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May 2010

Vol. 15, No. 19 Week of May 09, 2010

Fish & Wildlife gives polar bear habitat cost

Draft economic analysis indicates that cost would mainly be for additional consultation relating to critical habitat under ESA

Alan Bailey

Petroleum News

On May 4 the U.S. Fish and Wildlife Service issued its draft economic analysis of the critical habitat designation for the polar bear. In October the agency had proposed the critical habitat as a follow-up to the May 2008 listing of the animals as threatened under the Endangered Species Act. And the ESA requires an assessment of the economic ramifications of the critical habitat designation prior to a final ruling on that designation.

Impacts through 2039

“The draft economic analysis provides estimated costs of the reasonably foreseeable potential economic impacts of the proposed critical habitat designation for the polar bear through 2039,” Fish and Wildlife said. “This timeline pertains to the forecast of impacts to oil and gas exploration, development and production, and associated construction projects, as these are the primary human activities occurring within the proposed critical habitat area.”

That proposed habitat area encompasses 200,541 square miles of U.S. territory on those sections of the Arctic Alaska offshore continental shelf where water depths are 300 meters (980 feet) or less in depth; barrier islands and spits along Alaska’s northern coast; and polar bear, on-land denning habitat along the Beaufort Sea coast.

While supported by environmental organizations, the critical habitat designation triggered howls of protest from the oil industry, the State of Alaska, the North Slope Borough and other entities concerned that restrictions on otherwise legitimate activities across a vast area of the Arctic offshore and coast would cause significant economic harm.

Little additional impact

But Fish and Wildlife maintains that the designation will have relatively little impact beyond the protection that polar bears already receive, both under the Marine Mammals Protection Act and as a consequence of their threatened status under the ESA. In fact, the main economic impact of the critical habitat designation would be the cost of additional government agency consultations, Fish and Wildlife said. These consultations, required under section 7 of the ESA and carried out between Fish and Wildlife and other federal agencies, enable Fish and Wildlife to ascertain whether a planned activity might have a negative impact on polar bears and, if so, what mitigation measures would be needed to avoid that impact.

“Because polar bears already receive significant protection under the Marine Mammals Protection Act and the ESA, costs associated with the designation of polar bear critical habitat are primarily associated with considering adverse modification of critical habitat as part of future ESA section 7 consultations,” Fish and Wildlife said.

Consequently, assuming a 7 percent discount rate, Fish and Wildlife has estimated the current value of the total cost of the critical habitat designation to be the fairly modest sum of $669,000 over the period 2010 to 2039. That is equivalent to an annual impact of $53,900.

Comments on the draft economic analysis need to reach Fish and Wildlife on or before July 6. The agency is conducting public hearings in Anchorage on June 15 and in Barrow on June 17.






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