On May 20, 2024, the U.S. Fish and Wildlife Service (FWS) issued a final rule listing the dunes sagebrush lizard (“DSL”) as endangered under the Endangered Species Act (“ESA”).1 The change in the DSL listing status, which became effective on June 20, 2024, has the potential to substantially impact oil and natural gas operations, as well as hydraulic fracturing sand (“frac sand”) mining, in the Permian Basin. Not only should Permian Basin owners and operators carefully assess how the rule may affect them, but they should also be alert to FWS taking further steps to designate DSL critical habitat. FWS now has a year to designate critical habitat for the DSL, which is found in parts of Texas and New Mexico, and that designation will likely further restrict operator flexibility. Here, we outline the key takeaways from this rule, as well as the future actions FWS is likely to take as to the DSL.
DSL as Endangered, Round 2
FWS’ recent endangerment listing of the DSL is not the first time this lizard has come under the spotlight of the ESA. In the early 2010s, FWS proposed to list the DSL as endangered.2 Following its original proposal, FWS reversed its position on listing the DSL and withdrew its rule in 2012. As FWS explained at the time, its “withdrawal [was] based on [its] conclusion that the threats to the species as identified in the proposed rule no longer [were] as significant as believed at the time of the proposed rule.”3 FWS went on to also state that, based on its review, “the current and future threats are not of sufficient imminence, intensity, or magnitude to indicate that the [DSL] is in danger of extinction (endangered), or likely to become endangered within the foreseeable future (threatened), throughout all or a significant portion of its range.”4 This withdrawal was upheld in federal court after a challenge by environmental organizations.5 Nonetheless, following a 2018 petition and subsequent complaint from several environmental organizations, FWS again reversed course and proposed to list the DSL as endangered in July 2023. This proposed rule was then finalized this May, with FWS explaining that it is taking into consideration post-2012 data that was previously unavailable.
Impacts and Future FWS Actions
FWS’ decision to list the DSL will have ripple effects that could impact a substantial amount of oil and natural gas operations and frac sand mining throughout the Permian Basin. To illustrate the breadth of these effects, on its website, FWS provides a map of the geographic range of the DSL in southeast New Mexico and west Texas:6
As this map demonstrates, oil and natural gas owners and operators in this region will have to carefully assess whether their facilities and activities fall within this widespread geographic range to avoid the risk of committing inadvertent takings of the DSL (discussed further below) now that the rule has become effective.
Separately, under the ESA, FWS is required to designate a listed species’ “critical habitat” to the “maximum extent prudent and determinable.”7 This critical habitat includes not only the geographic areas a species occupies at the time of listing, which have essential features to the species’ conservation and might require special management or protection, but also other areas outside the occupied range that FWS determines are similarly essential to conserve the species. This designation affects federal agencies, as well as private actors undertaking actions that are federally authorized or funded, who must avoid “the destruction or adverse modification” of critical habitat.8 While this designation typically happens concurrent with a species listing, as noted above, the ESA provides FWS an additional year to make this designation. Such is the case here, where FWS indicated in the final rule that it intends to publish a proposed rule to designate critical habitat for the DSL “in the near future.”9 Interested parties should monitor this designation as it is proposed, if they wish to comment, and finalized, if there is a federal nexus with their activities and operations within the critical habitat.
Other Key Takeaways from the DSL’s Listing
In addition to the above, it is worth highlighting several more key takeaways from the DSL’s listing:
- Shinnery Oak Duneland is Key to DSL Habitat
As FWS explains, “the shinnery oak,” a type of low-growing shrub, “is the foundation of the entire ecosystem” on which the DSL relies.10 The listing decision for the DSL repeatedly emphasizes the importance of shinnery oak duneland to the lizard’s “viability,”11 and pays the most attention to this type of duneland and associated, “supportive habitat” that functions to help stabilize shinnery oak duneland.12 Among other things, FWS highlights that drought can have a substantial impact on both the shinnery oak and its associated duneland.
- DSL Populations are Limited and Pocketed
FWS asserts that much of the shinnery oak duneland in southeastern New Mexico and western Texas is presently incapable of supporting DSL populations. Accordingly, FWS explains, throughout much of its habitat range, the DSL exists in limited pockets that, depending on the characterization of the specific area in which a population lives (for example, the area is considered “degraded”), indicate that the DSL “is functionally extinct across 47 percent of its range.”13 This percentage of the DSL’s habitat includes the southern Mescalero sandhills, largely located in southeastern New Mexico. While FWS acknowledges that such areas “may continue to support the [DSL] in small, isolated patches,” these populations of DSL are still deemed functionally extinct because “there is little potential for recolonization due to habitat fragmentation.”14
- Different Operations are Treated Differently
Among the factors contributing to habitat fragmentation, loss, and degradation (which FWS describes as being the primary threats to the DSL), FWS emphasizes the impacts of oil and natural gas operations and frac sand mining. However, these types of operations are not treated equally. For instance, in response to public comments, FWS acknowledges that various advances in oil and natural gas development and extraction will lessen ground disturbances, which can substantially impact DSL habitat, compared to historical norms. In contrast, as to frac sand mining, FWS explains that such mining creates surface disturbances that impact DSL habitat without similar qualification for new and improved technologies or processes. However, FWS acknowledges that “[t]here are currently no peer-reviewed studies on the impacts of sand mines on the [DSL],” so it instead relies on “the best available science” to support its conclusion that sand excavation harms the DSL.15 Indeed, FWS’ attitude regarding the impacts of frac sand mining is reflected in the Service’s assumed “treat[ment] [of] the footprint of sand mines as complete non-habitat for” the DSL in its habitat analysis.16
And while typically habitat restoration can play an important role in preserving the habitat of species being considered for listing, in this instance, FWS found that the restoration of shinnery oak duneland “is not currently feasible.”17 As a result, FWS presumes, any loss of the lizard’s habitat within those dunelands has a “potential permanent impact.”18
- Climate Change and Climate Conditions
In addition to habitat fragmentation, loss, and degradation, FWS highlights climate change (and related conditions) as being some of the biggest threats to the DSL. In particular, FWS avers that climate change and conditions will impact the DSL by “resulting in hotter, more arid conditions with an increased frequency and greater intensity of drought throughout” the lizard’s range.19 Nonetheless, FWS acknowledges that the “direct impacts of climate change” on the DSL, as well as its habitat and food, “are somewhat uncertain,” and that “there are no studies available that have examined the specific response of the [DSL] to a changing climate.”20 As such, FWS relies on an assessment of “likely future impacts of climate change” that is informed by its general knowledge of the DSL and its habitat (for example, the effects of climate change on drought, and drought on shinnery oak).21
Potential Issues with Taking the DSL
Under the ESA, it is illegal to “take” a listed endangered species, which broadly encompasses any actions to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”22 Those who do violate the ESA, such as by taking an endangered species, are subject to civil penalties (the severity of which can be informed by whether the violation was knowing), and those who knowingly violate the ESA are also subject to criminal punishment, including fines and imprisonment.
In deciding to list the DSL as endangered, FWS elaborates on a nonexhaustive list of example activities that would likely be considered violations of the ESA, including the “[d]estruction, alteration, or removal of shinnery oak duneland and shrubland vegetation,” “[d]egradation, removal, or fragmentation of shinnery oak duneland and shrubland formations and ecosystems,” and any “[d]isruption of water tables in dunes sagebrush lizard habitat.”23 These examples demonstrate the extent to which FWS is seeking to establish that the degradation, removal, or fragmentation of the DSL’s habitat will intrinsically be considered violations of the ESA. However, it is not always necessarily the case that habitat degradation constitutes a taking of a listed species. Section 9 of the ESA prohibits people from, among other things, taking endangered species, and it does not provide that habitat degradation automatically counts as a violation. While courts have acknowledged that the taking of a species “includes significant habitat modification,” this is qualified by such modification being of a type that “results in injury or death by ‘impairing essential behavioral patterns.’”24 To the extent FWS’ final rule implies that modification of the DSL’s habitat necessarily constitutes a taking and a violation of the ESA, it is arguably in tension with this recognized principle.
Possible Challenges to the DSL’s Listing
Considering the likely widespread impacts that the DSL’s listing will have on energy providers and others throughout the Permian Basin, it is perhaps unsurprising that FWS’ rule has already been the subject of a legislative proposal. On May 31, 2024, Representative August Pfluger of Texas introduced legislation under the Congressional Review Act (“CRA”) to roll back the DSL’s listing. As we have previously discussed,25 the CRA provides authority to retroactively negate regulations through a joint resolution of disapproval that must pass through the House and Senate before going to the President for approval. Timing is critical to the CRA, as the day on which a final regulation is received by Congress kicks off a period of 60 “days of continuous session,” which can be longer than 60 consecutive calendar days, during which members of the House or Senate can submit joint resolutions. The CRA is particularly important leading up to, and immediately following, a presidential election, as there is a “lookback” period at the beginning of a new administration during which rules issued near the end of the previous administration can be subject to a joint resolution of disapproval. While the functional opening window for the CRA can vary from election to election, the prospects of Representative Pfluger’s joint resolution of disapproval succeeding while President Biden remains in office are likely dim. Nonetheless, this legislative effort could portend other challenges to the DSL’s listing with the rule having become effective and critical habitat likely to be designated.
Next Steps
Those who might be impacted by the DSL listing should keep apprised of FWS action related to designating critical habitat for the lizard and consider providing comments to FWS on its proposed designation. Interested parties should also keep an eye out for potential court challenges to the listing.
1 See Endangered and Threatened Wildlife and Plants; Endangered Species Status for the Dunes Sagebrush Lizard [“Final Rule”], 89 Fed. Reg. 43,748 (May 20, 2024) (to be codified at 50 C.F.R. pt. 17), https://www.federalregister.gov/documents/2024/05/20/2024-11025/endangered-and-threatened-wildlife-and-plants-endangered-species-status-for-the-dunes-sagebrush.
2 FWS is required under the ESA to make such determinations based on factors like “the present or threatened destruction, modification, or curtailment of [a species’] habitat or range,” “disease or predation,” and “other natural or manmade factors affecting [the species’] continued existence.” 16 U.S.C. § 1533(a)(1)(A)–(E). In considering these and other factors, FWS must make its determinations “solely on the basis of the best scientific and commercial data available . . . after conducting a review of the status of the species and after taking into account those efforts, if any, being made by any State . . . to protect such species.” Id. § 1533(b)(1)(A).
3 Endangered and Threatened Wildlife and Plants; Withdrawal of the Proposed Rule To List Dunes Sagebrush Lizard, 77 Fed. Reg. 36,872, 36,872 (June 19, 2012), https://www.federalregister.gov/documents/2012/06/19/2012-14818/endangered-and-threatened-wildlife-and-plants-withdrawal-of-the-proposed-rule-to-list-dunes.
4 Id. at 36,897–98.
5 See Defs. of Wildlife v. Jewell, 70 F. Supp. 3d 183, 199 (D.D.C. 2014), aff’d sub nom. Defs. of Wildlife & Ctr. for Biological Diversity v. Jewell, 815 F.3d 1, 3 (D.C. Cir. 2016).
6 Dunes Sagebrush Lizard, U.S. Fish & Wildlife Service, accessed June 18, 2024, https://www.fws.gov/species/dunes-sagebrush-lizard-sceloporus-arenicolus.
7 16 U.S.C. § 1533(a)(3)(A).
8 Id. § 1536(a)(2).
9 Final Rule, 89 Fed. Reg. at 43,768.
10 Id. at 43,753.
11 Id. at 43,754.
12 Id. at 43,756.
13 Id. at 43,766.
14 Id.
15 Id. at 43,753.
16 Id.
17 Id.
18 Id.
19 Id. at 43,748.
20 Id. at 43,753.
21 Id. at 43,753–54.
22 16 U.S.C. § 1532(19).
23 Final Rule, 89 Fed. Reg. at 43,768.
24 San Luis Obispo Coastkeeper v. Santa Maria Valley Water Conservation Dist., 49 F.4th 1242, 1246 (9th Cir. 2022) (emphasis added) (citation omitted), cert. denied sub nom. City of Santa Maria v. San Luis Obispo Coastkeeper, 144 S. Ct. 74 (2023); see also Babbitt v. Sweet Home Chapter of Cmtys. for a Great Or., 515 U.S. 687, 708 (1995).
25 See, e.g., Senate Acts to Remove Trump-Era Methane Rule, Opening the Door to Further Regulation of Methane from Oil and Gas Activities (Apr. 30, 2021), available at https://www.velaw.com/insights/senate-acts-to-remove-trump-era-methane-rule-opening-the-door-to-further-regulation-of-methane-from-oil-and-gas-activities/.
