Midland, Texas — Monarch butterflies, tiny lizards, and a type of grouse known as the lesser prairie chicken all drew close scrutiny from a large gathering of oil and gas executives at the Permian Basin Petroleum Association’s annual meeting this year.
Fracking has helped turn the Permian Basin into the nation’s most productive oil field — and the only part of the U.S. where the oil industry continues to expand robustly despite a price slump that began in mid-2014.
But the parched Permian Basin is also home to a broad array of rare wildlife, including a significant number of species already considered threatened or endangered. With the Fish and Wildlife Service considering adding dozens more species in Texas to their lists, the oil industry here is sweating (and not simply because last month was the warmest October in Midland in over 80 years of record-keeping).
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Endangered species may prove to be an unexpected Achilles heel for the Permian drilling industry as it attempts to turn the deserts of west Texas into an oil “well factory” — a dense field of wellpads, pipelines and access roads built right amid unique ecosystems and habitats for wild animals that may be at risk of extinction.
At the same time, over the past few years, the oil and gas industry has ramped up its efforts to chip away at, de-fund, or even re-write the Endangered Species Act, a cornerstone of American environmental protections. The recent election results may have sharply redefined the industry’s prospects in Congress.
For at least the next two years, the House and Senate will both be controlled by Republicans, led by President-elect Donald Trump, who has sharply criticized the Endangered Species Act.
“As President, I will direct the Interior Department and Commerce Department to conduct a top-down review of all Obama Administration settlements, rules, and executive actions under the Endangered Species Act and other similar laws, and we will change or rescind any of those actions that are unlawful, bad for American farmers and workers, or not in the national interest,” he told the American Farm Bureau Federation during his campaign. “I will also work closely with Congress to improve and modernize the Endangered Species Act — a law that is now more than 30 years old — so that it is more transparent, uses the best science, incentivizes species conservation, protects private property rights, and no longer imposes needless and unwarranted costs on American landowners.”
Much remains to be seen about whether Trump will follow through on campaign statements or what issues might take priority under that administration — especially because Trump himself has also praised American environmental protections, touting the country’s “high environmental and conservation standards, which we want to keep” at a shale industry conference in September.
There are few places in the country where the stakes for endangered species protections are higher. Permian basin oil can be fracked cheaply, drillers say, with one company announcing in July that its production costs here totaled less than $3 a barrel (at a time when a barrel of oil sells for roughly $45). Those extraordinarily low costs help explain why drillers are expected to pump an ever-growing amount of oil from the west Texas ground, with the Energy Information Administration projecting a record-breaking 2 million barrels a day from the Permian in November.
Drillers fear that federal protections for more threatened and endangered animals could drive up their costs at a time when the industry is already battered by low oil prices, growing competition from renewable energy, and increasing attention from investors and regulators over the climate-altering impacts of fossil fuels.
Endangered species advocates argue that not only has the nearly universally popular law protected iconic animals like the bald eagle, California condor, and the Florida panther, and helped preserve wild areas, but that it also preserves the future benefits to humanity from the medicinal and agricultural uses of rare and little-studied plants or animals. Even aside from the inherent value of diverse and wild life, the economic value of so-called “ecosystem services” — or the benefits to humanity and even industry from nature, like clean water and air, flood control, and food — is so broad and fundamental that experts worry any attempt to put dollar values to those functions would never fairly capture their worth. Endangered and threatened animals often serve vital roles in keeping those natural systems working.
But while the nation’s list of protected species is poised to grow, a handful of those rare and wild animals can only survive in habitat also targetted by Texan drillers. And any changes to environmental standards driven by oil lobbyists from this small corner of Texas could undermine fundamental protections for wildlife nationwide.
A panel of experts at the Permian Basin Petroleum Association (PBPA) meeting — prior to the election — directed the industry’s attention at various ways that the Endangered Species Act could slow oil and gas activities across Texas — especially the water-intensive processes of drilling and fracking.
“There’s a lot of talk about how the Endangered Species Act is being used to control how we use the landscape,” Myles Culhane, an attorney for Occidental Petroleum Corp, told the crowd.
“It is going to be used to control how we manage water in the United States,” Mr. Culhane added, zeroing in on freshwater mussels like the Texas hornshell mussel, describing how surface water withdrawals by the oil industry could be slowed if more mussels are listed as endangered.
If the handful of Texas freshwater mussel species currently being reviewed by Fish and Wildlife gained protections as threatened or endangered animals, drillers might face limits on how they use water from the already-parched desert for fracking.
“You take too much water, you are taking — under the Endangered Species Act — that mussel species,” he explained — and “taking,” or acting in ways harmful to protected wildlife, is strictly prohibited under the law.
For years, the oil industry here has spent millions of dollars battling to prevent the listing of just two rare animals, the lesser prairie chicken and the dunes sagebrush lizard, both by fighting in court and by funding voluntary preservation programs.
This summer, the industry beat back protections for the lesser prairie chicken, after voluntarily committing over $60 million and putting over 130,000 acres under habitat preservation contracts — but critics charge that those contracts will expire too soon to give the bird population time to bounce back and that some of the most-protected land is in fact only marginally used by the birds, which they say are threatened not only by the direct impacts of roads and drilling activities, but also by the extreme heat that a changing climate is already bringing to the west Texas deserts.
In September, WildEarth Guardians, the Center for Biological Diversity, and Defenders of Wildlife filed a new petition arguing that those voluntary steps have so far “failed to achieve meaningful conservation for the lesser prairie chicken” and asking federal regulators to take another look.
With over 520 more possibly endangered species on Fish and Wildlife’s docket over the next five years, the panelist said, the long fights over the lesser prairie chicken and dunes sagebrush lizard may be just the first hint of things to come.
“We’re watching a whole bunch of other species because of the potential for their impact on the Permian,” Mr. Culhane said.
“Economic Growth and Endangered Species”
The Endangered Species Act is one of the country’s most powerful environmental laws, enjoying broad support across the political spectrum. In 1973, the US Senate unanimously approved the Act, and the House followed with a vote of 390-12, an overwhelming margin reflecting strong backing from Republicans and Democrats alike.
It remains highly popular among voters, advocates say, with a 2015 poll conducted on behalf of Defenders of Wildlife and Earthjustice finding 90 percent support for the Act nationwide.
But over the past five years, legislative efforts to weaken protections surged from their historical levels of less than five a year to over 33 annually — followed by a record-shattering 66 introduced in roughly the first half of 2015 alone, a report from the Center for Biological Diversity found — and many attacks came from members of Congress with close ties to the oil industry.
In late September, as DeSmog reported, the Obama administration unveiled new rules that will make it harder for environmental groups to ask federal regulators to examine whether a species should be considered endangered.
In Texas, a historic oil industry stronghold, state officials have found creative ways to work around the federal rules and minimize the impacts of the Act on drilling.
For example, the state decided to give its tax collectors authority over endangered species in 2011, on the logic that protecting endangered species might affect industries and, down the line, the state’s revenues.
Dr. Robert Gulley, a Texas comptroller official with the unique job title of “Director of Economic Growth and Endangered Species,” presented at the PBPA conference — and made it very clear how he saw his job.
“We were not created to protect species,” he told the oil executives. “You are our clients. Let us know what we can do for you.”
Dr. Gulley, whose office has received $10 million of Texas taxpayer funding for endangered species research since 2013, described ways that research had been used to combat new protections for animals from drilling.
“The Endangered Species Act provides very little room to talk about economics,” Dr. Gulley said, so his office instead focused on building up scientific evidence — and using that evidence to aid the drilling industry.
In one case, his office worked to discern exactly where a particular kind of animal spent the winter, ultimately narrowing its suspected range and making less land potentially off-limits to industry. Another time, researchers had found very few of a particular type of lizard and suspected that the oil industry had fragmented its habitat. So Dr. Gulley’s office funded teams of researchers from Texas A&M and the University of Texas to look for lizards. “They are very, very good at finding herps, and particularly lizards,” he said.
Those numbers were then shared with wildlife regulators. “And I think one of the things that they said was that they no longer looked at the oil and gas industry as having the most significant impact on the lizard and on fragmentation,” he said. “So we think we’ve done some things. We hope we do more.”
He directed the conference’s attention to the spottail earless lizard, whose habitat “pretty well tracks the Permian basin, the Eagle Ford, and there he is down into south Texas,” he said. “A listing of that species, particularly given the range that would be involved, would be quite significant.”
And like Mr. Culhane, Dr. Gulley issued a dire warning for the industry about endangered species that live in water. “I think the potential for freshwater mussels is grave,” he said.
The Fight That’s Coming
With regulators at their heels, industry advocates are getting ready to take the fight to the courthouse.
“Litigation needs to be a major tool in our tool box,” panelist Kathleen Sgamma, a former military intelligence officer in the U.S. Army who now serves as vice president of governmental and public affairs of the Western Energy Alliance, said. “The PBPA and Western Energy Alliance are taking the lead in using litigation aggressively and successfully.”
Earlier in the day, frustrations over the efforts of environmental groups had bubbled up from the audience.
“Can we not countersue them?” Todd Lovett of the Panhandle Producers and Royalty Owners Association asked during a Q&A session. “Why can’t we do something of that nature to get them off our backs? If we had discovery, we could go into their email to see where they say not just ‘save the lizard’ but ‘kill the oil and gas industry’. In the Permian Basin, we got to deal with that. Why can’t we do that?”
That idea initially drew a bemused reaction from Kierán Suckling, executive director of the Center for Biological Diversity. “You can’t file lawsuits to ‘get discovery,'” he told DeSmog, “you actually have to allege a wrongful action.”
But he added that frivolous legal strategies could have more serious consequences if they drew support from government officials.
“Very often it’s these rural poor counties that end up giving money to people like the Permian Basin Association because they pursue campaigns and lawsuits that are utterly hopeless,” he said, “and the Permian Basin lawyers, they make out just fine — win or lose they get paid.”
At the PBPA conference, the talk of lawsuits extended past endangered species and into other federal laws that could impact drilling.
“Western Energy Alliance and Independent Petroleum Association of America together sued and stopped federal regulation of fracking. We did that by suing, along with the states and some Indian tribes, and we were able to get an Obama appointee to agree with us that that was federal overreach, the federal government does not have the ability to regulate fracking,” Ms. Sgamma said. “We’re going to be doing the same thing with the venting and flaring rule. Following the same plan. We will be ready to litigate on that immediately. We have some states lined up, we’re working on some others.”
The industry’s air pollution — especially as it relates to climate change — could become as controversial as fracking and water contamination, she predicted. “The way I look at it now, methane is the new fracking,” she added. “The new front is on methane. So we need to be aggressive there as well.”
She also discussed prospects for eroding support for the Endangered Species Act in Congress, describing complaints about the listing of new endangered species from the agriculutural industry to top Democrats.
“If we can get other regions of the country to feel the pain on the Endangered Species Act,” she said, “we will maybe get some change.”
In Midland, drillers remained sharply focused on how protections for individual species could dry up their access to water from the arid landscape to use for drilling and fracking.
“This is going to be about water,” Occidental’s Mr. Culhane said. “I often say, you know, whiskey’s for drinking and water’s for fighting over. Well this is the fight that’s coming.”