We are a company committed to complying with and, when
possible, exceeding government-established environmental standards. We seek to
continually monitor, assess and improve our environmental performance. We also seek to foster strong working
relationships with the local, state and federal agencies that monitor our
environmental stewardship.
Finally, we believe we have a dual responsibility to
protect our natural resources and to provide safe, reliable and reasonably
priced power and gas transportation services. The company will, therefore,
bring to any emerging environmental policy discussion the need for a sensible
balance between environmental gain and its resulting costs and resources.
The purpose of this testimony is to outline the
historical interpretation and the more recent philosophy and change of the U.S.
Fish and Wildlife Service (“USFWS”) in its informal and formal consultations
relating to protection of an endangered species believed to exist in areas
where Enogex conducts pipeline construction activities in Oklahoma and
Arkansas.
Background. Enogex and the oil and gas industry conduct a wide
variety of operations from construction of well pads and access roads to laying
gathering and transmission pipeline systems for the delivery of natural gas to
intra and inter-state markets. Enogex
conducts its activities in the majority of counties in Oklahoma and in numerous
counties in Arkansas.
In order to proceed with oil and gas construction
activities, Enogex requests applicable environmental clearances or informal
consultations relating to any endangered species that may be present in the
areas of the planned construction.
Enogex requests these clearances from the USFWS. An endangered species, the American Burying
Beetle (Nicrophorus americanus) (“ABB”) has been identified as existing
in Oklahoma and Arkansas.
The ABB was listed as endangered in 1989. At the time of listing it was believed that
there were only populations in Rhode Island and Oklahoma. As of 2002, populations are now known from
Rhode Island, Oklahoma, Nebraska, South Dakota, Kansas, Massachusetts and
Arkansas. The beetle is listed as
existing in 17 Oklahoma Counties and 4 Arkansas Counties. It is suspected in other counties in these
two states. (These known and suspected counties will be referred to as “the ABB
Counties”)
The ABB is a large beetle that ranges from 1 to 1.5
inches in length, has four red-orange spots on its wing covers, and is
distinguished by its larger size and its orange-red pronotum. The beetles are habitat generalists,
occurring in many different habitats.
They feed on carrion and lay their eggs in or adjacent to a buried
vertebrate carcass. It is suspected
that carrion availability in a given area is more important than the vegetation
or soil structure. The beetle is
typically active in Oklahoma and Arkansas from mid-May to mid-September. Adults are presumed to be an annual species,
fully nocturnal and are usually active only when nighttime temperatures exceed
60 F (15C). The remainder of the year
it hibernates. The ABB has been
recorded traveling as much as 2 miles per night.
Historical Treatment.
Historically, Enogex has
requested environmental clearances relating to any endangered species in the
ABB Counties from the USFWS in Tulsa, Oklahoma and Conway, Arkansas. Informal consultations relating to projects
being initiated in the ABB Counties have always resulted in a “no adverse
impact” finding by the USFWS. Such
clearances from the USFWS were typically determined within a few days to a
little more than a month with the responses generally provided within 30 days. Accordingly, projects received clearances
and were allowed to proceed without delay.
Enogex’s main construction activities relate to laying
gathering or transmission pipeline to connect producing natural gas wells to
its pipeline system to allow the produced natural gas to be marketed. To be competitive and allow Enogex the
ability to provide these services, wells must be connected efficiently and
without delay. It is not feasible to
begin the construction of the connecting pipeline until it is determined that a
well being drilled will produce in commercial quantities. Upon this determination, Enogex customers
expect and demand that the pipeline be constructed and placed in service
without delay to transport the natural gas produced to the market place. If Enogex is unable to predict and
understand the timing required to timely complete its construction, it cannot
be competitive and meet the expectations of the well operators, working
interest owners or royalty owners in the producing well.
Prior to late 2002, Enogex
submitted environmental clearance requests or informal consultations to the
USFWS for the ABB Counties and received clearances that either no endangered
species were present or, if present, the proposed project would have no adverse
effect on the ABB. During years 2000
through 2002, Enogex submitted 54 informal consultations to the Tulsa, Oklahoma
USFWS and 46 to the Conway, Arkansas USFWS and each time received the
clearances to proceed with the planned pipeline construction. A change in these clearances being granted
without comment began in July, 2002.
Initial Change in
Consultation Process. By letters dated July 16 and
18, 2002, Enogex was advised by the USFWS that two proposed pipeline projects
in Latimer County, Oklahoma were in the vicinity of where the ABB may
occur. The USFWS, at this time,
recommended that the pipeline projects be implemented outside the ABB’s active
period (early October through April) and thereby avoid impacts on the
species. If this recommendation was not
feasible, the agency recommended continuously baiting beetles away from the
project area using chicken parts or mice to ensure that beetles would not be
adversely impacted by the proposed projects.
The USFWS advised that if the proposed projects could be implemented
outside of the beetle’s active period or if the recommended baiting protocol
was followed, then the ABB would not likely be adversely impacted by the
projects. Therefore, no further Section
7 consultation would be needed.
Drastic Change in
Consultation Process. In October, 2002, in
response to requested informal consultations relating to pipeline construction
projects to connect two recently completed natural gas wells in Latimer County,
Oklahoma, Enogex was advised by USFWS of a drastic change in treatment relating
to the USFWS’s informal consultation policy relating to the ABB. The USFWS
advised that sufficient site-specific information on the occurrence of beetles
within the project areas was not available and that therefore the USFWS could
not provide an accurate assessment of the impacts of the projects on the
species. The USFWS recommended that
Enogex conduct a survey for the presence of the ABB in the project areas. The USFWS advised that the survey should be
conducted by a biologist with knowledge of the life history of the ABB and who
has a Section 10 permit from the USFWS to conduct such surveys. Due to the beetle being active only during
the warm summer months, the USFWS advised that the survey could only be
conducted between late April and early September. If beetles were observed, further Section 7 consultation would be
required.
If Enogex could not proceed
until after a survey in the summer, the connection of these newly completed
wells by Enogex would be delayed by at least 8 months. Enogex responded quickly to understand the
request and data that would be required to properly initiate a formal
consultation immediately. Enogex
retained a biologist to conduct field surveys.
It consulted with the EPA to determine what further information needed
to be provided to EPA so that a formal consultation could be requested. Enogex provided detailed project
information, construction protocol, operations and maintenance protocol,
geological survey maps, survey plats, storm water pollution prevention plans
and recently completed habitat surveys to the USFWS and EPA. The EPA formal consultation letter was
sent to USFWS on November 27, 2002. The
final Biological Opinion (“BO”) from the USFWS was received on January 23,
2003.
The BO issued by the USFWS
determined that after reviewing the current status of the ABB, the
environmental baseline for the action area, and the cumulative effects of the
proposed action, the projects were not likely to jeopardize the continued
existence of the ABB across its entire range.
No critical habitat has been designated for this species, therefore none
was affected. The BO provided numerous restrictions, implementation of
required terms and conditions relating to construction practices and
established a permitted take.
Immediate Effects of Change
to Pending Commercial Well Connects. As noted, these most recent
requests for consultations to the USFWS related to two recently completed
natural gas wells ready to produce natural gas to the market place. One of the wells was not connected to Enogex
and the connection was awarded to a competitor. This resulted in significant revenue loss to Enogex exceeding
$1,000,000 over the life of the well.
Additionally, because the delay prevented the natural gas in the well
from reaching the market, the well producer lost approximately $2,000,000. After receipt of the BO by Enogex and
extensive education and training to its operators and contractors, the second
well was connected to Enogex. The delay
in the treatment of the ABB consultation resulted in a loss to Enogex exceeding
$150,000. Additionally, the delay
caused the well producer to lose approximately $2,500,000 because the natural
gas in the well could not get to the market.
Future Implications. This recent change in treatment and approach of the
ABB by the USFWS is not based on any new data or science about the ABB. Instead, it is our understanding that this
change is based upon new interpretation of existing data differently from
previous reviews. Currently, the USFWS
is responding with a very aggressive approach for the purpose of preservation
of the ABB. Enogex has been informed
that all proposed construction projects located within the ABB Counties will be
exhaustively scrutinized and formal consultation initiated.
If a pipeline, oil and gas operator or other
construction company wishes to construct during the ABB hibernating season
(late September to late April) and the project triggers a federal nexus, the
company will be required to enter into formal consultation with the USFWS. The result will be the issuance of a
Biological Opinion that will state restrictions, construction practices and
permitted take of the species. Such
consultation, if not delayed, is required to be completed within 135 days after
the Formal Consultation is officially requested. A federal nexus trigger includes projects that exceed 5 acres of
soil disturbance, cross jurisdictional waters or involve mechanized clearing of
forested wetlands, and include all FERC regulated projects.
The USFWS has noted
construction activities presented to it for consultation in the ABB Counties in
2002 included pipelines, roads, cell towers, residential developments, bridges,
mining, petroleum production, sewer lagoons, commercial developments,
recreational developments, fiber optics, cable and electrical lines and water
treatment facilities. Clearly, the
implications of this new procedure and expansive interpretation of the ABB data
will have far reaching effects to any construction activity in these ABB Counties.
As noted, Enogex’s experience in the past is that it
took approximately 30 days to receive clearances to proceed with pipeline
construction. Under the new
interpretation, the USFWS has 135 days to complete the formal consultation. The most recent construction projects for
which formal consultations were entered into by Enogex took approximately 4
months to receive what the USFWS called “expedited” clearance.
In addition, Enogex has been required to hire a third
party biologist to survey the proposed project area for the presence of the
beetle. These surveys are time
consuming and expensive to complete.
Enogex estimates an average of $5,000 is incurred for each project in
order to provide data relating to the specific area and the presence or absence
of the ABB.
Enogex (and all effected parties) will be required to
expend enormous resources of time, energy and money to establish construction
programs, training, third party experts and to implement the expansive
conditions and requirements to meet the conditions now being imposed by the
USFWS in these areas. Such additional
costs and burdens must be questioned when it has not been established that
necessary preservation or recovery of the ABB will result.
It is also believed that this new, expansive approach
in the preservation philosophy by the USFWS in one district will be implemented
in other areas. Enogex has recently
been advised that this same process will be implemented in Arkansas.
Conclusion. Along with numerous oil and gas industry trade
associations such as Mid-Continent Oil and Gas Association, Oklahoma
Independent Petroleum Association, Gas Processors Association and Oklahoma Farm
Bureau, Enogex is seeking to address the USFWS’s procedural changes in the
protection of the American Burying Beetle.
Enogex believes that the first step needs to focus on whether the facts
present relating to the ABB merit this comprehensive and far reaching change in
consultations and clearances being granted.
After accurate and complete data is established then the measures
necessary to properly preserve this endangered species can be implemented. Until this step is undertaken and
accomplished, actions - such as the recent actions taken by the USFWS - only
tend to create unnecessary hardship on the agency and unnecessary hardship on the
public attempting to do business in these areas, and they result in no true
protection to the ABB. Enogex is
hopeful that this issue can be resolved without affected parties having to
resort to a costly and time-consuming litigation process.
Mr. Chairman and members of this Committee, Enogex
appreciates and seeks any assistance that this Committee can provide to address
this critical issue.
