Feds offer clarification

Absent a federal nexus, compliance with US wildlife laws is an honor system

Mike Ellerd

For Petroleum News Bakken

In February, Petroleum News Bakken reported that in a legislative hearing, North Dakota Department of Minerals Commissioner Lynn Helms said the U.S. Fish and Wildlife Service wanted every drilling permit in North Dakota to get Fish and Wildlife approval, an allegation that Fish and Wildlife official Jeff Towner adamantly denies.

Helms’ comment was at least partly based on an email he received from Towner, the Fish and Wildlife ecological services field supervisor for North Dakota. In that email, discussing the role that the Fish and Wildlife plays in oil and gas development in North Dakota, Towner said: “In fact, oil companies and any other entity must ensure that their activities do not result in a violation of the Endangered Species Act, Migratory Bird Treaty Act, Bald and Golden Eagle Protection Act, and the Refuge Improvement Act. The only ways an entity can be assured that they will not incur a violation from their proposed development in North Dakota is to receive a letter signed by me to that effect, or to apply for and receive a permit to take a protected species.”

The issue boils down to a matter of interpretation.

Read one way, the statement could imply that it is mandatory for companies to either have a letter from the Fish and Wildlife indicating their activity will not incur a violation, which is equivalent to controlling permitting activity. However, read another way, the statement could imply that several options are available to companies if they want to make sure their activities do not result in a violation.

Towner recently spoke at length with Petroleum News Bakken and explained in detail the responsibilities companies have in oil and gas development in terms of federal wildlife laws and what options are available to companies to comply with such laws.

First some background

Certain wildlife species are held in trust by Fish and Wildlife, including all threatened and endangered species, bald eagles, golden eagles, migratory birds, units of the national wildlife refuge system and interjurisdictional fish species whose use and allocation are determined by more than one governmental jurisdiction. Towner says the three principle federal wildlife laws that apply to oil and gas development in North Dakota are the Endangered Species Act, the Bald and Golden Eagle Protection Act and the Migratory Bird Treaty Act.

Fish and Wildlife, however, doesn’t necessarily get involved in every oil and gas operation — that depends on whether a “federal nexus” is present. In the context of Fish and Wildlife jurisdiction, a federal nexus exists when an activity is permitted, licensed, funded or conducted by a federal agency. In the situations where a federal nexus exists, the federal construction, permitting or funding agency or agencies have an obligation to consult with Fish and Wildlife.

When a federal nexus does not exist, a different standard applies to private parties. According to Towner, when there is no federal nexus, a company is not required to consult with Fish and Wildlife on its proposed activity, or for that matter even notify the agency of its proposed activities. However, all federal wildlife laws still apply, and a company or any private entity or person has the responsibility to ensure that its activities do not violate any of those laws.

Towner says in any and all oil and gas operations, a party may be liable for an unauthorized “take” of a threatened or endangered species, a bald or golden eagle, or any migratory bird or its active nest, whether the operation is permitted by a federal agency or not. In this context, the term “take” generally means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect any such species or attempt to engage in any of those actions. In addition, for bald and golden eagles the definition includes disturbance, such as an activity that disturbs a breeding pair to the point the pair abandons the nest, or even to the extent that there is a reduction in productivity of the nest.

Fish and Wildlife consultation

In short, without a federal nexus, there is no federal oversight and compliance with federal wildlife laws is essentially on an honor system. However, operators do have the option to consult with Fish and Wildlife and receive guidance and assistance from the agency to ensure their operations comply with federal wildlife laws and do not result in an unauthorized take.

But Towner adds that if a company opts not to consult with Fish and Wildlife and proceeds with their operations, they run the risk of a violation.

“We’re the experts on these species. We know the laws and regulations. And so we’re really in the best position to help make those judgments,” Towner told Petroleum News Bakken. “What our typical advice to companies is — is to come talk to us and share their plans with us so that we can make an assessment of whether or not we think that their activities aren’t going to result in a take, and if they are, then to work with us to try and modify their plans to avoid take.”

If a company wants to consult with Fish and Wildlife on its proposed operations to ensure compliance, Towner says he asks companies to submit their plans and maps for construction and drilling so his agency can compare those maps with the agency’s maps of known or suspected occurrences of federal trust species and look at the habitat types that are occurring in the area. The agency, he says, can then make judgments as to whether there is a high risk of take and then work with the company to see what can be done to avoid the take. “If we can avoid all take, then that’s the win-win-win for the companies, for us and for the resource.”

When a company and Fish and Wildlife come to an agreement on a path forward that the agency believes will not result in a take, Towner says, the agency then issues a letter, signed by him, that provides protection and assurance to the company that the agency believes the activities will not result in take and the company “is in the clear.”

However, if it looks like a take is going to occur, Towner continues, then the situation can get more complicated and time consuming.

When a take is unavoidable

If it is not possible to avoid take of a threatened or endangered animal species, Towner continues, there is another option where a company can prepare a habitat conservation plan and submit it to the Fish and Wildlife along with an application for an “incidental take permit.” However, such a permit, he says, can only be issued after a company has demonstrated that it has taken every reasonable action to avoid the take.

But when talking about an actual take, Towner says that things can get complicated because the different laws vary in regard to a take. “I don’t want to paint this as something that’s just in every case going to sail right through with no issues.”

For example, Towner says, in addition to the process under the Endangered Species Act, a permit can also be issued to take an eagle under the Bald and Golden Eagle Protection Act. A similar demonstration of measures taken to avoid take must be made for issuance of an eagle take permit as for endangered or threatened species.

The situation is slightly different under the Migratory Bird Treaty Act because that act has no program for incidental take permits, according to Towner. “So what we do with that act is we ask the person or the company to come in and work with us and show us what their plans are and look at the potential for take. “And then if they’ve done everything we think is reasonable, then we exercise what we call a prosecutorial discretion.” Towner says if a company has indicated they have done everything reasonable to avoid take, they may be allowed to take a migratory bird, in which case the agency will “exercise discretion in not referring a case for prosecution to the Department of Justice.”

It all comes down to “take”

While there are a number of activities that constitute a take, the occurrence of a trust species, including an endangered species, in a particular area doesn’t necessarily preclude a company from proceeding with activities. It all gets back to whether a take will occur. Just because an activity is in an area where some protected species is known to occur, has occurred or even may occur, doesn’t necessarily mean that a take is going occur. That, Towner says, is the standard that private entities need to meet. “They need to assure that their activities do not result in unauthorized take.”

Towner says a person or a company needs to be “pretty fluent” in terms of their knowledge of the federal wildlife laws and what they require. “That’s the reason that we’re wanting to work closely with these companies because they don’t necessarily know all of the ins and outs of these laws and regulations like we do,” he concludes. “It gets kind of complicated.”

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NDIC, Alaskans on Fish & Wildlife

Alison Ritter, public information officer for the Oil and Gas Division of the Department of Mineral Resources within NDIC, says the division cannot impose federal wildlife requirements in its permitting process and says that it is the responsibility of the operator to ensure its activities will not violate federal wildlife laws.

However, Ritter says the Oil and Gas Division encourages operators to consult with the U.S. Fish and Wildlife Service as part of their due diligence. “We encourage it but it’s not a requirement on our part,” she says. “It’s all the responsibility of the operator as to who they need to contact and where. I think that may be the big thing that may be missed.”

If an operator is in violation on the federal side, Ritter continues, then that is simply something the operator will have to take up with the federal agency. “We want them to talk to Fish and Wildlife. We want them to get that letter. We want them to get that approval. We don’t want them going into an area and encroaching on any species. Nobody wants that. We want them to do everything they need to do on a federal level, but we can’t require them to do what they need to do on a federal level.”

Adding time to the process?

On the federal permitting side, she says, there are “a lot more hoops,” and it takes more time to get a federal drilling permit than a state drilling permit. Adding an additional step of getting a letter from Fish and Wildlife, Ritter says, “is only going to increase that permitting process time.”

Ritter says that DMR Director Lynn Helms has expressed concerned that if one person has to approve every individual drilling permit, then that could significantly slow down the permitting process. “How much more time is the federal government going to tie up with the process if one person needs to look at every single permit,” Ritter says. And there is the question of whether Fish and Wildlife has sufficient staff to evaluate each individual permit application.

Jeff Towner, who is the ecological services field supervisor for Fish and Wildlife in Bismarck, says his agency does not have sufficient staff to review individual development proposals, but he adds that reviewing each application is not an approach he is suggesting. Instead, Towner says, the approach is to evaluate operations at a program level. “The conservation benefits are actually greater when we look at these things in a programmatic way.”

Towner says he has sufficient staff for that type of programmatic approach. In addition, he says, that type of approach is actually a priority for his office because, as he says, if a company is willing to work with his office and allow his office to look at the company’s plans of development and lease holdings across the board, “then I think we can have some conservation gains and we can minimize the impacts to the companies and the impacts to us in terms of the time that would have to be invested.”

Alaskans say “beware”

One State of Alaska agency official said, “North Dakota ought to give him a medal, because if you want to see unnecessary delays designed to stop oil and gas development or drastically increase its cost, get EPA or Fish and Wildlife involved. … This Towner sounds like he’s just trying to do his job, but what about the guy who takes his place? There are a lot of anti-development folks in both EPA and Fish and Wildlife. Good science, the facts, are meaningless to them.”

In preparation for this article Petroleum News Bakken interviewed three well-respected individuals who have done oil and gas permitting for at least a decade each in Alaska and are considered experts in their field. Like the people who called in praising Helms, they did not want to be identified in this article, but they all said Helms was right to be concerned.

One of the three, a long-time, solid source for Petroleum News in Alaska, had this suggestion for companies doing business in the Bakken play in North Dakota and Montana: “The wildlife official (Towner) is correct. Including federal wildlife reviews of planned activities, and mitigating plans to avoid breaking the law and harming the environment and wildlife is an excellent idea. What we do is hire people who have worked in federal agencies; who are familiar with applicable federal law and task them with the responsibility. Frankly, it’s less scary than dealing with agency employees who may have hidden agendas. … We see way too much of that.”

Another said he had “never seen federal involvement advance projects … to help them meet target dates, or speed things up. In almost every case, it meant slowing things down by weeks … sometimes by months or years, especially when a federal agency is the lead on permitting.”

The third expert said he would advise taking Towner up on his offer: “It’s a free consulting service and it’s a sign of good faith. … If it doesn’t work out, hire someone who can do it for you. An ex-U.S. Fish and Wildlife Service enforcement supervisor, for example.”

—Mike Ellerd & Kay Cashman