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Natural Resource Decisions Will Bring Continued Controversy in Second Obama Term

December 21, 2012

Natural resource decisions made in President Obama’s first term included plenty of controversy: the ESA listing of the polar bear, along with listing and delisting of other high profile species; passage of the Omnibus Public Land Management Act; restoration of ESA consultation regulations that the second Bush Administration had altered; prioritization of domestic renewable energy projects; and efforts to zone areas of the ocean. The second term will include increased ESA listing decisions, including on backlogged “candidate” species; continued disputes between environmental groups, agencies, and developers over energy development on public lands; disputes over the designation of critical areas for wildlife; and, possibly, some level of implementation of a national ocean policy.

Upcoming ESA Listing Decisions

The Obama Administration has listed species at an average rate of between 25 and 30 annually: more than former President George W. Bush’s average of 8 per year, while less than the averages of former Presidents William Clinton (65 per year) and George H.W. Bush (58 per year).[1] As a result of court orders and settlements with environmental groups, however, Obama’s second term will include considerably more listing decisions that will affect a wide range of resources and, potentially, increased use of ESA candidate conservation agreements (“CCAs”) designed to avert federal listings.

Pursuant to a September 2011 settlement with the Center for Biological Diversity (“CBD”) and WildEarth Guardians (“WEG”), the U.S. Fish & Wildlife Service (“FWS”) has committed to take final action by 2016 on 251 species currently listed as “candidates” for ESA listing, and to make initial findings on listing eligibility for many more species.[2] FWS’s increased activity may complicate resource development in the West and in other regions of the nation.

The theory behind the settlement is to give FWS a reprieve from litigation and listing petitions so it can dedicate more resources to addressing its backlog of candidate species. FWS has indicated that this backlog is attributable in part to the resources it must dedicate to defending itself against ESA lawsuits. CBD and WEG, however, are still dissatisfied with the declining number of ESA listings and FWS’s pace. In an effort to expedite listings, CBD and WEG agreed to limit litigation and WEG agreed to limit its listing petitions on the condition that FWS takes a range of steps to accelerate its consideration of nearly 800 species, beginning with 251 species on the “candidate” list.[3]

This new wave of potential listings has raised conflicts with resource development in several contexts. The proposed listing of the dunes sagebrush lizard and a new effort to list the lesser prairie chicken, for example, involve species that share habitat with significant oil drilling operations in the Southwest, including the Permian basin in west Texas and southeast New Mexico.[4]

FWS proposed to list the dune sagebrush lizard as endangered in 2010, but in June 2012, determined not to protect the species under the ESA. The listing proposal was controversial from the beginning.[5] Ultimately, FWS determined that the Texas Conservation Plan, a CCA with assurances, would provide sufficient protection to the lizard without requiring an official listing.[6] The plan—pioneered by the Texas Comptroller and FWS Southwest Region over a 10-month period—reflects an effort to balance the needs of the lizard with the interests of the oil and gas industry by identifying voluntary measures industry will take to protect the lizard.[7] FWS retains the right to reinitiate the listing process should the measures prove inadequate.[8]

With the dunes sagebrush lizard conflict finally concluded, at least for now, FWS is again facing fierce opposition, this time over the listing of the lesser prairie chicken. The lesser prairie chicken is a grouse with a shrinking prairie habitat in Colorado, Kansas, New Mexico, Oklahoma, and Texas.[9] Even before FWS’s November 30, 2012 proposal to list the chicken, Republican lawmakers and energy groups argued that federal protections could devastate oil and gas development as well as wind farms and transmission projects. While some stakeholders are optimistic that the voluntary agreement created for the dunes sagebrush lizard can serve as a model for protecting the lesser prairie chicken, the chicken poses unique challenges. Its habitat is more spread out than the lizard’s, and much of the land is privately owned.

Still, a final listing could hypothetically be unnecessary if sufficient measures are taken to conserve the chicken’s remaining habitat. If a listing is to be avoided, many stakeholders from several states with diverse interests would have to work together to arrive at an acceptable agreement.[10] Such efforts are underway in the form of a draft CCA.[11]

As part of FWS’s settlement with WEG, FWS agreed to submit a proposed rule or “not warranted” finding for the following species no later than the end of the specified fiscal year: New Mexico meadow jumping mouse (2013); Pacific fisher (2014); greater sage-grouse, including any Distinct Population Segments (2015); Sonoran desert tortoise (2015).[12] As a result of FWS’s settlement with CBD, FWS agreed to do the same with the following species: cactus ferruginous pygmy owl (2011); Acuna cactus, Jollyville Plateau salamander, Mexican wolf, Miami blue butterfly, Mt. Charleston blue butterfly, spring pygmy sunfish, and wekiu bug (2012); Ashy storm-petrel, bi-state (Mono Basin) distinct population segment (“DPS”) of greater sage grouse, Dakota skipper, eastern small-footed bat, Kittlitz’s murrelet, Mexican garter snake, mountain yellow-legged frog, North American wolverine, northern long-eared bat, Oregon spotted frog, red knot, Rosemont talussnail, yellow-billed cuckoo, and Yosemite toad (2013); Arctic grayling, black pine snake, least chub, Rio Grande cutthroat trout, Tucson shovelnose snake, west coast fisher DPS, and yellow-billed loon (2014); Eastern massasagua, greater sage-grouse range-wide (including Columbia DPS), headwater chub, Kentucky arrow darter, New England cottontail, roundtail chub, and southern Idaho ground squirrel (2015); Relict leopard frog, and Tahoe yellow cress (2016); and Pacific walrus (2017, post-Obama).[13]

FWS has met some but not all of those 2012 deadlines. For example, it determined that listing the pygmy owl,[14] Mexican wolf,[15] and wekiu bug[16] is not warranted. FWS also listed the Miami blue butterfly as endangered.[17] FWS found listing of the Acuna cactus and the Jollyville Plateau salamander warranted but precluded. FWS also proposed to list the Mt. Charleston blue butterfly in September 2012[18] and the spring pygmy sunfish in October 2012,[19] but is seeking new information on both before making a final decision.

Still looming is the contentious listing decision for the sage grouse. 2013 promises an initial decision on the Mono Basin DPS of greater sage grouse. By the end of 2015, FWS must make a final listing decision for all sage grouse. Listing could impact millions of acres of Western lands important to farming, resource extraction, and other economic interests.[20] Similar levels of controversy surround other pending listing decisions, including, in particular, the Pacific Walrus and Sonoran desert tortoise.

With the September 2011 settlement in place, industry pushing back on some listing proposals, and FWS falling behind on some elements of the settlement listing schedule, CBD continues to put pressure on FWS to do more. In July 2012, CBD proceeded with a new ‘mega-petition‘ seeking protection for 53 amphibians and reptiles with habitats across 45 states.[21] While CBD declared the petition a necessary step to prevent a mass extinction,[22] FWS warned that the petition could siphon resources from efforts to comply with the settlement.

FWS has not begun to consider publically whether these amphibians and reptiles warrant listing. When it does, conflicts between stakeholders, agencies, and environmental groups will surely arise. The Arizona toad, for example, has an extensive range including much of the Southwest. Its listing could impact oil and gas operations, renewable energy development, and a range of other economic interests. Several species covered by the petition reside in the West, where listing could clash with a range of energy projects. Listing of the alligator snapping turtle could affect 14 or more states across the Southeast and Midwest, as the FWS has previously found that the species is threatened by habitat destruction and water pollution (i.e., bioaccumulation of industrial and agricultural toxins).[23] In the Northwest, a listing of the Cascade torrent salamander, which occupies cold streams in Oregon and Washington, could affect the timber industry and hydropower operations.[24]

Obama’s first term was marked by a period of relative ESA listing inactivity due in part to resource constraints and focus on certain high-profile species.[25] Over the second term, the 2011 settlements, FWS’s commitment to an accelerated pace, and CBD’s new mega-petition will generate more challenges in balancing resource development and species protection.

Recent and Upcoming Critical Habitat Designations

Northern Spotted Owl Designation and NW Timber Industry

Last month, FWS designated 9.6 million acres, almost entirely on federal land, in Washington, Oregon and California as critical habitat for the spotted owl. While the final area is smaller than originally proposed in March 2012 (13.9 million acres), the designation covers more area than the 1992 and 2008 rules did. FWS excluded private land, and provides for active management that will allow thinning and logging in some areas.

As is often the case, the reasons for the owl’s decline are uncertain, controversial, multi-faceted, and being exacerbated by climate change. The FWS’ approach to achieving spotted owl recovery involves reducing competition from barred owls—larger, more aggressive owls that tend to out-compete spotted owls; actively managing forests to improve their ecological health; and protecting what remains of premier spotted owl habitat.[26]

The designation covers a large area of land, and has drawn criticism.[27] The FWS, however, does not anticipate major regulatory changes—while some Oregon state lands are covered by the rule, the designation should not affect the state’s management or timber harvest on those lands. The Service will also continue working with BLM and the FWS to protect old growth forests on federal lands, while conducting some harvesting aimed at reducing wildfire and insect infestations. Still, the Service estimates that the overall spotted owl population is declining at a rate of 2.9% annually. It is weighing potential barred owl management measures, and the designation only affects actions with a federal nexus on the designated lands.[28]

Forthcoming Designations of Critical Habitat

As a result of the CBD and WEG settlements, as of August 2012, FWS had issued nine rules designating critical habitat. Because the settlements do not explicitly require habitat designations be made, but only require them to “the maximum extent prudent and determinable” (per the statute), it is difficult to predict what decisions may be forthcoming.

When and if such proposed rules are published, however, they will likely be accompanied by an economic analysis. FWS and NOAA Fisheries are expected to publish a final rule—originally proposed in late 2012—that mandates publication of a draft economic analysis for public comment at the time a Service proposes critical habitat. The rule would require use of the “baseline” approach in that analysis, which limits the scope of economic impacts considered to those for which designation is the “but for” cause.[29]

Potential Changes in Ocean Management

U.S. ocean management has historically been implemented under a patchwork of federal and state laws by coastal states and nearly 30 federal agencies with varying legislative directives. In 2009, the Obama Administration established an Interagency Ocean Policy Task Force, led by the White House Council on Environmental Quality, to develop recommendations for a national policy for protection, maintenance, and restoration of oceans, coasts, and the Great Lakes, as well as a framework for coastal and marine spatial planning.[30] Following through on Task Force recommendations, President Obama’s second term is likely to include a push for major changes in ocean management, such as zoning of offshore areas.

In July 2010, the Task Force issued its Final Recommendations, which President Obama incorporated into Executive Order 13547. They represent the first federal attempt at a comprehensive planning policy for ocean areas in U.S. jurisdiction and the Great Lakes. The Task Force describes the recommendations as follows:

(1) our Nation’s first ever National Policy for the Stewardship of the Ocean, Our Coasts, and the Great Lakes … ;
(2) a strengthened governance structure to provide sustained, high-level, and coordinated attention to ocean, coastal, and Great Lakes issues;
(3) a targeted implementation strategy that identifies and prioritizes nine categories for action that the United States should pursue; and
(4) a framework for effective coastal and marine spatial planning (“CMSP”) that establishes a comprehensive, integrated, ecosystem-based approach to address conservation, economic activity, user conflict, and sustainable use of ocean, coastal, and Great Lakes resources.[31]

In the Executive Order, President Obama ordered implementation of the Ocean Policy and associated infrastructure under authority of “the Constitution and the laws of the United States.” The Ocean Policy does not supersede or change any federal or state agency or department’s authority.[32] But the Policy contains big ideas that, if realized, would change the face of ocean management in the United States.

In January 2012, the National Ocean Council published its Draft National Ocean Policy Implementation Plan. The Plan sets nine “priority objectives,” and calls for over 50 actions to be taken by approximately 30 federal agencies and interagency task forces. One of the most specific objectives is CMSP. To be implemented by nine regional planning bodies, the White House’s National Ocean Council asserts that CMSP is authorized by an amalgam of federal environmental laws. CMSP would use ecosystem-based management approach meant to enable sustainable and cohesive operation of established uses like fishing, transportation, mining, oil and gas, and accommodate newer uses like off-shore renewable energy and aquaculture.

Given heavy opposition and the discordant state of the 112th Congress, however, full implementation of the Ocean Plan is far from certain.[33] Some federal Republican lawmakers, supported by a variety of industry groups, have worked to stop the Policy before it starts. They question the Policy as a potential usurpation of legislative authority, and worry that it would create more federal bureaucracy and a zoning overlay with new regulatory burdens and costs. Environmental groups and Democratic lawmakers have largely supported the policy, arguing that it will streamline bureaucracy, encourage sustainable development, and replace a confusing patchwork with cohesive, transparent planning.[34]

The biggest obstacle remains funding. In prior budget requests, President Obama has sought Ocean Policy funds for CSMP, geospatial modernization, regional ocean partnership grants, and integrated ecosystem assessments. The Administration would also spread investments across several federal agencies for “activities that support these recommendations, including: habitat restoration, water quality improvement, port and coastal security, improvements in marine transportation safety and efficiency, coastal and estuarine land protection, research and development of ocean sensor technology, catch-share based fisheries management, environmental tools to support resilient coastal communities, and ocean acidification research.”[35] The FY2013 Budget Request would provide over $5 billion for NOAA, an increase of approximately $160 million, toward “the agency’s core responsibilities for environmental science and stewardship, including implementation of the National Ocean Policy.”[36] The House Natural Resource Committee has included language in the House Interior and Environment Appropriations bill, however, to block all funding for the Ocean Policy.

It is not yet clear whether the Ocean Policy will be robustly implemented or, if insufficiently funded, just create a venue for inter-agency dialogue on convergent interests in ocean areas. If the former, then regulated entities in fishing, aquaculture, agriculture, offshore energy development and others can expect major changes and should take full advantage of public involvement opportunities. The fate of the National Ocean Plan remains to be seen.

For more information, contact Jessica Ferrell or any other member of Marten Law’s Natural Resources practice group.

[1] See J. Harkinson, Obama: Not So Wild About Wildlife, Mother Jones (Jan. 6, 2011).

[2] Settlement with CBD here; Settlement with WEG here. See also Pat Parenteau & Dan Niedzwiecki, Landmark Settlement Under the Endangered Species Act, Vermont Law Top 10 Environmental Watch List 2012 (2012).

[3] See generally id.

[4] Terrence Henry, How the Conservation Plan for the Dunes Sagebrush Lizard Works, NPR’s StateImpact (June 15, 2012).

[5] Karl Rundgren, Protests Continue Against Dunes Sagebrush Lizard In Midland, Permian Basin 360 (Jan. 17, 2012).

[6] Jemma Denny, The Texas Conservation Plan: The Good, The Bad and the Lizard, Ecosystem Marketplace (June 18, 2012).

[7] For the dangers of relying on such voluntary agreements, however, see J. Ferrell, Ninth Circuit Invalidates Biological Opinion on Ruby Pipeline, Marten Law News (November 27, 2012 ).

[8] See Denny, supra n.6.

[9] Phil Taylor, Interior proposes ‘threatened’ listing for bird with habitat coveted by energy developers, Greenwire (Nov. 30, 2012).

[10] See id.

[11] Staff, Lesser Prairie-chicken to be Considered As “Threatened” Species Under the Endangered Species Act, Kansas City InfoZine (Dec. 3, 2012).

[12] WEG and FWS Settlement, Exhibit 1.

[13] CBD and FWS Settlement, Exhibit 1.

[14] Endangered and Threatened Wildlife and Plants; 12-Month Finding on a Petition To List the Cactus Ferruginous Pygmy-Owl as Threatened or Endangered With Critical Habitat, available here.

[15] FWS, U.S. Fish and Wildlife Service Issues Finding on Mexican Wolf Petitions (Oct. 5, 2012).

[16] Endangered and Threatened Wildlife and Plants; Review of Native Species That Are Candidates for Listing as Endangered or Threatened; Annual Notice of Findings on Resubmitted Petitions; Annual Description of Progress on Listing Actions (Oct. 26, 2011), available here.

[17] FWS, Miami Blue Butterfly Receives Federal Endangered Species Status (Apr. 5, 2012).

[18] FWS, Service Proposes to Protect the Mt. Charleston blue butterfly and Five Similar Butterflies Under the Endangered Species Act (Sept. 26, 2012).

[19] FWS, Service Proposes to Protect the Spring Pygmy Sunfish and Designate Critical Habitat under the Endangered Species Act (Oct. 1, 2012).

[20] See J. Ferrell, Potential Sage Grouse Listing Continues to Shape Western Energy Development and Grazing Rights, Marten Law News Jan. 17, 2012).

[21] Natural Resources Committee, Center for Biological Diversity Disregards 2011 Settlement Agreement, Files Major Endangered Species Act Petition (Aug. 8, 2012).

[22] Center for Biological Diversity, The Amphibian and Reptile Extinction Crisis (July 2012).

[23] FWS, 70 Fed. Reg. 74700 (Dec. 16, 2005) (listing turtle under CITES App. III).

[24] Id.

[25] See J. Harkinson, Obama: Not So Wild About Wildlife, Mother Jones (Jan. 6, 2011).

[26] FWS, Northern Spotted Owl Recovery Plan (2011).

[27] Republican lawmakers, including Doc Hastings (R-Wash.), chairman of the House Committee on Natural Resources, argue that the Northwest Forest Plan governing spotted owl habitat has eliminated jobs and large bases of the Northwest timber economy over the past 20 years, but failed to promote the owl’s recovery.

[28] For all regulatory documents referenced and cited in this section, visit the FWS’ NSO website.

[29] See J. Ferrell,Proposed Rule Would Limit Extent of Economic Impacts Considered in ESA Critical Habitat Designations, Marten Law News (Oct. 12, 2012)

[30] See J. Ferrell, The Year Ahead in Energy and Environmental Law: Natural Resources, Marten Law News (Jan. 14, 2010).

[31] Ocean Policy Task Force, Final Recommendations (2012).

[32] Executive Order 13547 (2010).

[33] So far, the Ocean Council has obtained its first director, former Massachusetts and Maine bureaucrat Deerin Babb-Brott, who worked on the Massachusetts Ocean Plan and oversaw environmental review for Cape Wind. See A. Winter, Sea-loving New Englander takes helm of Obama’s coastal policy, Greenwire, July 30, 2012. The first regional ocean planning meeting recently occurred in Portland, Maine. In the November meeting, federal, state, tribal, and New England Fishery Management Council representatives met, as part of the newly minted “Northwest Regional Planning Body.” The meeting marked the first in the country to attempt to implement the recommendations of the Ocean Policy.

[34] For discussion, see A. Jensen, NOAA, administration press on with ocean policy changes, Alaska J. of Comm. (2012).

[35] See White House Ocean Policy, Fact Sheet (2012).

[36] FY2013 OMB Budget Request at 71.

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