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Prairie-Chicken Listing Expected to Put Wind Farms in Crosshairs

June 7, 2021, 10:01 AM

A Biden administration proposal to list the lesser prairie-chicken as endangered in the Permian Basin of Texas and New Mexico could stymie oil and gas development in the largest U.S. petroleum basin, environmental attorneys say.

And one warns it could devastate another energy source—wind power.

The U.S. Fish and Wildlife Service announced the proposal to grant Endangered Species Act protection for the imperiled lesser prairie-chicken by listing it as endangered in the Permian Basin and threatened in a region centered on southwestern Kansas.

The May proposal is “at cross purposes with the Biden administration’s climate goals” to develop more renewable sources, said Brooke Marcus Wahlberg, a partner at Nossaman LLP in Austin.

An ESA listing for the lesser prairie-chicken could be devastating for the wind industry because the Fish and Wildlife Service is considering a possible mile-wide zone around each wind turbine within which the agency would assume the bird could no longer live, Wahlberg said.

Within that zone, wind developers would be held liable for “take,” a legal term for killing or harassing an imperiled species, Wahlberg said.

Escalating Costs

Developers can take steps to avoid take, or obtain a Fish and Wildlife Service permit to take an endangered species, as long as they employ mitigation measures that protect the animals.

If the service finds that wind developers are eroding the prairie-chicken’s habitat, they could participate in “existing conservation programs,” or meet with agency officials to discuss other options, Fish and Wildlife Service biologist Clay Nichols said, speaking through an agency spokesperson.

The Texas Panhandle on the edge of the Permian Basin is one of the country’s most productive regions for wind energy. Though the basin itself isn’t a hub for wind development, wind development is occurring close to the New Mexico-Texas border.

But avoiding or mitigating take comes at a high cost for developers.

“You end up having significant acreage that is now unusable,” Wahlberg said. “You’re in this place where the service is saying your take is reaching out to these lengths, or you’re getting a permit where your impacts estimates are so high your mitigation costs are just outrageous.”

New Regulatory Burden

An endangered listing wouldn’t be a “death knell for industry,” but it would be a new regulatory burden for developers, making wind farm construction more difficult, said Ben Rhem, a partner at Jackson Walker LLP in Austin who represents wind farm lenders and developers.

“Developers are going to have to be more careful, more thoughtful about where they’re siting their project,” Rhem said. “There may be certain areas where it becomes such a regulatory burden that it just makes sense to look elsewhere.”

The wind power industry believes wind turbines don’t severely harm the lesser prairie-chicken.

“Clean energy developers are confident that their projects can be built in ways that are compatible with the preservation of lesser prairie chickens and their habitats,” said Tom Vinson, vice president of the American Clean Power Association, which represents the industry.

Under the ESA proposal, zones of different sizes would apply to oil and gas wells, pipelines and transmission lines, creating an immensely complex permitting process for oil and gas, said Alan Glen, an ESA permitting and compliance attorney at Smith Robertson LLP in Austin.

“My alarm bells go off at the level of complexity that this is presenting,” Glen said. “It creates more disruption for the regulated community than is necessary. It creates disincentives to compliance.”

The bird previously was listed as threatened under the ESA. But a federal judge in Texas tossed out the listing in 2015 after finding the Fish and Wildlife Service didn’t account for the oil industry’s voluntary efforts to protect the bird’s habitat.

As few as 5,000 of the small grouse-like birds may remain in the Permian today. Oil and gas, wind power, and other development in the region has fragmented habitat already strained by drought and climate change, according to the Fish and Wildlife Service.

Echoing Sage-Grouse Fight

The proposed lesser prairie-chicken listing in some ways parallels battles over the greater sage-grouse, an imperiled bird with habitat across the West that also overlaps oil, gas and wind development, lawyers say.

The sage-grouse, found in Wyoming and eight other states, has been at the center of ESA litigation for years. State governments and the Bureau of Land Management created conservation plans for the bird to avoid a listing. Trump administration rollbacks of those plans have been challenged in court.

The lesser prairie-chicken would be another “high-profile listing,” said Jamie Auslander, a principal at Beveridge & Diamond PC in Washington. “I think it would have a chilling effect” on oil and gas development, he said.

Energy development on the Texas side of the Permian Basin largely occurs on private land, and if finalized, an ESA listing for the lesser prairie-chicken would create a “new federal nexus” on private land, Auslander said.

The possible listing’s sticking power may rest on legal issues that caused the lesser prairie-chicken’s first listing to be tossed out of court, including the effect of voluntary conservation measures by developers and private landowners to protect the bird, Auslander said.

High Stakes

The legal and economic stakes are high for permitting an oil and gas project in prairie-chicken habitat, he said.

“If you’re adding in consultation for the lesser prairie-chicken, that could add at least a year to permitting time frames,” Auslander said. “That raises enforcement risk, additional rounds of litigation for drilling approvals by third parties.”

But private conservation efforts have done little to halt the prairie-chicken’s decline, and ESA protections will help to save it while allowing oil drilling to continue, said Jason Rylander, senor ESA counsel for Defenders of Wildlife, an environmental group.

“There is no question in my mind it needs full protection of the Endangered Species Act,” Rylander said. “I think the important thing to remember is the ESA is a flexible tool that protects species and habitat but rarely stops development.”

To contact the reporter on this story: Bobby Magill at bmagill@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com

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