My first question to you is do you have any suggestions or any comment on that recommendation? Are you confident that all adequate information or data have been used to minimize the damage or possible damage from development?

Mr. HORN. We think that there is sufficient information contained in the legislative EIS for Congress to make the decision it chooses.

It has been our position from the outset that once Congress had made the decision to open the area up, in order for us to go ahead with any subsequent lease sales we would do site specific EIS's on any given lease sale.

Frankly, that was a misunderstanding that EPA had with our position. The LEIS is a generic, programmatic policy document, and the type of information that they said was not present, where do you get the gravel, where do you get the water, how do you tailor things on the ground, we said we cannot answer those questions until we get to the lease stage. We cannot answer those questions until we know who gets what lease and who wants to build their gravel pad where.

We think that it would be appropriate, and the Secretary has reiterated many times, that if we get the authority we intend to prepare specific environmental impact statements and comply with NPRA on at least the first lease sale and then deal with NPRA on the subsequent lease sales.

Senator BRADLEY. You have made some lease sales in the Beaufort Sea: is that correct?

Mr. HORN. Yes, sir.

Senator BRADLEY. How much area has been included in that, and how much has been leased by the oil company?

Mr. HORN. I would have to provide you with those numbers for the record. It has only been a fractional portion of the aggregate area that has been offered.

Senator BRADLEY. Will an environmental impact statement cover these areas?

Mr. HORN. Environmental impact statements have been prepared before each and every Beaufort Sea OCS sale has been held. Senator BRADLEY. EPA also notes that there were no cumulative effects evaluated in the 1002 report.

My question to you is do you think that that is wise? Has there been a systematic analysis of the overall impacts of leasing, not just in the ANWR area but also offshore and how that might affect the area?

Mr. HORN. I would disagree with EPA's conclusion.

We pointed out to them that we did engage in a cumulative effects analysis; that we did have cross-references to the Beaufort Sea OCS EIS's that were completed; and that we sat and talked to MMS, which is the division of the Department that runs the OCS program.

They have worked with the Fish and Wildlife Service on this whole question of cumulative effects. Some can argue it that maybe we did not cover it out to the Nth degree because I did not think we wanted to engage in rank speculation, but we have a process internally that we would prospectively intend to employ and that we have employed in the past to have BLM, Minerals Management

and Fish and Wildlife work together to assess the aggregate impacts of Beaufort Sea and 1002 operations.

Senator BRADLEY. So your argument is you do have cumulative impacts considered both onshore and offshore?

Mr. HORN. Yes, sir.

Senator BRADLEY. S. 1217 directs the Interior Secretary to provide impact aid to assist in alleviating some of the social problems that flow from this for Native American culture.

What is your position on such aid?

Mr. HORN. We would be essentially opposed to that type of provision. Most impact aid is related to the situation of Federal facilities and relates to provision of financial benefits primarily in the educational field.

We think that if impact aid is warranted, if there are to be impacts or effects on North Slope communities, the State of Alaska can deal with that out of whatever percentage of revenues they may acquire from the leasing in ANWR.

Senator BRADLEY. So you oppose that part of S. 1217?

Mr. HORN. Yes, sir.

Senator BRADLEY. Even though you oppose it, could you give us any thought as to what would be if it was in the bill the best way to be implemented and how the funding mechanism be devised?

Mr. HORN. We would have to get back to you for the record. Impact aid programs are not something which I deal with very regularly. I could not give you an answer at this time.

[The information follows:]

We believe that "impact aid" is not necessary or appropriate with respect to oil and gas activities carried out in ANWR. In general, oil and gas activities have a positive effect on the economies of local communities. Accordingly, we oppose any requirement for Federal financial assistance. If assistance is thought to be necessary, we believe that it should be administered and funded by the State of Alaska. Senator BRADLEY. Okay, what about hunting fish and game? That is not allowed at Prudhoe Bay?

Mr. HORN. That is correct. That is a matter of State regulation. We have proposed among our 29 stipulations that restraints be imposed upon hunting and fishing activities within x distance of pipelines, roads and facilities, and that people not be permitted to engage in hunting and fishing activities, except for local residents, let us say, of Kaktovic, so that we do not have a sudden influx of hunting and fishing pressure from people coming into the oil facilities.

Senator BRADLEY. You do believe that subsistence hunters should be allowed to continue to hunt in this traditional hunting area? Mr. HORN. Yes, sir.

Senator BRADLEY. In the 1002 report, you list 26 geological structures that potentially hold oil and gas. Could you rank the potential of these structures?

Mr. HORN. We have ranked it by a geographic grouping.

Let me point out that 26 structures is the minimal number. There are a number of other areas in there that could have the potential for subsurface things such as stratigraphic traps which could also hold significant quantities of oil and gas, but our 3 by 6 seismic grid was not sufficiently fine to permit us to map those. So that 26 is a minimum number.

The two most important areas are, if you look on the maps, labeled as structures 18 and 19, which are east/southeast of Kaktovic.

That area and the structures down in the Jago River area, which I think are 20 and 21, those two groups of areas have about 75 percent of the potential.

Senator BRADLEY. Are you saying you cannot rank them?

Mr. HORN. We have ranked them by groupings, and the report, if I can find the section, has broken the coastal plain into three blocks: A block, B block, C and D blocks, and it ranks those blocks by potential.

Senator BRADLEY. Would it make sense to lease them in that order?

Mr. HORN. That is something that we are not prepared to answer at this time. That is the type of decision that we would make going through the NPRA process on a lease sale, which would be which areas you offer first, how much acreage, and what sequence.

Senator BRADLEY. So you are saying you want to defer that decision?

Mr. HORN. Yes. We think that it is something that demands an awful lot of intense scrutiny after we know what the basic groundrules are for opening the entire area.

Mr. CASON. Senator, one other thing you might find there is the industry may find that they have different priorities than we do in approaching this, and that their interpretation of the seismic data may be different than ours.

Senator BRADLEY. One other question relates to the draft 1002 report. That made some quite different assessments on the impact of wildlife than the final report. The draft report states a 20 to 40 percent decline in caribou, 20 to 25 percent decline in distribution of musk oxen and a reduction of wolf, et cetera. Reference to these estimates did not appear in the final report.

In addition, EPA notes the final lexis is inconsistent in its application of impact definition.

Also, EPA comes with the revealing statement that impacts are in many cases downgraded from the draft lexis without any explanation or justification.

Do you have any explanation?

Mr. HORN. It is very easy. Let me deal with just a couple of the examples to demonstrate.

The draft report contained, first of all, an editorial error in which we were discussing the displacement phenomenon with calving female caribou. It is very clearly understood that they are just a bit more sensitive than the other animals, and they will generally move away from half a mile up to 2 miles away from sites of human activity to drop their calves.

That level of displacement itself has been considered a major activity even if it has no impact on population dynamics or calf mortality. We wanted to quantify the impacts to the degree that we could, and so the draft report talked about if you had development in certain areas and if in one of those years out of 15 a chunk of the herd moved into that area and that portion of the herd had to move a mile or so away, you could in some years end up with 20 to

40 percent of the pregnant cows having to move half a mile to 2 miles to avoid human activity.

That 20 to 40 percent dropped the comma out of the sentence and led people to believe that the 20 to 40 percent displacement equaled the 20 to 40 percent population decline. The day the draft came out, we discovered the error. I can remember sitting in Ottawa telling the Canadians that. I said that at the press conference when I announced the draft report.

We made it clear from the outset, but a lot of people have continued to say, ah, a 20 to 40 percent decline. It was a 20 to 40 percent displacement.

When we got to the final report, we kept pressing. Let us make this thing as accurate as possible. Our biologists concluded that there were so many ifs attached to getting to that 20 to 40 percent displacement prediction that it was a speculative number, not a predictive number.

So we took the number out, but the report still acknowledges that location of facilities, if that is an area that a caribou wants to go to calve in, she is going to move away from it. We have acknowledged that. That is still in the report.

Senator BRADLEY. One of the concerns is on mitigation of adverse impacts, and in the final report-I forget exactly what page—you have a list of the mitigation measures. It is around 160.

Mr. HORN. On page 167.

Senator BRADLEY. You have a list of mitigation measures. Would you have any opposition if that list was included in the law?

Mr. HORN. It is our opinion that a list with that type of specificity need not be in the law, that those are the types of things that we intend to employ in putting together a program if we get the authority to protect the environment.

Obviously, if Congress, I think, in the legislative history made some reference to this list as the types of things that you all were interested in, we think that would be highly and wholly appropriate. But I think to get to that level of specificity in the statute I think is going to create problems down the road.

Senator BRADLEY. One final question, and that relates to when drilling could occur. It is your sense that it would occur in the winter?

Mr. HORN. Absolutely. One of the requirements we have outlined would be to limit exploration activities basically between November 1st and May 1st. That is traditionally when it has been done up there. That is when the seismic work was done that helped us produce this report.

That is the time, of course, when the animals, with the exception of the musk oxen, are long gone.

Senator BRADLEY. You would not object to the legislation stipulating that?

Mr. HORN. There again, that is something that there may be a particular case where somebody starts drilling a well in an area that is not frequented by wildlife, they want to go down to a certain depth, they have got another 1,000 feet to go when we get to May 1st.

Obviously, it might be appropriate, because there is nothing around, they are not adversely affecting anybody, to let them drill

until the middle of June. That is the type of flexibility we think is important for a cost effective program to stay in place, but obviously putting those types of time frames on the statute would cause problems.

Senator BRADLEY. But basically, you oppose the mitigation measures in the final bill, and you would also oppose the winter-only drilling in the final bill?

Mr. HORN. No, I think what we are talking about here is how specific and precise does the statutory act get that lets us go. And I think that these are the types of things we would intend to do, and I think that some recognition of this by Congress is wholly appropriate.

But to pick up this level of detail in an area and put that into the law I think

Senator BRADLEY. So you would oppose it being in the final law? Mr. HORN. Right.

Senator BRADLEY. Thank you, Mr. Chairman.

The CHAIRMAN. Senator Evans.

Senator EVANS. Thank you, Mr. Chairman.

I hope I do not continue to beat the same horse, but let me read certain sections of this bill, when taken in conjunction one with another, then try to get your opinion as to what you think is required by the bill and what you intend to do as a result of those requirements of the bill.

And I am speaking now of the exploration phase of a program, not the development or the production or the transportation phase, but merely the exploration phase, which will come first.

In one section of the bill it says, in reference to coastal plain resources, the 1002 report, "that shall satisfy all legal requirements under those laws with respect to any action taken to develop rules and regulations or procedures for competitive oil and gas leasing program.'

It goes on further to say: "No further studies, reports, or assessments shall be required before the Secretary or other appropriate Federal officials may take action."

Then it goes on in the next subsection and says: "Nothing in this act shall be construed to affect the applicability of NEPA to phases of oil and gas development, production, and transportation conducted subsequent to initial leasing." So it leaves out exploration.

And then it goes on further to say: "Consistent with the general authority of the Secretary as described in section 288(a) of this Act, all Federal and State environmental laws of general applicability to oil and gas operations shall continue to be applied." "All Federal and State environmental laws of general applicability."

Then you read section 288(a), and it says: "This Act shall be considered the primary land management authorization for all activities associated." And it goes on to say "No land management review shall be required, except as specifically authorized in this Act."

Now, I am not quite sure where that puts us. You read those all in conjunction, it seems to me in the one section it says that NEPA is required, and all Federal and State environmental laws of general applicability should continue to be applied. That presumably would be for both the exploratory as well as the other phases.