Most, if not all of you, are very familiar with the tensions between natural resource extraction – be it coal or oil and gas – and environmentalists. Advocates of the energy industries want few restraints on exploration and production (E&P). Conversely, environmentalists constantly seek regulatory methods to hinder energy development.

Over the last decade, one of their favored methods has been to invoke the habitat protections created if they can find an endangered or threatened species living in the oil patch or seek to have an animal living there listed as being threatened or endangered. In recent years, environmental groups have petitioned the government to list hundreds of species and then sued when the government did not act on their petitions fast enough. The Fish and Wildlife Service (FWS) ultimately agreed to process petitions for 841 species. For those species that become listed, the Endangered Species Act (ESA) provides security for the designated species irrespective of the economic impact on an industry or community.

More importantly, it does not matter that the industry being adversely affected does no harm to the species. If the species lives, or could live, in the habitat where the natural resources are being extracted, the ESA creates a complex and often expensive series of hurdles through which industry must maneuver. Without going into detail, if E&P activities are found to harm and harass a species by modifying or degrading its habitat or potential habitat, the violator can be assessed both civil and criminal penalties - up to $25,000 per civil violation and $50,000 with up to one year in prison per criminal violation.

In Texas, these tensions manifested in the proposed listing of the Dunes Sagebrush Lizard (also known as the Sand Dune Lizard) that lives in the Permian Basis. The lizard's chief threat is habitat loss due to oil and gas development operations, the conversion of native ecosystems to cropland and rangeland, and increased use of off-road vehicles. Industry and state and local government responded by preparing a voluntary, long-term conservation plan through which landowners and industry agreed to undertake specified conservation practices believed to ensure the lizard’s survival. This worked because the lizard’s chief threat was man-made activity.

Unfortunately, the same cannot be said for three species living in the Appalachian Basin being considered for listing. Specifically, the Northern Long-eared Bat, the Monarch Butterfly, and the Rusty-Patched Bumble Bee.

The main threat to the bat is a fungal disease called “White Nose Syndrome”, which appears to rouse the bats too early when there are no insects on which to feed, and they starve to death. The FWS’s initial proposed solution was not to find a cure or manage the disease but to prohibit cutting down trees in which the bats might live, particularly those trees within a quarter mile from caves or trees in which bats are known to hibernate or roost. FWS seemed to acknowledge habitat control does nothing to solve the bat’s problem but claimed it was a good first step toward protecting the bats. The long awaited Final ESA 4(d) rule for the bat was just published in the Federal Register, 81 Fed. Reg. 1900 et. seq. (January 14, 2016). Thankfully, FWS heeded comments seeking relief for the oil and natural gas industry by limiting the incidental take caused by tree removal as follows:

For northern long-eared bats outside of hibernacula [the caves, mines, and other locations where the bats hibernate in winter], [FWS has] established separate prohibitions from (sic) take for activities involving tree removal and activities that do not involve tree removal. Incidental take of northern long-eared bats outside of hibernacula resulting from activities other than tree removal is not prohibited. Incidental take resulting from tree removal is prohibited if it: (1) Occurs within a 0.25 mile (0.4 kilometer) radius of known northern longeared bat hibernacula; or (2) cuts or destroys known occupied maternity roost trees, or any other trees within a 150-foot (45-meter) radius from the known maternity tree during the pup season (June 1 through July 31).

The three main threats to the butterfly are thought to be (1) deforestation in Mexico, (2) recent bouts of severe weather, and (3) the loss of milkweed on which it feeds because of increased use of herbicide-based agriculture. The three main threats to the bumble bee are thought to be (1) habitat destruction and modification related to urban growth and increased agriculture, (2) microparasites and pathogens from other bees, and (3) commercial use of pesticides, insecticides, herbicide, as well as “global climate change.” Clearly, the only connection between natural resources extraction and these threats is the species live in areas where natural resources exist – east of the Rocky Mountains (Monarch Butterfly) and the eastern seaboard and upper Midwest (Rusty-Patched Bumblebee).

Clients in the oil and gas industry should consider developing a voluntary conservation plan to prevent or forestall the listing of either the butterfly or bumble bee. The current threats to these species are not well understood, and such plans could give both industry and the FWS time to further study these species in return for industry agreeing to plant and/or protect milkweed habitats or the types of flowers from which the bumble bees seek nectar. Although industry is not the source of these species problems, it will have to deal with the fallout from a listing that may affect when and how industry can build infrastructure or drill wells. This issue may become more problematic should the FWS not focus on the species itself but on its “critical habitat” as has been proposed in new rules released in 2014. Unlike many species that have lived in a finite habitat, the bat, butterfly, and bumble bee live and migrate across entire regions of the United States.

FWS’s proposed rules are an attempt to give the government more flexibility and authority to set aside whole tracts of land for species conservation based solely on its projections of a species’ specific needs and the effects climate change may have on current habitat generally. Obviously, if this occurs, industries that need permits to operate in areas designated as critical habitat will face increased regulatory hurdles and uncertainty that will end up causing project delays, increased costs, and even having some development areas suddenly placed off-limits. The final rules are currently under review at the Office of Management and Budget.