On March 1, the oil and gas industry won a significant victory when the Court of Appeals for the D.C. Circuit upheld the U.S. Fish & Wildlife Service’s (“FWS”) decision that conservation agreements supported by the industry obviated the need to list the dunes sagebrush lizard under the Endangered Species Act (“ESA”).  Conservation Agreements are a critical means for responsibly developing oil and gas plays while protecting species in the surrounding ecosystem.

The dunes sagebrush lizard is a small lizard found in New Mexico and Texas that was allegedly threatened from habitat fragmentations caused by from oil and gas production and ranching.  States, landowners and land-access industries teamed up to develop conservation agreements for New Mexico and Texas that help mitigate the effects that oil and gas drilling has on the land and on the lizard.  FWS decided that those efforts displaced the need to list the species under the ESA, and withdrew the proposal to list the species.

Environmental groups challenged that finding and the decision to withdraw in court.  They alleged that the conservation agreements were not sufficiently certain to be effective or to be implemented, and they argued that voluntary protections could not replace regulatory controls.  Numerous oil and gas industry associations, including the American Petroleum Institute, Independent Petroleum Association of America, New Mexico Oil & Gas Association, Permian Basin Petroleum Association, and Texas Oil & Gas Association, intervened in the suit on behalf of FWS.  The District Court decided in favor of FWS and industry, and the environmentalists appealed.

On appeal, the Circuit Court upheld the district court’s decision, clearly recognizing the value and importance of voluntary conservation agreements, and the propriety of the Service’s consideration of those agreements in listing decisions.  The Court deferred to FWS’s judgment that the conservation agreements met the criteria to be considered a reliable protective measure, even if they weren’t “foolproof.”  This decision is a victory for oil and gas interests, which are increasingly relying on voluntary conservation agreements to keep lands open to development.