Welcome to The New Interior, a periodic update from Steptoe & Johnson LLP to keep you informed of coming changes at the Department of Interior, and for related matters on Capitol Hill and elsewhere with the administration taking charge in Washington, DC.  We intend to bring you the very latest on anticipated moves by the Obama Administration and in the 111^th Congress over the next several months, as a new direction takes shape for Interior-related positions and policies.

If you would like to speak with a Steptoe attorney about our Interior practice, please reply to this email or contact Tom Collier (202.429.6242 or tcollier@steptoe.com) or Jody Cummings (202.429.8096 or jcummings@steptoe.com). 

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Guidelines Issued to Protect Endangered Bat from Surface Coal Mining Impacts

In early September, Secretary Salazar announced that coal mining guidelines have been developed to protect the endangered Indiana bat.  The habitat of the Indiana bat stretches from the eastern US through the Midwest, including 13 states with coal mining operations.  The guidelines are designed to provide coal mining companies with protective measures that can be implemented when their proposed operations could impact the Indiana bat and its habitat. 

The Range-wide Indiana Bat Protection and Enhancement Plan Guidelines, developed by the US Fish and Wildlife Service along with several state coal mining regulatory programs, and facilitated by the US Office of Surface Mining Reclamation and Enforcement, will assist surface mining applicants and state coal mining regulatory agencies with ensuring protection of the Indian bat during coal mining operations authorized under the Surface Mining Control and Reclamation Act of 1977.  The guidelines provide species-specific protective measures with options for coal mining applicants and regulatory agencies to use while developing mine permits within the range of the Indiana bat.

Surface mining operations may affect the bat when located near its hibernation site, maternity roost, or in forested areas that might serve as foraging areas, roosting areas, or travel corridors for the bat.  Development of a plan under the guidelines is required when the Indiana bat habitat will be impacted by coal mining activity. 

A complete copy of the guidelines can be obtained here. 

Alaska Governor Weighs in with Secretary Salazar on OCS Plan

Alaska Governor Sean Parnell wrote to Secretary Salazar in early September, offering his thoughts on MMS’s Draft Proposed Outer Continental Shelf Oil and Gas Leasing Program for 2010-2015.  His comments included six key points:

• A comprehensive energy future must include oil and gas, in addition to conservation and greater reliance on renewable sources.  There is an estimated potential of 27 billion barrels of oil and 130 trillion cubic feet of natural gas in the Alaska OCS alone.  New oil production will allow the Trans Alaska Pipeline to continue efficient operations.

• Development of the OCS will increase economic opportunities for the nation.  It will create high paying jobs and ensure that more royalty and tax revenue go the US government instead of foreign governments.

• Development of Alaska’s OCS will advance national security and foreign policy interest, as it will reduce our reliance on imported oil, which often comes from unstable regimes.

• Alaska has a long record for responsible offshore development that is sensitive to and respectful of Native culture, tradition, and a subsistence lifestyle.

• The Alaska natural gas pipeline will be one of the largest and most reliable long-term sources of natural gas in the future.

• The federal government should share a certain percentage of revenue derived from OCS development with affected coastal states.  The states and communities that absorb the impacts of coastal development should receive a portion of the federal revenues to support planning, infrastructure development, and impact mitigation. 

Senate Indian Affairs Committee Publishes Energy Concept Paper, Sets Roundtable Discussions  

On September 10, Senate Committee on Indian Affairs Chairman Byron Dorgan (D-ND) and Ranking Member John Barrasso (R-WY) published an Indian Energy Concept Paper that will be used to begin discussion for legislative ideas and suggestions from tribal leaders and other stakeholders.    The concept paper originates from a 2008 hearing when the Committee received testimony on the efforts of tribes to unlock the potential of their energy resources.  The concept paper addresses three major barriers to Indian energy development: 1) outdated laws and cumbersome regulations for tribal energy development; 2) lack of tribal access to the transmission grid; and 3) difficulty in obtaining financing and investment for energy projects.  The concept paper overviews proposed legislation that would address each of these areas. 

• Title I of the bill would promote Indian energy development by streamlining the processing of permits and addressing some of the financial disincentives to energy development on Indian lands.  The Committee is considering several proposals:
  
  
  • An “Indian Energy Development One-Stop-Shop Demonstration Project” within the Department of Interior to help ensure that tribes and the energy industry are provided coherent and timely information on energy information, and to ensure that lease, permit and royalty processing occurs efficiently and timely.
    
    
  • Amending the Indian Mineral Development Act or Title V of the Energy Policy Act of 2005 to allow individual Indians the ability to negotiate agreements for leasing minerals on their lands in a manner similar to tribes.
  
  
  • Bundling the approval processes that tribes and individual allottees must follow for leasing and providing right-of-ways.
    Authorizing  DOI to prepare comprehensive environmental review documents for reservation-wide energy planning in efforts to provide proactive planning and decrease the amount of time needed to obtain permits for projects.
    
    
  • Exempting Indian lands from the $4,000 fee collected for processing applications to drill for oil and gas on federal lands under the Consolidated Appropriations Act of 2008.

• Title II would enhance federal programs designed to support Indian energy development and efficiency, with a primary focus on requiring the Department of Energy to implement sections of the Energy Policy Act of 2005 that remain unfulfilled.  The proposals include: 
  
  
  • Requiring DOE to implement the Indian Energy Loan Guarantee Program, which is currently authorized at $2 billion.  This would increase project financing available to tribes.
    
    
  • DOE’s Indian Energy Office could conduct a study to identify tribes interested in developing electrical generation and the obstacles that need to be overcome to transmit that electricity to energy markets as part of efforts to include tribes in national and regional electrical infrastructure planning.
    
    
  • Expanding the DOE State Energy program to make available to tribes funding that State governments receive for development and implementation of laws, policies and programs to conserve and improve energy efficiency.
    
    
  • Ensuring that tribes benefit from home weatherization assistance provided by DOE.

• Title III would focus on technical amendments and reauthorizations.  The Committee may seek to amend Title V of the 2005 Energy Policy Act to streamline and improve the process for entering Tribal Energy Resource Agreements (TERA) with the Secretary of Interior.  To date, no tribe has entered a TERA.  Such agreements allow tribes to review, approve, and manage leases, business agreements, and rights-of-way for energy development on tribal lands without the approval of the Secretary.

Committee staff will be holding a series of Indian energy roundtables to discuss the concept paper.  Roundtables are currently scheduled for September 17 (Bismarck, North Dakota) and September 18 (Denver, Colorado).  

FWS May Add Pacific Walrus to Threatened and Endangered Species List

The US Fish and Wildlife Service announced on September 8 that a petition to protect the Pacific walrus under the Endangered Species Act presents substantial scientific or commercial information indicating that adding the species to the federal list of threatened and endangered species may be warranted.  The preliminary finding is based in part upon projected changes in sea ice habitats associated with climate change.  The walruses use floating ice for various facets of their life cycles.  In light of the finding, FWS is initiating a more detailed status review to determine if listing the species is warranted and opening a 60-day public comment period, which will close November 9, 2009.

Pacific walruses are distributed in the Bering and Chukchi Seas, generally in shallower waters.  The total number of Pacific walruses is unknown, but results of a 2006 survey that collected population data is expected in late 2009.  Pacific walruses are currently protected by the Marine Mammal Protection Act of 1972.  In February 2008, the Center for Biological Diversity petitioned FWS to list the Pacific walrus as threatened or endangered under the Endangered Species Act and to designate a critical habitat.  The petition claims that global warming will impact the Pacific walrus by degrading and eliminating sea-ice habitat, decreasing prey availability, altering interactions with predators and disease, and increasing human disturbance throughout the range. 

Rahall Introduces Legislation to Streamline Development of Federal Energy Resources

House Natural Resources Committee Chairman Nick Rahall has introduced the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act of 2009, H.R. 3534.  The bill is designed to create greater efficiencies, transparency, and accountability in the development of federal energy resources. 

Key aims of the CLEAR Act include: 

• Reorganize and consolidate energy leasing programs for greater efficiency and effectiveness.  The bill proposes to:
  
  
  • consolidate the federal energy and mineral leasing programs within one bureau within DOI to provide greater efficiencies by combining lease sales, inspection, enforcement and revenue collection into a single entity;
    
    
  • establish the Office of Federal Energy and Minerals Leasing – combining the oil and gas, wind, wave and solar programs currently located in MMS and BLM; and
    
    
  • move the audit and compliance functions of MMS to DOI’s Office of the Inspector General to provide more independence for the employees working on those crucial activities.

• Improve the Federal Onshore Energy Leasing Program.  The bill proposes to:
  
  
  • require federal oil and gas lessees to diligently develop their leases;
    
    
  • impose “best management practices” on oil and gas lessees to ensure they operate in an environmentally sustainable manner;
    
    
  • raise onshore oil and gas rental rates;
    
    
  • assess a production incentive fee on existing leases that are not producing oil or gas;
    
    
  • establish a competitive wind and solar leasing program for federal lands, while allowing non-competitive leases for research and testing; and
    
    
  • establish a leasing program for uranium, updating the rules for uranium mining that have been in place since 1872.

• Improve the Federal Oil and Gas Royalty Collection Program.  The bill proposes to:
  
  
  • end the Royalty-In-Kind program;
    
    
  • eliminate payment of interest to oil and gas companies when they overpay royalties by accident;
    
    
  • enhance the ability of the government to go after oil and gas lessees that chronically or intentionally fail to pay full royalty amounts; and
    
    
  • repeal unnecessary royalty relief provisions.

• Create a robust planning process for energy development on the Outer Continental Shelf.  The bill proposes to:
  
  
  • establish regional ocean councils for the Atlantic, Pacific, Gulf of Mexico, and Alaska regions, which would prepare marine spatial strategic plans to guide OCS energy development;
    
    
  • ensure that existing energy activities on the OCS are not delayed while the strategic plans are being developed; and
    
    
  • direct 10% of OCS revenues into a new Ocean Resources Conservation and Assistance Fund, which would be used to protect, maintain, and restore ocean, coastal, and Great Lakes ecosystems.

• Fully fund the Land and Water Conservation Fund.  The bill proposes to:
  
  
  • provide funding to states, counties, towns, tribal governments, and other entities across the country to assist in preserving, protecting, and developing parks, trails, and other outdoor spaces and facilities, to enable and encourage public recreation and job creation; and
    
    
  • assist large major restoration efforts in Chesapeake Bay, Puget Sound, the Everglades, the Great Lakes, and other important aquatic systems.

The House Natural Resources Committee will hold hearings on the bill on September 16 and 17.  Witnesses at the hearings will include Secretary Salazar, as well as representatives from DOI's Office of Inspector General and the Government Accountability Office.  State and local officials, as well as interested stakeholders from the energy industry and environmental community are also expected to testify. 

Appointments Buzz

• US Fish and Wildlife Service Director Sam Hamilton has announced that Dan Ashe and Rowan Gould will fill key career FWS positions as deputy directors for the agency.  Ashe has been named the FWS Deputy Director for Policy.  He will oversee assistant directors in the FWS Washington, D.C. office, and be responsible for developing policy and guidance to support and promote program development.  Gould, who served as acting director from January 2009 to Director Hamilton’s appointment, will serve as deputy director for operations.  In that role, he will oversee regional directors, ensuring agency performance and accountability and consistent application of FWS resource management policies.  Gould will also be responsible for the day-to-day FWS operations.
  
  
• David Nawi has been named DOI’s Director of the Pacific Region.  In that role, he is responsible for ensuring that the Secretary Salazar’s views are considered and implemented in all appropriate venues, and that Secretary Salazar has adequate, timely information about project developments, opinions and concerns from elected officials, upcoming deadlines, legal issues, potential media attention, and imminent controversies in any area of DOI’s jurisdiction.  Nawi returns to DOI after having served as Interior’s Regional Solicitor for the Pacific Southwest Region during the Clinton Administration.