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Federal Register/Vol. 69, No. 168/Tuesday, August 31, 2004/Rules and Regulations 53229
<br />Estimated impacts related to
<br />administrative efforts and project
<br />modifications are likely to be minimal
<br />on a per- business basis. Project
<br />modifications specific to oil and gas
<br />activities are forecast to range from
<br />$1,000 to $25,000 per company.
<br />However, some small businesses in this
<br />industry will likely experience localized
<br />impacts related to the owl and the
<br />critical habitat designation. For
<br />example, as discussed in its comments,
<br />Bill Barrett Corporation (BBC) spent
<br />approximately $94,000 to conduct
<br />surveys for owl in a project area within
<br />previously finalized owl critical habitat
<br />in Utah. This corporation estimates that
<br />owl surveys cost them from $3 to $6 an
<br />acre.
<br />There is also some potential for future
<br />project modifications to include
<br />directional drilling, which could mean
<br />greater impacts to small businesses in
<br />the New Mexico and Utah area.
<br />However, the extent to which
<br />directional drilling may be required in
<br />order to protect the owl and its habitat
<br />is currently unknown; this drilling
<br />method has not been required in the
<br />past, and is not widely used in the
<br />region.
<br />Estimated impacts related to delays
<br />caused by owl surveying efforts or
<br />breeding season restrictions could affect
<br />operators in the CP -15 critical habitat
<br />unit in Utah, on BLM lands. While
<br />regional economic impacts resulting
<br />from owl- related delays are estimated,
<br />the analysis expects that producers will
<br />likely shift production to other
<br />locations, if not in the region than
<br />elsewhere; thus, producer surplus losses
<br />are not expected. However, if oil and gas
<br />producers are unable to shift production
<br />elsewhere, up to five companies could
<br />be impacted per year, assuming each
<br />delayed well belonged to an individual
<br />company. The impact of the loss of one
<br />well would depend on the finances of
<br />the company. Currently, the majority of
<br />the leases in the area are held by BBC,
<br />a small business, based in Denver,
<br />Colorado. BBC estimates that a typical
<br />well in the area has a net present value
<br />of $400,000. If five wells are delayed
<br />each year, this could be considered the
<br />equivalent of precluding drilling of five
<br />wells if substitute drilling locations are
<br />unavailable. If all five wells belonged to
<br />BBC, this could result in an annual
<br />impact of $2.0 million. In comparison,
<br />BBC estimates that its revenues from
<br />production in one area (the Southern
<br />Uintah Basin) are in excess of $65
<br />million per year.
<br />Based on a review of operators in
<br />Carbon County, Utah, the majority of
<br />operators in this industry are
<br />headquartered outside of Utah. Oil and
<br />gas companies operating in Carbon
<br />County, Utah, likely to be directly
<br />impacted by owl related conservation
<br />efforts are located in a variety of States,
<br />including Texas, Oklahoma and
<br />Alabama, among others. Therefore, the
<br />relevant area for purposes of this
<br />analysis is the U.S.
<br />There are approximately 7,680 small
<br />businesses in the oil and gas extraction
<br />sector in the U.S. The total number of
<br />oil and gas businesses operating in the
<br />critical habitat designation in New
<br />Mexico and Utah is likely in the range
<br />of 150 operators. Given the large
<br />number of oil and gas businesses
<br />nationwide, the number of potentially
<br />affected small businesses is only a small
<br />portion of small oil and gas businesses
<br />nationwide.
<br />Stone Mining and Quarrying Industry
<br />Small Business Impacts
<br />Impacts to small businesses in this
<br />industry resulting from owl
<br />conservation efforts are likely to be
<br />limited to one rock quarry operator. The
<br />quarry project area falls within critical
<br />habitat, but is not included in the
<br />designation by definition since it is
<br />private property, and is permitted
<br />through the State. While there is no
<br />Federal nexus, the quarry operator has
<br />been in negotiation with the Service for
<br />an Incidental Take Permit under section
<br />10 of the Act. This activity is.voluntary
<br />and while it is related to the owl, it
<br />would likely occur`vinth br without the
<br />cr tical habitat designation. The private
<br />operator of this quarry expects to incur
<br />various costs resulting from owl
<br />conservation activities, including
<br />$60,000 to $450,000 in one time costs
<br />and $10,000 per year in ongoing
<br />monitoring costs. Because this party is
<br />a small business with limited revenues,
<br />these expenditures represent a
<br />considerable impact to this business.
<br />Available information indicates that this
<br />operator is one of 11 businesses (of
<br />which nine are small businesses) in this
<br />industry in the affected Colorado
<br />counties.
<br />Based on the experience of this
<br />operator, there is some likelihood that
<br />other quarries adjacent to owl habitat
<br />may experience impacts related to owl
<br />conservation activities. However, a
<br />review of consultation records and
<br />communication with Service staff
<br />indicate other quarry operations are not
<br />occurring in the critical habitat
<br />designation or adjacent to owl habitat.
<br />Therefore, additional small businesses
<br />in the stone mining industry are not
<br />expected to experience impacts
<br />resulting from owl conservation efforts.
<br />in summary, potential impacts from
<br />restrictions on grazing on Federal lands
<br />are likely to affect some small
<br />businesses. Small business impact
<br />estimates are based on information
<br />provided by affected parties as well as
<br />information on small businesses in the
<br />region. While small business impacts on
<br />existing timber - related small businesses
<br />are unlikely, small ranchers in the
<br />region may experience some impacts. If
<br />the total impacts were to affect the least
<br />number of ranchers, no more than 15
<br />ranchers (less than two percent of
<br />grazing permittees) would be affected.
<br />However, if the impacts were evenly
<br />distributed, owl conservation could
<br />result in a reduction of up to 19 AUMs
<br />per rancher (a reduction of less than two
<br />percent of AUMs per permittee).
<br />Impacts to small businesses in the
<br />natural gas industry from owl- related
<br />delays are not expected as long as
<br />substitute drilling locations are
<br />available. However, if gas producers are
<br />unable to shift production elsewhere, up
<br />to five companies could be impacted per
<br />year, assuming each delayed well
<br />belonged to an individual company. The
<br />impact of the loss of one well would
<br />depend on the finances of the company.
<br />Also, one small entity operating a rock
<br />quarry may experience impacts related
<br />to preparation of ,a habitat conservation
<br />plan for owl vbd!40 believe. these costs
<br />Federal agencies must also consult
<br />with us if their activities may affect
<br />designated critical habitat. However, we
<br />believe this will result in minimal
<br />additional regulatory burden on Federal
<br />agencies or their applicants because
<br />Federal agencies are already consulting
<br />on both protected and restricted habitat
<br />pursuant to existing management
<br />agreements, and consultations use the
<br />standards from the owl recovery plan
<br />which addresses habitat management
<br />issues. Thus, as stated in the Executive
<br />Summary of our Economic Analysis, no
<br />additional economic impacts, with the
<br />exception of some additional
<br />administrative costs related to
<br />addressing critical habitat in future
<br />consultation efforts, are anticipated
<br />from the designation of critical habitat
<br />for the owl.
<br />Designation of critical habitat could
<br />result in an additional economic burden
<br />on small entities due to the requirement
<br />to reinitiate consultation for ongoing
<br />Federal activities. However, since the
<br />owl was listed in 1993, we have
<br />conducted a variety of informal and
<br />formal consultations involving this
<br />species. Most of these consultations
<br />involved Federal projects or permits to
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