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INSIGHT: New ESA Regulations: Controversial, But How Consequential?

Sept. 23, 2019, 9:31 AM

Last month the U.S. Fish and Wildlife Service and National Marine Fisheries Service finalized the first set of comprehensive revisions to the Endangered Species Act’s implementing regulations in decades. Because the ESA is one of the nation’s most cherished environmental laws, the rules received considerable media attention. As may be expected, many in the conservation community have criticized the new rules as a rollback of the ESA, while the regulated community has generally welcomed the new rules.

The agencies assert that the purpose of the new rules is to improve the functioning of the statute by facilitating more efficient engagement between federal agencies, encouraging communities to support conservation, and improving regulatory predictability for the business community. While the rules may achieve the first of those two objectives, they do little in pursuit of the third. By virtue of that omission, the new rules likely will have little to no impact on how developers of energy and infrastructure projects interact with the agencies, and do nothing to promote conservation or alleviate the regulatory burdens that the ESA imposes on developers.

The final rule package consists of three separate rules, each addressing a different aspect of ESA implementation: Regulations for protection of threatened species; criteria for listing and delisting of species and designation of critical habitat; and process and timing for internal consultations with other federal agencies.

The first rule lifts the USFWS’ “blanket 4(d) rule,” meaning that future species listed as threatened will no longer receive the protections against take in Section 9 of the ESA unless the USFWS also adopts a species-specific 4(d) rule.

The second rule allows the agencies to present information on the economic impacts of a proposed species listing, while still acknowledging that the ESA requires listing decisions to be based solely on the basis of the “best scientific and commercial data available.” The second rule also limits the circumstances in which the services can designate areas not currently occupied by a species as critical habitat for that species.

The third rule seeks to streamline the Section 7 consultation process between federal action agencies and the Fish and Wildlife Service and National Marine Fisheries Service by imposing a 60-day deadline on informal consultations, providing for the use of programmatic consultations, and clarifying various definitions.

Hitting the Target, but Missing the Mark?

While the new rules may narrow the reach and alter the agencies’ implementation of the ESA, the practical impact of those changes on individual energy and infrastructure projects is likely to be minimal. The new rules do not address those aspects of the ESA that have the most direct impact on individual projects—aspects that also serve as a practical barrier to the implementation of meaningful conservation efforts for listed species.

For non-federal project developers, the greatest challenges of the ESA stem from the unpredictability of individual consultations with and guidance from the Services, and the lack of consistency and regulatory accountability in the Section 10 incidental take permitting process. It has become increasingly apparent that the Section 10 process isn’t functioning effectively, and suffers from as many— if not more—delays as the Section 7 process that the new rules address, with less accountability on the part of the services or recourse for the regulated community.

As energy and infrastructure development continues to expand to meet the nation’s ever-increasing demand for energy, mobility, and connectivity, there has been increasing overlap with the habitat, migratory corridors and occurrence of many listed species. These intersections take on increasing significance as more species decline in the face of habitat loss due to agriculture, development or climate change, or disease epidemics such as white-nose syndrome in bats. Developers must make a critical determination as to whether their project is likely to require a Section 10 incidental take permit (“ITP”). That decisions is typically made through consultation with the services.

As a decentralized agency staffed by biologists rather than bureaucrats, Fish and Wildlife’s field offices provide important biological and technical guidance to developers. While site-specific considerations will always require individualized feedback, there can be a troubling lack of consistency between different field offices and different regional offices.

On the other hand, when the USFWS or one of its regional offices attempts to inject some consistency on important issues, it often does so through informal guidance or internal policy that has not been subjected to formal public comment or even peer review, leaving the regulated community with no ability to push back against unwarranted or impractical requirements.

Burdensome Policies

The Section 10 permitting process is emblematic of this issue. When project developers seek to obtain an ITP for a project they must develop a habitat conservation plan (“HCP”) that meets several issuance criteria set forth in the statute. Among other things, the HCP must estimate the take that is predicted to occur and describe how the applicant will minimize and mitigate the impact of the taking to the maximum extent practicable.

The Fish and Wildlife Service has issued a detailed “Habitat Conservation Planning Handbook” providing guidance on the various elements of an HCP and how the agency will evaluate them. But many of the policies set forth in the handbook are overly burdensome or limiting and appear to have little legitimate legal or scientific basis behind them. Moreover, available options for meeting those criteria or conditions are lacking in many key areas, making it impractical if not impossible to demonstrate compliance with the standard.

In some cases, Fish and Wildlife has developed biological or statistical models which are not included in the Handbook and have not been peer reviewed but are treated as mandatory by the regional and field offices, despite being incredibly burdensome or unnecessarily restrictive. This ad hoc approach to regulation has created a lack of accountability on the part of the agencies, since they rarely take a final action—such as issuance of a regulation or formal action on a permit application—that can be challenged judicially.

The end result is that companies developing similar projects in different regions can be subject to significant differences in regulatory requirements, creating an unlevel playing field between companies and projects. For those that choose to pursue an ITP, the process of developing an approved HCP can take upwards of four to five years or more, even when the level of take is predicted to be minimal. While it may be tempting to view this state of affairs as one that effectively protects listed species by limiting the issuance of ITPs and thereby preventing take from occurring, the reality is that it discourages some developers from consulting or monitoring for potential take at all while still pursuing their projects.

Among those that do seek to ensure compliance, it increases costs for both the developer and its customers, while directing a substantial amount of money to development costs or excessive monitoring that could otherwise be spent on meaningful conservation actions or research.

Missed Opportunity

The procedural benefits they provide in terms of species listings, Section 7 consultations, and critical habitat designations notwithstanding, the new rules adopted by the agencies make no effort to address these issues, ignoring the Section 10 process entirely. While the decision not to address Section 10 was a conscious one on the part of the services, it is a significant missed opportunity, as major new ESA regulatory initiatives generally occur only every several decades.

The most significant problems with the Section 10 process can only be alleviated with a thoughtful effort by the agencies to formalize their regulatory approach and adopt carefully considered new rules that clarify the applicable standards while making conservation—and not regulation—the central focus.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Ben Cowan is the Chair of Locke Lord’s Renewable Energy section. He has a broad-based environmental practice with a particular focus on energy project siting and permitting, including wildlife and natural resource issues under the Endangered Species Act, Bald and Golden Eagle Protection Act, and Migratory Bird Treaty Act. Andrew Davitt is an Associate at Locke Lord where he focuses his practice on environmental permitting, regulatory compliance counseling, and transaction-related environmental matters.