Fowl Play: Oil Industry Dodges Attack of the Prairie Chicken

Fowl Play: Oil Industry Dodges Attack of the Prairie Chicken

On September 1, 2015, a Federal District Judge in the Western District of Texas vacated the U.S. Fish and Wildlife Service’s designation of the lesser prairie chicken as “threatened” under the Endangered Species Act.[i] Judge Rob Junell’s order to remove the bird’s listing is a victory for the oil and gas industry operating in the prairie chicken’s habitat range because the order lessens the restriction on the incidental “taking” of listed animals. However, the energy industry remains incentivized to continue to comply with successful voluntary conservation plans, such as the Range-Wide Conservation Plan, in order to ensure oil and gas production and exploration processes are not hindered. In this instance, oil and gas development projects have not been delayed by the prairie chicken, but preemptive measures to avoid future prairie chicken “attacks” are wise.

The Endangered Species Act prohibits the “taking” of animals listed as “endangered”.[ii] A “taking” has been broadly defined to include harassment.[iii] Because the lesser prairie chicken was listed as “threatened” rather than “endangered,” the taking of the lesser prairie chicken was subject to a special rule, which provided that any incidental taking of the bird by a voluntary participant enrolled in the Range-Wide Conservation Plan would not be prohibited.[iv] Since the bird is now no longer listed as “threatened,” incidental taking is no longer limited to those enrolled in the plan. However, it is likely that the oil and gas industry will continue to participate in the plan for the following reasons.

The Range-Wide Conservation Plan uses market-based incentives to combine conservation efforts with energy production and exploration efforts. Project developers pay fees that are used to fund private landowners who set aside land for conservation efforts.[v] Some argue that de-listing the bird as “threatened” no longer incentivizes the oil and gas industry to voluntarily enroll in the plan, while others argue that continued participation in the plan should be encouraged because continuing participation evidences the success of voluntary conservation efforts. Judge Junell’s order itself thwarts the hypothesis that industry incentives to participate in the Range-Wide Conservation Plan cease to exist if the lesser prairie chicken is not listed as “threatened.”[vi] He calls it an “arbitrary and capricious” conclusory assumption with “no substantive basis.”[vii] The industry’s cooperation with local residents and environmental conservation efforts showcases the ability of energy and conservation to coexist. Continuing enrollment in the plan thus would help to develop a positive public perception of the industry.

Moreover, relaxed taking standards in relation to future development opportunities may be available only to those who maintain enrollment in the plan. For example, in 2012, TransCanada sought to complete a portion of a pipeline in Oklahoma and Texas.[viii] The American Burying Beetle, a species listed as endangered, occupied habitat in an area through which the pipeline was sited to span, potentially resulting in an incidental taking of the listed species.[ix] TransCanada proactively established a conservation plan with the U.S. Fish and Wildlife Service that protected portions of the beetle’s habitat in perpetuity, and the Keystone McAlester Conservation Area (KMCA) was created as a result.[x] TransCanada was able to satisfy regulators and obtain an incidental “take” permit for this portion of its pipeline, so future permit seekers now have both a model and a vehicle for similar, permanent conservation measures at an American Burying Beetle Conservation Bank located adjacent to the KMCA.[xi]

Because other federal court cases are currently pending over the designation of the lesser prairie chicken, Judge Junell’s order is only the beginning of what will likely be a long judicial process. Initially, the recent order de-listing the bird as “threatened” would appear to result in no restrictions on its taking, and therefore, incidental taking of the bird during energy production would not be subject to discipline under the act, giving oil and gas companies substantial freedom to increase production activity within the range of the prairie chicken and its habitat. However, when public opinion and future “taking” opportunities are considered, preemptive conservation efforts make long-term sense for the industry as a whole, regardless of the judicial end result.

[i] Permian Basin Petroleum Ass’n et al., v. U.S. Dep’t. of Interior, No. 7:14-cv-00050-RAJ (W.D. Tex. Sept. 1, 2015).

[ii] 16 U.S.C. § 1538 (2012).

[iii] 16 U.S.C. § 1532 (2012).

[iv] Endangered and Threatened Wildlife and Plants; Special Rule for the Lesser Prairie-Chicken; Final Rule 79 Fed. Reg. 20074 (April 10, 2014) (to be codified at 50 C.F.R. pt. 17).

[v]Thomas A. Campbell et al., Protecting the Lesser Prairie Chicken Under the Endangered Species Act: A Problem and an Opportunity for the Oil and Gas Industry, 45 Tex. Envtl. L.J. 31, 42-43 (2015).

[vi] Permian Basin Petroleum Ass’n, No. 7:14-cv-00050-RAJ at 12.

[vii] Id.

[viii] Id. at 48-49.

[ix] Id.

[x] Id.

[xi] Id. See also Draft Environmental Assessment and Draft Habitat Conservation Plan for TransCanada Keystone Pipeline’s Gulf Coast Project in Oklahoma, 77: 160 Fed. Reg. 49824 (August 17, 2012).