Last week we outlined the history of the decades-long battle between environmentalists and the oil and gas industry over the obscure species of the dunes sagebrush lizard (DSL) and the potential for this creature to shut down oil and gas production in one of the world’s most productive basins. In the most recent development, the environmental groups filed a petition with U.S. Fish and Wildlife Service (FWS) to reconsider the previously adopted Texas Conservation Action Plan (TCAP) in favor of a formal listing of the DSL on the Endangered Species List.
The Defenders of Wildlife (DoW) and the Center for Biological Diversity (CBD), the two environmental organizations that filed the petition, have never been supportive of the TCAP and have spent the last six years posturing that the TCAP does not work, with very little evidence.
But when frac sand companies moved into the Permian Basin two years ago, environmentalists found their opportunity to act. Because the DSL finds its most livable habitat in the very dunes that are potentially being mined for sand, DoW and CBD assumed that the new industry would negatively impact the lizard. However, in reality, as soon as managers of the TCAP became aware of the potential threat that frac sand presents to the DSL habitat, the state of Texas alerted FWS to the threat and immediately began to make adjustments to the conservation agreement. Today, almost all of the frac sand mining companies in the region are working with the plan to protect the DSL.
Given this fact pattern, and the fact that leadership at FWS is sympathetic to the Texas oil and gas industry, most observers expect that the petition will not result in a listing by the department. But the timing of when this will be settled can go one of a few ways.
The petition was filed on May 8 and FWS has 90 days to review it to determine whether or not it is “substantial” or “not-substantial.”
If found to be “not-substantial,” we can expect a lawsuit to be filed by petitioners as early as late summer or early fall. If FWS wants to take a closer look at the petition, they then have 12 months to determine whether or not the petition request is warranted but precluded, warranted, or not warranted. If not warranted, we can expect a lawsuit to be filed as early as fall 2019.
And, if found to be warranted or warranted but precluded, FWS has another year to publish rules, receive comments, determine final rules, or withdraw any drafted rules. This means that a listing by FWS would be made no later than August of 2020. If no listing is made, a lawsuit demanding FWS to list the DSL is expected to be the next step made by environmentalists. In short, we can expect a lawsuit to be filed as early as fall of this year or as late as fall of 2020.
Regardless of FWS’ ultimate decision, it is likely that the decision to list or not to list will be appealed to the federal court either by environmentalists or by industry, depending on the ruling. In 2012, when environmentalists challenged FWS decision not to list, the court sided with the agency, with the caveat that if the conservation agreements did not work, the issue could be revisited, opening the door to a second appeal. In 2016, DoW appealed the lower court’s ruling, which was upheld by the DC Court of Appeals. The environmentalists will have to prove that in the last two years the conservation plan has failed.
Should the oil and gas industry find themselves in the position of appealing FWS’ decision to list, their burden will be much heavier. Federal Courts have a pattern of siding with endangered species over industry and as recently as last month, shutting down work on 100 miles of the 600-mile Atlantic Coast Pipeline.
While the federal judiciary may be adverse to industry, leaders in the White House and Congress are friendly. In fact, there is an effort in Congress, led by Congressman Bob Bishop (R-UT) to require the Endangered Species Act to consider the economic impact of listing a species. It remains to be seen if this Act of Congress will become law before this particular petition process is exhausted.
While the fate of the DSL will presumably rest with a federal court judge or panel of judges, that also means that the fate of oil and gas production rests in those same hands. In the next and final article, we’ll examine the risk that such a listing poses to the U.S. energy supply and national security.