On August 28, 2012, the Center for Biological Diversity (“CBD”) served an Endangered Species Act sixty-day notice on the Bureau of Land Management, U.S. Fish and Wildlife Service, National Marine Fisheries Service, and the Secretaries of Commerce and Interior indicating its intent to sue.   The allegation?  “[F]ailing to reinitiate consultation regarding its oil and gas activities in California, in violation of the Endangered Species Act (“ESA”).”

“Specifically, BLM continues to issue oil and gas leases and drilling permits that allow intensive, controversial, and environmentally destructive hydraulic fracturing (“fracking”) techniques, but the agency relies on outdated biological opinions that fail to evaluate the substantial impacts these techniques – and the consequent increase in drilling these techniques facilitate – may have on ESA-listed species.”

Even more specifically, CBD – perhaps the most litigious of all environmental groups when it comes to the ESA – alleges that while oil and gas activities in the Monterey Shale Formation conducted throughout the San Joaquin Valley have been authorized for decades, “new and intensified drilling techniques, referred to as ‘fracking,’ have substantially increased the economic feasibility and the environmental risks of drilling.”  The Monterey Shale Formation is the “largest shale oil formation . . . , which is estimated to hold 15.4 billion barrels or 64 percent of the total shale oil resources” in the lower 48 states.  The focus of the letter is on the areas served by BLM’s Bakersfield and Hollister Field Offices.

The first eleven pages of CBD’s 27 page letter contain a detailed recitation of the history of hydraulic fracturing and technical details.  Not surprisingly, this discussion highlights public health studies ascribing significant adverse impacts to the components of fracking fluids and the hydraulic fracturing process itself, including Theo Colborn, et al., “Natural Gas Operations from a Public Health Perspective” and Lisa McKenzie, et al., “Human Health Risk Assessment of Air Emissions form Development of Unconventional Natural Gas Resources.”  Colborn is the head of a self-described environmental organization, The Endocrine Disruption Exchange, and the study was commissioned by the Oil and Gas Accountability Project, a component of Earthworks.  The McKenzie study, measuring benzene and other airborne pollutants near gas wells in Garfield County, Colorado, has been criticized for, among other things, “using a limited number of air monitors” and at sites within one mile of a major interstate highway.  According to Energy in Depth bloggers Sue Mickley and Uni Blake,

The location of the study’s limited sampling data sacrifices the study’s findings. Especially, considering EPA, in its Final Rule to Reduce Mobile Source Air Toxics, notes that “most of the nation’s benzene emissions come from mobile sources.  People who live or work near major roads, or spend a large amount of time in vehicles, are likely to have higher exposures and higher risks (emphasis added)." Meanwhile, the study’s control samples were three miles removed from that same interstate.

The balance of the petition describes the listed species and hypothesized impacts from current and future fracking activities.  These include the California condor, which has been the subject of a $40 million reintroduction effort.  CBD states, “In one National Wildlife Refuge [“NWR”] that allowed oil and gas development, FWS estimated that 63 percent of critical condor habitat was lost.”  While that figure is correctly quoted, it was based on 1980 estimate of the Hopper Mountain NWR.  The 2003 Government Accountability Office report which CBD cites, however, goes on to state:  “The current refuge manager said that the effect of this loss on the condor population may not be significant because the importance of the feeding habitat provided by the refuge may not be as great as previously thought.”  Other species highlighted in the 60-day letter include:  the San Joaquin kit fox, blunt-nosed leopard lizard, steelhead, and the giant kangaroo rat and others.

The thrust of the petition is that recent advances in fracking techniques, which undoubtedly have made it economically feasible to recover greater amounts of gas and oil resources from areas such as this where conventional recovery has been largely played out, will cause impacts on listed species the agency has not adequately considered.  CBD’s assertions include that “[h]orizontal drilling requires larger well pads than traditional vertical well drilling, and the industrial activity taking place on the pads is more intense, impacting wildlife and habitat.”  Thus, the claim is that the shift toward fracking will entail more habitat disturbance and harassment of listed species than has been accounted for in past resource management plans.

The organization also makes familiar claims about increased air, water (ground and surface), and toxic substance pollution from operations, waste water disposal, and leakage.  In particular, with respect to steelhead, CBD claims that both the potential for pollution and water withdrawals – always an issue of contention in California – will have adverse and unaccounted for impacts on river-spawning fish.  Increased traffic and access roads are also cited as unaccounted-for impacts on listed species.

The ESA Consultation Process

As we noted in a prior post, there are number of ESA-listed species throughout the range of the major shale oil and gas plays, and many more species in the pipeline for listing decisions.  If CBD is successful in spurring consultation in the Monterey Shale Formation, either through the threat of litigation or actual litigation, similar efforts will undoubtedly ensue elsewhere.

Under the ESA, federal agencies must consult with FWS or NMFS, for marine species like steelhead – collectively, “the Services” – in order to ensure any activities undertaken or permitted are “not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of” critical habitat.  16 U.S.C. § 1536(a)(2).  An “agency shall . . . request” from the Services information regarding whether listed species “may be present” in a proposed action area, and if so, the “agency shall conduct a biological assessment” to identify species that might potentially be affected.  Id. § 1536(c).  If a proposed action “may affect” any of those listed species, formal consultation must be undertaken.  50 C.F.R. § 402.14(a).

The resulting biological opinion determines whether or not the agency action is likely to “jeopardize” a listed species.  A jeopardy finding can result in imposition of “reasonable and prudent alternatives” the Services may find necessary to avoid extinction.  16 U.S.C. § 1536(b).  If the action, or the action as modified by the RPAs, will not cause jeopardy, the Services issue an incidental take statement (“ITS”) specifying an allowable take limit of various species.  The ITS protects a party from liability that otherwise attaches to taking a listed species.

Consultation must be reinitiated when: (1) the incidental take level is exceeded; (2) new information reveals that the action may have effects not previously considered, or (3) the action is modified in a way not previously considered.  50 C.F.R. §§ 402.16; 402.14(h)(3). 

Analysis

As CBD’s letter acknowledges, there have been numerous consultations between the BLM and the Services over the course of the past two decades.  The real question is whether these programmatic and project-specific consultations are legally adequate.  CBD contends they are not, alleging that fracking-specific impacts have not been accounted for and that BLM has not reasonably accounted for future growth of such activities.  Notably, CBD has previously submitted 60-day notices (in 2009) “alleging BLM violated the ESA by approving various oil and gas lease sales in the Bakersfield and Hollister Field Office areas.”  These notices were revived in the current letter.  Given CBD’s history of litigation, the agencies will undoubtedly take notice.

Regardless of whether BLM reinitiates consultation in response to the letter, it is clear that future and even current permitted projects in the Monterey Shale Basin will receive heightened scrutiny.  What impacts this may have on operations is unknown, but the most likely outcome will be increased conditions in the form of reasonable and prudent measures being imposed to mitigate any adverse impacts.  Perhaps of most concern would be any addressing issues of water withdrawals and wastewater storage or disposal.  More broadly, it is reasonable to expect that CBD will expand its ESA activities in the fracking realm beyond California.