“Is that worth an additional investment in our field capacity, to make those kind of partnerships happen and to ensure that they’re successful? I think that it is,” Ashe declared.
But environmental organizations and conservation investment groups aren’t so sure. They are warning that state wildlife managers are going to miss a key conservation deadline that was established when the lesser prairie chicken was added to the list of threatened species protected by the Endangered Species Act (ESA) a year ago (E&ENews PM, March 27).
The failure to meet the Sunday, March 30, deadline established in that listing could immediately put the partnership, the species and millions of dollars at risk, according to the environmentalists and investors. It could also, they say, limit the potential for FWS to apply the conservation model it pioneered with the lesser prairie chicken to recovering the greater sage grouse and other animals under threat.
“They’ve all gotten themselves painted into a corner of their own painting,” said Donald Barry, who oversees conservation programs for Defenders of Wildlife, in a phone interview yesterday. Referring to FWS and its state partners, the Western Association of Fish and Wildlife Agencies (WAFWA), he said, “it looks like they’re not going to be in compliance.”
At issue is a special rule FWS finalized when the lesser prairie chicken was listed as threatened. That rule, authorized under Section 4(d) of the ESA, allowed land users in Colorado, Kansas, New Mexico, Oklahoma and Texas who took part in a Range-wide Conservation Plan drafted by WAFWA to be exempted from the prohibitions on accidentally harassing, injuring or killing the ground-dwelling bird.
WAFWA’s plan in turn required land users to pay the organization mitigation fees for disturbing the lesser prairie chicken or its habitat and promised that WAFWA would offset twice as much harm as users inflicted by funding a mix of permanent conservation habitat and short-term conservation efforts.
The plan also granted the powerful oil and gas industry — which pledged to spend around $43 million on habitat conservation for the bird by 2017 — a one-year waiver from needing to have in place the 25 percent permanent to 75 percent temporary mitigation offset ratio before drilling (E&ENews PM, June 3, 2014).
But on Monday, that waiver period will be over.
If WAFWA hasn’t enough secured permanent mitigation credits, FWS could potentially force oil and gas companies to stop drilling in areas that are home to the lesser prairie chicken. Those offsets protect larger areas and are more difficult to obtain from ranchers, farmers and other landowners.
“The legality of FWS’s unprecedented decision to utilize a threatened listing and 4(d) rule to grant exceedingly broad ESA regulatory exemptions for activities that have been jeopardizing the lesser prairie chicken’s continued existence, and to delegate to an association of state agencies the lead role in conserving a federally-listed species, will be further called into question if the states and plan participants are allowed to violate a critical aspect of the [rangewide plan],” said Defenders of Wildlife President and CEO Jamie Rappaport Clark in a letter sent yesterday to Interior Secretary Sally Jewel, who oversees the FWS.
The leaders of Defenders are intimately familiar with the challenges facing Jewell and Ashe. During the Clinton administration, Rappaport Clark led FWS and Barry served as the Department of the Interior’s assistant secretary for Fish, Wildlife and Parks.
They are now part of a coalition of environmental groups that is suing Interior for listing the bird as threatened instead of endangered — a higher level of protection that they believe the species warrants.
At the same time, however, Interior is also facing four other lawsuits from oil trade associations, agricultural interests and the state of Oklahoma. Those plaintiffs argue that the agency should have never listed the species at all (E&ENews PM, June 17, 2014).
Distinguished by their elongated neck feathers, brown-and-white stripes and elaborate mating dance, the population of fewer than 23,000 lesser prairie chickens survive on 17 percent of the species’s historic range. In addition to habitat fragmentation, energy development is one of the main threats to the bird.
But Ashe downplayed the possibility of an oil and gas drilling freeze in the southern Great Plains at a House Natural Resources subcommittee budget hearing last week (E&E Daily, March 20).
After Rep. Jared Polis (D-Colo.), a prominent critic of the fossil fuel industry, asked the director about whether FWS plans to waive the deadlines set out in the special rule, Ashe suggested that there was more flexibility in the rangewide plan than environmentalists and investors assert.
“Maybe we have the disagreement about whether that March 30 deadline is clear,” he told Polis. “I believe it’s ambiguous.”
WAFWA, he added, is “making substantial progress in following through on the plan.”
Critics of Ashe’s interpretation, however, point to language in the participation agreement that oil and gas companies signed to be covered by the 373-page rangewide plan and the protection it provides from ESA violations. It seems to plainly spell out the deadline and requirements for companies going forward.
“Any temporary shortfalls in offset units incurred during the Waiver Period must be fulfilled by March 30, 2015. After March 30, 2015, the Administrator will require that sufficient offset units are available for mitigation prior to the commencement of Impact Activities,” said the agreement that the companies signed.
“They’re trying to manufacture this ambiguity,” said Wayne Walker, the CEO of LPC Conservation LLC, an Oklahoma-based company set up to buy lesser prairie chicken habitat and sell permanent conservation credits. “The plan requires that all of the mitigation be put in place.”
A few days ago, FWS approved 29,082 acres of lesser prairie chicken habitat overseen by LPC Conservation to be sold for long-term conservation credits.
The approved land is located in Kansas, which is currently the state with the largest population of the bird. It is divided into two parcels that LPC Conservation would manage in perpetuity for the benefit of the species — if it can sell the credits soon.
Delay ‘wipes our business plan out’
Walker and his investment partners, who bought into the venture with the March 30 deadline in mind, will take a major hit if FWS doesn’t enforce terms of WAFWA’s rangewide conservation plan. They flew into Washington, D.C., earlier this week to make a last-minute pitch for their credits to regulators, lawmakers and reporters.
After they arrived, WAFWA responded to a proposal LPC Conservation had sent to it to sell the approved permanent credits.
“I cannot disclose the details but it was not positive,” Walker said in an email yesterday.
Even more concerning for the investors, however, is a rumored proposal to extend the compliance deadline for five years.
“That just wipes our business plan out,” said George Howard, a LPC Conservation investor and the CEO of Restoration Systems LLC, another so-called conservation bank based in North Carolina.
LPC Conservation, he explained in a phone interview last week, had to spend a lot of money up front enticing landowners to change their management practices and ensuring that their properties are home to lesser prairie chickens.
“We spent $60,000 on helicopters last year monitoring every single bird,” Howard said. If an extended compliance delay materializes, he added, “I will have lost a million-and-a-half dollars, personally.”
Implications for sage grouse
But the significance of the potential delay extends beyond its immediate impact to conservation bankers — or even the lesser prairie chicken. As Ashe suggested to lawmakers, the partnership model employed in its recovery could conceivably be used to reduce the impact of a listing for another wide-ranging bird, the greater sage grouse.
Investors, however, will be loath to put their money in conserving grouse habitat if they don’t have confidence that FWS will enforce the deadlines it sets, Howard suggested.
“The chicken is going to set a standard for many decades to come in exactly what results after a listing,” he said.
Howard said he largely blames state “wildlife bureaucrats who are running the fee program” for the lack of certainty hanging over the lesser prairie chicken recovery effort and the partnership model it is pioneering.
The U.S. Government Accountability Office has raised concerns about such “in-lieu fee” mitigation programs in the past.
“The [Fish and Wildlife] Service has done limited monitoring to ensure fees are used as intended and desired mitigation results are achieved,” GAO said in a 2001 report requested by Rep. Don Young (R-Alaska).
“Although monitoring requirements are a part of each approved project and the required reports are usually sent to the Service, few site visits are made to verify findings or evaluate results,” the auditors said at the time. A GAO spokesman confirmed that the agency has not revisited the topic since then.
FWS claims that it has greatly improved its oversight of the mitigation program.
“We still do not have a national tracking system for in-lieu fee programs, but then we have very few of these programs,” an agency official said today in an email. “The Service monitors each in-lieu fee program it has approved at the field office level.”
But Howard argued that the system is inherently flawed.
“Inevitably, these little cabals get empowered with charging the public for impacting resources and then get to administer those funds pretty much how they choose. It turns into an exercise in kind of empire building,” he said. “They think a win for us is a loss for them, which is ridiculous.”
Asked about the potential for a delay, WAFA suggested that it may not miss the mitigation deadline after all.
“I hadn’t heard of anything about a delay,” said Bill Van Pelt, the organization’s grassland coordinator.
The oil industry is also unconcerned by the looming due date.
“We don’t think the expiration of the waiver period will have any effect,” Ben Sheppard, the president of the Permian Basin Petroleum Association, said in a phone interview today. The Texas-based oil group filed one of the five lawsuits against Interior over the controversial lesser prairie chicken listing.
“Surveys have showed that the population is increasing, and we believe this means that the mitigation efforts that are underway are having some effect,” he added. “We feel like the rangewide plan is continuing to function exactly as it’s intended, the implementation is on schedule and the birds are responding.”
But Van Pelt didn’t directly respond to questions about concerns that WAFWA wasn’t going to be able to meet Monday’s 25 percent permanent mitigation requirement.
Its required annual report will discuss “how the mitigation program identifies the impact units and offset units. Our obligation is to balance those by the date, and our report will detail that,” he replied.
Barry of Defenders wasn’t surprised to hear that the state regulators could be running into trouble meeting their self-imposed mitigation requirements.
“Buying an easement is one thing; buying a permanent protected area consistent with conservation banking standards is a different thing,” he said, echoing the language of the rangewide plan.
“If you have to do this over and over and over again on the fly, it’s going to be really hard to hit your 25 percent target,” Barry said, referring to WAFWA’s leaders. But he added, “if you can work with two or three or four banks that are out there with already approved credits, well, then, that starts to make it look a lot easier.”