Critics: Chesapeake deal erodes spirit of sage grouse strategyBy Dustin Bleizeffer — October 8, 2013
Wyoming Gov. Matt Mead’s staff recently unveiled a plan to allow Chesapeake Energy to continue drilling several horizontal oil wells in a special management area in Converse County, exempting the company from some standard restrictions designed to protect sage grouse. In exchange, the state will receive $2.8 million to apply toward habitat restoration and conservation inside other portions of the “Douglas Core Area.”
It was the best deal that Wyoming could muster, according to members of Gov. Mead’s staff, because Chesapeake had a large share of existing private minerals in the area, and Gov. Mead’s staff said the state cannot block development of private minerals — even under Wyoming’s Greater Sage-Grouse Core Area Protection executive order. The order was first issued under former Gov. Dave Freudenthal in 2008 as an attempt to allow Wyoming and other western states to maintain primacy over protecting the species rather than suffer under a listing under the Endangered Species Act.
The crux of the Chesapeake deal was to divide the Douglas Core Area into three different zones based on existing sagebrush quality. The company will concentrate drilling to areas where sagebrush is unsuitable to maintain sage grouse — including an area that was burned out due to a railroad fire many years ago — while improving more suitable habitat in other portions of the core area.
There’s some difference of professional opinion among wildlife biologists on the question of whether this plan will help improve the local sage grouse population’s chances of surviving, or whether the exemption to drill more wells — no matter where they’re drilled in the 140-square-acre core area — will only add to the demise of an already struggling local population.
Aside from questions on the biology, critics of the Chesapeake deal say their concern is that Gov. Mead is setting a precedent for such deals elsewhere in sage grouse core areas. Or worse, that the lack of transparency in negotiating this deal only serves to erode trust and faith in a system that relies on a delicate coalition of stakeholders who have already made a series of compromises on sage grouse conservation.
“This whole thing reeks because it’s a compromise of a compromise. … And they did the whole thing behind closed doors,” said Jill Morrison, organizer for the Sheridan-based landowner advocacy group Powder River Basin Resource Council.
Morrison said her organization is working with several residents in the Douglas area who have listed many complaints about Chesapeake’s operations — not the least of which is flaring of natural gas (including in violation of state rules and regulations), and an April 2012 blowout that spewed toxins over a rural neighborhood unmitigated for 66 hours, requiring dozens of people to evacuate their homes. No citations related to the blowout were issued to the company from the state.
Terry Henderson and her husband run a grass-fed cow-calf ranch surrounded by new oil development in eastern Converse County. Henderson said she and her husband didn’t know that Chesapeake and the governor’s office were dividing the Douglas Core Area into three separate zones and cutting a deal to exempt Chesapeake from some sage grouse protections. Henderson said they didn’t know which zone their ranch was in until a neighbor shared a map from the new plan.
“I didn’t know about it until it was announced on the news. Nobody out here knows a thing about it,” Henderson told WyoFile.
Henderson said her concern, as a landowner who is expected to live within the confines of the governor’s sage grouse core areas executive order, is whether the deal will hurt the local sage grouse population and push the species closer toward a listing under the Endangered Species Act. “Then we’ll be the ones faced with dealing with federal regulations for the long-term,” and not Chesapeake, Henderson said.
The U.S. Fish and Wildlife Service will make a decision in September 2015 about whether or not to list the Greater sage grouse under the Endangered Species Act.
Landscape and biology
The Douglas Core Area has been a controversial portion of Wyoming’s Sage Grouse Core Areas initiative since the first executive order under former Gov. Dave Freudenthal.
The threshold for surface disturbance inside sage grouse core areas is 5 percent per 640 acres. But disturbance inside the “Douglas Core Area” is well beyond 22 percent — due in part to a railroad fire many years ago, and due to prior and ongoing industrial development and housing development.
There were 76 male grouse on three active leks in the Douglas Core Area in 2007, according to Tom Christiansen, sage grouse coordinator for the Wyoming Game and Fish Department. At last count, there were 11 male grouse on those same three leks. Part of that sharp decline is due to the cyclical nature of sage grouse populations, said Christiansen.
“All the human activity that’s already out there has compromised the grouse,” said Christiansen. “The tough thing here is the grouse numbers are so small right now it’s possible their fate is sealed.”
So there was a lot of debate about whether to include the Douglas Core Area in the state’s overall core area plan in the first place. But the Douglas Core Area, along with the Powder River Basin Core Area to the north, make up the southeastern edge of the Greater sage grouse’s west-wide region targeted for conservation. Large areas of prime sage grouse habitat in the Powder River Basin Core Area were carved out for energy development, with state officials acknowledging that coal-bed methane gas activity — along with other factors — helped drive that local sage grouse population to the edge “functional extinction.” There’s already no hope for recovery for the Powder River Basin sage grouse population.
Most existing industrial developments in 2008 were grandfathered in to the sage grouse core areas initiative — even some that are still non-existent but legally still on the books, like DKRW Advanced Fuel’s proposed coal-to-gasoline plant near Medicine Bow. If it’s ever built, DKRW will not have to abide by the sage grouse core area rules and regulations that surround the plant.
But it was decided to include the Powder River and Douglas core areas in order to count the sage grouse that were still there in the state’s overall plan, and because the areas still contain some excellent habitat.
“When that area was established we understood that it was above the executive order 5 percent disturbance threshold,” Jerimiah Rieman, natural resource policy advisor to Gov. Mead, told WyoFile. “It (the Douglas Core Area) is the primary and the perfect area for us to try to experiment a little bit, and try to do these two experiments; to allow development but bring back habitat, bring back birds.”
Some wildlife biologists say the Chesapeake deal to allow drilling beyond Wyoming’s core area stipulations will almost certainly push the local sage grouse population beyond recovery and possibly even beyond functioning even as a DNA link to neighboring populations.
Take, for example, the analysis in this study, (Fig. 2 and accompanying text) “Combined Effects of Energy Development and Disease on Greater Sage-Grouse,” authored by Rebecca L. Taylor, Jason D. Tack, David E. Naugle, and L. Scott Mills, published August 5, 2013. It suggests that oil and gas drilling activities have a measured negative impact on sage grouse — far away from drilling pads. The implication is that no matter where industry drills inside the Douglas Core Area, it will result in fewer sage grouse throughout the core area.
Others, such as Tom Christiansen, the sage grouse program coordinator for the Wyoming Game and Fish Department, say these findings may hold true in many areas, but it doesn’t necessarily apply to all landscapes and all situations.
“It depends on where drilling is in relation to those birds,” Christiansen told WyoFile. “Just because it’s (Douglas Core Area) got a political line drawn around it called ‘core’ doesn’t mean the birds will be impacted no matter where you drill in there.”
Bob Budd is executive director of the Wyoming Wildlife & Natural Resources Trust. It was Budd and Rieman who negotiated the Douglas Core Area deal with Chesapeake Energy. Budd told WyoFile he agrees with Christiansen’s assessment regarding drilling impacts on sage grouse.
“First you have to make sure there are birds that can be negatively affected,” Budd said, adding that the Chesapeake plan, in his opinion, separates drilling activities far enough away from sage grouse to protect them. “If there are no birds (near drilling activities), how do you have an effect on them? … We’re looking at what can we do to maintain the birds we have?”
Others maintain that mitigation funds, such as the $2.8 million committed by Chesapeake, are not part of Wyoming’s Sage Grouse Core Areas strategy. The strategy instead relies mostly on avoiding disturbance to good habitat in the first place. And for good reason. Regulators and conservationists alike say their experience in Wyoming shows that you can’t grow sagebrush habitat fast enough to keep pace with industrial drilling and expect to offset the impacts of drilling on sage grouse in the local region.
Budd, Christiansen and other wildlife professionals contacted by WyoFile for this story all agreed that one disease outbreak (which tend to cycle every five years) or one bad wildfire could extinguish the Douglas Core Area sage grouse population, regardless of conservation efforts.
Transparency and collaboration
As for the political science of Gov. Mead’s deal with Chesapeake Energy; the private nature of the negotiations caused some irritation — even among those who now say the governor’s office probably got the best deal possible, given the circumstances.
It wasn’t until a letter from the Wyoming Game and Fish Department — sent to a consultant in May 2012 but circulated among core area stakeholders in August 2013 — that many people first learned of details in the Chesapeake deal. While state regulatory officials were involved in some details throughout the process, members of the broader Sage Grouse Core Areas Implementation Team didn’t get details of the plan until it was already completed.
“They (Gov. Mead’s office) didn’t consult with us on this one,” Audubon Wyoming executive director Brian Rutledge told WyoFile.
Rutledge is also a member of the implementation team. Members of the team only got to see the detailed Chesapeake plan for the first time a few weeks ago — more than a year after negotiations began between Chesapeake and two state officials representing Gov. Mead: Bob Budd and Jerimiah Rieman.
Rutledge said he had a lot of questions regarding the plan in the September 18 implementation meeting with Budd and Rieman. In an interview with WyoFile after the September meeting, Rutledge said he’d since had an opportunity to look over the plan, and it’s probably the best deal the state could have struck.
“It just really makes for awkward dealings,” Rutledge said of private minerals and private surface in the state’s core areas. “I will continue to engage … but I also made it very clear, and the governor will make it clear, too; this is not the beginning of reshaping core area habitat.”
Asked whether the Chesapeake deal could set a precedent, and whether the governor’s office will make similar exemptions for other oil and gas operators in sage grouse core areas, Gov. Mead’s press secretary Renny MacKay told WyoFile, “No, this is it.”
Wyoming’s core area strategy has been hailed as possibly the best defense against a potential listing of the bird under the Endangered Species Act — an action that would halt myriad activities on the landscape across the Rocky Mountain West and hit local economies hard for many years. Federal land managers are weaving main elements of Wyoming’s core areas strategy into their Resource Management Plans, and 10 western states are looking to Wyoming for guidance on how to promote sage grouse conservation using the core areas strategy.
All of this means that any weakness in Wyoming’s execution of “core areas” could be seen as a weakness in the potential for a west-wide non-ESA strategy to conserve the species. If the USFW decides in September 2015 against listing the Greater sage grouse under the ESA, the survival of the species will be left to individual governors across the West. And those administrations will rely on the trust and cooperation of coalitions that include energy interests, agriculture, sportsmen, recreation and many others.
People closely involved in collaborative efforts to conserve sage grouse told WyoFile that if there’s any speculation that there’s going to be sweetheart deals crafted behind closed doors, it will seriously threaten partnerships and voluntary cooperation among stakeholders.
Although the Chesapeake plan was primarily worked out between Jerimiah Rieman, Bob Budd — on behalf of the governor — and representatives of Chesapeake Energy, Gov. Mead says it is his decision alone to sign off on the Chesapeake agreement. In a statement to WyoFile, MacKay said Gov. Mead “made his decision after consultation with multiple state agencies and recognizing that the federal government would also provide a review. As with all major policy decisions, it is the Governor who makes the final decision.”
The private nature of the year-long negotiations to arrive at the deal was necessary, according to the governor’s staff, because most of Chesapeake’s oil and gas leases in the area are on private surface and private minerals (although the company does hold some state leases in the Douglas Core Area).
Budd said he and the governor’s office agreed to Chesapeake’s request that they work in confidentiality to craft the plan due to proprietary information related to the company’s drilling strategies and technologies applied to private wells. “They don’t want to put all their cards in a public forum,” Budd said of Chesapeake. “It gets down to what the technology is, and where they intend to drill.”
Chesapeake declined to answer WyoFile’s questions for this story.
Jill Morrison of the Powder River Basin Resource Council said she believes the governor’s staff could have negotiated in a much more transparent manner without compromising legitimate proprietary information.
“These guys, first of all, are public employees negotiating about a national issue; sage grouse,” Morrison told WyoFile. “That is one grand excuse they’re using. Everything with the core area should be open for public discussion.”
Morrison asked, if this is how negotiations must be worked out with oil and gas operators when it comes to development on private minerals, then can the core areas strategy be implemented in the spirit of cooperation and transparency that it was built on?
Budd said he never anticipated this question about private minerals and private negotiations as the Sage Grouse Core Areas strategy was being developed. However, both Budd and Tom Christiansen, sage grouse program coordinator for the Wyoming Game and Fish Department, claim there’s plenty of room within the governor’s executive order to work out such deals. Meanwhile, Morrison and others question whether Gov. Mead should make a formal amendment to his Greater Sage Grouse Core Areas executive order to approve the Chesapeake deal.
So how can stakeholders keep faith that Wyoming’s core areas strategy will work in Wyoming and throughout the Rocky Mountain West, even when it comes to private property? “Because of exactly what we’ve done,” answered Budd. And if there’s still heartache over private negotiations? “It doesn’t matter what you do, somebody’s going to think you’re doing it wrong,” said Budd.
USFW officials, Pat Deibert and Mark Satellberg said their preference is to see no additional oil and gas development in the Douglas Core Area. But they believe the governor’s staff indeed had their hands tied and couldn’t open the negotiations to the larger Sage Grouse Core Areas Implementation Team due to proprietary information related to Chesapeake’s private oil and gas leases in the area.
“Our preference is to see this area not be developed … But there’s nothing we can do because it’s private (minerals),” said Deibert.
Deibert added that Chesapeake’s ongoing drilling activity in the Douglas Core Area will factor in the USFW’s decision on whether to list the sage grouse. “But how much of an emphasis that makes on a decision for a national listing (I can’t say).”
Although Gov. Mead has final authority over the Greater Sage Grouse Core Areas executive order, the Chesapeake plan isn’t complete until USFW comments on it. The agency had not yet commented on the plan when Deibert spoke with WyoFile Monday afternoon September 30th. Most of the agency’s employees were furloughed the next day, and remain furloughed.
UPDATE (October 29, 2013): The U.S. Fish and Wildlife Service issued a letter (click to download pdf) to Wyoming Gov. Matt Mead’s office on October 29, 2013, detailing its comments regarding the Chesapeake Douglas Core Area plan. USFW field supervisor Mark Sattelberg essentially gives the plan the agency’s blessing. He writes, “In light of the unique issues associated with the DCA and the pre-Executive Order rights of Chesapeake, the Service considers this Plan as a logical strategy to allow Chesapeake to develop their rights in the DCA while attempting to minimize impacts on greater sage-grouse.”
— Below is the proposed agreement between Wyoming Gov. Matt Mead and Chesapeake Energy to develop oil and gas leases in the Douglas Core Area:
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