El Paso Corp. pays off environmental groups

Jul 30, 2010

El Paso Corporation, parent company of Ruby Pipeline LLC, has struck an agreement with Western Watersheds Project (WWP) and the Oregon Natural Desert Association (ONDA) to donate approximately $22 million over the next 10 years for conservation and grazing permit buy-outs in exchange for their agreement not to proceed with litigation that might interfere with the progress of the pipeline’s construction.

Manager of Media Relations for El Paso Corp., Richard Wheatley was quoted as saying, "The bottom line is we think it’s a preferable approach than being involved in litigation. There is the potential to do really good work."

The Ruby natural gas pipeline is a $3 billion project which, when completed, will stretch from Opal, WY, to Malin, OR, crossing parts of northern Utah and Nevada.

Both WWP and ONDA filed complaints with the Federal Energy Regulatory Commission (FERC) in April requesting a rehearing on the panel’s initial approval of the pipeline. Now, due to El Paso’s agreement to contribute the massive sum to WWP and ONDA projects, "We agreed not to try to delay or litigate Ruby Pipeline," WWP Executive Director John Marvel was quoted as saying.

The donation will not be given directly to WWP and ONDA, but will be put into two separate non-profit funds; $15 million will be used to establish the Sagebrush Habitat Conservation Fund with partners WWP, while an additional $7 million will go towards establishing the Greater Hart-Sheldon Conservation Fund with ONDA. These funds will be overseen by three-member boards composed of one WWP or ONDA appointee, one Ruby appointee, and a third member. Wheatley indicated that the board structure should provide for sufficient checks and balances of interests.

According to an ONDA press release, the purpose of the funds will be to promote restoration activities along the pipeline’s route, such as spring restoration, fence removal, creation of riparian exclosures, invasive species control, habitat improvements, and funding for purchase and retirement of livestock grazing permits.

ONDA Executive Director Brent Fenty explained, "Protecting the area around the Hart Mountain and Sheldon Refuges is critical to ensuring the survival of high desert species like sage grouse and pronghorn antelope. ONDA has been working to protect this region for over 20 years, particularly through fence removal efforts on the Hart Mountain Refuge. Establishing the Greater Hart-Sheldon Conservation Fund will create restoration and conservation opportunities on critical habitat spanning over 5 million acres."

Marvel has made it plain, however, that grazing permit buy-outs are a primary use to which these vast financial resources will be put. As quoted in the Elko Daily Free Press, Marvel remarked: "The money can be used to purchase private lands and conservation easements, but our priority is grazing permits. It’s time to end public lands grazing."

It is unclear whether, or to what extent, El Paso Corp. shares Marvel’s position. Although he refused to comment directly on Marvel’s remarks, Wheatley asserted, "Most of what we consider to be sagebrush habitat is not suitable for grazing. ... Based on our environmental work, we believe that that is an accurate statement."

Marvel indicated that before grazing buy-outs can go forward, it is first necessary for Congress to approve the permanent retirement of grazing permits. Nevertheless, it appears that El Paso has provided the funding necessary for large-scale permit buy-outs, should support from Congress be forthcoming.

WWP, ONDA, and El Paso emphasized that buy-outs of permits would only be made from "voluntary" or "willing" sellers. However, many public lands ranchers familiar with WWP and ONDA’s frequent litigation actions strongly doubt the apparent good faith of their intentions. They believe that WWP and ONDA’s many lawsuits contesting the use of public lands for grazing are used to harass and financially incapacitate ranchers to the point where relinquishing permits is a necessity.

Said Marvel of El Paso’s contribution, "It’s unprecedented to have the support of industry to work for retirement of public grazing permits."

In a WWP press release, an El Paso representative was quoted as saying that the donation was evidence of the company’s deep commitment to conservation.

"We are pleased to join with WWP and ONDA in protecting and enhancing this valuable sagebrush-steppe ecosystem," said Jim Cleary, president of El Paso Corporation’s Western Pipeline Group. "These partnerships reflect El Paso Corporation’s industry-leading commitment to environmental stewardship and to this end, represent a significant component of the unprecedented voluntary mitigation efforts being applied to Ruby’s construction and operation."

Wheatley also indicated that the projects would facilitate the pipeline’s maintaining their permit under FERC. "Essentially ... cattle and sheep are going to eat sagebrush only if they’ve exhausted all other food sources. And they do eat grass beneath and around the sagebrush and trample the brush, and during that process, they can also trample on sage grouse nests... That in turn creates erosion and run-off problems, et cetera. And all of that, if you roll that up and consider it in toto, it could impact the pipeline and how the pipeline operates on a daily basis, and the safety of the area, and the integrity of the pipeline. We have to maintain that according to our permit, and our obligations to our regulator, FERC."

The livestock industry is delaying its formal response to the situation pending a meeting between El Paso Corp. and industry representatives at the National Cattlemen’s Beef Association summer meeting in Denver on July 30. El Paso representatives will be meeting that same day in Ely, NV, with the Nevada Legislative Committee on Public Lands.

Ranchers are galled that El Paso Corp., itself a major natural resource user, would strike a deal to expedite their project at the expense of ranchers, who are also natural resource users. Many ranchers have facilitated the Ruby Pipeline by signing easements and access agreements on private land, and by providing water for the project. Now that these agreements are signed, ranchers face the prospect of having to defend themselves against newly empowered and deep-pocketed anti-grazing interests, funded by none other than El Paso Corp.

They are also demanding to know why, given El Paso’s stated emphasis on "checks and balances" of interests, ranchers were not included in, or even put on notice about, the cash-for-no-litigation deal.

According to Dean Rhodes, Nevada state senator from Tuscarora, rancher, and chairman of the Nevada Legislative Committee on Public Lands, these are a few of the questions he intends to put to El Paso Corp. in Ely on July 30.

Rhodes was among the many ranchers who inked an agreement with the pipeline to allow it to cross his land. Said Rhodes, "When we signed that access agreement, if we had known that they were going to give $20 million to Western Watersheds, we never would have signed it." — Andy Rieber, WLJ Correspondent