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This column has previously addressed the increasing likelihood of federal regulation of upstream oil and gas activities, principally by the EPA. EPA regulatory efforts could substantially increase compliance costs for oil and gas operators. However, a greater impediment to oil and gas development may come from statutes enforced by the U.S. Fish and Wildlife Service and by NOAA. NGOs who oppose oil and gas development are increasingly looking to the Endangered Species Act (ESA), the Marine Mammals Protection Act (MMPA) and the Migratory Bird Treaty Act (MBTA) to oppose oil and gas development.
The Endangered Species Act was enacted in 1973 to provide for the conservation of species that are determined to be endangered or threatened. Under the act, the U.S. Fish and Wildlife Services or NOAA’s National Marine Fisheries Service may list a species as “threatened” or “endangered.” A listing of a species can occur after a status review by one of the agencies or as a result of a petition by any U.S. citizen or organization.
If a species is listed as “endangered,” then Section 9 of the ESA prohibits the “taking” of that species. If a species is listed as “threatened,” then both FWS and NMFS take the position that they may, by regulation, restrict the taking of the species. “Taking” is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” Similar protection is afforded to marine mammals under the MMPA. “Taking” is defined under the MMPA as “harass, hunt, capture, kill or collect, or attempt to harass, hunt, capture, kill or collect.”
Oil and gas operators and service companies whose operations could result in the “taking” of an endangered species may be required to apply for an “incidental take” permit to protect the company if its operations result in the unintentional taking of an endangered or threatened species. As you might imagine, the process for obtaining such a permit is both time consuming and expensive.
On January 1 of this year, BOEM and BSEE issued two Notice to Lessees (NTLs), Joint NTL No. 2012-G01 and Joint NTL No. 2012-G02, setting forth requirements for vessels working in support of Gulf of Mexico oil and gas operations and offshore seismic to take measures to reduce the likelihood of vessel strikes and the impact of air gun blasts on marine mammals. The NTLS specify that 21 species of whales and dolphins, 5 species of sea turtles and 1 species of manatee could be encountered in the Gulf of Mexico, including the smallest species of sea turtle, the Kemp’s ridley sea turtle.
On land, NGOs are pointing to a variety of plant and wildlife that may be endangered by oil and gas operations, including the spectacled eider, greater sage grouse, Graham’s penstemon, Wyoming pocket gopher, Kentucky arrow darter, tan riffleshell, whooping crane, polar bear and, of particular interest to oil and gas operators in the Permian Basin, the dunes sagebrush lizard. It is not coincidental that the habitats of the species listed above are located in developed and developing oil and gas plays such as Alaska, the Bering Sea, shale formations in the West and Midwest, the Permian Basin and the Gulf of Mexico. For example, the Graham’s penstemon is a flower that, according to one organization, is found only on oil shale in eastern Utah.
The federal wildlife protection statutes pose several challenges for oil and gas compliance efforts:
You may not know what Kemp’s ridley sea turtles and dunes sagebrush lizards are, but they could be significant to your company and your compliance program.
Photo of Kemp’s ridley sea turtles by Zereshk via Creative Commons 3.0.
About the Author
David R. Dugas is a member of McGlinchey Stafford’s Baton Rouge office. Prior to joining the firm, David served as the U.S. Attorney for the Middle District of Louisiana for nine years. For more information about David, visit David’s CCI author page.
About the Author
David R. Dugas is a member in McGlinchey Stafford’s Baton Rouge office. Prior to joining the firm, David served as the U.S. Attorney for the Middle District of Louisiana for nine years.
David chairs the firm’s national energy practice. That practice involves representation of clients in the oil and gas industry, drawing upon David’s extensive trial and appellate experience handling complex oil and gas litigation, complex commercial litigation and casualty litigation before state and federal courts. David also has vast experience handling transactional oil and gas issues, corporate compliance and fraud investigations.
As a former leader within the U.S. Department of Justice, David co-chairs the firm’s government investigations practice. His practice focuses on corporate internal investigations, as well as criminal and civil government investigations by government entities, including investigations involving environmental law and energy, financial institutions, health care, and financial reporting for business entities.
From 2005 to 2010, David served as the Director of the Department of Justice’s National Center for Disaster Fraud and Executive Director of the Hurricane Katrina Fraud Task Force. David has received national recognition for his leadership in those roles and was named “2005 U.S. Attorney of the Year” by the Federal Law Enforcement Officers Association for his leadership of federal law enforcement in the aftermath of Hurricane Katrina.
From 2006 through 2010 David served as Chair of the Attorney General’s Environmental Issues Advisory Subcommittee and as Co-Chair of the Environmental Crimes Policy Committee of the United States Department of Justice. In those positions he was responsible for helping formulate national environmental enforcement policy for the Department of Justice.