Since its inception and the early battles over the snail darter and the Tennessee Valley Authority’s Tellico Dam in the 1970s, the Endangered Species Act (ESA) has been substantially entangled with energy production in the United States. Energy development is no less ensnared today by the Act. Recent significant ESA activities affecting the energy sector include: proposed listing of the dunes sagebrush lizard, which is found in the middle of one of the most prolific oil and gas fields in the U.S.; a suit for injunction of a massive solar power development in the Mojave Desert; and a settlement proposal between the Department of Interior and conservation groups setting an aggressive timetable for future ESA listing decisions involving over 250 species. All of these could have wide repercussions on energy development for some time. This post provides the latest update on how the ESA is affecting the energy sector and outlines some ways that interested parties can play a part in the process.
Recent Listing Proposals and Litigation Affecting the Energy Industry
A number of conservation organizations have filed petitions with the U.S. Fish & Wildlife Service (Service or FWS) to “list” species as endangered or threatened throughout the U.S. When the Service has delayed making listing determinations, conservation organizations have followed up with litigation against the Service.
On July 12, 2011, the Center for Biological Diversity (CBD) announced that it was dropping its opposition to a comprehensive settlement agreement between the Department of Interior and WildEarth Guardians encompassing 13 listing suits filed by WildEarth Guardians and consolidated in the D.C. District Court. The settlement would establish work plans and timelines for the FWS to take key steps in the ESA process on over 250 species. The goal is to make listing decisions by 2016 for all species identified on FWS’s current “candidate list”. The listing of several species covered by the settlement agreement - including the greater sage grouse, the spot-tailed earless lizard, the lesser prairie chicken, and mollusks - could have major effects on the energy industry. The settlement agreement has not been finalized, due in part to a pending motion to intervene by a hunting group. But even the prospect of a set timetable for the listing of certain species has created difficulties for energy development.
The potential listing of species like the greater sage grouse is problematic for alternative energy and the oil and gas sector because they can be found in a number of areas where upstream oil and gas activities and alternative energy projects now exist or are planned. One such area is the energy prolific Powder River Basin area of Wyoming. Sage grouse are also found in Colorado, and in a 2008 rulemaking the Colorado Oil and Gas Conservation Commission proposed a number of provisions that were designed to protect the sage grouse and other sensitive species such as the mule deer, including restrictions on oil and gas well development in "sensitive wildlife habitat". In addition, those provisions gave the Colorado Division of Wildlife a prominent role in the Application for Permit to Drill process. The provisions were actively opposed by industry and became the source of controversy during the rulemaking process.
Recent litigation over the desert tortoise in California’s Mojave Desert shows how the ESA can affect planned developments even after initial ESA reviews show no adverse effects. On June 27, 2011, the conservation group Western Watersheds sought a preliminary injunction and temporary restraining order (TRO) to stop construction of a $1.4 billion solar power plant project. Western Watersheds argued that the project’s impacts on desert tortoises were underestimated during the Bureau of Land Management’s review and approval process. While the TRO was denied, a hearing on Western Watersheds’ motion for a preliminary injunction is set for August 1, 2011.
FWS’s December 2010 proposed listing of the dunes sagebrush lizard in New Mexico and Texas as endangered specifically identified oil and gas, wind and solar energy activities as a threat. This has motivated stakeholders to commence an innovative joint Candidate Conservation Agreement with Assurances (CCAA) and Habitat Conservation Plan (HCP) process to insulate these energy sectors from potential adverse effects resulting from a listing. The use of more “programmatic” CCAAs and HCPs tied to industry activities as opposed to specific properties has taken on increasing importance to the energy sector as it becomes common for listing petitions and proposals to single out industry as a threat to species.
Another example involves litigation brought in March 2010 by The Aransas Project against several officials at the Texas Commission on Environmental Quality (TCEQ). That lawsuit, which was filed in United States District Court for the Southern District of Texas, Corpus Christi Division, alleges that TCEQ is committing “takes” of endangered whooping cranes when it allocates water in the Guadalupe and San Antonio rivers and prevents sufficient flows from reaching Nueces Bay, where the whooping crane is found. To the extent that it seeks wide declaratory and injunctive relief, including relief against a state agency and curtailment of existing water rights, the suit could set a significant precedent for future ESA suits related to water rights and actions by state agencies.
Keeping Up with the Evolving ESA Landscape
As is evident from the description of these recent developments, there are a number of steps in the process of listing a species as endangered or threatened under the ESA. As such, there are also a number of opportunities – both formal and informal – for members of the energy industry to weigh in on this process before the Service reaches the point of actually adding a species to the endangered and threatened species list. In addition, there are opportunities to initiate or intervene in litigation involving FWS with respect to listing actions and other ESA determinations.
To help develop a comprehensive strategy to anticipate and respond to potential challenges posed by ESA and related regulatory activities, interested parties should:
- Survey Potential State and Federal Species and Habitat Listings
- Survey Pending and Threatened FWS Litigation
- Keep Abreast of New and Creative Uses of the ESA and Similar Statutes by Environmental Groups; and
- Assess Risk to Operations and Evaluate Need for Possible Comments on Listings, Intervention in Litigation, or Subsequent Monitoring of Key Listing Decisions and Litigation.
By closely following the constantly evolving ESA landscape and taking advantage of strategic opportunities to influence the listing process and get involved in ESA litigation, the energy such parties can seek to influence the outcome of a process that can significantly impact the ability of companies to engage in energy production.