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53202 Federal Register/Vol. 69, No. 168/Tuesday, August 31, 2004/Rules and Regulations example, Torell et al. (2001) state that, "permit value represents the only available direct valuation of public land forage, except for a few scattered instances where public land is competitively leased. Using an appropriate capitalization rate, annualized estimates of forage value can be determined from the observed permit value." In a summary of recommended forage valuation methods, the author states that, "permit values provide a direct and site - specific estimate of forage value. Theoretically, this estimate should provide a site - specific estimate of value while considering the inherent production characteristics, regulations, and economic potential of specific allotments" (Torell et al. 1994). Thus, as discussed in Section 4.3.2, the revised economic analysis relies on the results of nine recent studies that attempt to measure the permit value of Federal grazing (per AUM) in order to estimate an average permit value for grazing on FS and BLM lands. It is true that a 1970 court decision supported the government's position that ranchers "are not given title to the grazing resource and as such do not own a property right or have a corresponding economic right to permit value" (Torell et al. 1994). Yet, numerous published studies have found that a rancher maintains a value for holding a permit whether or not he sells his property (Torell and Doll 1991; Rowan and Workman 1992; Sunderman and Spahr 1994; Spahr and Sunderman 1995; Torell and Kincaid 1996). Thus, this analysis assumes that value is lost if a rancher is forced to reduce his AUMs grazed. (90) Comment: One commenter states that the analysis overestimates impacts on grazing activity from owl, and should take the following factors into account when calculating the "bottom line" results: the number of threatened and endangered species in the allotment, existing soil and vegetation conditions, actual forage available in owl PACs, the climatic changes reducing AUMs, competition with other ungulates, and reductions in protective utilization levels accepted by range science. Our Response: Section 4.2 of the economic analysis discusses factors that affect the number of permitted and authorized AUMs approved by FS and BLM for a given grazing allotment containing owl habitat. These factors include the presence of endangered species, tree encroachment, fire suppression, forage availability, and forage by other ungulates. The analysis states that "on a particular allotment containing owl habitat, reductions to authorized or permitted AUMs made by FS or BLM may be: (1) Directly related to owl conservation; (2) indirectly related to owl conservation; (3) not related to owl conservation at all; or (4) resulting from a combination of factors." The analysis then explains each scenario in detail, and suggests that in most cases, reductions in AUMs result from a combination of factors. The analysis also concludes that because of the spatial and temporal overlap of past reductions in AUMs with owl habitat, it is difficult to separate owl- related causes from other causes of changes that occur in owl habitat areas. (91) Comment: One commenter stated that the differences in permit types such as continuous and seasonal grazing permits should be addressed. Our Response: Continuous, or year- long, permits for grazing on Federal lands are common in the affected study area. Ranchers with year -long permits are likely to have a greater fraction of their annual forage base on Federal lands than those holding shorter, seasonal permits. This would imply that permit holders with yearlong permits may have less access to substitute forage, and thus may be more disadvantaged by AUM reductions than holders of seasonal permits. What is also implied is that an AUM of grazing in a year -long permit has greater value than an AUM in a seasonal permit. Indeed, Torell et al. (1994) find some evidence that permit values are greater in New Mexico, where year -long permits are common, than other states with more seasonal use (Torell et al. 1994). However, research has also shown that forage values vary throughout a year, and that some seasons may be more critical than others to a ranch operation (Godfrey and Bagley 1994). Thus, a rancher with a seasonal permit who relies on a particular season may also be severely affected by reductions in AUMs. A discussion of the differential effect of permit type has been added to Section 4 of the analysis. (92) Comment: BLM stated that consultations are not expected to result in AUM reductions on BLM lands in Arizona. Our Response: This statement provides support for the final economic analysis, which does not forecast any future AUM reductions on BLM lands in Arizona. (93) Comment: One commenter states that the analysis erroneously included private ranch economic figures that are not in critical habitat, not in owl habitat, and not representative of ranch operations in affected areas. One commenter notes that a value of production figure was erroneously included in the permit value data. In addition, one commenter suggested that the permit values for Utah be removed from the analysis since this value has not been lost in Utah. Our Response: Section 2.6 of the economic analysis presents economic information relevant to the livestock industry for each county affected by the proposed designation. Efforts were made to utilize site - specific data as much as possible throughout the sections of the analysis that discussed grazing. Estimates of AUM reductions were derived from consultations conducted in owl critical habitat areas. Authorized AUM estimates were derived from FS estimates in affected National Forests at the forest level. Permit value estimates were taken from recent, relevant studies in the field, primarily from areas where owl critical habitat was proposed. The two studies that provided permit value estimates for Utah were included because they were deemed relevant to this analysis. The value of production estimate has been removed from the permit value data. (94) Comment: One commenter states that the costs associated with the proposed designation impacts on oil and gas activities are underestimated because the analysis did not consider owl- related restrictions on the time period available for exploration and development. The commenter believes that the owl stipulations limit the time period available for drilling to 2.5 months each year. In particular, the commenter states that owl seasonal restrictions on drilling are from March 31— August 31. The commenter notes that in Utah, BLM stipulations in designated critical habitat (and outside of critical habitat) restrict development on existing and future oil and gas leases, by preventing or limiting access to leases, which leads to less production. Our Response: In the economic analysis, impacts to the oil and gas industry related to delays resulting from owl drilling restrictions were not analyzed in detail because these were not considered likely. In particular, based on consultation history and because the owl breeding - season restriction would not be the only limiting factor for when an operator can drill, these delays were not considered a major impact in the economic analysis. In addition, since owl critical habitat in Utah has been in place since 2001, it is likely that operators in that area are aware of owl survey requirements in order to get a permit to drill. The analysis found that, if no owl are recorded during surveys, then owl _ restrictions are not likely. BLM has been attaching lease notices for owl critical