On May 20, 2024, the U.S. Fish and Wildlife Service published a final rule listing the dunes sagebrush lizard as endangered under the Endangered Species Act.

TAKEAWAYS

• The listing does not include a designation of critical habitat. The U.S. Fish and Wildlife Service found the designation to be prudent but not determinable and has one year from the time of listing to propose critical habitat.
• Permits may be issued for scientific purposes, for enhancing the propagation or survival of the species, or for take which is incidental to otherwise lawful activities.
• Industry has raised concerns that the listing could restrict further oil and gas and sand mining development by constraining production opportunities and limiting the speed at which production can occur in the region.

On May 20, 2024, the U.S. Fish and Wildlife Service (Service) published a significant final rule listing the dunes sagebrush lizard (DSL) as endangered under the Endangered Species Act (ESA). 89 Fed. Reg. 43,748. This small lizard is at the center of a debate pitting species conservation against the oil and gas development in the Permian Basin, a region that currently produces about 2.5 million barrels of oil per day. The listing goes into effect on June 20, 2024, and is codified in 50 C.F.R. § 17. However, the Service has not included a designation of a critical habitat and has one year to do so.

Background
The DSL, a microendemic species, relies on the specific patches of land spread across western Texas and southeastern New Mexico, where shinnery oak trees and coarse sands create small dunes used by the DSL for burrowing and hunting insects. But the rise of oil and gas development in the region—and the roads required to service them—have purportedly contributed to loss of these sand dunes, causing the DSL population to plummet in these areas. The Service emphasized the impacts of oil and gas operations as well as frac sand mining in the region as contributing to habitat loss. However, the Service did not treat these two industry operations equally. In response to public comments, the Service acknowledged that advances in oil and gas development will lessen ground disturbances compared to historical norms, whereas the frac sand mining industry has not undergone similar advances.

The Service explained that the DSL is functionally extinct across 47 percent of its range, as there is little potential to recolonize the habitat due to fragmentation. The Service has also highlighted that drought can have a substantial impact on the shinnery oak and its duneland. Shinnery oak roots anchor the sand dunes, and the tree’s foliage shelters insects that the DSL will later eat. But the leaves are toxic to cattle, so ranchers often attack the trees with herbicides, which further threaten the DSL’s habitat. While habitat restoration typically plays an important role in preserving the habitat of a species considered for listing, the Service found that restoration of the shinnery oak duneland is not currently feasible and any loss in the DSL’s habitat has a potentially permanent impact.

The Service has long considered the DSL a species of concern: it first became a candidate for listing in 1982. In 2002, the Center for Biological Diversity (CBD), among others, petitioned the Service to list the DSL. The proposal gained momentum in 2010 when the DSL was included on the Service’s proposed endangered species list, but the Service later withdrew its proposed listing rule in 2012 based on the conclusion that voluntary conservation efforts with landowners in New Mexico and Texas where the DSL reside were sufficient in mitigating threats to the species such that the threats were not as significant as once thought. Texas’s plan allows oil and gas development and ranching in DSL habitat, but participating landowners are only allowed to collectively destroy about 1,750 acres of lizard habitat. Texas’s conservation plan has gone through numerous revisions over the years, and membership in voluntary candidate conservation agreements and candidate conservation agreements with assurances declined in 2020. As of December 31, 2023, only seven participants were enrolled in the Texas conservation plan. Meanwhile, habitat loss, fragmentation and degradation persisted, and DSL populations did not improve.

CBD’s 2018 re-petition to the Service to list the DSL sought to impose stricter regulations, including permits for activities that could harm the lizard’s habitat. Industry opposition, on the other hand, cited concerns over the economic impact of protecting the DSL. The Service published a finding in July 2020 that the petition presented substantial information indicating that the DSL listing may be warranted. This finding obligated the Service to publish a 12-month finding on whether listing the DSL as endangered or threatened is warranted. The Service failed to publish such a finding, thus prompting CBD to file another lawsuit. The 2023 proposed listing was issued in response to a court order that required the Service to issue a decision on the DSL’s status by June 29, 2023.

Differences Between Final and Proposed Rule
There are several differences between the final rule and the proposed rule from July 2023. Based upon the Service’s review of the public comments, State agency comments, peer review comments and relevant information available since the 2023 proposed rule, the Service has updated information on the Species Status Assessment to include the following changes:

• Added references to the impact of frac sand mining on groundwater;
• Added information and references regarding human population growth in the Permian Basin exacerbating threats of habitat loss and fragmentation;
• Added information regarding estimates of genetic effective population size for DSL populations;
• Added information on the effects of climate change on groundwater levels;
• Updated enrollment numbers in existing conservation agreements;
• Removed statements referencing the impact of fugitive road dust on the DSL habitat;
• Updated language addressing confusion regarding “well density” and “well pad density.” The Service now focuses on well pads and the associated construction of road infrastructure, as these are central components of ground disturbance in oil and gas drilling and extraction.

Potential Implications
The Permian Basin is home to many land-users, particularly in the oil and gas industry, the sand mining industry, and the wind and solar development industry. Listing the DSL as an endangered species has many effects on land-users. It is unlawful under section 9 of the ESA to take a threatened or endangered species without a “take” permit. 50 C.F.R. § 17.21. Taking includes anything that involves harm, harassment, death and other actions. For example, for the DSL, the following activities could result in a take and thus a violation of the ESA if performed without a permit, thereby exposing land-users and operators to civil penalties, criminal penalties and potential injunctive relief from federal enforcement or citizen suit actions authorized by the ESA:

• Destruction, alteration or removal of shinnery oak duneland and shrubland vegetation;
• Degradation, removal or fragmentation of shinnery oak duneland and shrubland formations and ecosystems;
• Disruption of water tables in DSL habitat;
• Introduction of nonnative species that compete with or prey upon DSL;
• Unauthorized release of biological control agents that attack any life stage of DSL or degrade or alter its habitat;
• Herbicide or pesticide applications in shinnery oak duneland and shrubland vegetation and ecosystems.

Land-users and operators may be issued permits to authorize activity otherwise prohibited by the taking of an endangered species. These permits may be issued for scientific purposes, for enhancing the propagation or survival of the species, or for take which is incidental to otherwise lawful activities. 50 C.F.R. § 17.22. Application requirements for an incidental take permit include conservation program descriptions which explain conservation and monitoring measures that mitigate the impacts of the incidental taking. An applicant’s mitigation impacts, funding for conservation plan implementation, procedures for unforeseen circumstances, and likelihood of survival and recovery of the DSL in the wild, among others, are all factors considered in the permit process.

Industry has raised concerns that the listing could restrict further oil and gas development as well as sand mining development by constraining production opportunities and limiting the speed at which production can occur in the region. However, CBD presented an analysis demonstrating that the impact on oil and gas activities would be minimal, with DSL habitat accounting for less than 2% of the Permian Basin and less than 5% of the six West Texas counties where it exists. Other analyses projected that that DSL protection under the ESA affects less than 1% of oil and gas activity on federal lands in Southeast New Mexico. These analyses estimate that if drilling were to cease in these areas, which is not likely, fossil fuel extraction would continue largely unabated on 95% of state lands and nearly 99% of all lands in the analysis area. In addition, according to the Service, oil and gas wells are still able to reach most oil and gas reserves without disrupting the DSL’s habitat through advanced horizontal drilling techniques.

The DSL listing does not prevent existing candidate conservation agreements in New Mexico and candidate conservation agreements with assurances in both New Mexico and Texas from operating. The listing also does not prevent additional conservation agreements or partnerships to conserve the species.

Critical Habitat Designation Prudent but Not Determinable
The ESA requires the Service to designate a critical habitat once a species is deemed endangered or threatened. 50 C.F.R. § 424.12. If the critical habitat is not then determinable, the ESA allows the Service an additional year to publish critical habitat designations not determinable at the time of listing. Despite acknowledging the prudence of such a designation, the Service deemed it undeterminable due to insufficient specific information required for a thorough impact analysis. Presently, the Service is still assessing critical habitat and it plans to publish a designation in the near future. This lack of designation creates ambiguities regarding the effectiveness of the listing, as land-users are prohibited from disturbing the currently undesignated habitat of the DSL.

Reactions and What’s Next
The crux of the DSL listing saga has been attempts to strike a balance between environmental conservation and economic development, particularly maintaining the energy industry in western Texas and eastern New Mexico. However, a Republican Texas lawmaker whose district includes much of the Permian Basin immediately filed a joint resolution to nullify the listing. On May 31, Rep. August Pfluger put forth a Congressional Review Act (CRA) bid to address what he termed an “incredible threat to energy production” in the Permian Basin. On July 11, Texas Senator Ted Cruz filed a companion bill in the senate (S.J.Res. 102).

While industry response to this move has been positive—receiving public support from several oil and gas trade associations—the reality is that using the CRA to roll back environmental regulation, particularly ESA listings, has not had success lately. For example, efforts to nullify ESA protections for the lesser prairie chicken and the northern long-eared bat last year failed to gain the votes necessary in the Senate to override President Biden’s veto. However, the CRA is particularly notable surrounding a presidential election, as there is a lookback period at the beginning of a new administration that allows rules issued near the end of the previous administration to be subject to joint resolution of disapproval.

Texas oil and gas regulators at the Texas Railroad Commission, the state agency that oversees oil and gas activities in the state, have also challenged the DSL listing by voting unanimously to request that the Texas Attorney General file a lawsuit challenging the listing. The Commissioners stated that the Services’ metrics were flawed as they were based on outdated scientific studies that do not account for modernization in production technology, and that political motivations against the oil and gas industry were the primary drivers of the listing. While industry groups have signaled legal challenges to the listing are imminent, impacted land-users must comply with ESA requirements as of June 20, 2024.

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