Omnibus Spending Bill Halts Federal Action on Sage Grouse, Benefiting Oil & Gas, Mining Companies

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The frenzied congressional action over the weekend on the $1.1 trillion omnibus spending bill included a provision preventing the U.S. Department of the Interior from issuing draft or final rules on the Greater Sage Grouse, or the Gunnison Sage Grouse. That prohibition, tucked away on page 725 of the 1,603-page bill, has long been sought by energy interests, including Oil & Gas Producers and Metals & Minerals firms. Those companies assert that listing either bird under the federal Endangered Species Act (ESA) would significantly restrict their ability to conduct business. For more on that issue, see March 13, 2013, article - Denver Lawyer: Federal Lawsuits Can Restore Balance on Environmental Laws.

Congressional action to defund executive-branch activities it opposes is one of several ways the legislative branch can exert some measure of control over regulatory agencies, David Bernhardt, co-chair of the natural resources department at the law firm of Brownstein Hyatt Farber & Schreck (Denver, Colorado), said at last week's North American Prospect Expo (NAPE) conference in Denver. Bernhardt spoke the day after the sage grouse prohibitions had been inserted in the omnibus spending bill, which will fund most operations of the federal government through September 30, 2015.

Prohibiting federal action on the sage grouse was one of the lesser-known controversies aroused by the bill, which the House passed late last week and the Senate passed over the weekend. President Barack Obama is scheduled to sign the bill into law this week. The bill also loosened federal restrictions on financial institutions; preserved tax breaks for health-insurance companies; prevented ranchers and farmers from having to report methane emissions from cow flatulence; postponed enactment of modifications to the school lunch program; and stopped the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers from issuing separate regulations under the Clean Water Act.

Funding for federal government operations was scheduled to expire last week. Neither Democrats nor Republicans wanted to risk another government shutdown, given the public scorn the last shutdown triggered in 2013. So in the waning hours of the 113rd Congress, all manner of pet projects and prohibitions were inserted into one bill that had to pass to keep the government running. Political squabbling between Democrats and Republicans had prevented the passage of numerous agency funding bills this year. The 1,603-page bill had something for nearly everyone.

"Congress has a number of ways it can stop regulators actions it doesn't like," Bernhardt said in an interview at NAPE. "Regarding the ESA, it could simply redefine a critical habitat. Congress defined what a critical habitat was in the original ESA, so there's nothing preventing them from redefining what it is when it updates to the ESA."

Congress also could make a determination that a particular species was no longer endangered, as it did with the grey wolf, he told Industrial Info.

The third option, prohibiting regulatory activity on a specific issue or species, is the path Congress chose for the sage grouse. By next September, the U.S. Fish & Wildlife Service (Washington, D.C.), a branch of the Department of the Interior (Washington, D.C.), was scheduled to make a determination as to whether various species of that bird were threatened or endangered. If it was found to be threatened or endangered, a host of restrictions would be imposed on the bird's habitat, basically stopping industrial development in those areas.

The Greater Sage Grouse's critical habitat includes nearly all of Wyoming, much of Montana and Nevada, and portions of Oregon, Idaho and Colorado. The Gunnison Sage Grouse has a habitat comprising significant portions of Colorado. Among other industries, oil & gas producers and metals & minerals firms have opposed listing the birds as either threatened or endangered.

Click on the image at right to see a map of the Greater Sage Grouse's habitat.

As large an impact as an ESA listing could pose to industrial concerns operating in the West, Bernhardt said an even broader and deeper impact could be felt if another species, the Northern Long-Eared Bat, was listed as threatened or endangered. That animal currently is proposed to be listed as an endangered special under the ESA. According to the Fish & Wildlife Service, that animal's habitat stretches over 39 states in the eastern and central regions of the U.S. Such a listing could have a broad impact on oil & gas production, as it would include the following affected states and shale formations:

• Pennsylvania and West Virginia, which are home to the Marcellus Shale
• Ohio, which is home to the Utica Shale
• North Dakota, which is home to the Bakken Shale
• Oklahoma, which is home to several unconventional Oil & Gas formations
• Arkansas, which is home to the Fayetteville Shale
• Louisiana, which is home to the Fayetteville Shale

The omnibus spending bill that is on its way to President Obama's desk is silent on the proposed ESA listing of the Northern Long-Eared Bat.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.