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53204 Federal Register / Vol. 69, No. 168/Tuesday, August 31, 2004/Rules and Regulations delay the development of natural gas wells, the supply of natural gas would decline and thus the price paid by consumers for this commodity would increase. The commenter provides citations to several studies documenting the current supply and demand conditions of tha natural gas market, as well as reference to a model that considers the price implications of changes in supply and demand on the price consumers pay for natural gas. Our Response: While the specific number of wells that could be drilled in designated critical habitat in the future is unknown, wells affected by owl conservation represent only a small portion of expected development in the region. Of the active wells in Utah and New Mexico, less than one -half of one percent are in the proposed designation. Given the current high price of natural gas (which is expected to continue), the resources (e.g., equipment and labor) needed to develop this commodity are in high demand. Thus, even if development of certain wells is delayed, resources would likely be employed elsewhere, or would only remain unused for a short period of time. Additional primary research would be required to estimate the impact on consumers of a small change in natural gas supply, and significant uncertainty would remain regarding the impact of owl conservation on the pace of well development, the impact of reduced development on gas supplies, etc. In addition, the impact measure provided by the commenter ($8 million in savings to consumers as a result of development of one well), does not account for possible losses to existing producers as the price falls (i.e., changes in producer surplus). Thus, the net change in social welfare resulting from a change in supply of natural gas could be considerably smaller than that cited by the commenter. The final economic analysis has been modified to include qualitative discussion of the potential impact of the designation on consumers of natural gas. (99) Comment: The Service fails to consider substantial key data regarding the oil and gas industry in the region including employment data, production and revenues data and project modification data. Our Response: The economic analysis did consider these types of statistics for the oil and gas industry in the region, as demonstrated by the data included in Exhibit 7 -2. This exhibit presents employment data for oil and gas extraction as well as other sectors of the economy for the four states included in the designation. Data on oil and gas production in the region is also included in the analysis and presented in Exhibit 7 -1. Revenue data for oil and gas operators was not available as many of the operators in the area are private operators and this information is confidential. In addition, many of the operators in the area operate in areas more expansive than the local region. Thus, revenue data were not included in the report. In the economic analysis, project modifications were considered unlikely for oil and gas projects; therefore these data were not included. However, in response to comments and based on further research, Section 7.2 of the report has been revised to include additional discussion of potential project modifications to oil and gas activities that could result from owl conservation activities. (100) Comment: One commenter believes that the analysis of small business entities in the oil and gas industry is flawed because it compares the costs that local operators must incur to comply with owl restrictions in critical habitat to costs of operations for the entire U.S. oil and gas industry. The commenter further states that although some oil and gas companies that operate within the proposed critical habitat areas are headquartered outside those areas, much of their domestic oil and gas production potential is in the Rocky Mountain Region. Our Response: As discussed in the Section 8.3 of the economic analysis, based on a review of operators in Carbon County, Utah, the majority of operators in the oil and gas industry are headquartered outside of the region. Oil and gas companies operating in Carbon County, Utah, are located in a variety of states, including Texas, Oklahoma and Alabama, among others. To determine whether a substantial number of operators are likely to be affected, it is important to compare the affected operators to the potentially affected population of oil and gas operators. Since most of the operators in the region appear to be in a wide variety of locations across the United States, it was determined that the relevant area for purposes of this analysis is the United States. (101) Comment: One commenter states that AUM reductions are not typically evenly distributed, thus there is the possibility for significant regional economic impacts if all ranches affected are in the same region. Our Response: As discussed in the final economic analysis, Section 8.2 Livestock Grazing Small Business Impacts, information is not available to determine the specific permittees most likely to experience a reduction in authorized AUMs. The analysis estimates an annual reduction of 3,100 to 15,600 AUMs for a variety of reasons, including actions unrelated to owl conservation. Since a typical permittee grazes approximately 1,070 AUMs, this reduction would likely affect more than one permittee. In order to estimate the number of permittees potentially affected, the analysis uses two approaches. First, the analysis estimates the number of permittees that could possibly experience a complete reduction in their authorized AUMs. Second, the analysis estimates the impact on each permittee in the proposed designation, if the impacts were evenly distributed. While it may not be likely that impacts are evenly distributed, this approach provides useful information to understand the potential range of impacts on ranchers, in the absence of more specific information. (102) Comment: The environmental assessment only discusses cultural impacts to Tribes. The Southwest has a diverse mix of cultures that have already been significantly impacted by owl protections. Our Response: The commenter did not provide sufficient rationale to explain why he or she believes that cultures have been significantly impacted by owl protections. Section 3.10 was added to the environmental assessment to address environmental justice and social conditions. (103) Comment: The purpose of a NEPA document is to disclose impacts not to say that additional consultations are a result of designation of critical habitat when added to, "the effects of existing section 7 consultations for other species and existing land management plans and policies." While this discloses there will be cumulative effects it does not say what those effects will be or have been. Our Response: The cumulative effects analysis (section 3.11) was edited to clarify that critical habitat designation is unlikely to result in additional project modifications compared to the existing condition (i.e. project modification resulting from consultation on effects to the species). Cumulative effects from any of the critical habitat designation alternatives are therefore improbable. (104) Comment: The prior economic analysis did not consider all relevant costs. Our Response: A new economic analysis was completed to address this final designation. The previous economic analysis is not reflective of - this designation or our current approach for analyzing economic impacts.