Montana Petroleum Association

Montana Petroleum Association
HEARD IT THROUGH THE PIPELINE

May 9, 2008

Executive Director’s note: This edition of Heard it Through the Pipeline could well be called the “Wildlife Edition”. There are quite a few important topics summarized in this edition. Please take a moment with this newsletter.

Wildlife:
It is hard to know where to begin on issues dealing with wildlife in Montana, but lets do a quick recap. Monte Mason, Bureau Chief for the Minerals Management Bureau at the Dept. of Natural Resources and Conservation has authored a paper in response to the “Best Science” document on sage grouse developed by the Montana FWP. Monte did a very nice job on his paper and that report is available on at www.montanapetroleum.org.

Montana FWP, Director Hagener has responded back to MPA’s letter expressing concern about the “best science” document. The MPA letter was a cover letter attached to the analysis that was done by Taylor Environmental for the MPA regarding sage grouse science. Director Hagener’s letter promises that FWP comments to the USFWS will “ultimately reflect all information believed to be relevant to the issue”. Furthermore, Director Hagener states that the 2005 Management Plan and Conservation Strategies for Sage Grouse charts a good course for long term management of the grouse, but that lately several factors have caused them concern, including expanded oil and gas development. Director Hagener’s letter is also on the MPA website for further review.

Sportsmen For Responsible Energy Development, a new sportsman’s group that includes other groups like Trout Unlimited, the National Wildlife Federation and others, are gathering in Jackson Hole Wyoming May 21-23 to discuss their concerns with energy development. The agenda includes Wyoming Governor Freudenthal and can be viewed at the following website: http://sportsmen4responsibleenergy.org/symposium.html. If any MPA members plan to attend this event, please contact Dave at dave@montanapetroleum.org.

MPA, the Farm Bureau, the Montana Stock Growers Association and the Western Environmental Trade Association met with representatives of the Montana Department of Fish, Wildlife and Parks to discuss what we can do to help them as they prepare data submissions to the USFWS regarding the listing decision for sage grouse. The Western Association of Fish and Wildlife Agencies is working with the USGS to update their 2004 sage grouse assessment. Montana is doing the sage grouse ecosystem/habitat chapter. FWP will provide a database with all conservation efforts conducted since 2004 that are either planned or completed. One example will include the 195,000 acres of surface that FWP has enrolled in the Landowner Incentive Program (LIP). LIP allows the FWP to compensate landowners for agreeing to conserve sage brush lands and not plow or subdivide the acreage. Members on the interagency team are:

            Pete Husby NRCS
            Gayle Sitter BLM (Billings)
            Rick Northup FWP
            Beth Dickerson USFWS

FWP staff asked that whatever MPA members could offer in the way of forecasting reasonable, foreseeable development, and any information regarding conservation efforts from the agriculture groups would be appreciated. MPA stated that they would work with the BLM to see how best to get RFD information since they were doing so in each of their resource management plans.

FWP stated that any industry information should be submitted directly to the USFWS and that the USFWS has stated that they intend to make the listing decision by December 4th 2008.

As the U.S. Fish and Wildlife Service reconsiders its decision not to list the sage grouse they have given interested parties until June 27th 2008, to submit any relevant data. To assist in this effort IPAMS and API developed a RFP to identify a consultant to assist industry with data gathering, compilation and formatting for submittal to U.S. Fish and Wildlife Service. The IPAMS-API effort is designed to coordinate responses to the USFWS notice in other states of the sage grouse range where industry is active, including Montana.

Based on proposed strategy, estimated cost and existing relationship with industry, participants selected Buys & Associates of Colorado to perform this work. IPAMS and API will share the cost of this work. Buys & Associates is preparing a work plan and time line for the project effort which will be made available through MPA to member companies. With MPA assistance, Buys & Associates will soon be contacting MPA member companies to supply information and data on grouse and grouse habitat conservation measures to include in a compilation to be prepared on behalf of the industry in Montana. Please begin to consider what grouse related data in Montana that you have collected. We will be sending more detailed information soon.

MPA Executive Director Dave Galt has been asked by FWP Director Hagener to serve on a Conservation and Restoration Partnership. FWP has created a steering committee (of sorts) to help them implement their broad conservation plans across the state. This committee is a follow-up from their conference last November where they stated that they can no longer address wildlife and endangered species habitat related issues on a species by species basis. They have developed a Comprehensive Restoration and Conservation Plan and have asked for help in its implementation. The meeting held on April 22, was the first meeting and basically just a “get to know” each other session. There are 21 people on the committee, 3 industry folks and the rest government, land trust or environmental groups. The minutes from the first meeting are attached. If any MPA member would like a copy of the 600 page plan, condensed summaries and CD versions are available. Also, if any member would like to serve in the MPA slot on this committee, please contact Dave, (fast even!).

MPA is working with other state associations, regional and national associations to address the spectrum of endangered species listings. Recently, many of you may have noticed that environmental groups have petitioned to list the white tailed prairie dog, (http://www.billingsgazette.net/articles/2008/05/07/news/state/66-prariedog.txt ) yet another species in a growing list of petitions. The work that is required to provide competent responses to the USFWS is extensive. We are working as a region to address these issues and MPA will continue to update you on progress and ask for your financial and technical assistance.

Federal clean water act:
At the personal invitation of the Executive Vice President of the Montana Stockgrowers Association, MPA Executive Director Dave Galt attended a coalition building meeting to discuss opposition to pending changes in the clean water act. H.R. 2421 by Representative James Oberstar and Senate Bill 1870 seek to revise the Clean Water Act. One change is to revise the definition of waters of the United States by removing the word “navigable”. Landowner groups across the state are extremely concerned about this change as are natural resource based industries. MPA will be monitoring developments of the coalition and forwarding information to membership for action.

Pore Space ownership for carbon sequestration:
The Energy and Telecommunication Interim Committee met May 1st and 2nd. The issue of pore space ownership was introduced by Senator Greg Lind. The committee instructed staff to prepare draft legislation for review at the ETIC’s meeting July 10th meeting. The legislation will be patterned after House Bill 89 passed in the Wyoming 2008 session. The bill is attached, please have your legal staff review and pass any comments to Dave Galt at dave@montanapetroleum.org. MPA will be reviewing the pore space issue and continue to provide information.

ENERPLUS APPOINTS NEW US PRESIDENT:
Mr. Gordon J. Kerr, President and Chief Executive Officer of Enerplus Resources Fund (“Enerplus”) is pleased to announce the addition of Mr. Dana Johnson as the President of U.S. Operations effective May 5, 2008. Additional information is attached.

EPA’S SPARK IGNITION COMBINED ENGINE RULEMAKING AT THE API AND INGAA WORKSHOPS
API and INGAA have joined together to provide workshops for those interested in the EPA new Combined Engine Rule. Please give these workshops serious consideration. See the attached notice for more information.

DEQ Launches Montana Climate Change Website:
The Department of Environmental Quality has launched a web site for climate change information: www.MontanaClimateChange.mt.gov. The following is an excerpt from the DEQ press release:

"We created this site so that people both from Montana, and anywhere else in
the world, will have a convenient place to find credible data and resources
about how climate change is impacting the state.," said Richard Opper,
Director of the DEQ. "I also wanted a place where people could start finding
answers to the challenges we will face and ways that they can make a
difference."

The new website features information and actions to reduce carbon
contributions. Tips and resources on the website are directed to homeowners,
commercial places of business, agriculture, and even industrial settings. An
education area is available for students and teachers and features the
Montana Climate Change Test. There are several carbon footprint calculators
available on the site to let visitors assess their own impacts on greenhouse
gas emissions.

Items of Interest:
Energy Information Administration (EIA) released a study on the effect of the proposed Lieberman-Warner Climate Security Act of 2007 on energy markets, focusing on the impact of the greenhouse gas cap-and-trade program under Title I of S. 2191. According to the report, the projected cost of the bill per U.S. household would increase from the current $76 per year to $723 by 2030. Implementing the bill would result in a 70-percent reduction in emissions from the 2005 levels by 2050. According to EIA, if new nuclear, renewable, and fossil plants with carbon capture and sequestration are not developed and deployed in a timeframe consistent with the emissions reduction requirements, covered entities are projected to turn to increased natural gas use to offset reductions in coal generation, resulting in a significantly higher price of $19 per MMBtu. The bill could also raise electricity costs by 11 to 64 percent by 2030, while the total discounted gross domestic product losses in 2009 through 2030 would range from $444 billion to $1.308 trillion under the base case. The enacted legislation also would lead to a rapid build-up in wind and solar energy capacity, which could provide a financial incentive for energy companies to deploy carbon capture and sequestration technologies. More details can be found at the following web site: http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp.

Department of Interior Rules on APD fees for Indian Lands:
Department of Interior’s Assistant Secretary of Steve Allred denied Montana Governor Schweitzer’s request to lower APD fees on Indian Lands. See attached letters.

Montana Business Leadership Council
the MBLC is an entity formed to help elect pro-business legislators in Montana. Their April newsletter is attached.

MPA Planning Meeting:
The MPA Planning Meeting is coming up June 17-18, 2008 with an opening reception on the evening of June 16th. The 2008 Planning Meeting will be held at the River Rock Lodge in Big Sky, Montana. In case of overflow, we do have a block of rooms available at the Bucks T4 Lodge in Big Sky. This is a beautiful part of the State and we are sure to have many topics to discuss in preparation for the 2009 Montana legislative cycle. We ask that you contact Bobbie to secure a room reservation (please see attached registration form). If the rooms have all been taken at the lodge Bobbie will contact you with the Bucks T-4 Lodge information. Again, please get your room reservation confirmed by contacting Bobbie at mpa@montanapetroleum.org. Thank you for your early response.