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Greater sage-grouse: emergency protection order

Registration

SOR/2013-202 November 20, 2013

Species at Risk Act

P.C. 2013-1245 November 18, 2013

Whereas the Minister of the Environment is of the opinion that the Greater Sage-Grouse faces imminent threats to its survival and recovery;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to section 80 and subsection 97(2) of the Species at Risk Act (see footnote a), makes the annexed Emergency Order for the Protection of the Greater Sage-Grouse.

Interpretation

Definitions

1. The following definitions apply in this Order.

“agricultural operation”
« activité agricole»

“agricultural operation” has the meaning assigned by the laws of the province in which the operation takes place.

“legal subdivision” or “LSD”
« subdivision officielle » ou « subd. off. »

“legal subdivision” or “LSD” means a unit of land described in the Dominion Land Survey System that is 1/4 of a quarter-section and has an area of approximately 16 ha or 400 m by 400 m.

“quarter-section”
« quart de section»

“quarter-section” means a unit of land described in the Dominion Land Survey System that has an area of approximately 64 ha or 800 mby 800 m.

Habitat

Alberta and Saskatchewan

2. For the purposes of paragraph 80(4)(c) of the Species at Risk Act, the following areas are identified as habitat that is necessary for the survival or recovery of the Greater Sage-Grouse:

Prohibitions

Prohibited activities

3. (1) The following activities are prohibited:

Type of road

(2) Paragraphs (1)(a), (b) and (e) only apply to a road that is paved, oiled, graded or levelled using heavy machinery and that is for the use of motor vehicles.

Non-application

(3) Paragraphs (1)(a) to (c) do not apply in respect of

Watering system

(4) For the purposes of paragraph (3)(b), a watering system must not occupy an area on or above the ground that is more than 30 m², must not include a dam and must not have any pipes with a diameter of 11 cm or more.

Non-application

(5) Paragraphs (1)(a) to (f) do not apply either inside or within 100 m of

Installing or constructing -- meaning

(6) For the purposes of paragraphs (1)(c), (d) and (f), installing or constructing does not include

Application -- paragraphs (1)(a) and (b)

(7) Paragraphs (1)(a) and (b) apply to

Application -- paragraphs (1)(c) to (f)

(8) Paragraphs (1)(c) to (f) apply to

Prohibited acute sensory disturbances

4. (1) A person must not operate a facility, motor vehicle or machine that produces a noise that exceeds 45 dB(A) at any given time between 1.5 hours before sunset to 1.5 hours after sunrise during the period beginning on April 1 and ending on May 30 of any given year, within a legal subdivision or road allowance.

Sunset and sunrise times

(2) Sunset and sunrise times are established by using the forecast of Environment Canada for the location that is closest to the location to which a prohibition applies under subsection (1).

Non-application

(3) Subsection (1) does not apply either inside or within 100 m of

Non-application

(4) The prohibition against operating a motor vehicle that produces a noise that exceeds 45 dB(A) during the period set out in subsection (1) does not apply to a person who operates a motor vehicle

Application

(5) This section applies to

Exception

5. The prohibitions do not apply to a person engaging in activities related to public safety or health, or to the health of animals and plants, that are authorized under provincial law.

Offences

6. Paragraphs 3(1)(a) to (f) and subsection 4(1) may give rise to offences under section 97 of the Species at Risk Act.

Coming into Force

90 days after registration

7. This Order comes into force 90 days after the day on which it is registered.

Schedule 1

(Subparagraphs 2(a)(i) and (b)(i) and paragraphs 3(7)(a), (8)(a) and 4(5)(a))

You can view the Table for Schedule 1 in a separate document.

Schedule 2

(Paragraph 3(3)(a))

Standards for Design and Construction of Fences in Greater Sage-Grouse Habitat

  1. A fence for grazing animals other than bison must not be greater than 1.2 m in height and must be constructed with a maximum of four wires that are single-, double- or triple-stranded and that are parallel to the ground, but must not be constructed of page wire, chicken wire, chain link or other similar woven wire.
  2. A fence for bison must not be greater than 1.7 m in height and must be constructed with a maximum of five wires that are single-, double- or triple-stranded and that are parallel to the ground, but must not be constructed of page wire, chicken wire, chain link or other similar woven wire.
  3. The top wire must be barbless.
  4. The top two wires must be marked with flagging or reflectors that are spaced at intervals of not more than 1.5 m.
  5. Fence posts must be designed to deter perching by avian predators of the Greater Sage-Grouse, including by fitting the posts with deterrent devices such as spikes, caps or cones or, in the case of metal fence posts, by cutting them at an angle of approximately 45°.

Regulatory Impact Analysis Statement

(This statement is not part of the Order.)

Executive summary

Issue: The Greater Sage-Grouse (Centrocercus urophasianus urophasianus) is the largest of the North American indigenous grouse species. Over the past several decades, Canada’s Greater Sage-Grouse population has been reduced to remnant populations in Alberta and Saskatchewan, occupying approximately 7% of the species’ historic range. The Greater Sage-Grouse are now extirpated from British Columbia and five U.S. states. The current population trajectory for this species suggests that without increased protection and additional conservation actions, the Greater Sage-Grouse is likely to become extirpated from Canada within approximately five years.

Description: The purpose of the Emergency Order for the Protection of the Greater Sage-Grouse, made pursuant to the Species at Risk Act (SARA), is to address the imminent threats to the survival and recovery of the Greater Sage-Grouse, including by protecting the habitat identified in the Emergency Order to help stabilize the population and begin its recovery.

Cost-benefit statement: The Order is a necessary condition for the survival of the Greater Sage-Grouse. The expected incremental benefits of the Emergency Order include the continuation of an existence value for the species (the value that individual Canadians derive from knowing that the species exists in Canada); the co-benefits associated with the preservation of ecological services from the Greater Sage-Grouse habitat to other species; and the avoided oil development costs, estimated at $1.6 million. (see footnote 1)

The incremental costs associated with the Emergency Order are expected to be low. Cost implications for affected sectors (agriculture and oil & gas) were analyzed and it was concluded that the Order will likely result in only minimal impacts on the agriculture sector, since private land, and almost all farmed areas on Crown land, are not included within the area subject to the Order. In addition, no significant restrictions are imposed by the Order on ranching, which does occur on almost all of the land subject to the Order.

The oil and gas sector will be affected by the Order as the noise prohibitions will result in a temporary halt in oil production during the mating season. There are four operational oil wells in the area subject to the Order and the compliance cost is estimated to be low. Moreover, the Order may affect the construction of two new oil wells. The forgone production for new oil wells located in the area of interest is estimated to be around 121,400 barrels over a period of 10 years. The associated foregone gross revenues from the two new wells are estimated at $10 million.

“One-for-One” Rule and small business lens:The small business lens does not apply to this Emergency Order, because it is anticipated that the Order is unlikely to result in economic implications for small agricultural businesses. In regards to the oil sector, none of the businesses meet the criteria of small business: one of the affected existing oil wells in the area is owned by a large private enterprise and three are owned by the municipality of Medicine Hat.

The “One-for-One” Rule does not apply to the proposal given that there are no new administrative costs.

Background

The Species at Risk Act (SARA) was designed as a key tool for the conservation and protection of Canada’s biological diversity and fulfils an important commitment under the United Nations Convention on Biological Diversity. The purpose of SARA is to prevent wildlife species from being extirpated or becoming extinct; to provide for the recovery of wildlife species that are extirpated, endangered, or threatened as a result of human activity; and to manage species of special concern to prevent them from becoming endangered or threatened.

SARA recognizes that habitat protection is necessary for the conservation of species at risk and defines critical habitat as the habitat necessary for the survival or recovery of a listed wildlife species and provides for the making of an emergency order by the Governor in Council (GIC) to protect a listed wildlife species on both federal and non-federal lands when the competent Minister is of the opinion that the species faces imminent threats to its survival or recovery. As per subsection 80(2) of SARA, the Minister must recommend an emergency order to the GIC if he or she is of the opinion that a listed wildlife species faces imminent threats to its survival or recovery. The final decision on whether or not to issue the emergency order rests with the Governor in Council.

The Greater Sage-Grouse (Centrocercus urophasianus urophasianus) is the largest of the North American indigenous grouse species. The Greater Sage-Grouse, hereafter referred to as Sage-Grouse, has brownish-grey upperparts, a blackish belly and undersides of the wings that are whitish. Adult males have a white band on a black throat and a large ruff of pointed white feathers concealing their yellowish air sacs that inflate during courtship displays. Females have more cryptic plumage, an inconspicuous comb above the eye, and are smaller than the male, which can reach 75 cm in length. This bird resides in semi-arid mixed grasslands that contain sagebrush habitat within southeastern Alberta and southwestern Saskatchewan.

The Sage-Grouse requires large amounts of upland habitat with moderate, patchy shrub cover and are extremely reliant on silver sagebrush for food and shelter. Individuals generally return to the same mating site and reuse other areas for nesting and brood rearing year after year. Offspring often return to the areas in which they were reared. Their habitat requirements and patterns of habitat use make Sage-Grouse particularly vulnerable to habitat loss, fragmentation and disturbance. Sage-Grouse are highly adapted to life in the prairie grasslands and the species has high sensitivity to elevated structures such as power lines and sources of loud noise such as industrial activity. Species experts suggest that Sage-Grouse avoid elevated structures because they act as lookouts for aerial predators such as hawks and eagles. This behavioural avoidance of natural predators influences Sage-Grouse response to human activity and structures.

Most of the public lands that support Sage-Grouse habitat are leased for grazing and are currently subject to stocking rate restrictions (i.e. the number of head of cattle that can be supported by a given site for a given period of time) and prohibitions against cultivation. Agricultural activities related to the cultivation of crops are uncommon within this area, since the Sage-Grouse habitat occurs on soils of limited capability for cropland where the predominance of grasses makes the area most suited for livestock grazing. Land leased to 96 agricultural lease holders intersects with the area subject to the Order.

Current oil & gas activities within the area occurs mostly on 106 km² of provincial land (the Manyberries oil and gas fields), located in the area of interest, are relatively mature and are presently being exploited with enhanced recovery techniques.

The population density of the area is low, with 0.03 residences per km². The non-protected land is used primarily for cattle ranching and conventional oil & gas activities.

Issue

Over the past several decades, Canada’s Sage-Grouse population has been reduced to remnant populations in Alberta and Saskatchewan. Historically, Sage-Grouse occurred in at least 16 states within the western U.S. and three provinces in Canada (Alberta, British Columbia and Saskatchewan). Sage-Grouse are now extirpated from British Columbia and five U.S. states. The Sage-Grouse population has continued to decline despite the provincial recovery strategies produced in 2001, 2006, and 2008. According to the Committee on the Status of Endangered Wildlife in Canada (COSEWIC), between 1988 and 2012, the total Canadian population of the Sage-Grouse declined by 98%. Current provincial population estimates from 2012 in Alberta are 40 to 60 adult birds and 55 to 80 adult birds in Saskatchewan.

Since 2003, Sage-Grouse have been listed as Endangered under SARA. Provincially, this species was listed as Endangered in Saskatchewan in 1999 and in Alberta in 2000. The final Recovery Strategy for the Greater Sage-Grouse (Centrocercus urophasianus urophasianus) in Canada, posted in January 2008 by the Parks Canada Agency, states that the range and size of Sage-Grouse populations in Canada have experienced significant declines. The current geographic range is approximately 7% of the historic range. In September 2009, the Recovery Strategy was amended to include a partial identification of the critical habitat for Sage-Grouse in Alberta and Saskatchewan. A new amendment to the recovery strategy is under development and will be posted on the Species at Risk Public Registry for a 60-day comment period shortly.

Sage-Grouse require continuous tracts of undisturbed habitat during all of their life stages. Areas used by Sage-Grouse must contain suitable habitat for mating sites (called “leks”), nesting areas, brood-rearing areas, and wintering sites.

Given their small and concentrated populations, Sage-Grouse are particularly vulnerable to both human induced and natural threats. Threats to the survival of Sage-Grouse populations include habitat loss or degradation, predation, altered landscape hydrology, disease, direct mortality, climate fluctuations, extreme weather events, drought, sensory disturbance, and collisions with vehicles and vertical structures. Habitat loss or degradation is believed to be the primary threat to Sage-Grouse survival in Canada. This loss of habitat is attributable to nesting cover degradation, alteration of natural hydrology, and fragmentation due to transportation (e.g. roads, ditches, fences) and other types of infrastructure (e.g. power lines). Since most Sage-Grouse habitat occurs on native prairie, the management of grazing lands is critical to the survival of the species. Increased protection and quality of Sage-Grouse habitat, in combination with other conservation actions that are likely to increase the number of individuals in the near future, is crucial for the species’ survival and recovery.

Given the continuing decline in the population size of the Sage-Grouse, coupled with the lack of adequate measures to protect its critical habitat, the Minister of the Environment is of the opinion that the survival and recovery of the Sage-Grouse in Canada is imminently threatened. As such, pursuant to subsection 80(2) of SARA, the Minister recommended to the Governor in Council that an Emergency Order be put in place to provide for the protection of the Sage-Grouse.

Objective

The purpose of the Emergency Order for the Protection of the Greater Sage-Grouse, made pursuant to the Species at Risk Act (SARA) is to address the imminent threats to the survival and recovery of the Greater Sage-Grouse, including by protecting the habitat identified in the Emergency Order to help stabilize the population and begin its recovery.

Description

The Emergency Order contains prohibitions that apply on a number of legal subdivisions (see footnote 2)found on provincial and federal crown lands and the road allowances found between those legal subdivisions, which include and surround all leks (mating sites) that were active with male Sage-Grouse in at least one of the years between 2007 and 2012. These are listed in the table of Part 1 or 2 of Schedule 1 of the Order. Figure 1 below presents an overview of the area where prohibitions apply, but stakeholders should refer to the Order to identify the specific prohibitions that apply to the land in question.

The area subject to the Order covers 1672 km² of federal and provincial crown lands in southwestern Saskatchewan and southeastern Alberta. The area includes provincial Crown land (1276 km², representing approximately 76% of the total area), federal protected areas (356 km², representing approximately 21% of the total area) and lands leased from the provinces to Agriculture and Agri-Food Canada that include community pastures and lands surrounding a research station (40 km², representing approximately 2% of the total area).

Private lands are not included in the scope of the Emergency Order. However, the Government of Canada will encourage and support stewardship actions which help protect potential Sage-Grouse habitat on private lands.

Figure 1: Area affected by the Sage-Grouse Emergency Order

Figure 1: Area affected by the Sage-Grouse Emergency Order. (See long description below)

Long description of Figure 1

Figure 1. Map describing where the Emergency Order for the Protection of the Greater Sage-Grouse applies in Canada. Federal and provincial crown lands, in Southeastern Alberta and Southwestern Saskatchewan, are subject to various prohibitions under the Order. The map legend indicates which prohibitions apply within each portion of the total area (1672 km²) covered by the Order. The map describes prohibitions that protect Sage-Grouse at all mating (or 'lekking') sites that have been used in any year between 2007 and 2012, which and also protect the nesting, brood-rearing, and wintering habitats that broadly surround those mating sites.

The Emergency Order contains year-round prohibition of

Additionally, seasonal prohibitions apply to the operation of a facility, vehicle or machine that produces noise exceeding 45 dB(A) between dusk and dawn during the mating season (between 1.5 hours prior to sunset and 1.5 hours after sunrise from April 1 to May 30 of any given year). This includes the operation of existing structures or machines that produce chronic noise. The prohibition does not apply to a person operating a motor vehicle to or from a residential building, to or from an area where they are conducting an agricultural operation or to visit a person who is conducting an agricultural operation.

The prohibitions in the Order do not apply inside or within 100 m of

Reconstructing, replacing or repairing a pole or structure (including a fence) that existed on the date of the coming into force of the Order is permitted, as long as it is replaced with a pole or structure whose dimensions do not exceed those of the existing pole or structure. It is also permitted to reconstruct, replace or repair a structure or machine whose dimensions and noise levels do not exceed those of the existing structure or machine. However, these activities are subject to noise prohibitions that apply during the Sage-Grouse mating season if they occur within 3.2 km of a lek.

The seasonal noise restrictions apply only between dusk and dawn during the mating season. Most agricultural or industrial noise-producing activity occurs during the day (i.e. outside the time period where the noise restrictions apply). In developing the prohibition regarding the operation of a facility, vehicle or machine that produces sounds greater than 45 dB(A) between dusk and dawn, Environment Canada considered (1) noise thresholds for Sage-Grouse mating sites in Wyoming; and (2) existing regulations related to oil and gas development in Alberta.

The average overnight rural noise in Alberta is approximately 35 dB. The Alberta Energy Resources Conservation Board (ERCB) noise regulation directive already sets a requirement for development in rural areas that “New facilities must meet a [permissible sound level] of 40 dB(A) Leq (see footnote 3)(nighttime) at 1.5 km from the facility fence line if there are no closer dwellings” (ERCB Directive 038, 2007, p. 8). The requirement for meeting a similar threshold is therefore not novel to regulatees. The recommended measures would simply require that a 45 dB(A) level be applied relative to Sage-Grouse habitat, not just rural dwellings, and again, only between dusk and dawn during the mating season. However, it is important to note that the Emergency Order provides exemptions for residents and individuals performing agricultural operations.

Grazing operations will not be affected by the Order, as some grazing is beneficial to Sage-Grouse habitat. In areas where grazing is impacting Sage-Grouse habitat, the Government of Canada will promote and support effective voluntary stewardship measures through programs like the Habitat Stewardship Program for Species at Risk.

Local residents are not expected to be significantly affected by the prohibitions, because the prohibitions in the Order do not apply inside or within 100 m of an existing residential building.

The Order is not expected to significantly affect federal land, since approximately 80% of this land is located within Grasslands National Park which was established to preserve the prairie ecosystem. The remaining federal land is currently managed by Agriculture and Agri-Food Canada and consists of grassland that is made up predominantly of native grasses. This land is leased to communities of ranchers (who are called “pasture patrons”) to move their cattle to the community pastures where the cattle graze for long periods of each year. Ranching activities further to the leasing of this land are not expected to be affected.

Agriculture

The Order is expected to have only minimal impacts on agricultural operations, as the prohibitions apply only on select federal and provincial crown lands. In addition, legal subdivisions on provincial crown lands that contain farmsteads or which were used at the time of the coming into force of the Order for the cultivation of crops are not included in the Order. Moreover, to provide further certainty, exemptions to certain prohibitions for agricultural activities are included in the Order.

Agricultural operations could incur minimal incremental costs in that they will be restricted when building new fences for the purpose of managing grazing on provincial crown lands in the area subject to the Order. In that case, they will need to build Sage-Grouse-friendly fences as described in the Order, which are estimated to have a slightly higher cost (see footnote 4) than traditional fences. Given that the area subject to the Order is comprised of established grazing operations on vast grazing areas, we have made the assumption that this will not occur. Schedule 2 of the Order specifies standards for the design and construction of new fences in Sage-Grouse habitat:

Repairing or replacing existing fences is exempted from Schedule 2 of the Order, as long as it does not exceed the dimensions of the fence that existed on the date of the coming into force of the Order.

The Emergency Order also includes exemptions allowing the construction of fences and structures taller than 1.2 m and the production of chronic noise inside or within 100 m of a residential building, a building or shelter that is used for the purpose of an agricultural operation or a structure or machine that is used to feed, handle, treat or provide water to grazing animals, as long as these existed at the time of the coming into force of the Order.

The Order does not require local ranchers to alter their livestock grazing practices, as these can be beneficial to the Sage-Grouse. In addition, it is prohibited to cultivate or convert public lands into crop lands without provincial authorization. Although the Order prohibits the removal and destruction of native vegetation, grazing by cattle does not kill this vegetation.

The Order includes an exemption to the seasonal noise prohibition to allow individuals to operate a motor vehicle to or from a residential building, to or from an area where they conduct an agricultural operation or to visit a person who is conducting an agricultural operation.

Finally, an exemption has been provided to allow for the construction or installation of a watering system to manage grazing by animals, as long as it does not result in the destruction of more than 30 m² of an area covered with sagebrush plants, native grasses or native forbs.

Oil industry

According to the most recent data available, four active oil wells located within the area of interest will be affected by the seasonal noise prohibition under the Order. (see footnote 5) Three of the wells went into production in or before May 1999, and one went into production in early 2011.

An existing oil pipeline (the Express Pipeline) runs through the affected area, but its operations will not be affected by the Order’s prohibitions. Associated pumping stations belonging to the pipeline are located outside of the area subject to the Order and are therefore not impacted by the seasonal noise prohibitions.

The proposed route of the Keystone XL pipeline does not intersect the Order boundaries and is at least 3 km away from the area subject to the Order.

Compared to the overall oil and gas activity in Alberta and Saskatchewan, the oil and gas industry within the Sage-Grouse habitat is relatively small. For example, Alberta’s oil sands (located at least 500 km further north of Sage-Grouse habitat) cover 14 million ha (140,000 km²), of which 9.1 million ha (91,000 km²) are currently under lease. (see footnote 6)In comparison, the existing oil & gas infrastructure occupies 11,200 ha (112 km²) within the Order boundaries.

Gas

There are currently gas wells within the area of interest. However, existing gas wells are not expected to be affected by the Order due to their technical and operational characteristics that do not affect the species and its habitat (e.g. height of infrastructure, noise levels). No further gas development is currently underway, and although there is a potential for development in the future, this could nonetheless take place in such a way as to not contravene the Order (e.g. via horizontal access of the resource) without significantly increasing the cost.

Regulatory and non-regulatory options considered

Both Alberta and Saskatchewan have listed the Sage-Grouse under their respective wildlife legislations and have undertaken measures to protect the species. Although the provincial legislation provides for protection of individual birds, it does not protect the species’ habitat. Existing non-regulatory provincial measures to protect habitat include guidelines stipulating setback distances for industrial activity close to important habitat, and some grazing restrictions on provincial Crown land. The province of Alberta is also involved in recovery initiatives, including translocation of Sage-Grouse from the US, and, together with Environment Canada, is providing funding to the Calgary Zoo for the development of a captive breeding/rearing project for release of Sage-Grouse into the wild.

Despite the efforts of the provinces and others, the Sage-Grouse population continues to decline rapidly. The Emergency Order will help protect the Sage-Grouse by preventing habitat loss and fragmentation, and restricting chronic and acute sensory disturbances to Sage-Grouse in Alberta and Saskatchewan. This will allow time for progress on other activities, such as habitat enhancement and translocation of Sage-Grouse populations, which are designed to help stabilize and eventually recover the species.

The non-regulatory options considered involved providing incentives to protect semi-arid mixed grasslands that contain sagebrush by working with landowners, the energy sector and lessees on provincial crown lands. This option would have been based on an approach founded on voluntary stewardship actions to protect Sage-Grouse habitat. It would encourage the participation of both the agricultural and energy sectors to contribute towards stabilizing the Sage-Grouse population and may result in lower enforcement costs for the Government of Canada. However, it was determined that, on its own, this stewardship option would not be restrictive enough or be able to be implemented quickly enough to address the imminent threats to the survival of the Sage-Grouse. In addition, SARA includes a statutory requirement for the Minister of the Environment to recommend the making of an Emergency Order once they have formed the opinion that there is an imminent threat to the survival or recovery of a listed species. Thus, even if the voluntary measures were sufficient to recover the Sage-Grouse, it would not eliminate the requirement for the Minister of the Environment to recommend to the Governor in Council to issue an Emergency Order.

Non-regulatory approaches are being pursued for the conservation and recovery of Sage-Grouse in its habitats within and beyond the geographic scope of the Order.

Benefits and costs

The cost-benefit analysis covers only the area subject to the Order. The area of interest refers to the area that contains suitable Sage-Grouse habitat and will be affected by the provisions of the Order. Private lands are excluded from the Order.

This analysis presents potential economic impacts of the Order only. It does not take into account other voluntary measures that may be introduced, such as activities funded under Environment Canada’s Habitat Stewardship Program or other voluntary stewardship initiatives.

The analysis identifies two scenarios:

Qualitative and quantitative incremental costs and benefits of the proposed policy scenario were assessed and the likely impacts in distributional terms are presented. The main sector expected to be affected by the Order is the energy sector (i.e. oil & gas industries).

Unless otherwise stated, all monetary values are in 2012 Canadian dollars. (see footnote 7)As per Treasury Board guidelines, discount rates of 3% and 7% were used to estimate the present value (PV) of the costs and benefits over ten years (2014-2023). The text indicates numbers discounted to 2013 at 3%.

Agriculture

The analysis has not quantified any costs of the proposed Order for agricultural businesses, as the Order is only expected to have minimal implications on agricultural operations, as outlined previously.

Oil and gas

Four active oil wells exist in the area affected by the Order.

As detailed below, under the business as usual scenario, it is forecasted that two new oil wells would have been developed between 2014 and 2023 in the area affected by the Order. This forecast was made taking into consideration a constant production level projection for conventional oil in both provinces. Under the policy scenario, although it might be reasonable to assume that this production would simply move to land not affected by the Order, this analysis makes the conservative assumption that the two new oil wells could not be constructed as the Order prohibits removing or destroying native vegetation.

In addition, the production from four existing oil wells is assumed to be deferred for two months during the Sage-Grouse mating season (April-May) due to noise prohibitions in the Order.

Gas wells will not be required to cease their operation, as they do not generate chronic noise at the levels threatening the Sage-Grouse. As noted above, no impacts on gas producers are anticipated.

The estimates for the number of stakeholders that will be affected by the Order are presented in Table 1.As noted, the area of interest excludes private lands.

Table 1 -- Stakeholders (sectors) affected by the Emergency Order

Stakeholder Land type affected Number of stakeholders expected to be affected Total
Agricultural businesses Provincial or federal
0
0
Oil: Existing wells Provincial or federal
2 stakeholders (4 wells)
2
Oil: New wells Provincial or federal
1–2 stakeholders (2 wells)
1–2
Gas: Existing wells Provincial or federal
0
0
Gas: New wells Provincial or federal
0
0

Benefits

The Order is a necessary condition for the survival and recovery of the Sage-Grouse. The expected incremental benefits of the Emergency Order include the continuation of an existence value for the species (the value that individual Canadians derive from knowing that the species exists in Canada); the co-benefits associated with the preservation of ecological services from the Sage-Grouse habitat to other species; and the avoided oil development costs, estimated at $1.6 million. (see footnote 8)

Avoided oil development costs

Due to the halt in development of new oil wells, the affected oil industry is expected to avoid some costs of production. For the purposes of cost benefit analysis, these avoided costs are considered benefits. Due to lack of available data on operating costs of oil wells, (see footnote 9)this analysis considered only avoided well development costs, estimated at $930,000 per oil well. (see footnote 10) Therefore, a conservative estimate of the avoided costs is provided in this analysis. In present value terms, these benefits reach $1.6 million, discounted at 3% over ten years.

Qualitative existence value

The Emergency Order, in combination with complementary voluntary stewardship measures, is anticipated to help address the imminent threats to the survival and recovery of the Sage-Grouse, including by protecting the habitat identified in the Emergency Order to help stabilize the population and begin its recovery. Environment Canada is not able, at this time, to quantitatively assess the extent to which the Order alone is specifically contributing to the benefits of preserving the species. Therefore, these benefits can only be described qualitatively. Nonetheless, for context, the section “Quantitative existence value” below presents plausible monetary estimates of the value that can be placed on the continued existence of this species.

The survival of the Sage-Grouse would benefit all Canadians. The Sage-Grouse has high public appeal due to, among other things, their unique mating display -- a “courtship dance” which takes place each spring. Some people refer to it as an iconic prairie species. The rapid decline in Sage-Grouse population in recent years has been the subject of considerable attention by environmental non-governmental organizations and the media.

Beyond the conventional “use-values” of a species, people derive satisfaction and perceive benefits from knowing that the species still exists (existence value) or will exist in the future (bequest value). (see footnote 11)

With respect to species at risk, passive values tend to typically dominate all values. Even if a given species is not readily accessible to society, existence value may be the most significant or the only known benefit of a particular species.

Co-benefits

Preservation of Sage-Grouse habitat will also result in benefits in excess of those realized from preservation of the species alone. For instance, due to their relationship with sagebrush, the Sage-Grouse may be used as a representative or an indicator of the health of the prairie ecosystem they inhabit. The Sage-Grouse’s habitat is also of value due to ecological services it provides to other species, including other species at risk listed under SARA: the Burrowing owl (endangered), Swift fox (endangered), Sage thrasher (endangered), Western harvest mouse (endangered), Long-billed curlew (special concern), Sprague’s pipit (threatened), Mountain plover (endangered), and McCown’s longspur (special concern). Some of these ecological services include provision of habitat for the species’ mating, wintering and foraging. Protecting the Sage-Grouse habitat thus helps maintain the populations of other species at risk, implying larger benefits to Canadians.

The preservation of Sage-Grouse habitat also results in the preservation of ecological services that the prairie ecosystem provides such as carbon storage, maintenance of soil stability/erosion prevention, water table maintenance and water filtration.

Costs

The main sector expected to be affected by the proposed Sage-Grouse Emergency Order is the energy sector (i.e. oil & gas industries).

As there is no available evidence that any installation of new buildings and/or fences is currently underway or planned by local agricultural businesses, the expected incremental costs of the Order are expected to be minimal. The agricultural area within suitable Sage-Grouse habitat is currently used predominantly for livestock grazing. The Order prohibits moving or killing native vegetation, which is not a consequence of grazing.

It is assumed that there will not be incremental compliance costs related to the prohibition of killing or moving sagebrush plants, native grasses or native forbs in the area that is subject to the Order, because agricultural activities related to the cultivation of crops are limited within the area of interest, since the Sage-Grouse habitat occurs on soils of limited capability for cropland. It is also to be noted that it is prohibited to cultivate or convert public lands into crop lands without provincial authorization.

Existing oil wells

With respect to compliance costs for the oil industry, the existing four oil wells located within the area subject to the Order will be prevented from operating at full capacity for April and May given the noise restrictions. For these wells, the provisions of the Order are expected to slow down or defer the rate of extraction. It is assumed that affected stakeholders in the oil industry will compensate for the production in the period outside the seasonal noise prohibitions. The operational costs of a temporary shut-down are expected to be low; they could involve, for example, the time and costs to send staff to the site in order to complete the shut-down procedures. Restart of the wells and associated costs will depend on whether the suction remains in the well. The costs of restarting the production may range from the time to restore the power to the pump to more costly priming. In some cases, it may not be possible to restart the production once the suction is lost. However, this is only a possibility for older wells, for which further production would already be limited. As such, costs associated with deferring extraction and/or the inability to restart production are assumed to be minimal.

New oil wells

The costs of halting the development of new oil wells on Crown land were quantified in this analysis, using conservative assumptions. As detailed below, this analysis assumes that the development of two oil wells will be prohibited by the Order, and not replaced with production elsewhere in Saskatchewan or Alberta. It could be argued, on the other hand, that any producers with the intention to develop new wells on their existing tenures within the area affected by the Order would simply move to land not affected by the Order, to access the same oil field or another. In this case, the only costs associated with potential future wells would be the sunk-costs associated with any sub-surface tenure that may have been already purchased (which, in 2009, were typically sold for roughly $14,000 per tenure in southeastern Alberta). Nonetheless, this analysis presents costs assuming two new wells will not be developed in the policy scenario, in order to represent an upper range of potential costs associated with the Order.

Assumptions regarding future well activity were developed based upon existing production in the area and the following analysis as described below. According to the Energy Resources Conservation Board (ERCB), Alberta’s Energy Reserves 2012 and Supply/Demand Outlook 2013-2022, (see footnote 12) the average well productivity of producing oil wells in south-eastern Alberta in 2012 was 8.8 barrels/day (1.4 m3/day), and approximately 44% of producing oil wells in Alberta produce at rates less than 3.1 barrels/day (0.5 m3/day). For this analysis, it is assumed that the three older wells produce oil at the average day rates in south-eastern Alberta. Given that these wells are within an older play, and are themselves between 14-26 years old, assuming this level of production is highly conservative. It is also assumed that the newer well that started operation in 2011 produces at the average rates typical for new oil wells in south-eastern Alberta. (see footnote 13) Given these assumptions regarding production levels, and expected declines over time, (see footnote 14) the total production of these four existing wells is estimated to decrease from approximately 19,000 barrels in 2013 to 4,400 barrels in 2023. Given that the National Energy Board and other sources forecast near constant production levels of conventional oil in Saskatchewan and Alberta, it is therefore projected that two more wells would be drilled and put into production during the coming ten years (one in 2016 and the other in 2021) in order to compensate for the decline in output from the current wells. Based on this assumption, production of conventional oil within the area of interest is projected to average approximately 21,000 barrels per year during the period 2014-2023.

Therefore, it is assumed that two new oil wells will be affected by the prohibitions. The installation of these wells will be prohibited to avoid the damage to or destruction of the suitable Sage-Grouse habitat and to avoid chronic noise. As a result, local oil producers will have to forgo revenues from the affected wells.

The assumed forgone oil production is based on average production of the wells in the area and the price of light crude oil. According to the Energy Resources Conservation Board, the initial average day rate of oil wells placed on production in 2012 in southeastern Alberta was 56.6 barrels per day per well. As noted earlier, the initial production was forecasted to decline at a rate of 34% the first year, 23% the second year, 20% the third year, 17% the fourth year, 15% the fifth year and 13% over the rest of the forecast period. Oil price estimates were provided by the National Energy Board.The price of light/heavy crude oil was $100/$79 per barrel in 2012 and was projected to reach $109/$86 per barrel by 2023. (see footnote 15)

Consequently, the total forgone production for new oil wells located in the area of interest is estimated at 121,400 barrels over the analytical period of ten years. This translates to $10.0 million in forgone gross revenues in present value terms, discounted at 3% over 10 years.

Costs to the Government

To ensure affected stakeholders are aware of the Order and understand its impacts, Environment Canada developed a Compliance Strategy and Compliance Promotion Plan which outlines a two-year approach of the best perceived methods to implement and measure the compliance promotion and enforcement activities required for the Emergency Order, such that affected communities and stakeholders comply with the Emergency Order. Implementation costs for the Compliance Promotion Plan are estimated at $25,000 and 0.8 full-time employees for the first year, to be funded through existing departmental budgets. Parks Canada will be responsible to ensure compliance and enforcement in the portions of Grasslands National Park that are subject to the Order using the existing Agency’s capacity and resources.

With respect to enforcement costs, a one-time amount of $50,000 will be required for the training of enforcement officers and the purchase of measurement instruments. In the first year of the coming into force of the Emergency Order, the enforcement costs are estimated to require an undiscounted annual budget of $121,500 broken down as follows: $109,500 for inspections (which includes operations and maintenance costs and transportation costs) and $12,000 for investigations, measures to deal with alleged violations, and prosecution. For subsequent years, the enforcement costs are estimated at $89,000 per year, broken down as follows: $77,000 for inspections (which includes operations and maintenance costs and transportation costs) and $12,000 for investigations, measures to deal with alleged violations, and prosecutions.

Distributional analysis

In distributional terms, the costs of the proposed Order are expected to be concentrated more locally than the benefits. Local residents are expected to be affected by the proposed Order to the extent that they participate in the local oil industry, which is assumed to bear the majority of cost impacts.

Local well service providers may be minimally affected by the proposed Order; however, the extent of the impact could not be quantified at the time of this analysis.

No significant compliance costs are expected for agricultural businesses, as the proposed prohibitions do not affect grazing and are unlikely to have a significant impact on other agricultural activities.

The costs of compliance for the local oil & gas industry are not expected to be substantial. Gas producers are not likely to be affected by the proposed prohibitions. Although local oil producers might lose the opportunity to produce within the Sage-Grouse habitat, there are opportunities to develop wells in areas outside of the Sage-Grouse habitat. Some potential costs of deferring the production for two months may include the lost opportunity cost of owned equipment during non-productive time. Haulage fees may continue depending upon contractual arrangement. If haulage fees are interrupted, truckers may incur some revenue loss.

The direct benefits derived from the contribution of the Order are assumed to be concentrated in both provinces where Sage-Grouse currently occur (i.e. Alberta and Saskatchewan). However, all Canadians are expected to benefit from preserving the Sage-Grouse.

Net present value

The cost-benefit analysis presented some potential impacts of the proposed Emergency Order for protection of the Sage-Grouse habitat in southeastern Alberta and southwestern Saskatchewan. The proposed Order includes prohibitions on certain activities that adversely affect the species and its habitat.

A comparison of the quantified costs and benefits of the Sage-Grouse Emergency Order indicates that the measure may result in a net cost. However, this may be because the benefits of preserving the species, expressed in terms of an existence value (i.e. the value individuals derive from knowing that a species exists) cannot be ascribed to the Order alone. Rather, these benefits are expected to result from the combined effect of the Order and the planned stewardship measures funded by the Habitat Stewardship Program and any other voluntary measures. The Order is, however, likely a necessary condition for the survival of this species. As well, conservative assumptions regarding costs were used in this analysis. Noting these caveats, the net present value of the Order is estimated at -$9.3 million (discounted at 3% over ten years), with a benefit-cost ratio of 1:7 when considering only the quantifiable costs and benefits (see Table 2). As previously mentioned, an existence value may be the most significant or the only known benefit of a particular species. Therefore, for context, the section “Quantitative existence value” below provides an estimate of the value to residents of Alberta and Saskatchewan of avoiding the loss of the Sage-Grouse.

Table 2 -- Cost-benefit summary statement (millions of 2012 dollars) (see reference *)

Benefits (millions C$2012) Present Value at 3% Present Value at 7% 2014–2023
Avoided costs of development for new oil wells
$1.6
$1.4
Total Benefits
$1.6
$1.4
Costs (millions C$2012) Present Value at 3% (2014–2023) Present Value at 7% (2014–2023)
Forgone production from new oil wells
$10.0
$7.8
Compliance promotion and enforcement (Government)
$0.9
$0.8
Total Costs
$10.9
$8.6
Net Value (millions C$2012)
-$9.3
-$7.2
Benefit/Cost Ratio
1:7
1:6

 

B. Qualitative impacts

Stakeholder/Impacts

Canada

Region

Communities

Local businesses

Reference * Due to rounding, the totals might not add up precisely.

Quantitative existence value

As noted, the Emergency Order, along with subsequent voluntary stewardship measures, is anticipated to address the imminent threats to the Sage-Grouse and help stabilize the population and begin its recovery. It is possible to place a monetary value on the preservation of the species. However, it is not possible to ascribe all or part of this monetary value to only the Order in isolation (i.e. such a value represents a benefit to be derived from both the Order and stewardship measures) since in combination they are expected to help prevent the extirpation of the species. Currently there is no cost estimate for the total level of expected resources required to prevent the extirpation and eventual extinction of the Sage-Grouse.

This section presents plausible estimates of the value that can be placed on the continued existence of this species.

Beyond the conventional “use-values,” people derive satisfaction and perceive benefits from knowing that the species exists (existence value) or will exist in the future (bequest value). Information on passive values is typically collected via contingent valuation studies. (see footnote 16) A review of the research to-date indicates that no such studies currently exist on the Sage-Grouse. Based on evidence derived from other contingent valuation studies done on similar species, the benefit transfer technique can been applied to estimate the value Canadians would place on Sage-Grouse preservation. For example, Richardson and Loomis report that U.S. households are willing to pay, on average, between US$11 and US$130 (2006 dollars) per household per year to avoid loss of one species of iconic bird. For a conservative estimate, this analysis focuses on the lower value used in this study (estimated for the Wild Turkey), and uses it as a reasonable indicator for the Sage-Grouse, bringing the value to CAN$23 (2012 dollars) per household. In comparison, values for other popular species in this study were (2012 Canadian dollars): $50 for bald eagles, $83 for owls, and $71 for whooping cranes. (see footnote 17)

According to the 2011 Census, there are currently close to 1,800,000 households in Alberta and Saskatchewan combined. An aggregate estimate of the willingness-to-pay to avoid the loss of iconic Sage-Grouse for these two provinces combined is $40.8 million per year. If the species is preserved, this would translate into benefits with a present value of approximately $161.1 million, discounted at 3% over 10 years. (see footnote 18)

“One-for-One” Rule

The “One-for-One” Rule does not apply given that the Order does not impose any new administrative costs as defined by Government of Canada guidelines for the “One-for-One” Rule (e.g. reporting or registration obligations).

Small business lens

Although the full range of suitable habitat for Sage-Grouse was considered in determining the scope of the Emergency Order, the habitat subject to the Order is that which was deemed necessary to address the imminent threats to survival. The Emergency Order was determined not to add a burden to small businesses. The only small businesses located in the area subject to the Order are agricultural operations, and these businesses have been provided with exemptions to the prohibitions so that their operations costs are not expected to be significantly impacted. There are no grazing restrictions and ranchers can continue to access and care for their cattle in the same way they did prior to the issuance of the Order. They can also access and maintain all existing fences at any time of year, regardless of their location. The only possible minimal cost to small businesses would be if they decided to build new fences to fence off new grazing areas, as mentioned above. This is unlikely as the leased land covered by the Order is all part of long established grazing operations and ranchers have already fenced the areas they are leasing for grazing purposes. There will be no ongoing costs pertaining to reporting or record-keeping. In keeping with this, it is assumed there will be no significant costs to small businesses associated with the proposed Order.

Consultation

Provincial governments are taking important steps to stabilize Sage-Grouse populations. However, given that Sage-Grouse populations are at dangerously low levels, it is imperative to have a strong regulatory framework in place on both provincial and federal lands that is clear and directly prohibits activities that represent an imminent threat to this species.

Environment Canada recognizes the shared responsibility for species at risk between the federal, provincial and territorial governments and values the relationships of collaboration that have been built. However, given the urgent nature of this Emergency Order, the Department was unable to consult on the details of this Order with the governments of Alberta or Saskatchewan, or with local landowners or industry representatives. Environment Canada has consulted stakeholders on the amendment to the Recovery Strategy for the Greater Sage-Grouse (Centrocercus urophasianus urophasianus) in Canada, including on the identification of new critical habitat, and will be reaching out to the provincial governments as well as stakeholders to clarify the rationale and implications of an Emergency Order.

The federal government has been working and will continue to work closely with both the Alberta and Saskatchewan governments through a variety of mechanisms to protect the Sage-Grouse, such as through a collaborative multi-species action plan for southwestern Saskatchewan that will be finalized in the coming year and a captive breeding program at the Calgary Zoo, in partnership with the Province of Alberta. Moreover, through the existing Habitat Stewardship Program, projects are evaluated by federal-provincial teams to ensure that stewardship funding is being targeted at actions that make a difference.

Rationale

Many species at risk serve as indicators of environmental quality, while some are culturally important. It is valuable to Canadian society to not only preserve species in the short term, but also for future generations to enjoy. The unique characteristics and evolutionary histories of many species at risk may also be of special interest to the scientific community. The Government of Canada is also committed to protecting the natural heritage of our country. Specifically, the Government has made international commitments to protect species at risk and their habitat under the Convention on Biological Diversity.

Both Alberta and Saskatchewan have listed the Sage-Grouse under their respective legislations and have undertaken measures to protect the species, however, neither province has specific endangered species legislation prohibiting destruction of Sage-Grouse critical habitat.

In Alberta, the provincial Recovery Plan for Sage-Grouse includes measures to enhance nesting, brood-rearing and wintering habitat, to protect mating sites, and to manage and mitigate impacts of resource development on Sage-Grouse habitat. More than 80% of current Sage-Grouse habitat in Alberta is on public land that is leased as grazing land. Alberta’s Public Lands Act prohibits cultivation or conversion of these lands without provincial authorization. Sage-Grouse individuals are protected on private, provincial and federal lands under Alberta’s Wildlife Act and SARA, respectively.

In Saskatchewan, 25% of Sage-Grouse habitat is in Grasslands National Park. Parks Canada has developed a Management Plan which addresses recovery of Sage-Grouse populations, and has been implementing conservation actions for many years to conserve and recover Sage-Grouse through active management. This includes the restoration of native prairie which is Sage-Grouse habitat. Approximately 80% of federal lands where the Order will apply are located in Grasslands National Park where Sage-Grouse individuals, residences and habitat already receive some protection under both the Canada National Parks Act and the Species at Risk Act.

Forty-five percent of the Sage-Grouse habitat occurs on provincial crown land that is protected through policies under the Provincial Lands Act and, in some cases, the Wildlife Habitat Protection Act. The remaining habitat occurs on federal Agriculture and Agri-Food Canada (AAFC) lands, and private lands that are not subject to the Order. Sage-Grouse individuals are protected on private, provincial and federal lands under the Saskatchewan Wildlife Act and SARA, respectively.

Despite the provinces’ existing efforts, their protection measures have not been successful in halting the species’ rapid decline. Existing measures are not mandatory or sufficiently targeted to protect the habitat of the species. Compliance with the Emergency Order is anticipated to contribute to protecting the Sage-Grouse by preventing habitat loss and fragmentation, and restricting chronic and acute sensory disturbances to Sage-Grouse in Alberta and Saskatchewan. This should in turn increase the probability of maintaining the species in Canada.

With the Emergency Order and associated voluntary stewardship actions on private lands in place, the imminent threats to the survival of the Sage-Grouse will be addressed, including the protection of habitat so that the population can move towards stabilization.

A comparison of the quantified costs and benefits of the Sage-Grouse Emergency Order indicates that the measure may result in a net cost. However, this is due to two factors. First, conservative assumptions regarding costs were used in this analysis. Second, the benefits of preserving the species expressed in terms of an existence value (i.e. the value individuals derive from knowing that a species exists) cannot be ascribed to the Order alone. Rather, these benefits would likely be a result of the combined effect of the Order and the forthcoming voluntary stewardship measures. The Order is, however, a necessary condition for the survival of this species. Preservation of Sage-Grouse habitat would also result in benefits in excess of those realized from preservation of Sage-Grouse alone, including protection of other species at risk who rely on the same prairie ecosystems.

Implementation, enforcement and service standards

The implementation of this Emergency Order will provide protection and recourse against the destruction of Sage-Grouse habitat in Alberta and Saskatchewan. To ensure affected stakeholders are aware of the Order and its impacts, Environment Canada has developed a Compliance Strategy and Compliance Promotion Plan, which outlines a two-year approach of the best perceived methods of implementing and measuring the compliance promotion and enforcement activities required for the Emergency Order. This will help to ensure that the affected communities and stakeholders comply with the Emergency Order. At the end of the two years, the Strategy will be reviewed to determine if changes to the approach are required to enhance compliance with the Emergency Order or, conversely, if compliance promotion may be reduced to a maintenance level in the event that the objective of the Order has been achieved.

Environment Canada Enforcement Branch officers are responsible for enforcing the Emergency Order, as required, on the applicable federal and provincial Crown lands. Responses to complaints, referrals and alleged violations will be conducted following the existing relevant Compliance and Enforcement policies.

Enforcement officers will coordinate activities with Provincial partners whenever possible. Parks Canada Agency is responsible for enforcement in the portions of Grasslands National Park that are included in the Order.

The Strategic Environmental Assessment conducted for this Order concluded that it is expected to result in important positive environmental effects, and would support Goal 5 (Maintain or restore populations of wildlife to healthy levels) and Target 5.1 of the Federal Sustainable Development Strategy by increasing the probability of maintaining the Sage-Grouse in Canada.

Performance measurement and evaluation

Environment Canada has put in place a Results-based Management and Accountability Framework (RMAF) and a Risk-based Audit Framework (RBAF) for the Species at Risk Program. The specific measurable outcomes for the program and the performance measurement and evaluation strategy are described in the Species at Risk Program RMAF-RBAF. The last program evaluation took place in 2012 and is currently being finalized.

Contact

Caroline Ladanowski
Director
Wildlife Program Support Division
Canadian Wildlife Service
Environment Canada
Gatineau, Quebec
K1A 0H3
Telephone: 819-994-3432

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