New Rule on Endangered Species Consultations Finalized Despite Industry Pushback

Despite AAPA and Industry Objections, Fish and Wildlife Finalizes Rule

Washington, D.C. – On March 28, the U.S. Fish and Wildlife Service and National Marine Fisheries Service (together the “Services”) finalized a rule regarding how agencies should consult with the Services about minimizing harm from construction projects under Section 7 of the Endangered Species Act. The rule, which went into effect Friday, April 5, 2024 (30 days after publication on the Federal Register), finalizes the proposed rule issued June 22, 2023. The Rule applies to port projects where endangered species or critical habitat designations potentially exist.

The Services finalized this rule despite extensive pushback from AAPA and many other industry groups. AAPA submitted comments on August 21, 2023 and has continued to raise our concerns with agency officials and Members of Congress. Find a summary of AAPA’s concerns and a full analysis of the Rule below.

AAPA Concerns  

  • The Services are ignoring the costs and economic impacts associated with regulatory decisions made under the proposed rule;
  • Changes to the definitions of “environmental baseline” and “effects of the action” will be detrimental to port maintenance efforts; and
  • The proposed rule will increase complexity of permitting – creating an additional burden on current staffing shortages and exacerbating consultation delays.

Analysis of the Rule

In the Final Rule, the Services’ reiterated their intention to provide additional guidance for these changes in an updated ESA Section 7 Consultation Handbook, which will be made available for public comment after the final rule’s publication.

Section 7 requires federal agencies to consult with the Services to ensure any actions those agencies authorize or fund are not likely to threaten the continued existence of endangered or threatened species, or result in harm to the designated critical habitat of such species. This consultation requirement applies to discretionary federal agency actions, like permitting, licensing, and authorizations, along with other federal programs. Under this consultation process, federal agencies must identify the “environmental baseline” the action will be evaluated against, which includes the past and present impacts of federal action as well as the expected impact of proposed federal projects that have already undergone section 7 review. Federal agencies must then evaluate the “effects of the action” against this baseline to determine whether the proposed agency action may threaten a special status species or its designated critical habitat. If so, further consultation is required. Notably, “effects of the action” is currently defined as “consequences” to listed species or critical habitat, which are “caused by the proposed action if it would not occur but for the proposed action and it is reasonably certain to occur.”

The final rule will impact this consultation process by altering the definition of “effects of the action.” Specifically, the rule clarifies that “consequences” to special status species or critical habitats caused by—but not a part of—the proposed agency action are considered “effects of the action” if they satisfy a “but-for” causation standard. The two-part causation test is used to determine when a consequence of these other activities is caused by the proposed action because the other activities (and the consequences of them) would not occur “but for” the proposed action and are “reasonably certain to occur.” This widens the scope of impact agencies must consider when comparing proposed actions to the environmental baseline.

The final rule also removes provisions from a 2019 final rule under the Trump administration that provided certainty and clarity to industry stakeholders. The previous Administration clarified that the analysis of the aforementioned “effects of the action” was limited in scope to actions that would be “reasonably certain to occur.” For an action to be “reasonably certain to occur,” the rule required the Services to cite evidence of “clear and substantial information, using the best scientific and commercial data available.” The final rule eliminates these two clarifying provisions. Further, 50 C.F.R. § 402.17—also added in the 2019 rulemaking—provided factors to determine whether an activity or a consequence was “reasonably certain to occur.” The factors included consideration of the impact of past actions similar in scope, nature, and magnitude, and whether potential consequences would be proximate in time and geography, among other considerations. These guidelines are also removed by the final rule.

The final rule also includes changes to the environmental baseline. The Services changed the third sentence in the definition of environmental baseline (50 CFR 402.02) from “the consequences to listed species or designated critical habitat from ongoing agency activities or existing agency facilities that are not within the agency’s discretion to modify are part of the environmental baseline” to “the impacts to listed species or designated critical habitat from Federal agency activities or existing Federal agency facilities that are not within the agency’s discretion to modify are part of the environmental baseline.” The definition was changed, according to the Services, to more clearly address the question of a federal agency’s discretion over its own activities and facilities when determining what is included within the environmental baseline. In the final rule, the Services stated that “the revisions do not alter current practice related to the analysis of the effects of a proposed discretionary Federal action that involves the authorization or funding of an action taken by a non-Federal entity such as a private landowner. The Services decline to speculate or generalize in a response to public comments as to the breadth of scope of agency discretion in all of these actions as these are case-specific determinations.” The Services explained that “the baseline includes the original construction of facilities and past operations and maintenance that have occurred. However, the proposed future discretionary actions are all of the discretionary actions that will occur—even those ongoing discretionary actions for which no changes are envisioned.” For example, if a federal agency proposes to continue the operations of a dam, regardless of their “ongoing” nature, all the consequences of the proposed discretionary operations of the structure would be considered “effects of the action”. The Services said that those future consequences of discretionary operations are properly considered “effects of the action” even if those similar operations that occurred previously are included in the environmental baseline.

Finally, the rule also amends regulatory provisions relating to the scope of “reasonable and prudent measures” (RPMs) in an incidental take statement (ITS) reversing prior policy that confined the Services to considering RPMs only regarding measures that reduce take “in the action area.” The rule allows the Services to impose affirmative mitigation requirements outside the action area “when incidental take cannot be avoided.” The Services declined to comment on concerns about the concept of “useful life” and existing non-Federal projects, stating only that the definition of “environmental baseline” does not change current practice.