A pair of rules proposed by the Interior Department’s U.S. Fish and Wildlife Service (FWS) that would list as endangered the gunnison sage grouse, which is found in Colorado and Utah, and designate 1.7 million acres of critical habitat for the bird under the Endangered Species Act (ESA), would cost the two states more than $290 million annually, according to a draft economic analysis released by FWS last week.

The states would lose a total of $130.2 million and 40 jobs in baseline impacts annually and another $160.2 million and 49 jobs in incremental impacts annually as natural gas and oil companies adjust to the rules, according to the 204-page analysis. In addition, it would cost up to $16.7 million over the next 20 years to implement the rules, and Utah would lose a total of about $120,000 in tax revenue annually, FWS said.

“While sage grouse conservation is not expected to result in a net change in total oil and gas production or development activity at the national level, the proposed listing and critical habitat designation could result in a redistribution of oil and gas production away from areas within the proposed designation to comparable, substitute sites outside of the proposed designation,” FWS said. “That is, substitute lease sites are not scarce enough, nor the oil and gas development opportunities within critical habitat preferable enough, to justify oil and gas operators taking on the additional burden that could result from the listing or designation of critical habitat.”

The sage grouse population has been on the decline across the West. States and federal agencies have stepped up their efforts to search for a way for development, including oil and natural gas drilling, to coexist with the bird. In March the Bureau of Land Management (BLM) deferred nearly 41,300 acres in a promising unconventional find in northeastern Nevada from its quarterly oil and gas competitive lease sale because the parcels were partially or entirely in Greater Sage-Grouse habitat (see Shale Daily, March 19).

Earlier this year the House Natural Resources Committee sent a letter to the Interior Department expressing concern about the scientific integrity of and the imposition of what it said were arbitrary deadlines on a decision to potentially list the sage grouse under the ESA.

In July, FWS postponed its final determination on the two rules — which had already been postponed once — to March 31, 2014, and extended the public comment period as well. “We are taking this action based on our finding that there is substantial disagreement regarding the sufficiency and accuracy of the available data relevant to our determinations regarding the proposed listing rule, making it necessary to solicit additional information by reopening the comment period for 45 days,” the agency said at the time. The comment period, which had closed Sept. 3, has been reopened until Oct. 19.

In April, Utah Gov. Gary Herbert said his state had completed a conservation plan to preserve greater sage grouse in his state, protecting more than 90% of the state’s species through a combination of incentives and “reasonable” regulation. Last year, Herbert established a group to address the concerns for the large ground-dwelling birds. The group included county commissioners, federal land managing agencies, FWS, Utah’s Department of Natural Resources and Department of Agriculture and Food, the School and Institutional Trust Lands Administration, and representatives from the energy, recreational and conservation sectors.

Further north, Chesapeake Energy and the Wyoming Wildlife Natural Resource Trust (WNRT) have been working on a plan that would regulate drilling oil wells in an area of that state designated as sage grouse habitat. WNRT and Chesapeake officials discussed the proposed drilling plan Wednesday during a meeting of the Wyoming Sage Grouse Implementation Team in Cheyenne, WY. The deal would divide the Douglas Core Area into three zones, with Chesapeake suspending drilling in one zone and the state allowing some drilling in the other two zones, according to media reports.