Regulatory Uncertaintyand

Production Impacts

Duane Zavadil

Bill Barrett Corporation

Land Ownership

Resource Area # Pending APDs Days Pending

Buffalo 1256 293

Farmington 187 321

Pinedale 119 189

Vernal 175 189

APDs Waiting

BLM Average Approval Timeframes

77

96

175

137

84

0

20

40

60

80

100

120

140

160

180

200

1998

1999 2001

2002

2003

2000Not

Available From

AFMSS System Due to Court Order

“Optimistic” Time Requirements for NEPA Compliance

$2-3 K

Large Field EISor RMP

1 year 2 years

Field DevelopmentEIS

Small Exploratory Or Development EA

Single Well/ROW EA

CategoricalExclusion or DNA

2 weeks to 6 months

6 months

1 year

2 years

2 ½ + years

Cost of NEPA Compliance

$1

$100

$10,000

$1,000,000

Cost

CatagoricalExclusion or

DNA

SingleWell/ROW EA

SmallExploratory orDevelopment

EA

FieldDevelopment

EIS

Large Field EISor RMP EIS

$2-3 K$20 K

$250 K

$1-2 MM $2.5 MM

Other “Multiple Use” Resources

• Archeological Resources

• Cultural Resources

• Paleontological Resources

• Threatened and EndangeredSpecies

• Species of Special Concern

• Visual Resources

• Hunting

• Recreational Vehicles

• Raptors

• Soils

• Range/Grazing

• Air Quality

• Water Quality

• Flood Plains

• Riparian Areas

• Prime and Unique Farmland

• Wild and Scenic Rivers

• Wilderness and WildernessStudy Areas

• Aquatic Species / Fishing

• Wild Horses

• Areas of CriticalEnvironmental Concern

Photo by: Robert MuellerPhoto by: Robert Mueller

Typical Seasonal Restrictions

Mule Deer Wintering

Elk Wintering

Mule Deer Fawning

Elk Calving

Sage Grouse Mating

Raptor Nesting

Spotted Owl Nesting

Burrowing Owl Nesting

Big Horn Sheep Lambing

Sage Grouse Wintering

Mountain Plover Nesting

Southwest Flycatcher Nesting

Dessert Tortoise

Moose

Pending

No Disturbance

J F M A M J J A S O N D

Anti-Oil and Gas Spending

Local Groups:

Western Organization of Resource Councils $757,000Northern Plains Resource Council $ 864,000Powder River Basin Resource Council $296,000Greater Yellowstone Coalition $1,815,000San Juan Citizens Alliance $177,531Oil and Gas Accountability Project $262,000Wyoming Outdoor Council $661,000Southern Utah Wilderness Alliance $1,890,000

Total $7,099,000

(2001 Tax Returns)

National Groups:

Sierra Club $75,440,000Earth Justice $17,965,000Natural Resource Defense Council $55,697,000Wilderness Society $24,119,000

Total $173,221,000

Anti-Oil and Gas Spending

(2001 Tax Returns)

Cumulative Impacts

•Supply Shortages

•Limited Capital Availability

•Equity Devaluation

•Drainage/Inefficient Production

•Disproportionate State and Fee Production

•Inadequate Pipeline Capacity/Basis Differential Spikes

Active Rig Count

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Dry

Gas

Oil

Current Federal Energy Production Efforts

Rocky Mountain Energy Council

White House Task Force on Energy Streamlining

Energy-Oriented Political Appointees

Natural Gas Supply Hearings

Energy Bill Provisions?

Oil and Gas Instructional Memoranda(6)

Department of Interior’s Implementation Plan for President’s Energy Policy

WIA Settlement

Needed Actions

•Affirmative Support of Energy Development

•Encourage Market Solutions

•Reverse Engineer Regulatory Capacity

•Employ Private Sector Models

•Establish Production Goals and Reverse Engineer Organization

•Create Group to Understand and Promote Development

•Reorganize to Separate Regulatory and Development Roles

•Perform “Spec” NEPA for Exploratory Activities

•Coordinate/Negotiate with Sister Agencies

•Allocate a Portion of Royalties to Promotion/Management

•Production Incentives

Improving Federal Lands AccessEmploy Private Sector Model

Improving Federal Lands Access

•Prompt Decision Making

•Resource Specialist Prioritization

•Mineral Staffing •State-Wide/Region Wide NEPA Teams

•NEPA/FONSI Guidance Policy •Energy Education

•Final Resolution of Wilderness Study Areas

State Regulatory Reforms

•Strengthen and Streamline NPDES Program

-Resolve Interstate Issues with Montana

-Establish “Fixed” Water Quality Targets

-Confirm Right of In-Stream Flow

-Appropriate Organization, Staffing, and Capabilities

-Monitor and Adapt

State Regulatory Reforms(continued)

•Increase “Responsiveness” of Air Quality Program

-Increase Flexibility For Movement and Replacement of Compressors and Dehys

-Reduce Permit Processing Times

-Employ General Permits for Minor Sources

-Monitor and Adapt

Industry Responsibilities

•Agency Involvement

•Political Advocacy

•Public Acceptance