Behind FERC’s recent back and forth on allowing construction on the Atlantic Coast Pipeline: the ambiguity of the Incidental Take Permit

The Standing Rock protests concerning the Dakota Access Pipeline have brought recent awareness to the numerous complexities involved with constructing infrastructure that spans over a thousand miles in length. The clash with the Native tribes in the surrounding area over sacred ancestral land and concern for potential pollution of their primary water supply, as well as arguments on the rights of landowners and risk of environmental disaster have all played out on a national stage.

While the Dakota Access Pipeline has received the majority of media attention to date, the recent permitting challenges of the smaller, six-hundred-mile-long Atlantic Coast Pipeline have captured the interest of legal, energy, environmental groups in the Southeast.

While construction on the pipeline began in May 2018, the Federal Energy Regulatory Commission (“FERC”), briefly halted construction in early August 2018 due to a recent Fourth Circuit Court of Appeals decision which in part dealt with an Incidental Take issue  Sierra Club v. United States DOI, Nos. 18-1082, 18-1083, 2018 U.S. App. LEXIS 21708 (4th Cir. Aug. 6, 2018). The Court vacated a Fish and Wildlife Services (“FWS”) Incidental Take Permit related to five different endangered species that are adversely impacted by the Atlantic Coast Pipeline. Id. at 2.

The Endangered Species Act (“ESA”) was passed in 1973 “to protect and conserve endangered and threatened species and their habitats.” Id. at 8. As part of the act, the “take” of endangered species is prohibited. Under 16 U.S.C. § 1532.19, “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” The specific word “harm” explicitly includes habitat modification or degradation. 50 C.F.R. § 17.3

However, there is an exception carved out in 16 U.S.C. § 1539 for granting Incidental Take Permits when the “taking is incidental to, and not the purpose of, the carrying out of an otherwise lawful activity.” For an Incidental Take Permit to be granted, an Incidental Take Statement (“ITS”) has to be issued by the FWS which specifies the potential impact of any such taking on the species.

A recent Ninth Circuit decision summed up the Incidental Take Statement thusly: “It (1) specifies the impact of the incidental taking on the species; (2) specifies the ‘reasonable and prudent measures’ that the FWS considers necessary or appropriate to minimize such impact; (3) sets forth ‘terms and conditions’ with which the action agency must comply to implement the reasonable and prudent measures and (4) specifies the procedures to be used to handle or dispose of any animals actually taken.” Defs. of Wildlife v. Zinke, 856 F.3d 1248, 1253 (9th Cir. 2017).

In Sierra Club v. United States DOI, petitioners argued that the Incidental Take Statement issued by the FWS was “arbitrary and capricious” because the limitations were so indeterminate as to be unenforceable and unmonitorable.

Id. at 2. The FWS had declined to provide discreet limits in the ITS and instead used language like “small percent” or “majority.” Id. at 14. However, the FWS does not always have to set a discrete limit in the ITS, rather can sometimes use a habitat surrogate. Id.

A habitat surrogate is “a way of defining take by the amount of adversely affected habitat rather than by the number of individuals harassed or killed.” Id. There are three critical elements of a valid habitat surrogate: (i) the causal link between the habitat and species take; (ii) an explanation of why setting a discrete limit is not practical; and (iii) a “clear standard” for determining when an incidental take limit has been exceeded.” 50 C.F.R. § 402.14(i)(1)(i).

The Court determined that the FWS had not set discrete limits in the ITS as well as had simply not met all three requirements of a surrogate habitat for five out of six of the contested species. Id. at 2. Therefore, the Incidental Take Permit was arbitrary and capricious and needed to be vacated. Id.

However, another Circuit Court has recently come out on the opposite side of this issue which indicates the controversy of what is required in an ITS is not settled law. In a recent 2016 D.C. Circuit Appeals Court decision, the court ruled that a wind turbine company had violated NEPA by not considering a reasonable range of alternatives for the killing of Indiana bats. Union Neighbors United, Inc. v. Jewell, 831 F.3d 564, 580 (D.C. Cir. 2016). However, the court deferred to the FWS’s findings regarding a separate ESA challenge to the Incidental Take Permit. Using a Skidmore standard of review instead of Chevron, the court agreed with the FWS’s position that the ESA only called for the minimization of impacts to the species of bats as a whole and not to individual bats. Id. at 580.

Given the tremendous amount of investment required for these major energy infrastructure projects as well as fervor of their opponents, this issue of what is required in an Incidental Take Statement is likely to receive an increasing amount of attention and litigation until it is resolved by the Supreme Court or a Circuit Court of Appeals issues a superseding opinion.