commission for 28 years now. Over those 28 years, I have
watched this process become more byzantine with every passing
year. My concern is that we may be getting to a point in the complexity of the permitting process where ultimately the first dollar
of investment will not occur and those dollars will migrate elsewhere, including overseas.
My testimony goes specifically to three issues that I think need
to be addressed in enhancing the permitting process. One is the parochial interests that sometimes override regional needs; two is
what I call agency creep, where different agencies use an aspect of
the project and their authority concerning that aspect of the project
to make the overall public interest determination; and three is
what I term distributed decisionmaking. I would like to focus in
these oral comments on distributed decisionmaking and how that
affects permitting of energy infrastructure.
By distributed decisionmaking, I mean that everybody has a bite
of the apple at this point. If you look at my testimony and the
charts that I have attached to it, you will see for LNG facilities,
as an example, in some States you are looking at 30, 40, 50 permits
that have to be acquired by the proponent of that project before
they can go forward. That in itself is a problem. But when you look
underneath just the chart to see how that works, you can see how
there is sort of an insidious aspect of permitting that can stop
projects.
8
One is the aspect that one agency will wait for another. They will
say we cannot do this until they do that. So you end up with a sequential aspect of the permitting process that seems to go on and
on and on. Two, everybody seems to want to take their particular
permit and make that the last action that occurs. They want to
wait until everybody else sees what is going on and then they take
action. Well, if you have several agencies that are trying to do that,
it becomes almost a bidding contest to see who gets to be the last
person to say yes or no. That can also affect the ability for a project
to move forward.
The effect of this distributed decisionmaking is that ultimately
projects that are in the public interest are not constructed. They
die a death of a thousand cuts, with everybody taking a little bit
of the project away as they go through the permitting process until
the project just dies and goes away. I have seen that over and over
again and with increasing frequency.
The cure for this, of course, is pretty plainyou vest all authority with one agency for all the laws that are affected and hold them
responsible. That is never going to happen. The genie is way too
far out of the bottle for us to ever go back to having an agency decide whether or not energy infrastructure should or should not be
built, there are too many interests involved. But that does not
mean you cannot discipline that distributed decisionmaking, and
that is what I would call for today.
If we lack that discipline, if we do not acquire itand Memorandums of Understandings, and MOAs, and administrative actions all
seek to do this, but they do not have the force of law, if we do not
discipline that processwhat we will end up with is no decisions
at all as this becomes increasingly more complex. To discipline that
process, we are calling for a three-pronged approach to rational
siting.
The first prong of that is identification of an agency having exclusive jurisdiction for the overall siting decision. That does not
mean that anyone else loses their authoritythe Clean Water Act
would still apply, the Endangered Species Act would still apply
but those projects and those agencies dealing with that would have
to recognize that is an aspect of the project, not the overall public
interest determination.
The second prong is the development of one Federal record. This
is just good Government. It is a matter of taking all those agencies
that have a role in this, who play a role, forcing them through law
to work together to develop one record and then everybody acts
from that record in a timeframe set by the lead agency. If they fail
to make that decision in that timeframe, their decision will be conclusively presumed. That is the discipline applied to them to take
an action within a timeframe set by the lead agency.
The third prong of that rational siting process is direct appeal to
the court of appeals. It does not do any good to have all those agencies make their decisions and then all of the appeal processes run
off into various different arenas to try to be resolved over years and
years of process. We need immediate appeals, a one-stop to go to
the court of appeals to review those actions by those permitting
agencies.
9
If we have rational siting that would affect any type of energy
infrastructure, what we will gain from that is certainty of the decisionmaking process. With certainty, that first dollar that people
want to invest to develop infrastructure will be invested; it will not
migrate overseas, and we will get decisions on what is and what
is not in the public interest to develop in this country. Thank you,
sir.
Senator INHOFE. Thank you, Mr. Robinson. What is good about
your opening statement is you actually come out with a specific recommendation. We do not hear that very often. I appreciate that
very much.
Mr. ROBINSON. Well, I have been dealing with this a long time
but I feel very strongly that is about the only thing we can do to
try to bring some sanity to the process.
Senator INHOFE. We will be interested to explore that.
We have been joined by Senator Warner, who is the senior member on this committee; however, I chair it because he is the chairman of the Armed Services Committee. Senator Warner, do you
have an opening statement?
Senator WARNER. Thank you, no. I would like the opportunity
when Mr. Duffy completes his opening comments, if I could just
spend a few minutes with him.
Senator INHOFE. In some questions, you mean?
Senator WARNER. Yes. I will not take long, and I thank you for
the courtesy, Mr. Chairman.
Senator INHOFE. All right. We will go ahead and move on to Mr.
Duffy. After that, I know Senator Warner cannot stay very long, we
would recognize Senator Warner to pursue his request.
Mr. Duffy.
STATEMENT OF DENNIS DUFFY, VICE PRESIDENT OF
REGULATORY AFFAIRS, CAPE WIND ASSOCIATES, LLC
Mr. DUFFY. Thank you, Mr. Chairman. My name is Dennis J.

Duffy. I am the vice president of regulatory affairs for Cape Wind
Associates.
For the past 5 years, Cape Wind has been developing the Nations first offshore wind generation project. The project would be
located approximately 5 to 10 miles off the nearest point of land
on the coast of Massachusetts. It would generate up to 468
megawatts of clean and renewable energy, with no fuel requirements and no air emissions. This amount would represent approximately 75 percent of the annual electric needs of Cape Cod and the
Islands of Marthas Vineyard and Nantucket.
The principals of our company have been in the energy business
for more than 25 years. We have developed and operated some of
the most efficient gas-fired plants now operating in the U.S. Now,
in direct response to State mandates for renewable energies, the
so-call renewable portfolio standards, we are focusing upon wind
energy development.
We are confident that wind technology has now advanced to the
point where it is both proven and reliable and can play a much
more meaningful role in our national energy supply. In order to realize the full potential of this source, however, we need to ensure
10
that our national energy and environmental policies are implemented in a consistent manner.
The Cape Wind project would consist of 130 wind turbines located in Federal waters connected to the land-based power grid via
2 submerged cables. Although this is the first offshore wind energy
farm proposed in the U.S., in Europe offshore projects of this type
have been operated successfully for more than a decade. The Cape
Wind project
Senator WARNER. Excuse me. I missed what you said. What had
happened not in a decade?
Mr. DUFFY. The European projects have been operating for a decade or more now. The project would be located on a shoal out of
shipping lanes and would impose no restrictions on current uses of
the area. Cape Wind enjoys strong support from environmental,
consumer advocacy, and labor groups, and a Cape-based grassroots
support organization with now over 4,000 members.
The Federal regulatory process under current law is both thorough and comprehensive, but, importantly, it lacks any requirement that would limit the duration of project review period, which
in some cases can open the door for opponents to try to use delay
as an end in itself. After extensive analysis of potential sites, we
submitted our application to the Army Corps in November of 2001.
The project has been undergoing regulatory and public scrutiny for
more than 312 years, including the preparation of an Environmental Impact Statement under the NEPA.
The Army Corps has acted as the lead Federal agency in a process that has included 17 Federal and State participating agencies
and which has afforded exceptional opportunities for public involvement, including 9 public hearings. During this process, an exhaustive record has been put together under a public interest standard
which has included a whole range of issues, from environmental
impacts, project aesthetics, cost implications, and the need of the
public.
At the same time, there has been an extensive parallel proceeding. In 2002, we filed with the Massachusetts Energy Facilities
Siting Board for authorization for the transmission facilities which
would cross the waters of the Commonwealth. I am happy to report
that after a 212-year review, with 20 days of expert testimony and
over 50,000 pages in an evidentiary record, on May 10, the Massachusetts Energy Facilities Siting Board approved our petition based
largely on a finding that our energy would be needed for 3 purposes: To meet the growing need for the regions power; to lower
the prices to electric ratepayers; and to offset air emissions from
fossil generation.
Notwithstanding the review we have gone through over the last
312 years, however, we still face additional processes of uncertain
duration. In particular, the Army Corps issued a draft EIS in November of 2004 and has received more than 5,000 comments on the
draft. While most of those comments were positive, the comments
also included continued demands from project opponents that multiple years of additional field studies now be completed. Some, for
example, call for the Corps to now evaluate nuclear and fossil plant
proposals on an equal footing, notwithstanding the fact that we
11
proposed this project in specific response to mandates for renewable energy.
In conclusion, Cape Wind and the other wind projects that will
follow present great potential for meeting the multiple objectives of
national energy and environmental policy, including decreased reliance on imported fuel, reducing and offsetting air emissions, and
lowering the cost of electricity to the ratepaying public, all with
minimal environmental impact.
Based on our experience, we have two suggestions for improving
the process. First, we believe that national policy objectives would
be better served if environmental review of proposed energy facilities were conducted in a more timely manner, perhaps pursuant to
statutory timeframes that would prevent delay tactics from crippling an otherwise worthy project. I point out in that case, for example, many of the New England States have adopted energy facilities siting acts which specifically limit the review period to a 12month process for major energy projects.
Second, because the process involves so many agencies with often
conflicting agendas, it is important that the process appropriately
recognize the clearly stated Federal and State energy objectives, as
well as the societal tradeoffs inherent to any major energy project.
Thank you.
Senator INHOFE. Thank you, Mr. Duffy.
Senator Warner.
Senator WARNER. Thank you, Mr. Chairman. I will not be too
long. I will put a number of things with unanimous consent in todays record.
Let me make it clear, Mr. Duffy, you do not know me, I do not
know you, and this by no means is any personal criticism to you.
But I became involved in this issue, as you probably know, because
of several concerns.
First, I think I have to digress a moment to speak about a personal aspect of this. For many years I was married to a wonderful
person who is still a very dear and valued friend, I guess it was
about 25 years ago now, 26 years ago when we unfortunately parted ways, but she does have a home in the Cape and I was actually
married there to that wonderful woman. Every time I try and get
into this fray, they conjure up this woman, who is very private, and
three children of mine who occasionally visit the house.
I just think it is fine for anyone to heap criticism on me, but I
really resent, and it is not a part of your organization, but the local
press has seized on this as why I have questioned this thing. I have
not been to the Cape personally for a number of years, although
I plan to go this year to a wedding for 3 days. So when I make a
sighting, I am sure they will conjure up some more stories. But let
us put that to one side.
Here is my concern with this, because it really grabbed my interest in several ways. One, yes I have seen the Cape for many years,
and that part of America to me is one of the great treasuresthe
next witness, Ms. Buccino, if you could listen to thisone of the
great natural treasures in America is that confluence of islands up
there, Marthas Vineyard and the Cape and so forth.
It is a marvelous sanctuary for birds and wildlife. It is a sailors
haven, a fishermans dream. I could go on and on about that part
12
of America. In my years, I have been to every place in this country
one way or another just about.
I have been very disturbed about the environmental community
not focusing on this. The environmental community has sort of
taken the hear no evil, see no evil, speak no evil, put hands over
their face and look the other way because they realize that possibly
some modest measure of energy can be derived from wind power
and, therefore, all the evils of the other sources of energy is where
they direct their attention.
But I have never quite understood why they did not step in to
look at this magnificent piece of America and speak on it in a more
objective and authoritative way. But put that aside. That is one
concern that I have, that it is just a treasure of this country.
Second, let us go backand I am going to put in todays record
a letter I wrote, Mr. Chairman, to the Army Corps of Engineers.
Senator INHOFE. Without objection.
Senator WARNER. As a member of this committee, I have some
say about the Corps, and as a member of the Armed Services Committee, we have some things to say about the Corps. We had before
this committee, Mr. Chairman, the former Assistant Secretary of
the Army, not the former, he is currently again acting, for Civil
Works, Mr. Woodley, and I am going to put in todays record the
full testimony of the Assistant Secretary.
Senator INHOFE. Without objection.
Senator WARNER. Mr. Woodley stated that he did not believe the
Corps has clear statutory authority to grant Federal permits for
wind power projects in the Federal offshore shelf waters. This is
what I wrote to the Corps of Engineers, they are having this open
hearing on this:
The Corps is reviewing an application for a navigation permit under section
10 of the Rivers and Harbors Act of 18991899. The only windmills or wind
power that the Members of Congress had any knowledge about then maybe was
Don Quixote, as you know, and a few local farmers windmills and something
else. They never envisioned this. To think that you are moving forward on this
project under that ancient statute, which in my judgment and the judgment of
the Acting Assistant Secretary of the Army for Civil Works, just does not have
the statutory framework to support this decision.
I go on:
The stated purpose of this statute is clearly to prevent obstructions to navigation in waters of the U.S. It does not provide authority to the Corps of Engineers to grant property interests in those CS lands, as would be the result
should this permit application be granted. The legislative history of the 1899
Rivers and Harbors Act shows that section 10 was originally enacted to remedy
the inability of Federal common law to prevent obstruction to navigation. The
law and implementing regulations have been broadened somewhat over the
years and now includes a public interest test. But its essential purpose has not
changed.
The jurisdiction of the Corps of Engineers as provided in the 1899 Rivers and
Harbors Act and implied authorities under the Outer Continental Shelf Lands
Act are wholly inadequate to evaluate the construction proposed of 130 windmill
towers in U.S. waters to properly protect our environment, to ensure that navigation on our seas is not impeded, to guarantee that public assets are not granted to private developers for free, to provide for appropriate compensation to the
Federal taxpayer for the private use of public lands, and to ensure the careful
management of other Federal interests. The 1899 statute simply cannot, and
should not, be stretched 100 years later to embrace the unique concepts of the
proposed project.
13
I am not against the concept of wind power. I simply say, if it
is going to be done, do it right. The responsibility in large measure
falls upon the Congress. When the energy bill, Mr. Chairman, is
brought up, I intend to address this issue on the floor. I tried last
year in the context of the Military Act, which the Chairman and
I worked on, to ask for a 1-year moratorium to give Congress the
opportunity to step in and establish a regulatory framework for
these offshore lands, such that you could proceed under a current
law of Congress specifically designed to take care of the wind
power.
Now these wind units are proposed off the shore of Virginia, and
that is really the underlying reason why I am so involved in this.
I do not understand how you can put this much private capital behind a project that really has no foundation in statutory law for the
regulatory process. Yes, you have been at this for 3 years-plus. I
guess I am slightly amused by that. I have been for 15 years trying
to get a dam in Virginia with the Corps of Engineers. I have not
given up by any measure, but these processes are somewhat slow.
So I have stated my case, Mr. Chairman, and I would like to
have our distinguished witness reply, to the extent that he wishes.
To save time, you can have a chance to look over my letter, and
I would ask that maybe you would like to expand your remarks
and place them in todays record after you have had an opportunity
to reflect on this.
Mr. DUFFY. Thank you, Senator, I would welcome that opportunity. Let me just say, I fully appreciate your concerns, but on the
legal analysis I think we respectfully disagree on a couple of points,
which I can explain somewhat.
The way we have read section 10 of the Rivers and Harbors Act
is that it was always intended to be a general delegation of authority to the Army Corps and not limited to any specific type of structure or for a specific purpose.
For example, we looked back over a long history of courses of
dealing where the Army Corps has used its section 10 authority for
a whole host of different types of projects. Some have included
things like rerouting rivers; others, highway construction projects,
bridge construction projects; and others offshore have included
things such as filling hundreds of acres of waterways of the Federal
waters for things such as airport expansions.
More specifically going offshore, the section 10 authority has
been used for a whole range of authorities which have been recognized by court decisions which have included things such as offshore cable projects, weather towers, and radio stations. There is
a whole range of things that the Corps has done historically with
an established course of dealing which has been upheld in the
courts.
I would also point out that we, more than 212 years ago, got a
preliminary permit to place an offshore weather station with a 200foot tower for taking wind data, which has been in service now for
over 2 years. The opponents to our project appealed the grant of
that permit under some of the very same reasons, arguing that the
Army Corps offshore structure was intended to be very narrow and
limited, and in fact limited only toward extractive operations.
14
We have now gone through 2 years of Federal court litigation
with two decisions at the district court in Massachusetts, and two
decisions at the first circuit, which we think confirm our original
reading that the congressional grant of authority to the Corps was
not meant to be limited, but it was general in nature and extends
beyond extractive structures.
But I think probably more importantly to the policy question, we
feel that under current law the structure is in place to give a full
and fair regulatory review to the substantive issues.
Senator WARNER. What structure is in place?
Mr. DUFFY. Well, I would say the structures are the public interest review that the Army Corps applies under any section 10 review process, which includes the whole range of all likely detriments and benefits that might result from the project, which are
going to include issues such as aesthetics, tourism, conservation,
fish and wildlife impact, as well as current uses of the area.
That is why the draft EIS which was released after the first
phase of the project included over a 4,000-page analysis of all these
issues. I would point out that, in addition to the process being driven by the broad public interest test of the Corps statute, it is also
being done pursuant to the National Environmental Policy Act,
where it is proceeding in line with the rules and procedures established for an environmental impact statement, which has involved
19 participating agencies both from the Federal and the State level.
So I recognize fully the type of issues that you raised in particular. I know the Cape very well. It is very special to me as well.
But I feel that when you stop and look very closely at the process
which has happened so far, including the Massachusetts review
and approval which we just got a couple of weeks ago, as well as
the Federal process, I think the analysis really shows a careful balancing which recognizes that there are going to be detriments to
this project, like any energy project, but tends to view those in the
overall scheme where they are at least weighed and measured
against the potential benefits.
We just think when people see the final environmental impact
statement we really believe that the merits of the projects are
going to be far in excess of the detriments. We do not dismiss the
detriments, but we think on balance the project makes sense.
Senator WARNER. I came within a millimeter of getting my statute of a years moratorium through. I will not tell you what happened in the wee hours of the morning, but one individual was able
to stop it in the other body. That is the way we do business up
here. I am not complaining. I have done it myself.
But I came up through the legal profession and I just say to myself, if I were in your position, as an industry, not just your company, as an industry, you should have come to the Congress and
said, Look, we are first cousins to the oil and gas industry and
there has been a framework of law and regulation covering their
offshore drilling for years and it sets out clearly the criteria, the
environmental concerns, a whole framework is there.
You should, in my judgment, be treated fairly under that type of
framework of law, rather than fumbling around and trying to
squeeze an 1899 statute to get under. Because some Federal court
someday might just slam you down and say, You know, those
15
Members of Congress never were envisioning this type of energy,
the source, as fitting into a navigation statute.
There you are, and all your shareholders and the rest of the
world, and all the turbulence in the Cape, and everything else either comes to a standstill or collapses. Why has the industry never
come to the Congress and said, Come on Congress, this is a potential source of energy, we would like to do it in the proper way, give
us a framework of laws?
Mr. DUFFY. I understand your concern there, Senator, and to
some extent I do share it. But I think on one level we do feel sound
in our legal position.
But we, both our project as well as the industry generally, have
been supportive of some of the legislative proposals which have
been circulating for the last 2 years, including the Administrations
proposal which was introduced last session originally as the Cuban
amendment, now included in the House version of the energy bill
and I believe also in the version that is circulating in the Senate.
Senator WARNER. Well, we will see what comes out of that. That
has sort of made my point. But there is also the interest of the Federal taxpayer. I think you will grant me the common ground of
agreeing that in the oil and gas situation that taxpayer is protected
when U.S. property is used for purpose by the private sector to create a product, whether it is oil and gas or, in this instance, wind.
But the taxpayer is not protected as you are proceeding. Am I not
correct there?
Mr. DUFFY. You are correct, Senator. Under current law, only extractive uses of the Outer Continental Shelf pay a royalty back to
the Government, oil and gas extractions under a mineral lease.
Non-extractive activities such as the Ocean Thermal Energy Act,
cables, communications systems, are permitted, but they do not pay
a royalty. We do not oppose that. The current provisions within the
bill that would address offshore would provide for compensation to
the Government, and we have no problem with that.
Senator WARNER. I thank you for your indulgence and your courtesy. We will continue to work away. I thank the Chair. I will put
some things into the record. I will provide you with a copy of my
letter to the Corps of Engineers which sort of states the case,
maybe you have it, I do not know, but I will give you a copy. Thank
you very much.
Mr. DUFFY. Thank you, Senator.
[The prepared statement of Senator Warner follows:]
STATEMENT
OF HON. JOHN W. WARNER, U.S. SENATOR FROM

THE COMMOMWEALTH OF VIRGINIA
Thank you, Mr. Chairman for calling this hearing today. We are here to discuss
and examine the permitting process for energy projects. Our witnesses will share
their first hand knowledge and experience with what is a broken process. The
growth in demand for energy is outpacing our growth in supply and increased global
consumption is driving prices even higher. As the demand for energy rises in the
U.S. our goal as public servants should be to help provide a legal and regulatory
framework that helps deliver basic resources to the citizens in the most cost-efficient
and environmentally friendly manner possible. The President has called for efficient
permitting and numerous energy bills have been proposed with hopes of improving
this review process.
Ironically, the permitting process isnt just inadequate for energy projects but also
other public works. I have been working for the better part of two decades to get
16
a reservoir approved for an area of my state in desperate need for more drinking
water. It simply should not take this long to obtain a permit for a water reservoir.
Today we will hear testimony from entities in oil and gas exploration and wind
energy development tell their stories of how difficult it is to obtain the necessary
permits to move ahead on any energy producing work. They will share very different
stories; one of frustration with bureaucratic red tape and the other as a pioneer attempting to break new ground.
Over the past several years I have taken a particular interest in the growing wind
energy industry in the U.S. The Department of Energy says that this industry is
growing at a 24 percent rate each year. Technological advancement (mainly as a result of growing the size of the actual wind turbines) and a healthy Federal tax credit
have combined to enable wind energy companies to produce electricity at a consistently cheaper rate over the past twenty years. However, the cost to the American
consumer is not accurately reflected in this model as it fails to take into account
the overall cost to the Treasury of the tax credits. The Department of Interior has
a strong and clear process in place for the permitting of these resources on public
lands and also for the competitive bidding and leasing of OCS lands for oil and gas
development. Unfortunately this framework is not currently clarified for the permitting of offshore wind production. As a result, we could have a form of electricity production subsidized by the American taxpayer in the form of free land and cash back
just to make the cost to the consumer about the same as other forms of electricity.
I look forward to hearing from our witnesses today and having the opportunity
to shed some light on the potential problems on the horizon if we do not establish
a comprehensive process for the permitting of off shore wind production. According
to the U.S. Commission on Ocean Policy there is no comprehensive and coordinated
Federal regime in place to regulate offshore wind energy development or to convey
property rights to use the public space of the OCS for this purpose. The Commission has clearly called for the establishment of such a process in its Final Report
saying that Congress should enact legislation to streamline the licensing process
with adequate review from local, state, and Federal entities, with a fair return to
the U.S. Treasury for the use of the public resource.
The U.S Army Corps of Engineers has claimed Federal authority over the granting of permits through the Rivers and Harbors Act of 1899. However, the legislative
history of that law shows it was originally enacted to prevent obstructions to the
navigable waters of the U.S. It is not only my view, but one shared by many others,
that this law is clearly inadequate to fully evaluate the construction of thousands
of windmills in the waters of the United Sates. In fact, the EPA, USGS, and U.S.
Fish and Wildlife have all gone on the record about the current application. When
asked directly about the Corps authority under the 1899 statute, the Assistant Secretary of the Army for Civil Works said It is not well adapted to the purpose I do
not believe that the Corps of Engineers is the appropriate resident for that except
to the extent that we should be consulted with respect to the navigation channels.
It is our responsibility to make certain that any permit granted is done so in a
manner that uses more than just a superficial review under the Rivers and Harbors
Act of 1899 so that we are ultimately able to properly protect the environment, to
ensure that navigation on our seas is not adversely affected, to guarantee that public assets are not granted for free to private developers, to provide for appropriate
compensation to the taxpayers for the use of public lands, and to provide for and
ensure the careful management of other national interests such as aviation and the
national defense.
It is my hope that we are able to continue to shed light on this issue so that the
Nation will be able to move ahead in the expansion of our energy and electricity
production. As we know all too well, the growing population and economy will continue to grow its need for these resources. The communities affected, companies
working hard to develop innovative solutions, and the American public all deserve
a process that is sufficient and efficient in providing the proper review to achieve
our ultimate goal.
Senator INHOFE. Thank you, Senator Warner.

So the other members who have arrived will know where we are,
we have completed opening statements, and we have heard the
opening statements of Mr. Robinson and Mr. Duffy, but not from
the other two witnesses yet.
At this point, if any, or all of you, want to make an opening
statement, I only ask that you try to confine it to 4 or 5 minutes.
In order they came in, I believe Senator Chafee is first.
17
Senator CHAFEE. I will submit mine for the record, Mr. Chairman, so we can continue with the hearing.
[The prepared statement of Senator Chafee follows:]
STATEMENT
OF
HON. LINCOLN CHAFEE, U.S. SENATOR FROM

THE STATE OF RHODE ISLAND
Thank you, Mr. Chairman.

Thank you for calling this hearing on the permitting of energy projects.
Energy is the lifeblood of our economy. Everyone depends upon access to affordable, reliable energy to conduct the activities of their lives.
As our nations demand for affordable, reliable energy increases, our current capacities continue to be strained. My hope is that we can continue to work at alleviating the supply shortage by promoting energy efficiency and energy conservation
programs to cut down on demand. However, these measures alone will not be
enough. To sustain a growing, robust economy, new energy projects will have to be
sited. It is my hope that the siting of new projects will be carefully scrutinized, and
that public safety and environmental concerns remain our nations priorities.
It is my firm belief that Americans deserve an affordable, reliable energy supply
and a clean environment. Both are achievable. Todays hearing is important so that
we can benefit from the experiences of existing energy projects; learn from the past;
and build upon the successes that we have already enjoyed. By doing so, we have
the opportunity to make significant improvements in our quality of life. I look forward to hearing the testimony of todays witnesses so we can benefit from their
work. Thank you.
Senator INHOFE. Thank you, Senator Chafee.

Ms. Buccino, we are finally around to you. You are recognized.
Please try to confine your statement to 5 minutes if you could.
STATEMENT OF SHARON BUCCINO, SENIOR ATTORNEY,
NATURAL RESOURCES DEFENSE COUNCIL
Ms. BUCCINO. Good morning. My name is Sharon Buccino. I am

an attorney with the Natural Resources Defense Council. NRDC is
a nonprofit organization. We have over half a million activists and
members across the country. We work to protect the environment,
but for the humans living in it.
I, like you, want to make energy permitting work better. I have
had the privilege to work with ranchers, farmers, homeowners
across the West as energy development has come to their communities. Domestic energy production, the work of companies like
Questar, is important. The permitting process is what allows this
development to go forward in a way that identifies community concerns and addresses them. The permitting process is what gives
citizens a voice in the Government decisions that affect their lives.
I would like to spend the few minutes I have here to address the
National Environmental Policy Act, known as NEPA. NEPA was
signed into law in 1970 by President Nixon. Since then it has
served as a valuable tool to produce both informed and accepted
Government decisions. It has helped citizens protect their communities and enhance the quality of their lives. NEPA has also helped
Federal officials better meet the needs and interests of the public
they serve.
NEPA improves projects. I was involved in a seismic exploration
project in the Nine Mile Canyon region of Utah. This is an area
that the State of Utah has described as an outdoor museum. The
Bureau of Land Management describes the area as the greatest
concentration of rock art sites in the U.S. This project involved
60,000 pound trucks and they used explosives to collect data about
18
oil and gas resources. It was in a very sensitive, arid area in Utahs
canyon lands.
As a result of the review process under NEPA and also under the
National Historic Preservation Act, the company conducting this
exploration took additional steps to protect those natural and cultural resources that were in the area. The company agreed to additional monitoring and mitigation. In fact, just recently in a USA
Today article, the BLM manager for that project said, I cant
imagine this project without a process like (this).
NEPA gives people a voice. You will find that many of your constituents, from city council members to homeowners, care deeply
about NEPA. They care about having a say when the LNG facility
may be coming into their area, when a gas company wants to put
a coal-bed methane well in their backyard, when a highway is proposed through their neighborhood. I urge this committee and Congress to work to enhance the publics voice and not silence it.
There are several provisions that have actually been introduced
and passed on the House side in the energy bill, H.R. 6, that take
us in the wrong direction. I will just highlight one, which is section
2055. It removes completely from the NEPA process numerous oil
and gas activities, including the seismic exploration that I just described. It provides that those activities shall not be subject to review under NEPA. Rather than working to improve the review
process, this provision simply eliminates it. Instead of using the
NEPA process to identify and address concerns and potential adverse impacts on the publics health, livelihood, and communities,
this provision excuses the Government and industry from listening.
I urge you to fight to keep energy legislation clean of provisions
that compromise environmental protections and public participation. In the past, this committee has stood strong in defense of
NEPA, the Clean Water Act, the Clean Air Act, the Safe Drinking
Water Act, and I urge you to stand strong now.
Finally, one last point I would like to make is that we can increase domestic energy production without weakening environmental protections. Getting permits is not preventing oil and gas
companies from drilling. In fact, the Bureau of Land Management
is issuing record numbers of permits. In the last fiscal year, they
issued over 6,000 permits, which was up from about 3,800 the previous fiscal year. Many of these permits are actually going unused
right now.
So in conclusion, because of the increasing demands being made
on our public lands and our shrinking open space, NEPA is needed
now more than ever. I remain inspired by that vision that was in
NEPAit is a future where man and nature can exist in productive harmony. It is a future where our valuable public lands serve
diverse interests. I hope that this is a vision that you all share and
will fight for as well. Thank you.
Senator INHOFE. Thank you, Ms. Buccino.
We have been joined by some other members. They have agreed
not to have opening statements. So we will move right along.
Mr. Hogan.
19
STATEMENT OF RONALD E. HOGAN, GENERAL MANAGER,
QUESTAR EXPLORATION AND PRODUCTION COMPANY
Mr. HOGAN. Good morning, Chairman, and members of the committee. My name is Ron Hogan, general manager for the Pinedale,
WY Division of Questar Market Resources.
I would like to describe our efforts to obtain permission to reduce
our environmental impact to levels substantially below existing
regulations, while increasing worker safety and stabilizing our contribution to the local community. Some of the special technology
and innovative solutions I will describe shortly may or may not be
applicable to other oil and gas development projects, but perhaps
our experience can help this committee understand the challenges
we face in todays complex regulatory environment.
Pinedale is a small community in Sublette County, WY. According to the current estimates, there are over 20 trillion cubic feet
of recoverable natural gas in the Pinedale anticline, which is about
1 years supply of natural gas for the entire country. In July 2000,
the Pinedale field office of the Bureau of Land Management published a record of decision that outlined the guidelines and restrictions for oil and gas exploration and development on the Pinedale
anticline. This decision was the result of a comprehensive NEPA
process that included significant public involvement.
Among the many guidelines imposed by the record of decision
was a restriction prohibiting drilling operations during the winter
to minimize possible disruption to deer herds, other wildlife, and
their habitat. To meet these restrictions, Questar was forced into
a condensed, summer-only drilling schedule. Under these restrictions, we projected it would take nearly two decades just to fully
develop the gas reserves available on our acreage, thereby delaying
the delivery of much needed gas.
While operating within these restrictions, we witnessed some of
the unintended consequences of the summer-only schedule. For instance, the shortened season made it unfeasible and cost-prohibitive to apply available disturbance-limiting technologies like drilling directionally multiple wells from a single well pad.
Also, it was difficult for us and our contractors to hire, train, and
retain quality employees due to the seasonal part-time nature of
the work. This, in turn, created an annual boom-and-bust economic
impact on the local community. Perhaps most importantly, winter
restrictions made better environmental mitigation measures economically unattractive or, in many case, physically unattainable.
We did not feel these unintended consequences were the goal of
the BLMs record of decision. Therefore, Questar voluntarily offered
to engage in a multi-year, multi-million effort to explore ways that
we could leverage the benefits of new technology, minimize environmental impacts, enhance the safety of operations, stabilize the
impact on the local economy, and meet or exceed the established
goals for the protection of local wildlife and habitat.
The first step in our effort was to submit a request to the BLM
for a permit to operate one drilling rig during the winter of 2002
2003. This would allow us to gain valuable scientific data and technical insight into whether a year-round development project could
help avoid the unintended consequences of summer-only restrictions. In addition, we also voluntarily agreed to fund a University
20
of Wyoming and Wyoming Game and Fish study that would help
determine the real impact, if any, of natural gas development on
wintering deer populations.
Our request for an exception to the winter drilling restriction
was approved by the BLM for the winter of 20022003, as was a
similar request for a one rig, one winter exception for 20032004.
On April 15, 2004, we formally submitted a comprehensive proposal for long-term year-round operations, with certain restrictions,
on Questars acreage. I want to provide some quick highlights of
our proposal so you can get an idea of the scope of our request.
First, we proposed investing more than $200 million in directional drilling, thereby greatly minimizing surface disturbances
and associated environmental impact.
Second, we proposed expanding both the scope and the duration
of the ongoing deer study to help design energy development
projects that minimize disruption to wildlife and habitat.
Third, we proposed building a $25 million water and liquid condensate pipeline system. This pipeline system eliminates the need
for truck transport of produced water and condensate off the winter
habitat area. At peak production from just our acreage, this system
will eliminate more than 25,000 tanker truck visits in a single
year. The result will be a significant reduction in traffic and air
emissions from levels originally anticipated by the BLM.
Fourth, we eliminated the need for flaring, which is used to clean
up the production stream from new wells to remove the water and
sand we use during the completion process.
Last, we invested in busing our contractors employees during
the winter months and trucking necessary materials in bulk to the
rigs in the fall to decrease traffic in the wintering wildlife areas.
In summary, our proposal included investments of more than
$200 million in onsite mitigation and outlined an approach that
was scientifically based, field tested, and offered substantial benefits over the restrictions imposed by the 2000 Pinedale record of decision.
To facilitate a thorough review and analysis of our proposal, we
worked closely with local BLM officials, biologists, and experts from
Wyoming Game and Fish, and elected officials. We received formal
support of our proposal from Wyomings Governor Dave
Freudenthal, the Wyoming Game and Fish Department, U.S. Senator Craig Thomas, Wyoming State Representatives Monte Olsen
and Stan Cooper, Pinedale Mayor Rose Skinner, as well as the
Sublette County commissioners, the North American Grouse Partnership, and Trout Unlimited.
We also recognized that the Pinedale community needed to be involved in the decisionmaking
Senator INHOFE. Try to wrap up, Mr. Hogan, if you would.
Mr. HOGAN. Yes, sir. In November 2004, the Bureau of Land
Management officially approved our request for the site-specific
limited year-round operations. I am proud of Questars Pinedale
project. Our company is committed to invest over $200 million to
achieve the benefits significantly above and beyond those required
by existing regulations.
But even with this commitment, our proposal is constantly at
risk. We continue to get bogged down in a complex web of overlap-
21
ping jurisdictions and a maze of regulatory requirements that
many times simply defy logic. When you add to the equation those
that take advantage of regulatory complexity to delay, litigate, and
obstruct any energy project
Senator INHOFE. Mr. Hogan, I am going to have to interrupt you.
You are almost 2 minutes over. We have to keep some time discipline here.
Mr. HOGAN. Thank you.
Senator INHOFE. Let me share with my panel members up here
that the order of early bird and, going back and forth, will be myself, then Senators Carper, Chafee, Jeffords, Isakson, and Clinton.
I will go ahead and start off. In my opening statement I made
a statement that I will read again. I am going to ask each one of
you whether you agree or disagree with this statement. So listen
very carefully. What I said in my opening statement is, Environmental review needs to be completed in a timely manner and slippage undermines the credibility of the process and drains the energy and resources of the members of the public. Indefinite delay
harms not only the project proponent and those who see the benefits flowing from the project, but also damages stakeholders.
I will start with you, Mr. Robinson. Do you agree with that?
Mr. ROBINSON. Agree wholeheartedly.
Senator INHOFE. Mr. Duffy.
Mr. DUFFY. Absolutely.
Senator INHOFE. Ms. Buccino.
Ms. BUCCINO. I agree with that statement.
Senator INHOFE. Mr. Hogan.
Mr. HOGAN. I agree, Chairman.
Senator INHOFE. Thank you very much. I thought that would be
the case. This actually was a quote from a letter that came from
13 environmental groups, advocacy groups. So it seems that we do
all agree, we have one area where we agree.
Mr. Robinson, after your opening statement, I complimented you
because you came out with something that was very specific. If you
could abbreviate that for the members who were not here at the
time, and then I am going to ask the other three if they agree with
your comments on what I consider to be a reasonable solution.
Mr. ROBINSON. First, I would like to make it clear that this proposal for a rational process for siting energy infrastructure does not
in any way reduce the authorities of any other agency. What it
does is to try to provide discipline to that process, something that
we all work on and have worked on for years through administrative procedures, MOAs, and things of that sort.
The first leg of that rational siting process is exclusive jurisdiction designated to a lead agency. What this would do would make
it clear to all agencies that one agency is responsible for the overall
public interest determination. Everyone else should focus on their
aspect of the project, be it dredging for the Corps of Engineers, or
water quality for the States.
The second leg of the rational siting process is one Federal record
development. All agencies involved in the decisional process should
work together to create one record. That record would be used for
all decisions at a single point in time under a schedule set by the
lead agency. Should an agency fail to exercise their authority with-
22
in that schedulekeeping in mind that the lead agency has to look
at all aspects of the project, so any schedule that would satisfy
them should satisfy an agency that only has one aspect of the
projectthey would lose that authority. Their authority would be
conclusively presumed.
The third leg of that rational siting process is direct appeal of all
of those decisions to the U.S. Court of Appeals. Instead of going off
to the State administrative agency, then the States courts, or to
another Federal agency, and then the Federal courts, everybody
would go at one time. It would shorten the timeframe and give a
certainty to the decisionmaking process.
Senator INHOFE. OK. Mr. Duffy, what do you think of that?
Mr. DUFFY. I had not thought of it before today, but I like that
approach very much, and let me just tell you why. It sounds to me
very similar to the approach on energy projects that most of the
New England States have taken for their State environmental review of energy projects. By adopting energy facility siting acts
which delegate to a specific board the primary, the ultimate authority for the decisions for energy projects, all the other entities
that would otherwise have jurisdictional roles are still involved in
the process but when they review the project, rather than each
issuing their own opinion or their own decision, they issue an advisory decision to the State siting board which then makes a decision
based upon all the relevant factors.
I think the important thing to keep in mind is that when it operates in that way, the substantive standard should not have
changed, the degree of examination and review should not have
changed. But what you get is a single decisionmaker who is in a
position to make a public interest determination after considering
all of the other authorities which otherwise could give you conflicting results.
Senator INHOFE. Thank you.
Ms. Buccino.
Ms. BUCCINO. I guess the way I react to that is, first, I would
like to emphasize that I am for spending more money on protection
rather than paper. As I said, I am for making the system, the process work better. I think maybe this takes us in the right direction.
I would just like to flag a couple concerns that I think need to be
looked at carefully if you consider moving in this direction.
One is, I think that while the statement has been made, you are
not taking authority away from existing State or local governments, there is very real concern that is the result. At least in the
version that I have seen, I think it is in H.R. 6, at least it has been
articulated there, you are making a clear change. You are concentrating authority in FERC.
So my approach would be to give the resources that are needed
to the agencies to provide their input in a timely manner rather
than create a system that may put them at a disadvantage. You
can look to the transportation act ISTEA where it was first used,
where you have transportation funds going to resource agencies,
wildlife agencies to help them get their job done. So my approach
is help the agencies provide their input in a timely manner rather
than silencing those voices.
23
Senator INHOFE. All right. Mr. Hogan, I am going to let you answer for the record because we are running short of time here and
I had one more question I wanted to ask in my turn here.
Mr. Duffy, I found it to be interesting after Senator Warner
asked you some questions, in your opening statement, do I understand that 75 percent of the electricity in Cape Cod, Marthas Vineyard, and Nantucket is wind?
Mr. DUFFY. No. If our project were to come online.
Senator INHOFE. If it were to come online. How long would that
take?
Mr. DUFFY. Oh, probably 2 years from the time of a favorable decision. We have to work around winter construction seasons, but
basically 2 years.
Senator INHOFE. You always hear that the technology is not
there, it is not going to work, and I have heard a lot of gloom and
doom about wind energy. I would like to see it work. Where do you
think we are in technology?
Mr. DUFFY. Obviously, we have been in the energy development
business for 25 years and we are putting our private capital at
stake in this project. We have invested very heavily in this and,
prior to doing that, we had to come to the conclusion that it was
both technically viable and economically viable. I think in particular looking at the offshore projects, it is a proven technology,
it has been commercially successful in operation in the European
market for more than a decade. There are numerous projects under
development in the European markets today. Off the coast of New
York, the Long Island Power Authority is proposing a project very
similar to ours. We are just absolutely convinced that the technology is proven.
Senator INHOFE. Thank you, Mr. Duffy.
Senator Carper is not here. Let us just go ahead and come back
to him.
Senator Chafee.
Senator CHAFEE. Thank you, Mr. Chairman. It is a pleasure to
join you here at this hearing on an important issue of the siting
of energy facilities. Certainly, New England has been mentioned
not only with Cape Wind, but LNG being very important to us also.
We all know the abundance of natural gas in the world. The problem is getting it to market. It certainly burns cleaner than coal and
oil, so it is advantageous to try and get it to market. Thus the dilemma. We have several fairly controversial proposals in Narragansett Bay; one on the Massachusetts side, one on the Providence
side.
But my question is to Mr. Robinson. In response to Ms. Buccinos
assertion that under H.R. 6, numerous gas and oil activities on
public lands shall not be subject to review under NEPA, has FERC
taken a position on that?
Mr. ROBINSON. It is amazing how this proposal has generated
criticism that has no application to the proposal. No one is calling
for any changes to the NEPA process. The only thing that we are
asking for is to discipline the process by allowing an agency, be it
FERC or any other agency, who is designated as that lead, to set
a schedule and have all other agencies act under their authorities
whatever actions they want to take to grant or deny within that
24
schedule. So there is no diminution of authority in any other agency whatsoever.
As far as resources go, I think that was one of the other criticisms that we heard, that we should just apply more resources. I
will guarantee you, as a regulator of 28 years, working with every
agency that you can think of, State, local, or Federal, that we will
consume those resources and we will design even more complicated
processes administratively to try to do what we should do. It is not
a matter of resources. It is a matter of discipline. I think that is
what we are calling for in our proposal.
Senator CHAFEE. Thank you. Mr. Hogan, I know you had interesting testimony of what is happening in Pinedale, but because of
time constraints could not get through it. I think there is a ranch
there, the Box R.
Mr. HOGAN. I have heard of it, yes.
Senator CHAFEE. The Logier familyI think Mrs. Logier came
from Rhode Island from years back. So I am familiar with
Pinedale. A beautiful area of the world.
But you were going to say that you were trying to get the proposal to drill into the winter, at least one well during the winter.
How has that proceeded so that you could diversify? You said it
was a boom and bust economy, all the people come in for the summer, and you are trying to diversify the impact on the community.
Has that process concluded? Are you getting that one well in the
winter?
Mr. HOGAN. Yes. We received two opportunities to drill with one
rig during the winter season to try and establish a baseline that
we could, in fact, do what we want to do, which is to have three
pads with two rigs on each pad drill during the winter. When we
receive that, we have had that approved, but when we are actually
able to implement it this coming winter, then we are estimating
that will establish the beginning of our 9 years of drilling on a
year-round basis, which will provide opportunities for members of
the crews to be able to identify long-term employment and therefore move their families into the area.
Senator CHAFEE. What year are you in in that process?
Mr. HOGAN. Excuse me?
Senator CHAFEE. What year are you in the winter drilling process?
Mr. HOGAN. We just received approval in November to start. We
were unable to start the three pad winter proposal until this coming winter. So we currently have commenced the pipeline portion
of the project.
Senator CHAFEE. How was the regulatory process at trying to
make that proposal?
Mr. HOGAN. It was a fairly long, drawn out procedure. We identified early on that there was a certain element of timidity, I guess,
on behalf of the BLM to try and take a leading edge. I want to say
that the BLM office in Pinedale is an excellent office. I do not take
anything away from them.
But they were a little skittish about going forward with our proposal fairly independently. So we took it upon ourselves to meet
with the public on a very concentrated basis, explain our project,
answer any questions that they would have to try and make sure
25
that really the critical mass that the BLM needed in order to make
a positive type of determination was there.
Senator CHAFEE. Was there concentrated public opposition initially?
Mr. HOGAN. Well, I would not say it was concentrated. But there
was some opposition. We spent a lot of time with the conservation
groups and I think it was a matter of education. Once we got over
the hurdle of educating them as to the benefits of our proposal, we
did not receive any opposition. At this point, we have not had any
litigation filed against our project. So we take that as a form of endorsement.
Senator CHAFEE. I am sure in all these siting proposals public involvement has its pros and cons. Having been a mayor and going
through zoning processes, you have to make sure you reach out to
the neighborhood as the proposal comes forward. I know Cape
Wind has tried to do that, and the liquid natural gas people have
as they come up Narragansett Bay, but nonetheless, as politicians,
we sure hear from our constituents on these issues. Thank you, Mr.
Chairman.
Senator INHOFE. Thank you, Senator Chafee. Only we former
mayors understand that.
Senator CHAFEE. Front lines.
Senator INHOFE. Senator Carper left. We will come back to him
when he comes back. Senator Jeffords, do you have some questions? Our distinguished Ranking Minority Senator Jeffords.
Senator JEFFORDS. That is better. Thank you. Mr. Robinson, in
your testimony, you provide a chart that lists the number of State
and Federal approvals and permits needed for liquified natural gas
facilities. Can you clarify for the committee which of these are actual permit requirements as opposed to some other review status?
Mr. ROBINSON. I think we were using the term permit in its
broad sense. But I believe all of them are, in fact. It is a process,
a certificate, an authorization, a permit, an OK from an agency
that our applicants have to go through. Now there is a distinguishing aspect of those permits that is not identified in that chart.
Some of those are permits that are pursuant to Federal statutesthe Clean Water Act, the Clean Air Act, the Coastal Zone
Management Act, and othersand many of those are legal predicates for an action to occur at the project, others are not. So there
is a distinction there. But there is at least a half a dozen of those
permits which by Federal statute must be acquired prior to any
construction of a project.
Senator JEFFORDS. Mr. Duffy, I would be interested in your
thoughts about how the NEPA process has affected your project so
far. Do you feel that the process of developing the draft Environmental Impact Statement has increased local community acceptance of the project?
Mr. DUFFY. I think it has, Senator. NEPA is always a doubleedge sword. It is a difficult, long process, but I think the level of
public support, in particular from the environmental community,
has been much stronger now that the draft EIS has been issued.
I mean, we have always had the strong support of the most respected environmental organizations. But until the draft EIS came
out, it always was subject to the caveat that it is a good idea pro-
26
vided that the EIS is favorable. Now that it is out and it is showing
a very favorable conclusion, it has absolutely solidified our support
in the public.
Senator JEFFORDS. Thank you. Ms. Buccino, in your experience,
do you think that the current Clean Water Act, Safe Drinking
Water Act, and National Environmental Policy Act provide enough
protection for landowners who live near the energy-production
sites?
Ms. BUCCINO. Well, those Acts provide a core of protection that
is essential. There are issues related particularly to the split estate
situation where a company has leased the mineral rights underneath the land. Actually legally right now those mineral rights underneath the land trump private property rights on the surface. So
there is quite a bit of conflict occurring right now primarily around
coal-bed methane development where drill pads are being put in
peoples backyards, and the current legal framework does not address adequately those concerns.
Senator JEFFORDS. To what extent has changing administrative
guidance on NEPA fueled litigation in an effort to clarify the requirements regarding the content of the Environmental Impact
Statement?
Ms. BUCCINO. There has been quite a bit of work actually, administratively to help improve the process. For example, the White
House, under this Administration, had a NEPA Task Force that focused on implementationimproving implementationand I think
they are moving forward with some of those recommendations. The
White House Task Force on Energy Project Streamlining was referred to earlier, and they have actually done a lot of work within
the existing statutory framework.
In fact, they issued a report, it was December 2002, reporting on
the proceedings of their first year. In that report, they reaffirmed
that improvements can be made within the existing statutory
framework, there is no need to change that statutory framework,
and they have moved forward with Memoranda of Understanding
to address deep water ports and also pipelines.
Senator JEFFORDS. Thank you very much.
[The prepared statement of Senator Jeffords follows:]
STATEMENT
OF
HON. JAMES M. JEFFORDS, U.S. SENATOR

THE STATE OF VERMONT
FROM
Mr. Chairman, thank you for holding this hearing, and a sincere thanks to all the
witnesses, many of whom have traveled across the country to provide testimony to
the Committee. The Committee will be examining several very important issues
today, as we conduct oversight of energy project permitting.
Though this is the first one this Congress, this is essentially the third hearing
in the last year in which the Committee has examined environmental permitting
related to energy projects. In the 108th Congress, we held both a natural gas and
a gasoline supply hearing in which permitting issues were discussed.
America needs a reliable, affordable, and environmentally friendly energy supply.
Im concerned, Mr. Chairman, that in our desire to adopt a national energy strategy,
a goal I share, we may yield to premature calls to repeal or revise our Federal environmental laws. These are important laws, important for the health of our citizens
and our environment. In exercising our oversight responsibility, we must examine
the effect of environmental laws, if any, on various sectors of the economy, including
energy industries.
Of course, however, this Committees first and foremost responsibility is to assure
that the nations laws are protective of public health and the environment. It is our
job also to set performance standards for industries like the natural gas or wind in-
27
dustry that are adequately protective and wherever possible, fuel neutral. These
standards should not be skewed to protect any one industry, but should encourage
sustainable economic development.
We must be mindful that though we benefit from the use of natural gas and wind
resources to generate electricity, heat our homes, and produce commodities, there
are costs as well. While we have improved public health by improving our air quality, we are also having real on-the-ground environmental impacts on our countrys
public and private lands, and our water and wildlife resources. I feel that a good
understanding of these issues is extremely important.
I think this is even more the case now that the Senate is putting together an Energy Bill. Therefore, I am pleased that we will hear from witnesses, both energy producers and individuals who have examined energy production sites, about the sufficiency of these laws in protecting the environment.
Moreover, whatever contribution the costs of environmental compliance has made
to the overall price of energy development in our country, I am very skeptical that
these costs are a primary driver behind the recent price fluctuations we have seen.
We routinely implement our environmental laws in a deliberate and measured
way. In the case of Clean Air Act and Clean Water Act requirements, all of them
have been phased-in over long timeframes in consultation with industry. We have
done this specifically to try to avoid market shocks and price spikes. These are not
new requirements, they are not a surprise, and the costs associated with meeting
them are known.
The National Environmental Policy Act of 1969 has largely been heralded as a
success as well. It has made Federal agencies take a hard look at the potential environmental consequences of their energy permitting actions. It has also involved the
public into the agency decisionmaking in a way unlike any other statute.
We must not sacrifice our environmental laws to pressures from the power industry. The energy future of our nation relies on our ability to find ways to harness
our current resources in cleaner ways and develop cleaner alternative energy
sources.
Thank you again, Mr. Chairman for holding this hearing. In covering the issues
I have outlined, it will be a comprehensive look at several areas of permitting. I look
forward to hearing from the witnesses.
Senator INHOFE. The next would be Senator Isakson. I have

asked if he would Chair the remainder of the meeting, which will
just go for one round of questions because of something that has
come up. So I appreciate your willingness to do that, Senator
Isakson, and you are recognized for your questions.
Senator ISAKSON. Thank you, Mr. Chairman. Out of respect for
Senator Carper, in case he does not come back, I will ask a question I think he rhetorically asked in his brief opening statement.
I guess, Mr. Robinson, it would be for you. What I heard him say
was a discussion of giving the State a role in the siting of LNG facilities. That implied to me that the States do not now have a role.
I am not knowledgeable either way. Would you tell me?
Mr. ROBINSON. I would like to give you one example. We have
a project proposed in California, the Port of Long Beach, it is the
SES project. There, the State designated agency for their CEQA responsibilities, the NEPA equivalent, is the Port of Long Beach Authority. They are supposed to gather the information for all the
other State agencies and act as the agency that prepares the Environmental Impact Statement. They are a cooperating agency with
the Federal Energy Regulatory Commission in preparing the NEPA
document that we are doing.
We were prepared in October of last year to go forward with our
draft EIS on that project. The Port Authority was not. There were
more studies that they wanted to do. We agreed, and continue to
agree, to wait while the Port Authority continues their State process before we go forward with our NEPA document.
28
The State has a vital role in the siting of LNG facilities integrated into the NEPA process, certainly, as I just demonstrated,
but also in terms of the permitting that goes on. No LNG facility
can be sited unless it receives a Coastal Zone Management Act permit granted by the State. The State can stop any LNG facility they
wish just with that one Act, and that is one of three that they can
stop a project with.
Senator ISAKSON. Thank you. I want to be sure to get that in the
record in case Senator Carper did not get back in. I do not know
if he had a follow up question, because I am not a mind-reader.
Mr. Hogan, I would like to ask you a question. Does Questar
is it Questar, is that right?
Mr. HOGAN. Yes, sir.
Senator ISAKSON. Do you do offshore drilling for natural gas?
Mr. HOGAN. No, Senator, we do not.
Senator ISAKSON. All right. If anyone at the dais is knowledgeable about offshore drilling, and this again is educational and informative for me, what are the environmental concerns, I understand those with regard to petroleum, but what are the environmental concerns with regard to drilling for natural gas offshore?
Ms. Buccino?
Ms. BUCCINO. I will just highlight a few. A lot of them are similar, and it starts with the exploration stage, not just at the production end. There are concerns about the impacts on marine mammals from the seismic exploration, and I think there are also concerns that relate to impacts on tourism and local economies.
I know there has been a debate about whether the potential impacts are really the same with gas versus oil drilling. I think again,
that illustrates the importance of the environmental review and
public participation process, to allow that information to come out,
to allow the public to digest it, and if the case is made, the public
accepts it and you can move forward with a project that is not controversial and not opposed.
Senator ISAKSON. Well that was my reason for asking the question. Georgia has about a 123-mile coastline and natural gas is a
real premium today and is going to be in shorter supply than it
now is because of the amount being consumed just in generating
electricity. As the pressure grows on that, I just was not familiar
with what the environmentalI know on petroleum, it would obviously be the oil spill and the fracturing and everything else that
goes on. But it primarily would be to the marine wildlife and the
esthetics, I take it, more than anything else. Is that correct?
Ms. BUCCINO. I think that is true. I think it is an area that has
not been explore fully and the review process can help do that.
Senator ISAKSON. Thank you very much.
Senator Clinton.
Senator CLINTON. Thank you, Mr. Chairman, and I thank the
witnesses who are here with us today.
I wanted to just add something for the record, because I know
my friend Senator Warner was here earlier to discuss his concerns
with the current permitting process for offshore wind farms, and
there are several proposals under consideration as part of the energy bill debate to revise that permitting process, which is cur-
29
rently being done by the Corps under section 10 of the Rivers and
Harbors Act.
I just want to state for the record that we have a proposal that
is in the pipeline in New York. The Long Island Power Authority
has selected Florida Power and Light to build a 140-megawatt
wind farm off the Long Island coast. This project enjoys strong
local support, and the permitting process is in midstream. So I
think it is extremely important that whatever we might do in the
context of any energy bill, or any other bill where this issue is addressed, we take into account some of the projects that are strongly
supported and already on their way to going into production.
I understand Senator Warners concerns and I appreciate them.
Whatever the adequacies or inadequacies of the Corps current authorities may be, my concern is that I do not want LIPA to have
to start all over again if we change the permitting rules. So I hope
that the Chairman and all of our colleagues will work with me on
that in the spirit of this hearing, which is to reduce unnecessary
roadblocks to energy projects. I would look forward to working with
Senator Warner and others on the committee.
I have a few questions for Mr. Robinson, and, Mr. Robinson, it
is in line with what you have already been testifying about. As I
believe you know, Broadwater Energy has proposed building an offshore LNG terminal in the New York waters of Long Island Sound.
There are many concerns on both sides of the Sound about the impact such a facility would have. It is not a huge body of water. It
is not out in the open ocean. It is an important environmental, recreational, and economic asset. Given the importance of this issue,
I laid out a number of concerns in a letter that I sent to FERC
Chairman Wood last week.
Twenty million people live within 50 miles of the Sound. Obviously, for anybody who has ever been to Long Island, you know we
have some of the most beautiful beaches, some of the most picturesque towns and villages. The first time, Mr. Chairman, I went to
Long Island, I told some people where I was going and they said,
How can you be going to the beach in New York? So there is a
lot of education that needs to be done.
But it is an incredible resource and it is something that we care
deeply about, because it is also not just recreational and environmental, but economic. There are a number of people who make
their livelihoods from the Sound. So we have specific concerns
about the safety and security risks associated with the presence of
an anchored LNG terminal that could hold up to eight billion cubic
feet of natural gas.
So I would like to ask, Mr. Robinson, what is the size of the area
around the proposed terminal in which release of gas by either accident or attack could result in pool fires or flammable vapor
clouds?
Mr. ROBINSON. Well there are two aspects to safety and security
that you have to consider when you are thinking LNG. One is the
tanker safety and security, and the other is the terminal itself. We
actually commissioned a study by ABS about a year, gosh, I guess
it was a year and a half ago now. That calculation that they came
up with, which we use as a model for site-specific calculations, was
in the range of around 4,500 feet for a radiant heat zone of 1600
30
BTU per square foot per hour. That is a heat rate that if you left
your skin exposed to it between 30 and 40 seconds and just waited,
you would get a second degree burn; your clothing would protect
you. So that is the perimeter of that 1600 BTU per square foot per
hour is about 4500 feet for a tanker spill at its worst extent, the
biggest pool expression.
Sandia Laboratory did a follow up study on that in December of
last year, and I think their number came out, again in general, it
has to be applied specifically with the winds and the humidity and
all the different types of factors that go into the calculation, and
I believe it was around 5200 feet for that same 1600 BTU expression.
Senator CLINTON. That is the immediate area where there might
be pool fires. But the impact would go beyond that immediate restricted area in terms of impact in the water. So how would access
around the terminal be restricted? What would be the size of a restricted area around this terminal?
Mr. ROBINSON. That is something that will be looked at in the
analysis of the specific project, so I cannot answer that now. But
typically, we are looking at an area for an on-ground land terminal
of about 21 acres being about what you need to ensure that you
have exclusion zones that will protect the public in case you have
a worst case accident.
Senator CLINTON. Do these calculations take into account a deliberate attack on the terminal from missiles or aircraft?
Mr. ROBINSON. It is hard to imagine how you would get the worst
case example that we are analyzing in any way other than if there
were a direct attack.
Senator CLINTON. Mr. Robinson, how would this area be patrolled, and by whom?
Mr. ROBINSON. Well again, through the NEPA process that we go
through, we involve the State and local experts in this, the first responders, and the Coast Guard is heavily involved in this and they
develop a waterways security assessment that we incorporate into
our analysis, and then ultimately, the Coast Guard and ourselves
put conditions on the proponent that include the development with
the local responders exactly how the project would be protected,
right down to do you need to close a bridge while a tanker passes
under, or do you need six boats around the tanker as it comes in,
with what type of protective measures that those boats have to employ. All of that is worked out with the site-specific characteristics
of the project and the people that would be intimately involved in
that protection.
Senator CLINTON. My time has expired. But I find it hard to
imagine how, given the potential site for this project, those kinds
of concerns could be satisfied. But I appreciate your answers, and
I would look forward to receiving a response to my letter to Chairman Wood.
Mr. ROBINSON. Certainly.
Senator CLINTON. Thank you.
Senator ISAKSON. Thank you, Senator Clinton.
Senator Carper.
31
Senator CARPER. Mr. Chairman, thank you. Mr. Robinson, I welcome you and the other witnesses here today. Thank you all for
being here and for your comments.
I seem to recall a number of years ago I think GAO recommended that there be a requirement that all new large LNG facilities be built in remote areas, and I think some kind of prohibition against transportation through densely populated areas. I do
not know when that recommendation was made, but I am told
there was such a recommendation.
I think in your testimony you suggest that in order to effectively
site natural gas infrastructure, and this may be a quote, A rational siting process should be adopted. I think those are your words.
I would just suggest that the first step in that rational siting process should be rational siting. I understand the economic motives for
companies, and I do not blame them, to try to get their facilities
as close as they can to population centers, and if I were in their
shoes I would be doing that, too. But I just do not understand why
those same motives should also drive FERC. That is not clear to
me.
I just wonder why does, and if I am alleging something that is
not true, correct me, but why does FERC continue to consider locations like the Delaware River, across the river from where we live,
or in places like Fall River, Massachusetts? Would not many of the
problems with State and local governments that you cite be lessened, not by overpowering them, but by trying to rationalize the
sites that you do approve?
Mr. ROBINSON. OK. I am trying to think where to start on that.
The rational siting process is a process that tries to bring officials
Senator CARPER. First of all, go back to the GAO. Any recollection
Mr. ROBINSON. I am totally unaware of a GAO recommendation
like that. What I think you may be speaking of is that in 1979 the
Pipeline Safety Act had a provision which required the development of regulations for remote siting of LNG facilities. DOT promulgated those regulations in 1980, and the response to that, the
definition of remote siting was the development of these exclusion
zones which we just discussed. So that constitutes remote siting if
you can put a terminal in place and look at the impacts associated
with the 1600 BTU per square foot per hour radiant heat flux and
protect people from that, that was considered to be remote. That
went through a review process and it was appealed and all that,
and it has stuck ever since.
So that is the only thing prior to about now, because people really have not talked about LNG much in the last 30 years, that I
know where remote siting came up, and that is how it was handled.
Senator CARPER. All right. All right.
Mr. ROBINSON. Now as far as rational siting, first, I would like
to make it clear that the Commission does not have the profit motive aspect in looking at the siting, but we do have some knowledge
of the infrastructure needed to deliver gas to regions of the country. In New England, in particular, the problem is that I doubt if
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we will ever see another pipeline cross the Hudson River, I just do
not know that will ever happen.
If you do not, then your capacity for delivery of gas to New England is set. The gas that comes down from Canada is dwindling,
the play off Nova Scotia did not come in the way they thought; the
Maritime Northeast pipeline is running I think about two-thirds
full. The only optionand you have no underground storage in
New Englandis LNG. Underground storage is not geologically
possible.
Senator CARPER. Say that again.
Mr. ROBINSON. You have no underground storage in New England. It is geologically impossible. That is a big component of a
good gas delivery system which you just really do not have. Your
storage is all above ground, about 40 LNG tanks spread around
New England right now, with 10,000 truck loads of LNG moving
around New England every year right now. The only real addition
to natural gas that you have in New England that is available is
LNG.
Now the problem becomes, where do you find a deep water port
in New England that can accommodate these ships? There are not
many available that are not already in use or protected in some
fashion. So you are basically looking at existing ports with existing
industrial uses bringing in existing cargos that, in my estimation,
in many instances are much more hazardous than an LNG tanker.
Senator CARPER. Are you at all familiar with the Delaware
River?
Mr. ROBINSON. I have crossed it.
Senator CARPER. Did you pay the toll?
Mr. ROBINSON. Most times.
Senator CARPER. Our friends from BP, and they are a good company, as you know, but they are interested, along with some folks
in New Jersey, in building a pier that would stick a couple of thousand feet out into the Delaware River, at least initially they were
and I think they are having some second thoughts about it. The
Delaware River is not all that wide in that point and as you go further north. The idea of having a pier that sticks a couple thousand
feet out into the river is just a cause for concern for a lot of reasons, not the least of those could involve homeland security and potential for some kind of terrorist attack. Is that the sort of thing
that you all think about?
Mr. ROBINSON. Oh, absolutely. In fact, that will be a key component of our environmental analysis, to look at river congestion, the
effects on the economy, if there are any, and how it might be mitigated. Those are the types of public interest concerns, and they
range from wetlands to economic impacts to endangered species,
that the Commission has to look at in total in making the judgment whether it is in the public interest to grant an authorization
for an LNG terminal.
Senator CARPER. I would kind of like to go back and sort of ask
this again and ask you to think about it one more time. My final
question, it is kind of a restating of my earlier question, would not
many of the problems with State and local governments that you
cite, I think, in your testimony be lessened, not by overpowering
them, but by trying to rationalize the sites that you approve?
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Mr. ROBINSON. Certainly, there is a difference in siting regionally
across the country. We have LNG proposals that are in populated
areas where we have absolutely no opposition to them whatsoever.
We have the same technology being proposed for areas where there
is enormous opposition, and you are aware of those. That has to be
accounted for, that has to be taken into consideration, but it has
to be analyzed in terms of exactly what those impacts are and how
those people would be inconvenienced, and then that judgment
made.
I do not think we can have a national network of energy infrastructure that supports our economy that is based upon a vote at
the local level. I think that lowest common denominator aspect of
that would eliminate the ability for regionally significant energy
projects to be developed where local concerns of, we do not want
it here, would override that.
Senator CARPER. All right. Thanks very much. Thanks, Mr.
Chairman.
Senator ISAKSON. Thank you, Senator Carper.
I have never chaired a committee before, but I think I am supposed to leave the record open for 5 days in case any member
wants to submit any additional questions for the record.
Senator CARPER. Why do we not bring up some legislation and
see if we can get it through.
[Laughter.]
Senator ISAKSON. I know I am not supposed to do that. I suggest
the absence of a quorum on that.
Senator CARPER. Unanimous consent, what do you think?
Senator ISAKSON. I want to thank all the witnesses who testified
today, and thank the members who attended.
The committee stands adjourned.
[Whereupon, at 11:06 a.m., the committee was adjourned.]
[Additional statements submitted for the record follow:]
STATEMENT
OF
HON. BARACK OBAMA, U.S. SENATOR

THE STATE OF ILLINOIS
FROM
Mr. Chairman, thank you for holding this hearing today.

Like you, I am very concerned about this countrys energy future. The rising cost
of natural gas, our dependence on foreign oil, the aging of our coal burning facilities,
and the daunting prospect of restarting a national dialog on nuclear power are just
a few of the issues with which Congress must grapple.
The good news is that there are many new prospects for energy sources, some of
which will be discussed here today.
At the same time, however, one of the clear differences between the U.S. and
many developing nations is our quest to balance economics with a healthy environment. We learned from our early mistakes as an emerging industrial nation and instituted a series of environmental safeguards that have served us well. In our quest
for streamlined processes, we must be careful not to truncate the roles given different permitting agencies and deprive the public of access to the expertise that is
vested in those agencies.
We also must be careful not to needlessly amend the National Environmental Policy Act, one of the pillars of U.S. environmental law and a model for legislation in
other countries. At the heart of this law are the twin goals of disclosure and informed discussion regarding Federal actions. Through the NEPA process, many interested parties have been given a voice that might not have been heard otherwise.
I look forward to hearing the testimony of the witnesses. Thank you.
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STATEMENT
OF
J. MARK ROBINSON, DIRECTOR, OFFICE OF ENERGY PROJECTS,

FEDERAL ENERGY REGULATORY COMMISSION
My name is J. Mark Robinson and I am the director of the Office of Energy

Projects (OEP) at the Federal Energy Regulatory Commission. I am here as a staff
witness speaking with the approval of the Chairman of the Commission. Our office
is responsible for the licensing, administration, and safety of approximately 1,600
non-Federal hydropower projects; the certification of between 500 and 2,000 miles
of interstate natural gas pipelines annually; the certification of natural gas storage
facilities; and the authorization, safety and security of liquefied natural gas (LNG)
terminals.
I would like to thank you for the opportunity to speak today on the permitting
of energy projects. I will focus on natural gas-related facilities. The permitting of
natural gas facilities is governed by a comprehensive scheme of Federal regulations
that guarantees that the FERC and other Federal agencies will work with state and
local agencies, as well as the general public, to ensure that all public interest considerations are carefully studied and weighed before a facility is permitted, and that
public safety and the environment are given high priority. We are proud of our track
record of working well with other agencies, the states and with all interested stakeholders on these projects, and are committed to continuing to be responsive and responsible regulators. The comprehensive nature of the FERCs permitting program
addresses all siting and operational issues with the full participation of the Federal
and state agencies while attempting to ensure the timely development of necessary
energy infrastructure. Timeliness, however, is a virtue that, with some regularity,
goes by the wayside as a result of a widely distributed decisionmaking process. The
remainder of my testimony will describe the efforts the Commission has made to
efficiently process applications, the issues that still detract from our ability to move,
in a timely fashion, on energy projects that are in the public interest, and a rational
approach to the siting of energy infrastructure that would improve all agencies ability to reach a decision jointly on needed projects.
I. THE COMMISSIONS PROCESS
The Commission is charged, under the Natural Gas Act and the regulations that
codify the act, with jurisdiction over the construction of facilities used to transport
natural gas in interstate commerce and the construction of facilities used for the export or import of natural gas which includes LNG terminals. The fundamental concept that governs our efforts is the early identification of project related issues with
all parties that would be affected by the development. We believe that a proactive
approach to issue identification and collaboration among all parties provides the
best hope of determining whether a project is in the public interest in a timely fashion.
The goal of the FERCs natural gas permitting process is to determine if a project
is in the public interest. As an integral part of this process, FERC staff coordinates
closely with other agencies and solicits comments and recommendations at several
points in the review process from Federal, state, and local authorities, and members
of the public. We do this in order to obtain the broadest possible range of information and views and to accommodate, to the greatest extent possible, state and local
concerns.
Prior to a company filing a natural gas-related facility application, company representatives commonly meet with the Commissions staff to explain the proposal and
solicit advice. These meetings provide prospective applicants the opportunity for
Commission staff to offer suggestions related to the environmental, engineering and
safety features of the proposal. At this stage, Commission staff reviews conceptual
designs of planned facilities, provides guidance on resolving potential environmental, safety, and design issues, and explains the level of design detail and safety
analysis required for a complete application. In this manner, Commission staff
learns about future projects that may be filed at the Commission and helps direct
companies in their application preparation. I should also note that we encourage
project sponsors to also make early contact with all other relevant agencies, including state agencies, about their proposals.
During these early meetings, the Commission staff strongly encourages potential
applicants to engage in the Commissions Pre-Filing process. This process involves
getting the agencies and the applicants to begin the National Environmental Policy
Act (NEPA) review with FERC well before the filing of an application. The Pre-Filing process provides for early identification of issues, increased Federal, state and
public involvement, and the opportunity to begin developing consensus and working
on issue resolution. This process also calls on all agencies to work together concurrently under a schedule set in consultation with those agencies. FERC signed an
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interagency agreement with 10 Federal agencies in May 2002 that was based on the
principals of the Pre-Filing process that has fostered a more efficient review of energy projects. However, even though we work extremely well with agencies most of
the time, there is no force of law in effect with respect to timing of other agencies
review and issuances of permits.
Once an application has been filed, the Commission prepares either an environmental assessment (EA) or an environmental impact statement (EIS) to fulfill the
requirements of NEPA and the Commissions implementing regulations under Title
18, Code of Federal Regulations, Part 380. The purpose of these documents is to inform the public and the permitting agencies, and to solicit comments about the potential environmental impacts of the proposed project and its alternatives. A thorough analysis of any substantive environmental issue raised by a proposed project
is undertaken during the preparation of the environmental document.
Federal and state agencies and the public play crucial roles in the Commissions
authorization process. The Commission works with all stakeholders during the PreFiling process, to identify issues and establish partnerships for developing solutions.
As part of our NEPA analysis we consider the impact of the project on geological
resources; soils and sediments; water resources; vegetation; wildlife and aquatic resources; threatened, endangered and other special status species; land use, recreation, and visual resources; socioeconomics; cultural resources; air quality and noise;
reliability and safety; and cumulative impacts. We also look at alternative locations
for the proposed facility. This analysis includes consultation with state as well as
Federal agencies under the Clean Air Act (CAA), the Clean Water Act (CWA), the
National Historic Preservation Act (NHPA); the Magnuson-Stevens Fishery Conservation and Management Act (MSA), and the Endangered Species Act (ESA). Applicants are also required to consult with and obtain from the state, a determination
that the project is consistent with the states Coastal Zone Management Plan. Attached to my testimony are tables showing the Federal, state, and local authorizations that are required for siting LNG facilities in Texas (31 permits required), Louisiana (29 permits required) and Massachusetts (43 permits required). Further, in
the course of the NEPA process, the Commission holds public scoping meetings, notifies the public when a draft environmental document is available for review and
comment, and holds public meetings to receive comments regarding the draft document. These meetings are held near the site of the proposed facility for the convenience of the stakeholders and to build a more complete record. Stakeholders are also
given the opportunity to intervene and file comments in the proceeding.
As part of our NEPA responsibilities, we ensure that the appropriate studies requested by, for example, the State Historic Preservation Office are conducted and
that properties protected by the NHPA are appropriately cared for. We also consult
with the U.S. Fish and Wildlife Service, NOAA fisheries and the appropriate state
agencies to avoid, or minimize, the effects of the project on the species that are listed in the ESA and the MSA. We also consult with all relevant state agencies that
have a role to play in the authorization of the facility.
We are committed to an early collaborative approach to authorizing energy infrastructure and have designed processes to maximize our potential for efficiently handling projects. Several issues, however, keep us from achieving this objective as consistently as we would like.
II. CHALLENGES TO THE PERMITTING PROCESS
Underlying the difficulty in efficiently managing the permitting process is just the
shear number of agencies that have a role in any energy facility siting. As shown
on the attached tables the authorization of any project can best be described as distributed decisionmaking. Even where an agency has the lead, until the last agency
acts the first authorization does little good for the advancement of a project. Money
is not loaned, contracts are not signed and ground is not broken. That is why it is
critical to recognize this distributed decisionmaking process and modify it by placing
timing parameters on all participants. Although memorandum of agreements can
move agencies in this direction, only the potential loss of the agencies authority can
guarantee that action will be taken in a timely fashion.
A related issue in timely permitting can be described as extended agency authority. This is where agencies will take the authority they have been granted covering
an aspect of the project (e.g., water quality under section 401 of the Clean Water
Act) and utilize that singular authority to duplicate the action of the siting agency
to make an overall public interest determination. This unnecessary duplication of
the public interest determination can results in regulatory uncertainty when an applicant does not know which forum will ultimately decide if a project should be constructed. This is not to say that the agencies with permitting authority need to
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agree with the Commissions decision, but rather that those agencies should focus
on their aspect of the project and permit accordingly while leaving the overall siting
determination to the agency given that exclusive authority.
Another issue of concern is the growing tendency for parochial, or local, interests
trumping the greater public good. All siting is local and local concerns are of high
significance, but if the standard for approving infrastructure requires that there be
no local opposition for what in most instances are energy projects of regional importance, then no energy infrastructure will be built. An example of this is the state
of Connecticuts moratorium on energy projects crossing under Long Island Sound.
This moratorium prohibited state agencies from issuing a decision on any applications relating to electric power line crossings, gas pipeline crossings or telecommunications crossings of Long Island Sound. This action stops the development of natural
gas pipelines needed to ensure the reliability of the delivery system to New York.
This problem is not limited to states, but also shows itself with landowners, towns,
municipalities and non-governmental organizations. Admittedly, much of the infrastructure proposed today is going to serve the future and those that are comfortable
with the status quo may not see any direct benefit for themselves. But if our parents and grandparents had taken that same attitude more then a half century ago,
I doubt we would be traveling on the interstate road system we have today.
We need a national natural gas system that contains a balance of domestic production and imported LNG deliveries, transportation, and storage. This system will
serve the greater public at a lower cost. There, of course, are legitimate local concerns, but to adhere to all of their requests to not be disturbed will result in a balkanization of a national network that needs to expand and grow on an integrated
basis.
III. RATIONAL SITING PROCESS
In order to effectively and efficiently site natural gas infrastructure that is found
to be in the public interest and to address the challenges discussed above, a rational
siting process should be adopted. This process would be equally applicable to the
siting of any energy infrastructure and consists of three elements: the designation
of an agency with exclusive authority to site the projects; a requirement that all
agencies with authority over an aspect of the project work with the lead agency to
develop one Federal record from which all agency decisions would be made; and direct appeal of all agency actions at one time to the Federal courts.
Designating one agency as having exclusive siting authority would not usurp the
decisional authority of the other agencies involved. Rather it recognizes that one
agency has been vested with the decisional authority to determine whether the proposal is in the public interest while others have been vested with authorities that
go only to some aspect of the project like affects on water quality or endangered species. This would specifically address the issue of extended agency authority. The recently enacted Alaska Gas Pipeline Act of 2004 specifically addressed this issue by
distinguishing between the lead agency and other agencies that are handling aspects of the project.
The development of one Federal record for all agencies is at its core just a matter
of good government. Currently, at times multiple Federal and state agencies go to
the effort of developing records covering the same issues under different timeframes.
Requiring all agencies to work together under the schedule of the lead agency would
reduce waste, improve decisionmaking, and reduce the potential for conflicting conclusions. The schedule set by the lead agency would have to recognize any statutory
timing requirements and should work for all, given that the lead agency has to consider all elements while the others would only be dealing with specific aspects of
the project. Finally, to make this function the agencies need to know that, should
they not meet the schedule, their permit would be conclusively presumed or waived
as is now the case with a 401 permit granted by the state under the Clean Water
Act.
The final step in the rational siting process would be to require that all actions
taken by all the permitting authorities be subject to one appeal process. Currently
appeals can run in many different directions including the state courts, state administrative reviews, Federal courts and Federal administrative reviews. Some of the
appeals processes involve more than one of the above in a sequential fashion. The
net result of an appeals process that can run into multiple years is that a project
once found to be in the public interest will die from a death of a thousand cuts administered one appeal at a time. It is not only enough to approve a project on a
timely, unified basis, but there is a need to avoid fragmented, multi-layered administrative and judicial review that could unduly delay a final decision on the project.
This could be accomplished by having all appeals of Federal and state agency deci-
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sions that administer Federal law reviewed immediately in a single U.S. Court of
Appeals.
IV. CONCLUSION
The Commissions process is designed to ensure the safe, reliable construction and
operation of natural gas facilities, based on extensive input from all affected parties
and timely decisions from the relevant Federal and state agencies. Nevertheless, the
challenges that I outlined in my testimony are threatening to disrupt this process
and the timely approval and construction of necessary natural gas infrastructure.
At the present time, the number of LNG and other natural gas infrastructure
projects filed at the Commission is at an all time high. To respond to this, the
FERCs need to coordinate early and effectively with other Federal and state agencies is paramount. While the FERC staff must coordinate early with other agencies,
so too must those agencies cooperate with FERCand do so, on the schedule which
FERC establishes. This is also critically important. The adoption of the rational
siting process would curb these disruptions and allow the natural gas infrastructure
to grow as necessary. Natural gas is a crucial component of the nations energy
structure and the timely approval of the necessary infrastructure is vital to meet
the demands of a diverse and continually growing economy.
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STATEMENT
OF
DENNIS J. DUFFY, VICE PRESIDENT OF REGULATORY AFFAIRS,

CAPE WIND ASSOCIATES, LLC.
INTRODUCTION
I Appreciate this opportunity to address the Committee. My name is Dennis J.

Duffy, Vice President of Regulatory Affairs of Cape Wind Associates, LLC (Cape
Wind). For the last 5 years, Cape Wind has been developing the Nations first offshore wind generation project. The project would be located approximately 5 miles
off the nearest point of land on the coast of Massachusetts. It would generate up
to 468 MW of clean and renewable energy, with no fuel requirements and no air
emissions. This amount would represent approximately 75 percent of the annual
electricity needs of Cape Cod and the Islands of Marthas Vineyard and Nantucket.
The principals of our company have been in the energy business for more than
25 years. We have developed and operated some of the most efficient gas-fired
plants operating in the U.S. and we are intimately familiar with Federal and state
licensing processes for electric power plants. In direct response to State mandates
for renewable energy, the so-called Renewable Portfolio Standard, we are now focusing upon wind energy development. We are confident that wind energy technology has now advanced to the point where it is both proven and reliable and can
play a much more meaningful role in our National supply mix. In order to realize
the full potential of wind energy, however, we need to ensure that our National energy and environmental policies are implemented in a more consistent manner.
2. THE CAPE WIND PROJECT
The Cape Wind project would consist of 130 wind turbines located in Federal waters on submerged lands located approximately 5 miles off the coast of Massachusetts, with an aggregate generating capacity of approximately 468 MW. The project
would be connected to the land-based transmission grid via two 115 KV submarine
cables. Although it is the first offshore wind energy farm proposed in the U.S., there
are several operating successfully in Europe. The Cape Wind project would be located on a shoal that is outside of the shipping lanes and would impose no restrictions on current uses of the area. A schematic site map is attached. Cape Wind enjoys strong support of environmental, consumer advocacy and labor groups, and has
a grass-roots support organization with over 4,000 members.
3. FEDERAL REGULATORY PROCESS
The Federal regulatory process is thorough and comprehensive, but lacks any
legal requirements that would limit the duration of the review period. As a result,
with no required end point, opponents can use stalling tactics to try to financially
cripple even a project that meets all statutory standards and serves Federal and
State policy objectives.
After extensive analysis and long review of sites and conditions, Cape Wind submitted its Federal permit application to the U.S. Army Corps of Engineers
(USACE) in November of 2001, pursuant to section 10 of the Rivers and Harbors
Act, as amended by the Outer Continental Shelf Lands Act of 1978. This Act governs the placement of all offshore structures in Federal waters. The project thus has
been undergoing extensive regulatory and public scrutiny for more than 3 and onehalf years, including the preparation of an Environmental Impact Statement (EIS)
under the NEPA.
The US Army Corps of Engineers (USACE) has acted as the lead Federal agency
in reviewing Cape Winds application in a process that has included the active participation of 17 Federal and State participating agencies and which has afforded exceptional opportunities for public involvement. There have been nine public hearings.
During this process, an exhaustive analysis of all potential impacts of the project
was conducted, including studies of issues including potential impacts upon existing
uses of the area; environmental issues, including potential impacts to fish, birds and
marine mammals; project aesthetics; cost implications; and the energy needs of the
public. The USACE issued a Draft EIS (DEIS) in November of 2004, including
more than 4,000 pages of detailed project analysis based upon extensive scientific
literature and data bases, as well as some of the most extensive field work ever undertaken for a wind energy project. The USACE extended the normal period for
public comment in the DEIS, and we are now awaiting the USACEs response to
such comments and the release of a final EIS (FEIS).
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4. STATE REGULATORY PROCESS
In addition, there are extensive, parallel state regulatory proceedings, because the
projects transmission facilities must cross state waters in order to be connected to
the regional power grid. In September of 2002, Cape Wind and the local electric utility jointly petitioned the Massachusetts Energy Facilities Siting Board (MEFSB)
for authorization to construct those portions of the transmission facilities for the
project located within the land and territorial waters of Massachusetts. Although
the MEFSBs enabling statute requires it to reach its decision within 12 months,
in this case the review process took more than 2 and one-half years, including more
than 20 days of expert testimony, as well as an evidentiary record of over 50,000
pages.
However, the end of this process finally has been reached. After its exhaustive review, on May 10, 2005, the MEFSB approved Cape Winds petition. This decision
is based largely upon its findings that Cape Winds energy is needed (i) to reliably
meet the growing need for power in the region; (ii) to lower prices to electric rate
payers; and (iii) to offset air emissions from fossil generators, as follows:
The Siting Board has found there is a need for the power provided by the
wind farm beginning in 2007 for reliability purposes. The Siting Board has also
found that: (i) there is an additional need for additional renewable energy resources to meet the requirements of the Massachusetts RPS beginning in 2006;
(ii) there is a need for the full renewable output of the wind farm to meet the
requirements of the Massachusetts RPS beginning in 2010; and (iii) there is a
need for the renewable resources provided by the wind farm to meet regional
RPS beginning in 2006. The Siting Board further has found that there is a need
for the power generated by the wind farm for economic purposes during the first
5 years of operation.
EFSB 022, p. 189. More specifically, the MEFSB found that because generating
units without fuel costs displace higher cost units from dispatch, Cape Wind would
lead to substantial costs savings to the rate paying public:
The record shows that the wind farm will tend to reduced market clearing
prices for electricity because it typically will be bid into the market at its marginal operating costs, which are close to zero, than those power plants with
higher marginal costs. . . Consequently, the Siting Board finds that operation
of the wind farm will provide average annual savings of $25 million for New
England customers, including $10 million annually for Massachusetts customers
during the first 5 years of operation.
Id. at 162. The MEFSB also recognized the environmental benefits of Cape Wind,
noting that the Siting Board finds that, in the near term, operation of the wind
farm would reduce regional air emissions by approximately 4480 tons of SO2, 1132
tons of NOx and 1,062,554 tons of CO2 annually . . . Id. at 169.
5. REMAINING REGULATORY REVIEW
Notwithstanding the extensive review and analysis that has been done over the
past three and one-half years, the Cape Wind project still faces additional review
processes of uncertain duration. In particular, after the USACE issued the DEIS in
November of 2004, it received more than 5,000 comments. Notably, many of the
leading environmental organizations praised the depth and detail of the DEIS, including the following comments filed by the Conservation Law Foundation:
CLF commends the Corps and the project proponents for providing a fairly
exhaustive, comprehensive and accurate picture of the range of potential environmental impacts from the project and reasonable alternatives to the project.
In many instances, the level of scrutiny in the environmental review [of the
DEIS] exceeds comparable projects with similar profiles but far fewer environmental benefits than the Cape Wind Energy Project.
While most of the public comments were positive, the comments also included demands by project opponents that multiple years of additional field studies be conducted before the issuance of a Final EIS. Some call, for example, for the USACE
to conduct an expanded alternative study that would evaluate nuclear and fossil
plant proposals on an equal footing, notwithstanding the fact the Cape Wind is proposed in response to specific legislative mandates for renewable energy. Other comments demanded multiple years of additional bird studies, notwithstanding the fact
that the Cape Wind DEIS already reflects more extensive avian field research than
has ever been done for any other energy project of which we are aware, and includes
more than 450 pages of detailed avian analysis that provides an ample informational basis upon which a reasoned decision can be made.
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In addition, the project will be subject to further review under the Massachusetts
Coastal Zone Management Act for consistency with the enforceable provisions of the
Massachusetts Coastal Zone Management Plan, pursuant to the provisions of the
Coastal Zone Management Act, 16 USC 1451, et seq. The Massachusetts CZM Office
has long been an active participant in the permitting process.
6. CONCLUSION
The Cape Wind project and other wind energy projects that will follow present
great potential for meeting the multiple objectives of our National energy and environment policy, including (i) decreasing reliance upon imported fuel sources, (ii) reducing and offsetting air emissions, and (iii) lowering the cost of electricity to the
ratepaying public, all with minimal environmental impact. Nonetheless, after more
than 4 years, the schedule for completion of the permitting process is still unclear.
Based upon our experience, we have two suggestions for improving this process.
First, National policy objectives would be far better served if the environmental review of proposed facilities were conducted in a more timely manner, perhaps pursuant to specific statutory timeframes that prevent delay tactics from financially crippling an important and worthy project. Second, because the process involves so
many regulatory agencies with often conflicting regulatory agendas, it is important
that the process appropriately recognize clearly stated Federal and State energy objectives, as well as the societal tradeoffs inherent to any major energy project.
Thank you for your consideration.
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PREPARED STATEMENT OF SHARON BUCCINO, SENIOR ATTORNEY, NATURAL
RESOURCES DEFENSE COUNCIL
Good Morning. My name is Sharon Buccino. I am an attorney with the Public
Lands program of the Natural Resources Defense Council. NRDC is a non-profit
membership organization with over half a million members and activists across the
nation. We work to protect the environment for the humans living in it. NRDC
strives to protect nature in a way that advances the long-term welfare of present
and future generations. I, like you, want to make energy permitting work better.
I have had the privilege to work with ranchers, farmers, and homeowners across
the West as energy development has come to their communities. Domestic energy
productionthe work of companies like Questaris important. The permitting process is what allows this development to go forward in a way that identifies community concerns and addresses them. The permitting process is what gives citizens a
voice in the government decisions that affect their daily lives.
EPA GIVES PEOPLE A VOICE
One statute that is central to energy project permitting is the National Environmental Policy Act, known as NEPA. NEPA was signed into law in 1970 by President
Nixon. Since then it has served as a valuable tool to produce informed and accepted
government decisions. NEPA has helped preserve some of Americas most treasured
places, from the canyon lands of Utah to the old growth forests of Southeast Alaska.
It has helped citizens protect their communities and enhance the quality of their
lives. NEPA has helped Federal officials better meet the needs and interests of the
public they serve. As then Secretary of Energy James Watkins testified to Congress
in 1992 regarding his decision to defer selection of a tritium production technology:
[T]hank God for NEPA because there were so many pressures to make a selection
for a technology that might have been forced upon us and that would have been
wrong for the country. . . . .
NEPA has improved projects. One project that I participated in involved seismic
exploration in the Nine Mile Canyon region of Utah. The State of Utah has described the area as an outdoor museum. The Bureau of Land Management (BLM)
describes the Nine Mile Canyon region as an area with the greatest concentration
of rock art sites in the U.S.A. The project involved the use of 60,000 pound trucks
and explosives to collect data about oil and gas resources in sensitive, arid areas.
As a result of the review process under NEPA and the National Historic Preservation Act, the company conducting the explorationBill Barrett Corporation of Denvertook additional steps to protect the natural and cultural resources in the area.
The company agreed to additional monitoring and mitigation to make sure that the
vibrations from their equipment would not harm the irreplaceable Native American
rock art, kivas and cliff houses. They agreed to limit their activity in areas with
wilderness qualities. The NEPA process was indispensable in helping Federal land
managers perform their difficult job of balancing a variety of competing uses of the
public lands. As BLM manager for the project, Mark Mackiewicz, said, I cant imagine this project without a process like (this). Kenworthy, Tom. Oil Projects May
Get Less Scrutiny, USA Today (May 4, 2005) (Attached as Exhibit 1).
The Cape Wind project is another good example. Wind energy can help diversify
our energy supplies and increase our energy independence. It is a critical part of
a sound energy future. Cape Wind and other offshore proposals for wind electricity
generating facilities off the East Coast present an opportunity to boost significantly
the amount of energy produced from renewable sources in the eastern U.S. Indeed,
offshore wind power is probably the regions largest untapped renewable energy resource. Developing this resource is essential to help reduce local, regional and global
air pollution that threatens public health, critical habitat, and the very sustainability of the planet. At the same time, offshore wind energy projects will utilize
areas of the ocean that are held in common by citizens of the U.S., and, if improperly sited and designed, could pose risks to natural resources in biologically rich
near shore waters. Renewable energy projects must notand neednot undermine
protection of coastal habitats and living marine resources. The review process is a
critical tool for improving the project and reducing opposition by identifying the concerns of those affected by it and addressing them.
In addition, NEPA gives state and local governments a voice in Federal decisions
that affect their communities. One of Californias most valuable resources is its
coast. Ever since 1969, when a Federal well released huge amounts of crude oil into
the Pacific Ocean off of Santa Barbara, citizens and local elected officials have
joined together to protect the coast from offshore oil drilling. In 1987, after its new
5-year OCS plan went into effect, the Interior Department scheduled its first new
saleLease Sale Number 91involving over a million acres off the coast of north-
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ern California. Pursuant to NEPA, the Interior Department held hearings in two
coastal communities. Congressional representatives, state senators and assemblymen, and the state attorney general all expressed opposition to the proposal as did
Democratic candidates in the upcoming June 1988 Presidential primary. More than
a thousand citizens spoke on behalf of their coastline at these hearings, which made
headlines across the country. Following the hearings and a mere 2 days before the
primary, the Republican candidate for president George H.W. Bush announced that
he favored postponing the sale until it could be re-evaluated. On June 26, 1990,
then-President Bush canceled the lease sale (along with another CA lease sale and
a Florida sale) and announced he would delay drilling off the Pacific coast (as well
as southwest Florida and Georges Bank in New England) for 10 years.
More recently, NEPA has continued to help protect Californias coast from drilling. In 1999, the Clinton administration proposed to extend the terms of 36 undeveloped oil and gas leases along the central California coast, off Santa Barbara County another coastal region of great ecological sensitivity. The Interior Department
refused to conduct any NEPA analysis on the lease extensions, denying the state
as well as the general public any opportunity to provide input into whether the
leases, all of which were at least 20 years old, should be extended or allowed to expire. In another demonstration of the broad-based commitment to coastal protection
in California, the state, joined by NRDC and other environmentalists, successfully
challenged the Federal Governments actions. NEPA gave local communities a way
to speak up for their quality of life and their local economies.
If Members listen closely to their constituents, they will find that many, from city
council members to homeowners, care deeply about NEPA. They care about having
a say when a highway is proposed through their neighborhood or when the Department of Energy plans to store hazardous waste nearby. As the Seattle Post-Intelligencer reported following the recent April 23 hearing in Spokane, WA, held by the
newly formed House of Representatives NEPA Task Force, The biggest applause
came when John Roskelley, a well-known mountaineer and former Spokane County
commissioner, called himself an unabashed supporter of NEPA and added that explorers Lewis and Clark would embrace and strengthen NEPA if they were alive
today. For information on the House NEPA Task Force, see http://
resourcescommittee.house.gov/nepataskforce.htm.
CONGRESS SHOULD WORK TO ENHANCE THE PUBLICS VOICE, NOT SILENCE IT
Yes, we can do better. We can make the energy permitting process more efficient
and effective. Better means improving public involvement, not curtailing it. It
means doing more thorough analysis of cumulative and regional impacts, not less.
It means doing more monitoring and data collection, not less. It means giving Federal land managers the resources to complete environmental reviews and engage the
public in a timely manner, rather than imposing mandatory deadlines.
Several provisions in the energy bill now under consideration by Congress move
in the wrong direction. For example, Section 2055 of H.R. 6 as passed the House
aims to eliminate the NEPA process, rather than improve it. The provision, promoted by Rep. Peterson (R-PA), provides that numerous oil and gas activities on
public lands shall not be subject to review under NEPA. The provision includes
well pads less than 5 acres in size, increasing the number of wells in an existing
field, disposal of water from coalbed methane drilling and seismic exploration. The
provisions scope is sweeping. BLM has approved over 30,000 new wells in Montana
and Wyomings Powder River Basin alone. As one BLM official noted, Most of our
drill pads are less than 5 acres. Our average is less than 3 acres. Oil Projects May
Get Less Scrutiny, USA Today (May 4, 2005). The provision could affect offshore
exploration, as well as onshore. Instead of using the NEPA process to identify and
address public concerns and potential adverse impacts on their health, lifestyles,
and communities, proponents of the provision excuse the government and industry
from listening.
Another provision of H.R. 6 targets projects relying on renewable resources. Section 1702 limits alternatives, a critical element of NEPA. Public comment is limited
to the preferred alternative, often the project version as put forward by company
seeking the permit and a no-action alternative. Creative win-win solutions are
foreclosed. The provision could exempt solid waste incinerators and dams from
meaningful environmental review. The public deserves a meaningful voice in all energy projects whether using renewable resources or not.
In addition, Title V of H.R. 6 could remove the application of Federal laws, such
as NEPA and the National Historic Preservation Act, from energy development decisions on tribal lands. The bill affects land both on and off reservation. It provides
that once the Secretary of the Interior approves a tribal energy resource agreement
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providing a process for making energy development decisions, individual energy
projects would proceed without Federal approval. Since no Federal action would
occur, the existing guarantees of environmental review and public participation
under NEPA would be lost. Concerned tribal community members and communities
adjacent to the project would lose the mechanism that they have now to make their
voices heard.
Another piece of H.R. 6 (Sec. 2028) requires the Interior Secretary to approve applications for permits to drill within as little as 10 days of completion, restricting
the ability of Federal land managers to provide the environmental review and public
participation required by NEPA. Finally, Sections 1808 and 2014 would allow oil
and gas companies to conduct their own NEPA analysis of proposed projectsand
reimburse the companies for doing so. The bill offers no criteria to ensure that analyses would be unbiased and objective. Rather than viewing NEPA as a useful tool,
proponents of these provisions see NEPA as an obstacle to drilling more public lands
as quickly as possible. Our public lands can help meet our energy needs and almost
90 percent of them in the Rocky Mountain West are open for development. NEPA
is the way to ensure that this development is done right.
I urge Members of the Committee to work to keep energy legislation clean of provisions that compromise environmental protections and public participation. In addition to the provisions limiting the application of NEPA described above, provisions
in H.R. 6 that roll back important environmental protections include efforts to:
Weaken the Safe Drinking Water Act by prohibiting hydraulic fracturing fluids
from being considered pollutants of drinking water. (H.R. 6, Sec. 327)
Undermine the Clean Water Act by exempting from the stormwater requirements all oil and gas construction activities, including construction of roads, drill
pads, pipeline corridors, refineries, compressor stations, sweetening plants, etc.
(H.R. 6, Sec. 328)
Take authority for health and safety reviews of new oil refineries away from
the state and local officials who are closest to the needs of their communities away,
also, from the Environmental Protection Agency experts in public health and hand
that authority over to the Energy Department, whose primary concern with refineries is that they maximize output. (H.R. 6, Secs. 37179)
Allow more smog pollution for longer than the current Clean Air Act authorizes. Under the existing Act, areas that have unhealthy air are required to reduce
ozone-forming smog pollution by strict statutory deadlines. If these areas fail to
meet these deadlines, they are given more time to clean up, but must adopt more
rigorous air pollution controls. The bill attempts to allow polluted areas to have
more time to cleanup but without having to implement stronger air pollution controls, placing a significant burden on states and communities down-wind of the
urban areas subject to this provision. (H.R. 6, Sec. 1443)
Mandate that the Interior Secretary provide compensation to Federal lessees
in instances where the lessee claims that he or she is not being allowed to either
explore for or develop a Federal lease . . . in the lawful manner requested by the
lessee . . . , if the government has failed to act on a drilling permit application
within a certain period of time. Leases relinquished under this provision are available for future sale, and can be re-purchased by the former lessee. (H.R. 6, Sec.
2054)
Most of these provisions appear to have been left out of the energy bill being considered by the Senate Energy and Natural Resources Committee. I urge you to fight
to keep these provisions out of the final legislation and help ensure that energy development moves forward in a way that identifies and addresses its adverse impacts.
WE CAN INCREASE DOMESTIC ENERGY PRODUCTION WITHOUT WEAKENING
ENVIRONMENTAL PROTECTIONS
Energy exploration and drilling is already skyrocketing in the Rocky Mountain

West. Numerous leases and drilling permits are going unused. Nearly 73 percent
of the total acreage under BLM oil and gas leases is not in production. In the Rockies alone, BLM data reveal that, while more than 34 million acres have been leased
to industry, only 11 million acres32 percentare in production. BLM has been
issuing record numbers of drilling permits. The BLM approved 6,130 permits in
FY04, up from 3,802 permits in the previous fiscal year. Many of these permits remain unused. In the Rockies, BLM data show that 2,489 new wells were drilled in
FY04, leaving over 3,000 approved permits in the region unused.
One reason for the unused permits may be the limited availability of drill rigs.
Industry has exhausted available drilling equipment in North America. Harden,
Blaine, Gas-Drilling Permits in Rockies Outstrip Ability to Tap Resource, Wash-
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ington Post (April 28, 2005). There is also an acute shortage of gas-field workers.
Charlie Ware, who directs an industry-sponsored school to train field workers in
Wyoming, reported that energy companies have told us that they need 1,000 new
workers a year for the next 5 years to drill the leases that are out there right now.
Id. These numbers demonstrate that, contrary to industry complaints, permitting is
not blocking access to oil and gas on public lands.
Environmental review and public participation may cost money, but it is a necessary cost of doing business on public lands. Energy company profits are doing just
fine. In the last quarter, Exxon Mobils profits were up 44 percent, to $7.86 billion,
from the corresponding quarter a year ago. Blum, Justin, Oil Majors 1st-Quarter
Earnings Shoot Up, Washington Post (April 29, 2005). Other oil companies profits
are surging as well. Theres an embarrassment of riches now that is unavoidable,
said Lawrence J. Goldstein, president of the New York-based Petroleum Industry
Research Foundation, Inc. Id. At its annual meeting on May 17, 2005, Questar reported that its shareholders had realized a 141 percent gain since 2002. As industry
itself has said, we can increase domestic energy production and protect the environment at the same time. NEPA is the way to do that.
CONCLUSION
Limiting public involvement and weakening environmental review will not avoid
controversy or improve projects. Using NEPA to address a projects negative impacts
on surface owners and communities will do both. At a time when increasing demands are being made on our public lands and our shrinking open space, NEPA
is needed now more than ever. I remain inspired by the positive vision at the heart
of NEPAit is a future where man and nature can exist in productive harmony.
It is a future where our valuable public lands serve diverse interests. I hope that
this is a vision that you all share and will fight for as well.
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125
STATEMENT
OF
RONALD E. HOGAN, GENERAL MANAGER, QUESTAR EXPLORATION

PRODUCTION COMPANY
AND
Good morning. I want to thank you for this opportunity to discuss what I believe
is one of the nations most pressing issues, specifically, what the domestic oil and
gas industry is doing to meet our nations growing energy needs and some of the
challenges we as an industry face in meeting those needs in a safe and environmentally responsible manner.
My name is Ron Hogan, General Manager for the Pinedale, Wyoming Division of
Questar Market Resources a subsidiary of Salt Lake City-Based Questar Corporation, a $5.7 billion natural gas-focused energy company. I am an engineer by training, have worked with Questar for 17 years and have supported the Pinedale project
for 5 years.
Questar is an independent energy producer committed to responsible development
of natural gas throughout the Rocky Mountain West and in other producing basins
in the country. This year Questar affiliates will safely produce more than 150 billion
cubic feet equivalent net of natural gas and liquids and provide reliable, domestic
energy in the form of natural gas to more than 800,000 customers in Utah, Wyoming and Idaho.
Im here today to share a personal account of the significant effort Questar is expending to develop natural gas reserves at one of the largest and most important
natural gas fields in the Lower-48the Pinedale field in western Wyoming. Specifically, Id like to describe our efforts to obtain permission to modify our operations
in order to reduce our environmental impact to levels substantially below existing
regulations, while increasing worker safety and stabilizing our contribution to the
local economy.
Before I proceed, Id again like to thank this committee for hosting this forum.
The abundant and reliable domestic energy resources our country enjoys are clearly
very important to our economy and our national security.
Our approach to the project, including some of the special technology and innovative solutions Ill describe shortly, may or may not be applicable to other oil and
gas development projects, but perhaps our experience can help this committee understand the challenges facing the domestic oil and gas industry in todays complex
regulatory environment.
PINEDALE OVERVIEW AND PREVIOUS OPERATING CONDITIONS
Pinedale is a small, dynamic community in Sublette County, Wyoming with a population under 2,000. Located about an hour south of Jackson Hole in the upper
Green River Basin, Pinedale is known for its rich outdoor recreational opportunities,
stunning natural beauty and western hospitality.
Recently, Pinedale and the surrounding area has become known as much for
whats beneath the ground as for whats on the surface. According to current estimates, there are over twenty trillion cubic feet of recoverable natural gas in the
Pinedale anticline, which is about one years supply of natural gas for the entire
country. In fact, natural gas from this subsurface geological feature currently provides more than two percent of the nations entire natural gas supply, a figure that
will increase in future years as the field is developed. Its also useful to note that
there is sufficient clean natural gas in this country to meet our energy needs for
generations to come. The only question is whether or not we have the determination
and will to recover it in an environmentally responsible way.
Questar knows Wyoming and Pinedale well. Weve been exploring for, producing,
transporting and distributing natural gas in the State for more than 80 years and
drilled our first well in Pinedale in 1963.
Early wells at Pinedale were pretty anemic. We knew there was lots of gas in the
ground, but we couldnt figure out how to get it out. Technological advances in the
early nineties allowed economic recovery of gas from so-called tight gas sand reservoirs, spawning a dramatic increase in development of unconventional natural gas
accumulations that were previously deemed uneconomic. By 1997, we began to realize Pinedales true potential, but since most of our leasehold there was on Federal
land the environmental impact of our activity needed to be throughly evaluated before we could begin full-scale development.
In July 2000, the Pinedale field office of the Bureau of Land Management published an environmental impact statement and a record of decision that outlined the
guidelines and restrictions for oil and gas exploration and development on the
Pinedale anticline. This record of decision was the result of a comprehensive process
under the national Environmental Policy Act that included signficant public involvement. Questar participated in this process and, even though our leases date back
to the early 1950s and were not issued with any restrictions or stipulations, we
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agreed to develop our Pinedale acreage in a manner consistent with the established
restrictions.
Among the many guidelines imposed by the record of decision was a restriction
that prohibited drilling operations during winter months to minimize possible disruption to wintering deer herds, other wildlife and their habitat.
To meet these restrictions, Questar was forced into a condensed, summer-only
drilling and construction schedule. This required us to operate as many as fifteen
drilling rigs at once to drill only twenty-five wells during the summer season. Under
these restrictions, we projected it would take nearly two decades just to fully develop the gas reserves available on our acreage, thereby significantly delaying the
delivery of a much needed gas supply to our customers.
While operating within these restrictions, we witnessed some of the unintended
consequences of the summer-only drilling and construction schedule.
For instance, the shortened season made it unfeasible and cost-prohibitive to
apply available disturbance-limiting technologies like directionally drilling multiple
wells from a single well pad.
Also, it was difficult for us and our contractors to hire, train and retain quality
employees due to the seasonal, part time nature of the work. This, in turn, created
an annual boom-and-bust economic impact on the local economy as employees and
contractors flooded the area in the summer during the height of the tourism season
and disappeared in the winter months when local businesses could most use the revenue.
Perhaps most importantly, winter restrictions made better environmental mitigation measures economically unattractive or, in many cases, physically unattainable.
For instance, the seasonal activity required us to use more well pads to quickly drill
vertical wells, thereby creating more surface disturbance over a longer period of
time and making it difficult to manage impact on wildlife and habitat.
We did not feel these unintended consequences were the goal of the Bureau of
Land Managements record of decision. Therefore, Questar voluntarily offered to the
BLM to engage in a multi-year, multi-million dollar effort to explore ways that we
could:
Leverage the benefits of new technology;
Minimize environmental impacts;
Enhance the safety of operations;
Stabilize impact on the local economy; and,
Meet or exceed the established goals for protection of local wildlife and habitat.
RATIONALE FOR YEAR ROUND OPERATIONS
The first step in our effort was to submit a request to the BLM for a permit to
operate one drilling rig during the winter of 20022003. This very limited, one-year
request would allow us to gain valuable scientific data and technical insight into
whether a year round development approach could help avoid the unintended consequences of summer-only restrictions.
In addition, we also voluntarily agreed to fund a study that would help determine
the real impact, if any, of natural gas development on wintering deer populations.
Since there was virtually no scientific data available, this study independently conducted by biologists from the University of Wyoming and Wyoming Game and Fish
would provide information wildlife managers needed to make science-based decisions in the future. Furthermore, the data gathered might open up new options for
beneficial wildlife and habitat mitigation programs.
Our request for an exception to the winter drilling restrictions was approved by
the BLM for the winter of 20022003, as was a similar request for a one rig, one
winter exception for 20032004.
On April 15, 2004, we formally submitted a comprehensive proposal for long-term
year round operations, with certain restrictions, on Questars acreage. This proposal
was based on thorough internal analysis, a track record in the field from two winter
seasons and newly available scientific data.
BENEFITS OF YEAR ROUND OPERATIONS
I want to provide some quick highlights of our proposal so you can get an idea
of the scope of our request.
First, we proposed investing more than $200 million in directional drilling
thats $200 million more than would typically be invested to develop this resource.
This directional drilling technology, common in offshore development, allows us to
reach multiple underground locations from a single pad, thereby greatly minimizing
surface disturbances and associated environmental impact. The benefits of directional drilling can only be realized by conducting drilling operations year round. Re-
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moving rigs each winter and reoccupying the same location the following spring
forces enlargement of the surface pads for safety and operational reasons, effectively
eliminating any benefits achieved from this costly approach.
Second, we proposed expanding both the scope and duration of the ongoing deer
study. Information gathered during winter operations should provide wildlife biologists, government officials and industry with the scientific data necessary to help
design energy development projects that minimize disruption to wildlife and habitats.
Third, we proposed building a $25 million water and condensate pipeline system. These pipelines would gather and transport the produced water and condensate a liquid hydrocarbon very similar to gasoline that comes out of the ground with
the natural gas off the winter habitat area. This pipeline system eliminates the
need for transport of these products by tanker trucks which, in the absence of the
pipeline, would have to visit the field year round, traveling through the middle of
wildlife habitat and the local community. In fact, we estimate that at peak production from just our acreage, this system will eliminate more than 25,000 tanker truck
visits in a single year. The result will be a significant reduction in traffic and air
emissions from levels originally anticipated by the BLM.
Fourth, we eliminated the need for flaring during our well completion operations. Flaring is used to clean up the production stream from new wells to remove
the water and sand we use during the completion process. We figured out a way
to trap all the water and sand in closed containers while sending the gas straight
to the sales pipeline, thereby eliminating noise and likely additional local air quality
impacts.
Lastly, we invested in the little things essential for a safe and responsible operation. These included busing our contractors employees during the winter months
and trucking necessary materials in bulk to the rigs in the fall to decrease traffic
in wintering wildlife areas.
In summary, our proposal included investments of more than $200 million in onsite mitigation and outlined an approach that was scientifically based and field-tested. These investments further minimize the environmental impacts of our development and offer substantial benefits over the restrictions imposed by the 2000
Pinedale record of decision.
NEIGHBOR-2-NEIGHBOR APPROACH TO PUBLIC INVOLVEMENT
To facilitate a thorough review and analysis of our proposal we worked closely

with local BLM officials, biologists and experts from Wyoming Game and Fish and
other elected and appointed officials. We received formal support of our proposal
from Wyomings Governor Dave Freudenthal, the Wyoming Game and Fish Department, U.S. Senator Craig Thomas, Wyoming State Representatives Monte Olsen
and Stan Cooper, Pinedale Mayor Rose Skinner, as well as the Sublette County
Commissioners, the North American Grouse Partnership and Trout Unlimited.
We also recognized that the Pinedale community needed to be involved in the decision-making process. In November of 2003, nearly 6 months before formally submitting our proposal to the Bureau of Land Management, we launched our Neighbor-2-Neighbor outreach program. This effort operated on a simple premise we
would meet anytime, any where with anyone to discuss our plans, lay out the rationale of our proposal, listen to feedback, and work cooperatively to identify opportunities to make our proposal even better.
We also recognized that in order to establish trust and credibility, the people actually responsible for implementing the project needed to be actively involved and visible in the community.
By the time we formally submitted our proposal in April 2004, we hosted more
than 150 discussions and met with more than 500 interested stakeholders. These
meetings not only allowed us to share timely information, they also generated new
ideas that were incorporated into our proposal. For instance, building the condensate and water pipelines and including flareless completions as part of our efforts
were, in large part, due to input received from local community members.
We found this proactive approach, which went above and beyond mandated requirements for public involvement, allowed us opportunities to establish stakeholder
relationships, correct any misperceptions that existed and educate everyone on how
best to share their feedback with officials tasked with making the final decision.
CURRENT STATUS AND FINAL THOUGHTS
In November 2004, the Bureau of Land Management officially approved our request for site-specific, limited year round operations with six rigs drilling wells from
three surface pads during the winter. With this approval, we are now working to
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deliver the many benefits I described earlier, including: Reduced surface disturbance, reduced duration of drilling operations, reduced environmental impact, generation of beneficial scientific data, enhanced safety and stabilized impact on the local
economy.
I am proud of Questars Pinedale project. Our company has committed to invest
over $200 million dollars to achieve benefits significantly above and beyond those
required by existing regulations. Many of our employees, including myself, have
spent thousands of hours and have stepped way outside normal roles and responsibilities.
But even with this commitment, our proposal is constantly at risk of not becoming
a reality. We continue to get bogged down in a complex web of overlapping jurisdictions and a maze of regulatory requirements that many times simply defy logic.
When you add to the equation those that take advantage of regulatory complexity
to delay, litigate and obstruct any energy development project, at times its tempting
to give up. But we dont want to, because the benefits of successful implementation
of this project are a win-win for the environment, the community, and the nation,
which desperately needs the benefits of domestically developed clean natural gas.
On behalf of Questars entire Pinedale project team and our neighbors in Wyoming, thank you again for this opportunity.
STATEMENT
OF THE INDEPENDENT
PETROLEUM ASSOCIATION
OF
AMERICA
This Testimony is submitted on behalf of the Independent Petroleum Association

of America (IPAA). IPAA represents petroleum and natural gas producers, the segment of the industry that is affected the most by permitting delays associated with
oil and natural gas exploration and production energy projects.
Before presenting specific information on energy permitting, it is important to understand the nature of domestic oil and natural gas exploration and production and
the role of independent producers. Independent producers are companies that explore for and develop oil and natural gas. Typically, they only operate in these aspects of the petroleum and natural gas industries. There are approximately 7000
independent producers who are predominately small businesses employing an average of 12 employees each. However, they drill approximately 90 percent of the nations oil and gas wells.
Domestic petroleum and natural gas production has changed over the years, particularly since the mid-1980s. Maturing production areas in the Lower-48 states and
the need to respond to shareholder expectations have resulted in major integrated
petroleum companies shifting their exploration and production focus toward the offshore in the U.S. and into foreign countries. More and more, these large companies
must rely on large producing fields that are found only in frontier areas. Consequently, the role of independents is increasing in both the Lower-48 states and
in the near offshore areas. For example, the independents share of Lower-48 states
petroleum production has increased from 45 percent in the mid-1980s to over 60
percent by 1995and these states, despite their mature fields, still account for 60
percent of domestic oil production. Similarly, independent producers account for 85
percent of overall domestic natural gas production. These trends will continue. The
nation will need a strong independent exploration and production industry to meet
it future needs.
IPAA supports efforts by the Committee on Environment and Public Works to review the permitting process for energy projects. Specifically, it is important to recognize that the permitting process on Federal lands is a mosaic of regulatory programs
that require critical coordination between different Federal agencies and in many
cases involve different laws that task these agencies with different agendas. These
competing agendas need to be coordinated if the Nation is to meet its energy objectives. Overlaying all of these individual laws is the National Environmental Policy
Act (NEPA) that sets vague requirements for the consideration of environmental
issues within the Federal permitting process. One key objective of NEPA is the task
of assuring adequate stakeholder participation in the Federal decisionmaking process. This is an important and essential objective. However, because the NEPA process has largely been defined by Executive Orders, rulemakings, and judicial decisions, it has become an unwieldy and uncertain process. Moreover, it is essential
that Congress reiterate that its purpose is to assure stakeholder participation not
the prevention of decisions.
In this context IPAA is concerned about several comments included in the testimony by the Natural Resources Defense Council (NRDC) that mischaracterizes several provisions in the House passed Energy Policy Act of 2005 (H.R. 6).
For example, NRDC states:
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Section 2055 of H.R. 6 as passed the House aims to eliminate the NEPA process, rather than improve it. The provision, promoted by Rep. Peterson (R-PA),
provides that numerous oil and gas activities on public lands shall not be subject to review under NEPA. The provision includes well pads less than 5 acres
in size, increasing the number of wells in an existing field, disposal of water
from coalbed methane drilling and seismic exploration. The provisions scope is
sweeping. BLM has approved over 30,000 new wells in Montana and Wyomings
Powder River Basin alone. As one BLM official noted, Most of our drill pads
are less than 5 acres. Our average is less than 3 acres.
IPAA believes that this section actually limits NEPA only for seven specific situations all but one of which have already been through the NEPA process. The one
exception would be water discharged through an NPDES permit, an action that requires its own permit review process. In the other cases there would be at least one,
if not two, NEPA analyses conducted. For example, in the 5 acre case, the Resource
Management Plan (RMP) for the area would have been done under NEPA. In most
cases the leasing decision would be subjected to a second NEPA review. Later, in
its testimony, NRDC refers to the issuance of over 6000 Applications for Permits
to Drill (APDs) in 2004. Implicitly, NRDC argues that each of these should have
still one more NEPA review. Once (RMP) should be enough; two (leasing) becomes
overkill; three (APD) is clearly an effort to delay. This type of effort to use NEPA
to delay action goes well beyond the intent to assure that stakeholders positions are
understood by the Federal decisionmaker; it hopes to use the NEPA process to prevent action.
Further in its testimony, NRDC states:
Another piece of H.R. 6 (Sec. 2028) requires the Interior Secretary to approve
applications for permits to drill within as little as 10 days of completion, restricting the ability of Federal land managers to provide the environmental review and public participation required by NEPA.
This comment is actually pointed at Sec. 2027. What really happens is that BLM
would have 10 days after an APD is submitted to tell the applicant if it is complete
or not. If it is complete, the Bureau of Land Management (BLM) would have 30
days to issue or defer issuance if additional information (e.g., NEPA documents) is
needed. If additional information is needed, it must be submitted in 2 years. When
the additional information is submitted, BLM would have 10 days to issue the permit. Clearly, this section was drafted with the idea that NEPA had to be met to
allow the APD action to take place.
NRDC goes on to state:
Sections 1808 and 2014 would allow oil and gas companies to conduct their
own NEPA analysis of proposed projectsand reimburse the companies for
doing so. The bill offers no criteria to ensure that analyses would be unbiased
and objective.
This comment misstates the issue. What has happened is that BLM has not had
adequate funds to do all its NEPA documents. Instead, producers have had to pay
for the NEPA documents to get their permits. The documents are done under BLM
standards at BLM direction. Companies provide the money but do not control the
process. Sec. 20141 would allow them to recover these costs through reduced royalties if the project is successful. In passing NEPA in 1970 Congress decided that
NEPA documents were a Federal responsibility; however, to meet this responsibility
there must be funds available to the agencies. Adequately funding BLM would
eliminate the need for this provision.
NRDC concludes this paragraph with the following comment:
Our public lands can help meet our energy needs and almost 90 percent of
them in the Rocky Mountain West are open for development. NEPA is the way
to ensure that this development is done right.
This statement reflects a common NRDC misstatement. It refers to a study conducted by the Department of Interior under the Energy Policy and Conservation
Act. What this study really says is that about 12 percent of natural gas reserves
underlie parks and wilderness areas. It then identifies that another 25 percent is
constrained by stipulations at the leasing stage. It does not address stipulations at
the permitting stage.
No one is suggesting the NEPA should not apply. The broader issue, however, is
whether NEPA is being done right or being abused. As the Congress grapples with
the need to balance effective stakeholder participation in the Federal decisionmaking process and the need to produce its national resources, it should look be1 Section
1808 relates to geothermal operations, not oil and gas.
130
yond the broad objectives of NEPA. It needs to consider the application of NEPA
in the real world of the Federal permitting process, in a world that puts conflicting
mandates on the consenting and concurring agencies. It needs to grapple with this
mosaic of laws and regulations and seek ways to improve the decisionmaking process. All the stakeholders need to be heard, but no stakeholder should be able to stop
the process through manipulating it.
IPAA appreciates the opportunity to submit this testimony.
STATEMENT
OF
SUSAN NICKERSON, DIRECTOR, ALLIANCE TO PROTECT

NANTUCKET SOUND
Senator Inhofe and members of the Committee, thank you for this opportunity to
submit testimony to the Committee regarding the need for streamlining the siting
and review process for power projects. Improving the efficiency and effectiveness of
the procedures for reviewing energy projects is an important goal, which we support.
However, the most efficacious way to streamline the review process in a manner
that respects and protects the environment is by first requiring a thorough environmental analysis of the technology and a general siting assessment, so that agencies
and developers of site-specific projects can rely on programmatic decisions and a
general data base that eliminates sites that are unacceptable, sets standards to
guide decisions and provides the basis for accelerating the review of individual
projects. This approach is tried and true in energy project contexts such as offshore
oil and gas and offshore wind, and it is essential in situations where Federal land
and resources are to be used for the power projects involved. The Bureau of Land
Management fully understands the value in such an approach, and has effectively
implemented it in the context of on-shore wind energy development.
Unfortunately, the lessons learned from these approaches have been lost on the
U.S. Army Corps of Engineers, which is currently implementing an unstructured,
ad hoc, highly controversial and contentious process in the context of offshore wind
energy in New England. This issue is extremely important to Cape Codders, where
we face a substantial threat by Cape Wind Associates (CWA), the private developer
testifying here today, to develop a massive marine industrial facility in the middle
of Nantucket Sound without adequate review or protections for the public trust.
Concerned citizens living on Cape Cod and the Islands established our organization, the Alliance to Protect Nantucket Sound (APNS), in 2002 to oppose development in the Sound and to fight for its long-term protection and conservation. Motivated by its desire to take advantage of the unique physical characteristics offered
by Nantucket Sound that would allow it to maximize its profit margin, CWA has
attempted to downplay or ignore the numerous other unique ecological, cultural,
economic, historic, and scenic values those very same physical characteristics generate and support. CWAs proposed development will irreparably harm these very
values, a fact which CWA has attempted to downplay, ignore or hide during the entire review process.
CWA has complained before you today that there is no end in sight to the review
process it is undergoing, that its review has been thorough and extensive, and that
the existing system allows project opponents to employ dilatory tactics. In fact, this
is a problem largely of CWAs own creation. Its choice to develop the nations first
and the worlds largest offshore wind energy plant in the middle of one of the nations most prized marine ecosystems, through a process that virtually every other
knowledgeable party agrees is inadequate, under the jurisdiction of an agency that
itself admits to having insufficient expertise set it down a bumpy path of uncertain
duration.
On November 21, 2001, knowing that Congress had not authorized the development of offshore wind, CWA nonetheless applied to the Corps for a permit to construct its wind energy power project on Horseshoe Shoal in Nantucket Sound. CWA
attempted to locate its plant entirely within Federal waters, so that the Commonwealth of Massachusetts would have little control over the project, despite the incredible importance of the Sound to the Commonwealths economy. Nantucket
Sound has, in fact, been under consideration at various times for national marine
sanctuary status, beginning in 1980 and remaining today on the list of candidate
areas. The Commonwealth designated the surrounding state waters as a State marine sanctuary more than thirty years ago and prohibited therein the development
of power plants and other structures that would alter or endanger the ecology or
appearance of Nantucket Sound. Despite the obvious intent of the Commonwealth
to protect Nantucket Sound, [a]fter extensive analysis and long review of sites and
conditions, CWA somehow identified the area as an ideal location for industrial development.
131
The primary vehicle for CWAs thorough and extensive analysis is an 1899 law
administered by the Corps regulating impediments to navigation. This century-old
law is the sole source of authorization CWA intends to obtain a massive proposed
power facility, which would consist of 130 417-foot tall wind turbines laid out in a
grid spanning 24-square miles of Federal waters. Nothing in the statute addresses
energy development, and indeed, no statute or regulation at all relevant to using
public lands or energy development appears to apply to the proposed project. The
Federal Government has not authorized CWA to use the outer continental shelf
(OCS) for its proposed development, and the Corps itself admits that it has no
power to grant any entity a property right to use the OCS.
Rather than suspending review of the application, the Corps has been in the process of reviewing the project and conducting an environmental impact statement
under the National Environmental Policy Act (NEPA).1 From the outset of the
NEPA process, the Corps has allowed CWA to dictate the review process, including
determining the purpose and need for the project, the scope of the alternatives analysis, and the scope of the studies required. The consequences of allowing CWA to
dictate the process were evident in the draft environmental impact statement
(DEIS) generated by the Corps. In fact, contrary to CWAs testimony, most did not
praise the depth and detail of the DEIS, but instead complained about the numerous deficiencies in the document. For example:
U.S. Environmental Protection Agency:
We do not believe that the DEIS provides enough information to fully characterize baseline environmental conditions, the substantial environmental impacts
of the proposed project, and alternatives that avoid or minimize those impacts.
Without this information we do not believe an adequate mitigation and monitoring plan can be developed, nor can a decision be made as to whether the
project is environmentally acceptable or in the public interest.
[W]e recommend that the Corps prepare a supplemental DEIS.
U.S. Geological Survey:
In many cases conclusory statements regarding environmental impacts of
the proposed [CWA project] cannot be supported by the data collected and analyses done. While some sections appear to have been done reasonably well, others are not and in certain regards the DEIS is at best incomplete, and too often
inaccurate.
U.S. Fish and Wildlife:
[W]e believe this DEIS is insufficient to provide the information necessary
for the Corps to make a decision in the public interest.
Based on our review, significant additional information needs to be developed
to assess the impacts of the proposed action on resources under our jurisdiction
and expertise, and to identify actions which will adequately address those effects. This may be best accomplished through a Draft Supplemental Environment Impact Statement for public review.
Cape Cod Commission:
The Commission Subcommittee has a variety of concerns about the analysis
and methodology employed in reaching conclusions in the DEIS/DEIR. This results in many questions regarding the validity of the conclusions reached and
the appropriateness of the study. The Commission Subcommittee concerns can
be grouped into the following areas: IncompleteFlawed Assumptions; Lack of
independent assessmentlack of transparency; Balance of conclusions; and
Lack of quantitative information.
[I]t is the recommendation of the Subcommittee that a SUPPLEMENTAL
DEIS/DEIR be prepared . . .
Attorney General Tom Reilly:
A similar point can be made about the sufficiency of the existing regulatory
process. Proponents point to the lengthy environmental review process that is
underway. But the length of the process cannot make up for the flaws that lie
1 Despite
the lack of authorization, the Corps has explained its position as follows:
Our regulations specify that we do not get involved in property rights issues. It is the applicants responsibility to ensure they have the necessary property rights. It is not our responsibility to tell them what property interests they need to acquire. So we did not spend any time
researching that issue any further. Our regulations are clear that we do not address property
rights issues. It may be thats an issue that needs to be addressed in the legislative branch of
government. That if in fact there is a gap that the people perceive, that is something that the
Congress will need to decide whether or not they want to address it.
Massachusetts Technology Collaborative Meeting, (Jan. 8, 2005).
132
at its core. The current process includes no prospective planning of where we
as a societywant to put our off-shore wind farms.
In sum, the DEIS is an inadequate document, that resulted from a flawed process, that was based on an invalid understanding of the underlying law.
Massachusetts Division of Fisheries & Wildlife:
The amount and design of the fieldwork conducted was insufficient to demonstrate avian use of the waters and airspace of Nantucket Sound, much less
to evaluate risk.
The analyses (e.g., passage rates, facility rates, radar work) as presented in
the DEIS-DEIR are cursory, simplistic, and sometimes inaccurate. At times the
calculation methodology is not transparent, and some calculations contain procedural/mathematical errors that generally result in (sometimes vast) underestimates of bird use in the area.
Massachusetts Audubon:
Adequate information has not been provided on some key aspects of avian,
bat, and marine impacts . . . Much of the data that is presented is characterized by insufficient or flawed analysis.
Additional information should be provided and the public should be given the
opportunity to review and comment on material through a Supplemental DEIS
. . .
The Humane Society of U.S.:
Much more data and analysis than were provided in the DEIS/DEIR are necessary to determine whether Nantucket Sound is an appropriate location for one
of the nations first offshore wind farms. We believe that, at a minimum, a supplemental DEIS/DEIR is required.
Sierra Club Massachusetts Chapter:
The Club believes that the Army Corps of Engineers has done a reasonable
job in pursuing a rigorous and comprehensive process for a project area that
lacks Federal and state guidelines. However, because of this lack of guidelines,
the regulatory framework the Corps currently has available for siting and permitting offshore wind facilities is nowhere near a full-fledged and adequate
process.
The DEIS does not carry out a sufficient analysis of alternatives to the proposed project.
The Cape Wind project should not be grandfathered but be subject to the
process as the process evolves . . .
The review of CWAs proposed project is a model of agency mismanagement. It
demonstrates the hazards of proceeding in an ad hoc manner, without an adequate
regulatory regime in place, and without an overarching environmental review of the
technology proposed for development. It is also precisely the approach one should
take if a process fraught with controversy, delay, and confusion is sought. By allowing a project applicant to dictate the scope of review, the Corps has produced a document that undermines the publics faith in the Federal review process, will require
substantial additional work to comply with NEPA, makes possible a decision that
will have serious adverse environmental and economic consequences, and fundamentally hinders the development of an industry of substantial potential and importance
to the nation.
What is required is, first and foremost, is authorization for the type of development involved. The approach currently considered for this purpose in H.R. 5, the
House energy bill, is not adequate for this purpose because it fails to provide for
adequate standards and includes special interest legislation that would accord favored treatment to the Cape Wind project itself. Second, to streamline the review
process, it is critical that a programmatic review of the type of development involved
be conducted before individual projects are considered. The advantages of this approach manifold. As Conservation Law Foundation has noted in the context of offshore LNG facilities on May 5, 2004, an ad hoc approach has not been effective
and will continue to founder. It has pitted New England communities against one
another in wrestling with the merits and the risks of specific proposals. The most
appropriate vehicle for such a review is the development of a programmatic environmental impact statement under the National Environmental Policy Act, which
is used to evaluate broad actions geographically (e.g., by region) or generically (e.g.,
common timing, impacts alternatives), and anticipates that connected, cumulative
or similar actions should be evaluated in a single EIS. CLF believes that undertaking a regional approach to LNG terminal siting represents an important opportunity to address this controversial issue in a strategic manner and propel consideration beyond the current, site-specific, polarized siting debates.
133
BLM has reached the same conclusion with respect to onshore wind:
The proposed Wind Energy Development Program policies would establish a
comprehensive mechanism for ensuring that the impacts of wind energy development on BLM-lands would be kept to a minimum . . . These elements of the
program, along with the proposed amendment of land use plans, would likely
result in shorter time lines and reduced costs for wind energy projects, thereby
facilitating development.
In terms of facilitating wind energy development, implementation of the proposed action is expected is expected to minimize some of the delays that currently occur for wind energy development projects and reduce costs. In addition,
the proposed program would ensure consistency in the way [right-of-way] application and grants for wind energy development are managed. These benefits
would be realized as a result of the emphasis onsite-specific and species-specific
concerns during the project-level environmental analyses, the amendment of numerous land use plans to address wind energy development, and the potential
to tier future NEPA analyses off of this PEIS and decisions in the resultant
[record of decision].
This approach is no less necessary with offshore wind energy development. With
a structured regulatory regime and programmatic review comes certainty and efficiency. Both are needed to encourage development. The Cape Wind project might
have come to symbolize the promise of offshore wind energy, but it has instead set
back the development of offshore wind energy for years. This is because, as Cape
Wind has testified to this Committee, it is trying to fast-track the review of its own
project, to the detriment of the environment and the kind of programmatic review
that would protect special places like Nantucket Sound while identifying the appropriate locations for such development and establishing the framework for expedited,
efficient, site-specific decisionmaking. This Committee can help rectify this problem
by ensuring that the development of natural resources for energy purposes proceed
in a systematic, structured and efficient manner. The result is not to weaken or exempt projects like Cape Wind from our hallmark environmental laws, as they desire, but to return to the principles of Federal land and ocean management that
have been developed over the decades, but are being ignored by the Corps and
avoided in the offshore wind context. The Alliance pledges its support for establishing such a program.

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Senate Hearing, 109TH Congress - Oversight Hearing To Review The Permitting of Energy Projects

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S. HRG.

OVERSIGHT HEARING TO REVIEW THE

MAY 25, 2005

U.S. GOVERNMENT PRINTING OFFICE

For sale by the Superintendent of Documents, U.S. Government Printing Office

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

MAY 25, 2005

OVERSIGHT HEARING TO REVIEW THE

OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR

Senator VITTER. Thank you very much, Mr. Chairman, and

HON. DAVID VITTER, U.S. SENATOR

This is a very significant committee hearing. Before you leave, I

HON. JAMES M. INHOFE, U.S. SENATOR

Senator INHOFE. With that, let me just go over who we have

Mr. ROBINSON. Mr. Chairman, thank you very much. My name

Mr. DUFFY. Thank you, Mr. Chairman. My name is Dennis J.

OF HON. JOHN W. WARNER, U.S. SENATOR FROM

Senator INHOFE. Thank you, Senator Warner.

HON. LINCOLN CHAFEE, U.S. SENATOR FROM

Thank you, Mr. Chairman.

Senator INHOFE. Thank you, Senator Chafee.

Ms. BUCCINO. Good morning. My name is Sharon Buccino. I am

HON. JAMES M. JEFFORDS, U.S. SENATOR

Senator INHOFE. The next would be Senator Isakson. I have

HON. BARACK OBAMA, U.S. SENATOR

Mr. Chairman, thank you for holding this hearing today.

J. MARK ROBINSON, DIRECTOR, OFFICE OF ENERGY PROJECTS,

My name is J. Mark Robinson and I am the director of the Office of Energy

DENNIS J. DUFFY, VICE PRESIDENT OF REGULATORY AFFAIRS,

I Appreciate this opportunity to address the Committee. My name is Dennis J.

Energy exploration and drilling is already skyrocketing in the Rocky Mountain

RONALD E. HOGAN, GENERAL MANAGER, QUESTAR EXPLORATION

To facilitate a thorough review and analysis of our proposal we worked closely

This Testimony is submitted on behalf of the Independent Petroleum Association

1808 relates to geothermal operations, not oil and gas.

SUSAN NICKERSON, DIRECTOR, ALLIANCE TO PROTECT

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