The Obama administration is moving to close a regulatory loophole that has allowed hundreds of oil and gas drilling operations to operate within national park boundaries with little government oversight.

The 693 drilling operations are confined to state or private inholdings within 13 national park units, mostly in the Southeast.

Roughly half of the oil and gas wells within park boundaries are exempt from all federal regulation either because the leaseholders do not cross federal land to access the wells, have valid state permits, or were "grandfathered" in because the wells predate the formation of the park unit.

Such sites are exempt from Park Service mandates requiring firms to obtain federal approval before drilling, file plans of operation with the Park Service, pay fees for building access roads through park property, and post bonds to ensure there is money to pay to plug the wells or for future cleanup.

Oil and gas equipment, such as this abandoned well at Gauley River National Recreation Area in West Virginia, often sits idle for years with little or no oversight. But because such wells are on private inholdings, the Park Service has little authority to do anything about it. Photo courtesy of the National Park Service.

And while most of the operators are required to comply with state environmental statutes, NPS has argued that more should be done to ensure that national park resources are not damaged by drilling rigs and the pollution they produce. As such, the agency maintains that such wells should be subject to the federal Organic Act, which governs most nonconforming activities on Park Service lands.

"Our regulatory revisions are not aimed at reducing domestic exploration and production in national parks where they are authorized," said Jim Woods, an environmental protection specialist with the NPS geologic resources division in Denver. "Our focus is simply on improving protections of park resources."

In documents explaining its proposed revisions, NPS argues that the exempt wells "are not required to operate in a manner that protects park resources and values to the fullest extent practical," and it cites examples of environmental damage caused by exempt drilling at park service units in Kentucky, Tennessee and Texas.

A denuded landscape

Big South Fork National River and Recreation Area, which straddles the Tennessee-Kentucky border, is home to the largest number of exempt nonfederal drilling wells in the NPS system, with 151.

Many of the Big South Fork wells were drilled during wildcat booms in the 1970s and '80s. But over time, drill sites were abandoned or their owners declared bankruptcy, leaving an estimated 56 wells behind. Today, those wells "pose environmental risks and public safety threats, including resource damage from the release of contaminants as deteriorating pressure control equipment fails," according to an NPS analysis of the situation released last year.

"The burden, in those instances, has been on the American taxpayers to plug and reclaim the sites," said Woods, the NPS official.

NPS recently authorized the use of American Recovery and Reinvestment Act money to cap 45 wells at Big South Fork and other park units, and the state of Tennessee has provided funding to cap an additional 14 wells.

NPS officials and environmentalists cite the Big South Fork as a prime exhibit in their campaign to revise Park Service regulations for such inholdings.

"This is actually a pretty big deal when you've got 53 percent of all oil and gas wells inside park boundaries are not regulated by the Park Service," said Bryan Faehner, the National Parks Conservation Association's associate director for park uses.

In formal comments submitted to the agency, Faehner said NPCA is concerned that if the regulations are not revised, the number of exempted operations could grow as the vast Marcellus Shale natural gas deposit is developed from New York to Tennessee.

"The deposit underlies or is in close vicinity to 35 national park units and poses a particularly serious threat to Upper Delaware Scenic and Recreational River in New York and Pennsylvania," he wrote.

Specific reforms

Among the proposed revisions are provisions that would incentivize oil and gas firms to use directional drilling techniques that allow fossil fuels to be extracted without disturbing the ground surface.

Another proposed change would require for the first time that private well owners and operators provide financial assurance that they can meet the cost of cleanups should such measures be necessary.

The agency also wants to remove a $200,000 bonding cap for all drilling operations, a figure that Bill Wade, executive council chairman of the Coalition of National Park Service Retirees, said has "not been nearly enough to clean up all those sites."

In its place, the government would require that drillers be bonded at an amount that provides "financial assurance equal to the reasonable estimated cost of reclamation and liability today."

Another proposed change would allow the Park Service to fine drillers for "minor" environmental violations, such as small spills or unsightly debris piles. The agency could also charge fees for private access to wells that are landlocked within park boundaries and mandate greater financial assurances from industry to plug wells and halt operations.

"To be quiet honest, I think the NPS has deemed the revisions appropriate and necessary several years ago," said Woods. "This is a high priority."

Faehner and other critics note that parcels managed by the Bureau of Land Management and Forest Service, both of which have multiple-use mandates to accommodate drilling and recreational activity, are subject to much stricter regulations than national parks, even though the Park Service is mandated to preserve natural resources for future generations.

"Really, what we're talking about here with these revisions is bringing the Park Service into the 21st century, and putting them at least on par with the BLM and Forest Service in protecting natural resources," he said.

Industry response

Industry groups have remained mostly silent on the proposal.

The American Petroleum Institute has not taken a position, according to a spokeswoman. And local oil and gas drilling trade groups in Texas, Tennessee and Kentucky, where the vast majority of the exempt drilling operations in question are located, did not respond to requests for comment.

Still, the proposed revisions send mixed signals about the federal government's commitment to increasing domestic energy production, said Mike Olsen, a former Interior senior administrator who now works in the environmental strategies group at the law firm Bracewell & Giuliani LLP.

"If you look at it and compare everything that's going on with the current administration, you see that they say one thing, while their actions demonstrate an entirely different approach," Olsen said. "It looks like a pattern of closing public lands to oil and gas, or at least slowing energy production on public lands."

The Park Service's next step will be drafting formal rule revisions. Then, it will conduct an environmental impact statement on the proposed changes, a process that is expected to take at least two years.

Streater writes from Colorado Springs, Colo.