The Nickel Report

The US Fish & Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) issued three significant, highly anticipated, proposals to revise the Endangered Species Act (ESA) regulations on July 19. The proposals address critical habitat designation, ESA section 7 consultation, and protection of threatened species. Once published in the Federal Register, there will be a 60 day comment period for all three proposals. The proposals would make important changes in each area, and are likely to garner substantial attention in public comments.  Some key highlights follow.

Among the major issues at stake are: (1) concerns by industry, landowners and other stakeholders that critical habitat designations often draw into federal regulation broad areas of land and water that have little or no current demonstrated value to the species, resulting in costly burdens without proportionate benefits to the species, and (2) that ESA section 7 consultations on federal agency actions (like permits) often evolve into broad evaluations of activities that extend beyond the regulatory jurisdiction and control of the agency, leading to lopsided project restrictions and uneconomic outcomes. To avoid these and other problems, groups often urge the Services to ensure that (1) when an area of land or water is designated as critical habitat, it is truly critical to the species at the time of designation – and concerns about theoretical future habitat need be held for future revisions to the designation, as contemplated by Congress in the statute, and (2) consultation focuses on the specific agency action under consultation and those effects that are caused by the action and subject to the agency’s regulatory jurisdiction and control.

1.  Critical Habitat Designation

Following settlement of challenges brought by industry and State groups to critical habitat rules promulgated in 2016, the Services have now proposed revisions to the critical habitat regulations.

• The proposed rule would return to the prior two-step approach to designating critical habitat under which the Service first considers designation of occupied habitat, then considers designation of areas outside of occupied habitat only if a designation limited to the species’ present range would be inadequate to ensure the conservation of the species.
  • The proposal would thereby change the current process under which the Service immediately and automatically considers designation of unoccupied areas.
• The Services propose important clarifications to and limits on the designation of unoccupied areas as critical habitat:
  • Designation of unoccupied areas would be allowed only when a designation limited to occupied areas would (1) be inadequate to ensure the conservation of the species, or (2) result in less-efficient conservation for the species.
    • This change is intended to add predictability to the process of determining when designation of unoccupied habitat may be appropriate.
  • For an unoccupied area to be considered essential to conservation, the Secretary must determine that there is a “reasonable likelihood that the area will contribute to the conservation of the species,” taking into account the best available science regarding species-specific and area-specific factors.
    • As an example, the Services state that they might conclude that an area is unlikely to contribute to the conservation of the species where “it would require extensive affirmative restoration that does not seem likely to occur such as when a non-federal landowner or necessary partners are unwilling to undertake or allow such restoration.”

2.  Section 7 Consultation

The Services have proposed revisions to the ESA section 7 consultation regulations, including the definition of “destruction or adverse modification” of designated critical habitat.

• The proposal would revise the definition of adverse modification by removing the controversial second sentence in the current definition, which includes impacts to land that “preclude or significantly delay development of [physical or biological]  features” essential to the conservation of a species.
• The proposal would create a “but for” standard of causation for determining the effects of an action.

3.  Protections for Threatened Species

Current FWS regulations extend to threatened species most of the ESA’s prohibitions that otherwise apply only to endangered species, including the take prohibition. The proposal would require FWS, pursuant to ESA section 4(d), to determine on a species-by-species basis which, if any, prohibitions are appropriate for species the Service lists as threatened in the future (including the take prohibition).

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Once published in the Federal Register, there will be a 60 day comment period on all three proposals. Due to the significance of these proposals, it is anticipated that there will be robust participation in the rulemaking process by industry, States, and environmental groups. The Services will need to consider all comments received before issuing any final rules, which could be promulgated at some point during late 2018 or 2019.