![](media/image1.jpeg){width="2.0833333333333335in" height="2.75in"}

Economic Analysis of Critical Habitat Designation\
for the Buena Vista Lake Shrew

Prepared for:

U.S. Fish and Wildlife Service\
Division of Economics\
Alexandria, Virginia

Prepared by:

Northwest Economic Associates\
A Division of ENTRIX, Inc.\
Vancouver, Washington

January 6, 2005

Economic Analysis of Critical Habitat Designation\
for the Buena Vista Lake Shrew

Prepared for:

U.S. Fish and Wildlife\
Division of Economics\
4401 N. Fairfax Drive\
Alexandria, VA 22203

Prepared by:

Northwest Economic Associates\
12009 N.E. 99^th^ Street, Suite 1410\
Vancouver, WA 98682-2497

Send comments on the economic analysis to:

Field Supervisor\
U.S. Fish and Wildlife Service\
2800 Cottage Way, W-2605\
Sacramento, CA 95825

January 6, 2005

Table of Contents

# [Executive Summary ES-1](#__RefHeading___Toc85905727) {#executive-summary-es-1 .TOC-1}

# [1.0 Introduction and Background 1](#introduction-and-background) {#introduction-and-background-1 .TOC-1}

# [1.1 Approach to Estimating Economic Effects 2](#approach-to-estimating-economic-effects) {#approach-to-estimating-economic-effects-2 .TOC-2}

# [1.1.1 Efficiency Effects 2](#efficiency-effects) {#efficiency-effects-2 .TOC-3}

# [1.1.2 Distributional and Regional Economic Effects 3](#distributional-and-regional-economic-effects) {#distributional-and-regional-economic-effects-3 .TOC-3}

# [1.2 Scope of the Analysis 4](#scope-of-the-analysis) {#scope-of-the-analysis-4 .TOC-2}

# [1.2.1 Sections of the Act Relevant to Economic Analysis 5](#sections-of-the-act-relevant-to-economic-analysis) {#sections-of-the-act-relevant-to-economic-analysis-5 .TOC-3}

# [1.2.2 Other Relevant Protection Efforts 7](#other-relevant-protection-efforts) {#other-relevant-protection-efforts-7 .TOC-3}

# [1.2.3 Additional Analytic Considerations 7](#additional-analytic-considerations) {#additional-analytic-considerations-7 .TOC-3}

# [1.2.4 Benefits 7](#benefits) {#benefits-7 .TOC-3}

# [1.3 Analytic Time Frame 8](#analytic-time-frame) {#analytic-time-frame-8 .TOC-2}

# [1.4 Information Sources 8](#information-sources) {#information-sources-8 .TOC-2}

# [1.5 Background of the BVLS Listing 8](#background-of-the-bvls-listing) {#background-of-the-bvls-listing-8 .TOC-2}

# [1.6 Background of the BVLS Critical Habitat Designation 9](#background-of-the-bvls-critical-habitat-designation) {#background-of-the-bvls-critical-habitat-designation-9 .TOC-2}

# [1.7 Description of the Species and Habitat 10](#description-of-the-species-and-habitat) {#description-of-the-species-and-habitat-10 .TOC-2}

# [1.8 Proposed Critical Habitat Designation 12](#proposed-critical-habitat-designation) {#proposed-critical-habitat-designation-12 .TOC-2}

# [1.8.1 Land Included and Excluded in the Proposed Units 15](#land-included-and-excluded-in-the-proposed-units) {#land-included-and-excluded-in-the-proposed-units-15 .TOC-3}

# [1.9 Organization of the Report 15](#organization-of-the-report) {#organization-of-the-report-15 .TOC-2}

# [1.9.1 Categories of Costs Delineated 15](#categories-of-costs-delineated) {#categories-of-costs-delineated-15 .TOC-3}

# [2.0 Framework for Economic Analysis 17](#framework-for-economic-analysis) {#framework-for-economic-analysis-17 .TOC-1}

# [2.1 Retrospective and Prospective Effects 18](#retrospective-and-prospective-effects) {#retrospective-and-prospective-effects-18 .TOC-2}

# [2.2 General Categories of Economic Effects 19](#general-categories-of-economic-effects) {#general-categories-of-economic-effects-19 .TOC-2}

# [2.2.1 Federal 19](#federal) {#federal-19 .TOC-3}

# [2.2.2 Private 19](#private) {#private-19 .TOC-3}

# [2.2.3 Secondary and Regional Effects 21](#secondary-and-regional-effects) {#secondary-and-regional-effects-21 .TOC-3}

# [2.2.4 Effects on Small Entities 22](#effects-on-small-entities) {#effects-on-small-entities-22 .TOC-3}

# [2.2.5 Effects on Energy Supply 22](#effects-on-energy-supply) {#effects-on-energy-supply-22 .TOC-3}

# [2.3 Project Life, Period of Analysis, and Discount Rate 22](#project-life-period-of-analysis-and-discount-rate) {#project-life-period-of-analysis-and-discount-rate-22 .TOC-2}

# [2.4 Caveats and Assumptions 23](#caveats-and-assumptions-1) {#caveats-and-assumptions-23 .TOC-2}

# [3.0 Socioeconomic Profile of the Critical Habitat Area 24](#socioeconomic-profile-of-the-critical-habitat-area) {#socioeconomic-profile-of-the-critical-habitat-area-24 .TOC-1}

# [3.1 Geographic Description of the Region 24](#geographic-description-of-the-region) {#geographic-description-of-the-region-24 .TOC-2}

# [3.2 Population Characteristics and Demographics 24](#population-characteristics-and-demographics) {#population-characteristics-and-demographics-24 .TOC-2}

# [3.3 Employment 25](#employment) {#employment-25 .TOC-2}

# [3.4 Economic Activity 27](#economic-activity) {#economic-activity-27 .TOC-2}

# [4.0 Regulatory Environment 29](#regulatory-environment) {#regulatory-environment-29 .TOC-1}

# [4.1 Other ESA Listed Species 29](#other-esa-listed-species) {#other-esa-listed-species-29 .TOC-2}

# [4.2 Federal and California State Statutes and Regulations 30](#federal-and-california-state-statutes-and-regulations) {#federal-and-california-state-statutes-and-regulations-30 .TOC-2}

# [4.2.1 Habitat Conservation Plans 30](#habitat-conservation-plans) {#habitat-conservation-plans-30 .TOC-3}

# [4.2.2 California Endangered Species Act 31](#california-endangered-species-act) {#california-endangered-species-act-31 .TOC-3}

# [4.2.3 California Environmental Quality Act (CEQA) 32](#california-environmental-quality-act-ceqa) {#california-environmental-quality-act-ceqa-32 .TOC-3}

# [4.2.4 Elements of the Recovery Plan 33](#elements-of-the-recovery-plan) {#elements-of-the-recovery-plan-33 .TOC-3}

# [5.0 Economic Effects on Agriculture 35](#economic-effects-on-agriculture) {#economic-effects-on-agriculture-35 .TOC-1}

# [5.1 Description of Agriculture in the Region 35](#description-of-agriculture-in-the-region) {#description-of-agriculture-in-the-region-35 .TOC-2}

# [5.2 Retrospective Costs 37](#retrospective-costs-2) {#retrospective-costs-37 .TOC-2}

# [5.3 Prospective or Future Costs 38](#prospective-or-future-costs) {#prospective-or-future-costs-38 .TOC-2}

# [5.3.1 Development and Cost of Buffer Zones 41](#development-and-cost-of-buffer-zones) {#development-and-cost-of-buffer-zones-41 .TOC-3}

# [5.4 Summary of Direct Effects on Agriculture 46](#summary-of-direct-effects-on-agriculture) {#summary-of-direct-effects-on-agriculture-46 .TOC-2}

# [5.5 Distributional Effects: Secondary and Regional Impacts 48](#distributional-effects-secondary-and-regional-impacts) {#distributional-effects-secondary-and-regional-impacts-48 .TOC-2}

# [6.0 Economic Effects on Non-Agricultural Areas 50](#economic-effects-on-non-agricultural-areas) {#economic-effects-on-non-agricultural-areas-50 .TOC-1}

# [6.1 Introduction 50](#introduction) {#introduction-50 .TOC-2}

# [6.1.1 Federal Consultations 50](#federal-consultations) {#federal-consultations-50 .TOC-3}

# [6.1.2 Private and Non-Federal Effects 51](#private-and-non-federal-effects) {#private-and-non-federal-effects-51 .TOC-3}

# [6.2 Retrospective Costs 51](#retrospective-costs-3) {#retrospective-costs-51 .TOC-2}

# [6.2.1 Goose Lake CHU 52](#goose-lake-chu-1) {#goose-lake-chu-52 .TOC-3}

# [6.2.2 Other CHUs 52](#other-chus) {#other-chus-52 .TOC-3}

# [6.3 Prospective Costs 53](#prospective-costs-2) {#prospective-costs-53 .TOC-2}

# [6.3.1 Goose Lake CHU 53](#goose-lake-chu-2) {#goose-lake-chu-53 .TOC-3}

# [6.3.2 Coles Levee CHU 53](#coles-levee-chu-1) {#coles-levee-chu-53 .TOC-3}

# [6.3.3 Maintenance and Operation of Irrigation Canals by Water Districts 54](#maintenance-and-operation-of-irrigation-canals-by-water-districts) {#maintenance-and-operation-of-irrigation-canals-by-water-districts-54 .TOC-3}

# [6.3.4 Mosquito Abatement 55](#mosquito-abatement) {#mosquito-abatement-55 .TOC-3}

# [6.3.5 Water Requirements and Surface Water Purchases for Habitat 56](#water-requirements-and-surface-water-purchases-for-habitat) {#water-requirements-and-surface-water-purchases-for-habitat-56 .TOC-3}

# [6.3.6 Potential Effects on Oil and Gas Development 61](#potential-effects-on-oil-and-gas-development) {#potential-effects-on-oil-and-gas-development-61 .TOC-3}

# [6.3.7 Effects on Recreational Visitation 62](#effects-on-recreational-visitation) {#effects-on-recreational-visitation-62 .TOC-3}

# [6.3.8 Flood Risks 62](#flood-risks) {#flood-risks-62 .TOC-3}

# [6.3.9 Other Prospective Costs 63](#other-prospective-costs) {#other-prospective-costs-63 .TOC-3}

# [6.4 Distributional Effects: Secondary and Regional Impacts 63](#distributional-effects-secondary-and-regional-impacts-1) {#distributional-effects-secondary-and-regional-impacts-63 .TOC-2}

# [6.5 Effects on Federal Agencies 63](#effects-on-federal-agencies) {#effects-on-federal-agencies-63 .TOC-2}

# [6.5.1 Goose Lake BO 63](#goose-lake-bo) {#goose-lake-bo-63 .TOC-3}

# [6.5.2 Other Federal Costs 64](#other-federal-costs) {#other-federal-costs-64 .TOC-3}

# [7.0 Summary and Analysis of Effects 65](#summary-and-analysis-of-effects) {#summary-and-analysis-of-effects-65 .TOC-1}

# [7.1 Summary and Discussion of Findings 65](#summary-and-discussion-of-findings) {#summary-and-discussion-of-findings-65 .TOC-2}

# [7.1.1 General 65](#general) {#general-65 .TOC-3}

# [7.1.2 Summary of Quantified Impacts 65](#summary-of-quantified-impacts) {#summary-of-quantified-impacts-65 .TOC-3}

# [7.2 Discussion of Results 67](#discussion-of-results) {#discussion-of-results-67 .TOC-2}

# [References REF-1](#__RefHeading___Toc85905801) {#references-ref-1 .TOC-1}

# [Appendix A: Economic Effects to Small Entities and Energy A-1](#__RefHeading___Toc85905802) {#appendix-a-economic-effects-to-small-entities-and-energy-a-1 .TOC-1}

# [Appendix B: List of Acronyms B-1](#__RefHeading___Toc85905803) {#appendix-b-list-of-acronyms-b-1 .TOC-1}

# [Map Attachment MAP-1](#__RefHeading___Toc85905804) {#map-attachment-map-1 .TOC-1}

[]{#__RefHeading___Toc85905727 .anchor}Executive Summary

This report addresses the potential economic effects associated with the
proposed designation of critical habitat for the Buena Vista Lake shrew
(*Sorex ornatus relictus*, hereafter "BVLS"). The BVLS is one of nine
subspecies of ornate shrew. The species is insectivorous and is about
the size of a mouse. Coloration varies from black or brown to grey, and
the BVLS have long pointed snouts. The BVLS inhabits riparian woodland.
The purpose of this report is to quantify the economic costs of the
critical habitat designation (CHD), as well as protective activities
that aid conservation of the species within the specific areas
designated as critical habitat. Economic costs are measured here in
terms of the impacts of the listing and the CHD on the efficient use of
society's resources, as well as how those costs are distributed across
segments of society. This analysis is intended to assist the Secretary
in determining whether the benefits of excluding particular areas from
the designation (avoided costs) outweigh the biological benefits of
including those areas in a final designation.

The BVLS was proposed for listing by the Service as endangered under the
Endangered Species Act of 1973 (the Act) on June 1, 2000.[^1] Several
organizations in Kern County filed a lawsuit following the listing of
the BVLS by the Service. The Service entered into a consent decree for
settlement and was required to make final listing decisions for several
species, including the BVLS, by March 1, 2002. The final rule listing
the BVLS as endangered was published in the March 6, 2002, edition of
the Federal Register with an effective date of April 5, 2002.[^2] The
final rule incorporated information regarding species distribution,
status, and threats obtained after publication of the proposed rule. The
proposed rule designating critical habitat was published August 19,
2004.[^3]

### Designated Critical Habitat {#designated-critical-habitat .ES-Heading-3}

The Service has proposed five critical habitat units (CHUs) for the
BVLS, all in Kern County, California, covering a total of 4,649 acres.
These include Kern Lake Preserve, Kern Fan Water Recharge, Goose Lake,
Coles Levee, and Kern National Wildlife Refuge. The largest CHU is in
the Kern Fan Recharge area at 2,682 acres, and the smallest is in the
Kern Lake Preserve at 90 acres (see Map 1 in the Map Attachment).

The Service reports that the preferred habitat for the BVLS are areas in
and adjacent to riparian and wetland edge areas which have vegetation
that provides cover, which in turn offers moist soils that support a
variety of prey.[^4] The Service has determined that the BVLS requires
three primary constituent elements (PCEs):

-   Riparian or wetland communities supporting a complex vegetative
    structure with a thick cover of leaf litter or dense mats of
    low-lying vegetation;

-   Suitable moisture supplied by a shallow water table, irrigation, or
    proximity to permanent or semi-permanent water; and

-   A consistent and diverse supply of prey.[^5]

The five proposed CHUs are considered by the Service to be essential to
the conservation of the BVLS because all are reported to contain wetland
and/or riparian habitat and are located within the historical range of
the BVLS.[^6] Most locations supporting the BVLS are on private land and
are reported to be susceptible to variations in water supplies that
maintain current habitat.[^7]

## Key Findings {#key-findings .ES-Heading-2}

### Retrospective Costs {#retrospective-costs .ES-Heading-3}

Retrospective effects include those that have occurred since the time
that the BVLS was listed as endangered but prior to designation of
critical habitat. Few retrospective costs have been incurred since the
listing of the BVLS in April 2002. None of the proposed critical habitat
areas are included in active or completed habitat conservation plans
(HCPs). The Kern Fan Recharge CHU is adjacent to the Kern Water Bank,
which is covered by the operative Kern Water Bank HCP. That HCP was
completed prior to the listing of the BVLS and has not been updated to
include the BVLS. A formal section 7 consultation is underway for the
proposed Goose Lake CHU. At the Kern National Wildlife Refuge (KNWR), a
Comprehensive Conservation Plan (CCP) was in development for several
years prior to the listing of the BVLS and was completed in September
2004. In none of the areas around the proposed CHUs, however, has the
listing of the BVLS had evident effect on historical land use patterns.
As such, retrospective costs include only certain administrative costs
associated with the ongoing preparation of a Comprehensive Conservation
Plan at the KNWR CHU and the ongoing section 7 consultation related to
biological assessment preparation at the Goose Lake proposed CHU.

### Prospective Costs {#prospective-costs .ES-Heading-3}

Prospective effects include costs associated with BVLS conservation
activities anticipated through 2024. This prospective analysis attempts
to forecast the costs of conservation activities likely to occur within
the proposed designation. This forecast is difficult to develop, as no
section 7 consultations have been completed since the listing in 2002.
In addition, no identifiable changes in economic activities resulting
from BVLS conservation efforts have taken place since the listing. The
proposed rule, however, does outline potential threats related to
certain economic activities, including primarily agricultural practices
and water management. In addition, parties involved in litigation
related to the listing of the species expressed concern about how the
listing could affect a number of sectors within the regional economy.

Therefore, the prospective costs presented herein reflect, where data
permit, ranges representing the reasonably foreseeable future. The
primary prospective costs that are likely to be incurred because of BVLS
conservation activities relate to agriculture, operation and maintenance
of groundwater recharge projects and resultant effects on water
supplies, and water requirements for habitat. In addition, other
potential impact categories are identified and discussed qualitatively.
An important goal of the report is to provide a reasonable basis for
comment on whether the quantified effects are appropriately captured,
and whether other economic activities may also be burdened by BVLS
conservation efforts.

### Effects on Agriculture {#effects-on-agriculture .ES-Heading-3}

There is no cultivated farmland within the boundaries of the proposed
designation. In addition, it is uncertain whether farmers with cropland
adjacent or proximate to critical habitat may be required to alter their
farming practices as a result of BVLS conservation requirements. One
possible outcome is that these farmers would implement certain
protective measures to avoid incidental take of the species and mitigate
potential effects of their pesticide use practices. Specifically, the
scenario developed in this report considers that farmers would establish
buffer zones along the affected margins of their fields. These buffer
zones were assumed to be 45 feet wide. Based on site visits, land use
maps, and Kern County cropping data, it was determined that three of the
proposed CHUs (Kern Lake, Kern Fan Water Recharge, and Goose Lake) have
adjacent cropland. When aggregated for the three proposed CHUs, these
buffers would remove from production the equivalent of 15.9 acres of
field crops, 6.3 acres of vegetables, 2.7 acres of permanent crops, and
6.4 acres of hay, or a total of 31.3 acres. The annual loss from
foregone crop production, measured as gross revenue less variable costs
and rent, would be \$14,800.[^8] The annual costs for establishing
buffer zones and the annual cultural costs associated with the zones
would be \$14,400 for the five CHUs. The total annual costs attributable
to the buffer zones, including the annual loss from foregone crop
production, would be \$29,265. The largest effect would be \$13,100 for
the Kern Fan Water Recharge CHU, with \$11,000 for the Goose Lake CHU,
and \$5,200 for the Kern Lake CHU.

### Other Project Modification Effects {#other-project-modification-effects .ES-Heading-3}

#### Goose Lake CHU {#goose-lake-chu .ES-Heading-4}

A formal section 7 consultation was begun at the Goose Lake CHU in
2002.[^9] A draft biological opinion (BO) has been issued. Annual
prospective costs for the Goose Lake CHU, including issuance of a final
BO and monitoring, all attributable to the BVLS, include \$400 to the
Service and \$1,525 to non-Federal parties. In addition, the proposed
Goose Lake CHU includes about one-half mile of canal and adjacent
maintenance roads on both side of the canal. The Semitropic Water
Storage District (SWSD) estimates that there is increased diligence and
maintenance expense. Thus, annual SWSD costs attributable specifically
to the BVLS would be \$1,250.

#### Kern Fan Water Recharge CHU {#kern-fan-water-recharge-chu .ES-Heading-4}

The Kern Fan Water Recharge CHU is moist an average of two months per
year across all water year types. In some years, particularly dry years,
there may be no water recharged.[^10] While the Service has indicated
that the presence of open water does not appear to be necessary for the
survival of the BVLS, it also indicates that the availability of water
contributes to improved vegetation structure and diversity. Those
improve cover availability, and the presence of water attracts potential
prey species for the BVLS.[^11] Because the BVLS currently lives in this
CHU as it is currently operated, it is uncertain whether supplemental
water would be required to conserve the species. Therefore, this report
provides a cost range that is bounded with and without supplemental
water for the Kern Fan Water Recharge CHU. If supplemental water is
pumped ten months of the year from groundwater for 2,682 acres (10,996
acre-feet), the annual cost is estimated to be \$481,058. This amounts
to a present value of \$7.2 million when using a three percent discount
rate, and \$5.1 million when using a seven percent rate.

#### Kern National Wildlife Refuge CHU {#kern-national-wildlife-refuge-chu .ES-Heading-4}

The Service noted in the final rule listing the BVLS as endangered that
the KNWR has been managed primarily for waterfowl and that it received
at that time some water from Poso Creek as well as through purchases
from willing sellers via the Goose Lake canal. The Service also noted
that adequate water to meet the needs of all KNWR wildlife has not
always been available, and that without full deliveries of water to the
Refuge the continued existence of the BVLS is not assured. Since 2000,
the U.S. Bureau of Reclamation has attempted to provide KNWR with a more
reliable and consistent water supply in order to maintain wetland
habitat for waterfowl and other wildlife, including the BVLS.[^12]

The Service has indicated that KNWR would need about 3.5 acre-feet (AF)
per acre for optimal management of habitat.[^13] For this analysis,
therefore, it is assumed that the 387 acres in the KNWR proposed CHU
would require a total of 1,355 AF of supplemental water per year. The
annual cost associated with providing this supplemental water, based on
the water\'s value, is \$283,200. This amounts to a present value of
\$4.2 million when using a three percent discount rate, and \$3.0
million when using a seven percent rate.

#### Coles Levee CHU {#coles-levee-chu .ES-Heading-4}

The Coles Levee CHU is in an area surrounded by oil and gas wells; oil,
gas, and water pipelines; and related infrastructure. Although no wells
are located within the CHU, access roads and pipelines cross it. Past
practices indicate that as long as access roads have been developed for
these facilities and that the roads would not be considered critical
habitat, the designation of habitat would have no impact on the
operation of those facilities. In addition, it is difficult with
available information to assess whether impacts from BVLS conservation
efforts will be engendered in the future. For example, to the extent
that these operations expand into critical habitat, it is unclear how or
whether these expansions would be constrained. There are currently no
wells in critical habitat, and no plans to add new pipelines.

A multi-species HCP for the area, completed prior to the listing of the
BVLS, expired several years ago. Currently, the new owners and operators
are considering development of a new HCP or updating the previous HCP.
Should a new HCP be developed, the cost is expected to be approximately
\$750,000 based on other completed HCPs and industry contacts. Assuming
the permit will extend 20 years and cover eight Federally listed
species, annual cost would be \$37,500, of which a pro rata share of
\$4,688 could be assumed allocable to the BVLS.

#### Kern Lake Preserve CHU {#kern-lake-preserve-chu .ES-Heading-4}

Moisture for BVLS habitat in the Kern Lake Preserve CHU presently comes
from precipitation and agricultural runoff from the New Rim ditch. The
Service reported in 2002 that absent a dependable water supply to
maintain wetlands in the Kern Lake Preserve, the continued existence of
the BVLS was unlikely. However, because the BVLS currently lives in this
CHU as it is currently operated, it is uncertain whether supplemental
water would be required to conserve the species. Therefore, this report
provides a cost range that is bounded with and without supplemental
water for the Kern Lake Preserve CHU. If the estimated 20 acre-feet[^14]
of supplemental water were purchased from willing sellers, the annual
cost is estimated to be \$4,180.

### Distributional Effects {#distributional-effects .ES-Heading-3}

Based on the quantified impact figures, the distributional (secondary
and regional) effects of BVLS conservation efforts are likely to be
limited. For example, the annual value of agricultural production, both
crop and livestock, at the farm gate in Kern County exceeds \$2.4
billion. In contrast, the annual loss of \$50,000 of gross crop value
from land dedicated to buffer zones for the BVLS would be less than
0.003 percent of total agricultural output and would likely have effects
too small to measure on such entities as farm labor, suppliers of such
purchased inputs as seed and chemicals, and financial institutions.
Moreover, establishment and maintenance of the buffer zones are likely
to require various types of inputs, including labor, trees, chemicals,
and custom services, the purchases of which may partially offset the
direct and indirect reduction in crop output.

Similarly, the distributional effects on non-agricultural entities are
apt to be minimal. The expected cost of pumping groundwater for habitat
wetting at the Kern River Fan Recharge CHU is attributable to the BVLS
as a cost that would not otherwise be incurred. Regionally, however, the
impacts of these outlays are expected to be minimal. Most of the outlays
for pumping groundwater would circulate among sectors in the local
economy.

## Federal and Non-Federal Costs Attributable to the BVLS {#federal-and-non-federal-costs-attributable-to-the-bvls .ES-Heading-2}

### Retrospective Costs {#retrospective-costs-1 .ES-Heading-3}

Table ES-1 shows the estimated retrospective costs at the Federal and
non-Federal levels of BVLS conservation measures, by CHU. These include
Federal agency costs for section 7 consultations, research and
monitoring of sites, a conservation plan, and a biological opinion; and
non-Federal costs for a biological assessment and for an ongoing HCP.
"Non-Federal" includes private entities, State, water districts, and
local and regional governments. Total retrospective costs are \$122,000,
with the Goose Lake CHU, and the preparation of a biological opinion for
it, bearing the majority of the cost.

Table ES-1\
Total Retrospective Federal and Non-Federal Costs\
Attributable to the BVLS, by CHU (2004 \$)

  --------------------------- -------------- ----------------- ---------------
  **CHU**                     **Federal**    **Non-Federal**   **Total**

  Kern Lake                   \$3,540        \$3,214           \$6,754

  Kern Fan Water Recharge     \$3,540        \$3,214           \$6,754

  Goose Lake                  \$24,000       \$58,214          \$82,214

  Kern NWR                    \$16,545       \$3,214           \$19,759

  Coles Levee                 \$3,540        \$3,214           \$6,754

  **Total**                   **\$51,165**   **\$71,071**      **\$122,237**
  --------------------------- -------------- ----------------- ---------------

Note: Numbers may not sum due to rounding.

### Prospective Costs {#prospective-costs-1 .ES-Heading-3}

Table ES-2 shows the estimated average annual and present value of
prospective costs at the Federal and non-Federal levels BVLS
conservation measures, by CHU. These costs include effects on
agricultural producers on three CHUs, biological monitoring, HCP
development, and supplemental water purchases. The ranges shown for Kern
Lake, Coles Levee, and Kern Fan Water Recharge CHUs reflect totals with
and without supplemental water. Both the KNWR and Goose Lake CHUs are
assumed to require supplemental water, and thus are not shown as a
range. Present values shown are calculated at three and seven percent
discount rates. Total prospective costs range from \$6.7 to \$14.2
million under a three percent discount rate, and \$4.8 to \$10.1 million
under a seven percent rate.

The largest effects are expected to be for the Kern Fan Water Recharge
CHU, followed by the KNWR CHU. The large range of costs for the Kern Fan
Water Recharge CHU is a reflection of the "with" and "without"
supplemental water scenarios.

Table ES-2\
Annual and Total Prospective Federal and Non-Federal Costs\
Attributable to the BVLS, by CHU

  ---------------------- ----------------- ------------------------------ ------------------------------ -------------------------
  **CHU**                **Retrospective   **Prospective (Total)**                                       **Prospective (Annual)**
                         (Total)**                                                                       

                                           **3%**                         **7%**                         

  Kern National Wildlife \$19,760          \$4,213,598                    \$3,000,437                    \$283,220
  Refuge                                                                                                 

  Goose Lake             \$82,214          \$1,839,234                    \$1,309,690                    \$123,625

  Kern Lake              \$6,754           \$130,210-\$192,398            \$92,720-\$137,003             \$8,752-\$12,932

  Coles Levee            \$6,754           \$297,981-\$570,675            \$212,188-\$406,368            \$20,029-\$38,358

  Kern Fan Water         \$6,754           \$247,551-\$7,404,479          \$176,277-\$5,272,612          \$16,639-\$497,697
  Recharge                                                                                               

  **TOTAL**              **\$122,237**     **\$6,728,574-\$14,220,384**   **\$4,791,311-\$10,126,110**   **\$452,266-\$955,833**
  ---------------------- ----------------- ------------------------------ ------------------------------ -------------------------

Note: Numbers may not sum due to rounding.

Table ES-3 shows the estimated retrospective and annual and present
value of prospective costs at the Federal and private levels, by
category of impact. Present values shown are calculated at three and
seven percent discount rates. The largest private impacts are expected
to be for agriculture. The largest Federal impacts are for surface water
purchases for the KNWR CHU.

Table ES-3\
Annual and Total Prospective Federal and Non-Federal Costs\
Attributable to the BVLS, by Category of Impact

  ------------------------ ----------------- ------------------------------ ------------------------------ -------------------------
  **Category of Impact**   **Retrospective   **Prospective (Total)**                                       **Prospective (Annual)**
                           (Total)**                                                                       

                                             **3%**                         **7%**                         

  **Non-Federal:**                                                                                         

  Agriculture              \$0               \$435,396                      \$310,039                      \$29,265

  Goose Lake BO            \$55,000          \$22,688                       \$16,156                       \$1,525

  Goose Lake Canal Maint.  \$0               \$18,597                       \$13,243                       \$1,250

  Coles Levee HCP          \$0               \$291,018                      \$207,230                      \$19,561

  Kern Valley Floor HCP    \$16,071          \$1,860                        \$1,324                        \$125

  **Total Non-Federal**    **\$71,071**      **\$769,559**                  **\$547,991**                  **\$51,726**

  **Federal Agencies:**                                                                                    

  Consultations            \$51,165          \$117,711                      \$83,820                       \$7,912

  Supplemental Water       \$0               \$5,841,304-\$13,333,114       \$4,159,500-\$9,494,299        \$392,627-\$896,195

  **Total Federal**        **\$51,165**      **\$5,847,092-\$13,450,825**   **\$4,163,621-\$9,578,119**    **\$393,016-\$904,107**

  **TOTAL**                **\$122,237**     **\$6,728,574-\$14,220,384**   **\$4,791,311-\$10,126,110**   **\$452,266-\$955,833**
  ------------------------ ----------------- ------------------------------ ------------------------------ -------------------------

Note: Numbers may not sum due to rounding.

## Caveats and Assumptions {#caveats-and-assumptions .ES-Heading-2}

The assumptions presented here include only those which apply in general
to all areas included in the analysis. These general caveats describe
factors that introduce uncertainty into the results of this analysis.
The Service therefore solicits from the public further information on
any of the issues presented in the discussions and tables of caveats.
Additionally, information pertaining to the following questions is
requested:

-   Are data available to develop more accurate estimates of the number
    of future consultations, project modifications, and costs for the
    activities related to private lands?

-   Are data available on additional land use practices, or current or
    planned activities in proposed critical habitat areas, that are not
    specifically or adequately addressed in this analysis?

-   Are data available on additional co-extensive impacts (such as
    additional regulatory burdens from State or local laws triggered by
    the designation of critical habitat) that are not specifically or
    adequately addressed in this analysis?

-   Are there water district canals that would be affected by
    incremental costs incurred for vegetation control as a result of
    conservation activities for the BVLS, and if so, what are the length
    of the affected area and the nature of those costs?

-   Are there data available that help to determine whether there are
    effects on upstream water users in the Kern River, above the Kern
    Fan Water Recharge CHU?

## Estimated Cost of the Final Designation {#estimated-cost-of-the-final-designation .ES-Heading-2}

The analysis contained in this report is consistent with the designation
as described in the proposed rule. However, the Service has excluded
most of the proposed CHUs (four of the five units) from the final
designation. The area representing critical habitat was reduced from
4,649 acres to 83.7 acres. This section provides an estimate of the
economic effects associated with the final designation of critical
habitat for the BVLS.

In the final designation, the KNWR, Goose Lake, Coles Levee, and Kern
Fan Water Recharge CHUs were excluded. All of these units were
determined to have adequate management plans to benefit the BVLS. Table
ES-4 provides a summary of the economic effects attributable to BVLS
conservation measures in final critical habitat for each of the CHUs
considered in this analysis. Retrospective costs total \$122,000, with
the Goose Lake CHU bearing \$82,000 of the costs. The preparation of a
biological opinion represents the majority of this cost. Total
prospective costs range from \$130,000 to \$192,000 under a three
percent discount rate, and \$93,000 to \$137,000 under a seven percent
rate. These costs apply to the Kern Lake CHU, the only remaining unit in
critical habitat, and include effects on agricultural producers,
biological monitoring, and supplemental water purchases. The range shown
reflects the total with and without supplemental water. Annual
prospective costs are estimated to range from \$8,800 to \$12,900.

By excluding the four CHUs, the range of annual prospective costs will
be reduced by 98 to 99 percent. Retrospective costs will not change with
the final designation, as they reflect costs that have occurred as a
result of the listing of the BVLS rather than of CHD.

Table ES-4\
Summary of Economic Effects Attributable to\
BVLS Conservation Measures in Final Critical Habitat, by CHU

  ------------------------ ----------------- ------------------------- ------------------------ ----------------------
  **CHU**                  **Retrospective   **Prospective (Total)**                            **Prospective
                           (Total)**                                                            (Annual)**

                                             **3%**                    **7%**                   

  Kern National Wildlife   \$19,760          \$0                       \$0                      \$0
  Refuge\*                                                                                      

  Goose Lake\*             \$82,214          \$0                       \$0                      \$0

  Kern Fan Water           \$6,754           \$0                       \$0                      \$0
  Recharge\*                                                                                    

  Coles Levee\*            \$6,754           \$0                       \$0                      \$0

  Kern Lake                \$6,754           \$130,210-\$192,398       \$92,720-\$137,003       \$8,752-\$12,932

  **TOTAL**                **\$122,237**     **\$130,210-\$192,398**   **\$92,720-\$137,003**   **\$8,752-\$12,932**
  ------------------------ ----------------- ------------------------- ------------------------ ----------------------

Note: Numbers may not sum due to rounding.

\*Not included in final critical habitat designation.

### Economic Effects to Small Entities {#economic-effects-to-small-entities .ES-Heading-3}

Appendix A of this report provides an examination of the extent to which
the analytic results presented in the main report reflect impacts to
small entities. The effects on small businesses will fall primarily in
the agricultural production sector. Following the final designation, the
effects on small businesses would be reduced from that presented in
Appendix A. Based on the estimated costs to development and the average
sales per small business, the effects as a percent of small business
(farm) sales would be approximately 7.8 percent. Based upon the number
of affected farms, the proportion of all businesses in the commodity
group affected is 1.35 percent. The proportion would be lower if the
affected businesses are not considered small.

#  Introduction and Background

This report addresses the economic effects of activities associated with
the listing and designation of critical habitat for the Buena Vista Lake
shrew (*Sorex ornatus relictus,* hereafter "BVLS"). The analysis
attempts to quantify the economic effects of the designation of critical
habitat, as well as the economic effects of the protective measures
taken as a result of the listing of the BVLS or other Federal, State,
and local laws that also afford protection to habitat in the areas
proposed for designation. Because all BVLS-related species and habitat
protection efforts likely contribute to the efficacy of the proposed
BVLS critical habitat designation (CHD), the impacts of these actions
may be considered relevant for understanding the full impact of proposed
CHD. Costs are examined that (a) have been incurred since the date the
species was listed as endangered (retrospective costs), and (b) are
forecast to occur after the designation is finalized (prospective
costs). []{.mark}

This information is intended to assist the Secretary in determining
whether the benefits (avoided costs) of excluding particular areas from
the designation outweigh the benefits of including those areas in the
designation.[^15] In addition, this information allows the Service to
address the requirements of Executive Orders 12866 and 13211, and the
Regulatory Flexibility Act (RFA), as amended by the Small Business
Regulatory Enforcement Fairness Act (SBREFA).[^16] This report also
complies with direction from the U.S. 10^th^ Circuit Court of Appeals
that "co-extensive" effects should be included in the economic analysis
to inform decision-makers regarding which areas to designate as critical
habitat.[^17]

This section provides the framework for this analysis. First, it
describes the general analytic approach to estimating economic effects,
including discussion of both efficiency and distributional effects.
Next, it discusses the scope of the analysis, including the link between
existing and critical habitat-related protection efforts and economic
impacts. Then, it describes the information sources employed to conduct
this analysis. Finally, it describes the background of the listing and
proposed designation of critical habitat for the BVLS.

## Approach to Estimating Economic Effects

This economic analysis considers both the economic efficiency and
distributional effects that may result from species and habitat
protection (hereinafter referred to as "conservation activities").
Economic efficiency effects generally reflect "opportunity costs"
associated with the commitment of resources required to accomplish
species and habitat conservation. For example, if activities on private
lands are limited as a result of the designation or the presence of the
species, and thus the market value of the land is reduced, this
reduction in value represents one measure of opportunity cost or change
in economic efficiency. Similarly, the costs incurred by a Federal
action agency to consult with the Service under section 7 represent
opportunity costs of conservation activities.

This analysis also addresses the distribution of impacts associated with
conservation activities, including an assessment of any local or
regional impacts of habitat conservation and the potential effects of
conservation activities on small entities, the energy industry, or
governments. This information may be used by decision-makers to assess
whether the effects of the designation unduly burdens a particular group
or economic sector. For example, while habitat conservation activities
may have a small impact relative to the national economy, individuals
employed in a particular sector of the regional economy may experience a
significant level of impact. The difference between economic efficiency
effects and distributional effects, as well as their application in this
analysis, are discussed in greater detail below.

Where data are available, the analysis attempts to capture the net
economic impact imposed on regulated entities and the regional economy
of BVLS conservation efforts. That is, the economic impact of BVLS
conservation to the land management agencies and regulated community net
of any direct offsetting benefit they experience.

###  Efficiency Effects

At the guidance of the Office of Management and Budget (OMB) and in
compliance with Executive Order 12866 "Regulatory Planning and Review,"
Federal agencies measure changes in economic efficiency in order to
discern the implications on a societal level of a regulatory action. For
regulations specific to the conservation of the BVLS and its habitat,
efficiency effects represent the opportunity cost of resources used, or
benefits foregone, by society as a result of the regulations. Economists
generally characterize opportunity costs in terms of changes in producer
and consumer surplus in affected markets.[^18]

In some instances, compliance costs may provide a reasonable
approximation for the efficiency effects associated with a regulatory
action. For example, a landowner or manager may enter into a
consultation with the Service to ensure that a particular activity will
not adversely modify critical habitat. The effort required for the
consultation is an economic opportunity cost, because the landowner or
manager's time and effort would have been spent in an alternative
activity had his or her land not been designated critical habitat. In
the case that compliance activity is not expected to significantly
affect markets -- that is, not result in a shift in the quantity of a
good or service provided at a given price, or in the quantity of a good
or service demanded given a change in price -- the measurement of
compliance costs provides a reasonable estimate of the change in
economic efficiency.

Where habitat protection measures are expected to significantly impact a
market, it may be necessary to estimate changes in producer and consumer
surpluses. For example, a designation that precludes the development of
large areas of land may shift the price and quantity of housing supplied
in a region. In this case, changes in economic efficiency (i.e., social
welfare) can be measured by considering changes in producer and consumer
surplus in the real estate market.

This analysis begins by measuring costs associated with measures taken
to protect species and habitat. As noted above, in some cases,
compliance costs can provide a reasonable estimate of changes in
economic efficiency. In the case of the BVLS, compliance costs are in
fact expected to represent a reasonable estimate of efficiency effects,
and thus impacts on consumer and producer surpluses in affected markets
are considered but not estimated.

### Distributional and Regional Economic Effects

Measurements of changes in economic efficiency focus on the net impact
of conservation activities, without consideration of how certain
economic sectors or groups of people are affected. Thus, a discussion of
efficiency effects alone may miss important distributional
considerations. OMB encourages Federal agencies to consider
distributional effects separately from efficiency effects.[^19] This
analysis considers several types of distributional effects, including
impacts on small entities; impacts on energy supply, distribution, and
use; and regional economic impacts. It is important to note that these
are fundamentally different measures of economic impact than efficiency
effects, and thus cannot be added to or compared with estimates of
changes in economic efficiency.

#### Impacts on Small Entities and Energy Supply, Distribution, and Use

This analysis considers how small entities, including small businesses,
organizations, and governments, as defined by the RFA, may be affected
by future BVLS conservation activities.[^20] In addition, in response to
Executive Order 13211 "Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use," this analysis considers the
impacts of conservation activities on the energy industry and its
customers.[^21] While small business impacts are discussed, significant
impacts on the energy sector are not expected. See Appendix A for an
analysis of impacts to small businesses and the energy industry.

#### Regional Economic Effects

Regional economic impact analysis includes various approaches to
estimate the potential localized and distributive impacts of proposed
conservation activities. Regional economic impact analysis is often
based on input-output analysis, which enables the quantification of
linkages among sectors of the economy and the tracing of effects on
additional sectors resulting from a direct change to one sector.
Regional economic impact analysis is discussed more fully in Section
2.2.3.

## Scope of the Analysis

This analysis attempts to quantify the economic effects of the
designation of critical habitat, as well as any protective measures
taken as a result of the listing or other Federal, State, and local laws
that aid habitat conservation in the areas proposed for designation.
Habitat protection efforts undertaken to meet the requirements of other
Federal, State, or local agencies can assist the Service in achieving
its goals as set out in the Act. In certain cases, other government
entities may work cooperatively with the Service to address natural
resource management issues, thereby expediting the regulatory process
for project proponents. Because conservation activities affording
protection to the BVLS likely contribute to the efficacy of the CHD
efforts, the impacts of these actions are considered relevant for
understanding the full impact of CHD.

The following items are included in the economic analysis:

-   Consistent with recent court rulings, the analysis includes impacts
    that occur co-extensively with the listing resulting from sections
    4, 7, 9, or 10 of the Act. Enforcement actions taken in response to
    violations of the Act, however, are not included.

-   The analysis considers conservation and protection activities for
    the BVLS. No distinction is made between impacts that occur due to
    listing and those that result from CHD.

-   Both retrospective and prospective costs are considered.
    Retrospective costs include those that have accrued since the time
    that the BVLS was listed as endangered but prior to designation of
    critical habitat. Prospective effects include likely future costs
    associated with BVLS conservation activities from the present to the
    year 2024.

-   The geographic scope of the analysis reflects the five distinct
    areas inhabited by the BVLS that are currently designated as
    proposed critical habitat units (CHU): Kern Lake Preserve, Kern Fan
    Water Recharge, Goose Lake, Coles Levee, and Kern National Wildlife
    Refuge. The five areas are all located within Kern County,
    California.

-   The geographic unit of analysis is the area defined by each CHU.

-   The localized economic efficiency effects reflect the area
    specifically identified as critical habitat. However, activities
    occurring in adjacent land or beyond of the boundaries of each CHU
    with the potential to affect critical habitat, such as adjacent farm
    land, are also considered when appropriate. Thus, all relevant costs
    in adjacent areas may be included.

-   This analysis utilizes a "with" and "without" framework, and
    emphasizes those effects that are determined to be attributable to
    BVLS conservation activities. Impacts that would have occurred
    without the BVLS listing and CHD are evaluated on a case-by-case
    basis to determine if they should be assigned, in part, to
    conservation activities for the BVLS.

-   The period of analysis and discounting is guided by the availability
    of information concerning the start date and duration of the
    activity. Each potential cost component is examined over the time
    period that is appropriate for that specific activity or investment.
    Some of these are costs that are incurred one time only, while
    others are recurring. These costs are presented both as net present
    values and annualized costs, using three and seven percent discount
    rates.

### Sections of the Act Relevant to Economic Analysis

The analysis begins by estimating retrospective costs incurred from the
time that the BVLS was listed as endangered. It focuses on activities
that are influenced by the Service through sections 4, 7, 9, and 10 of
the Act. It then looks at activities likely to occur in the foreseeable
future, and quantifies the effects that sections 4, 7, 9, and 10 of the
Act may have on those activities.

Section 4 of the Act focuses on the listing and recovery of endangered
and threatened species, as well as the CHD. Pursuant to this section,
the Secretary is required to determine if a species warrants listing as
endangered or threatened "solely on the basis of the best scientific and
commercial data available."[^22] Under section 4(d) of the Act, the
Service may write regulations to provide for the conservation of
threatened species. The implementation of these regulations may have
economic impacts on resource managers, landowners, and other relevant
parties. However, there is no 4(d) rule in place for the BVLS, and thus
4(d) issues are not relevant to this analysis.

Protections afforded to threatened and endangered species and their
designated critical habitat are described in sections 7, 9, and 10 of
the Act. The economic effects of these protections are considered in
this analysis:

-   Section 7 of the Act requires Federal agencies to consult with the
    Service to ensure that any action they authorize, fund, or carry out
    will not likely jeopardize the continued existence of any endangered
    or threatened species, or result in the destruction or adverse
    modification of designated critical habitat. The administrative
    costs of these consultations, along with the costs of project
    modifications resulting from these consultations, represent
    compliance costs associated with the listing of the species and CHD.

-   Section 9 defines the actions that are prohibited by the Act, and in
    particular, prohibits the "take" of a listed species. The term
    "take" means to "harass, harm, pursue, hunt, shoot, wound, kill,
    trap, capture, or collect, or to attempt to engage in any such
    conduct."[^23] "Harm" in this passage is defined as "an act which
    actually kills or injures wildlife. Such act may include significant
    habitat modification or degradation where it actually kills or
    injures wildlife by significantly impairing essential behavioral
    patterns, including breeding, feeding, or sheltering."[^24] The
    economic impacts associated with this section manifest themselves in
    sections 7 and 10, though these impacts do not directly flow from or
    depend on the designation of critical habitat.

-   Section 10 of the Act, in part, allows non-Federal entities (e.g., a
    landowner or local government) to develop and implement a habitat
    conservation plan (HCP) for the species in order to meet the
    conditions for issuance of an incidental take permit in connection
    with development and management of a property.[^25] The requirements
    posed by the HCP may have economic impacts associated with the goal
    of ensuring that the effects of incidental take are adequately
    minimized and mitigated. These economic impacts do not directly flow
    from or depend on the designation of critical habitat; however,
    designation of critical habitat may influence the conservation
    measures provided under the conservation plans. Federal agencies do
    not develop HCPs, but instead obtain permission for incidental take
    through the section 7 consultation process.

### Other Relevant Protection Efforts

The protection of listed species and habitat is not limited to the Act.
Other Federal agencies, as well as State and local governments, may also
seek to protect the natural resources under their jurisdiction.[^26] In
addition, under certain circumstances, the CHD may provide new
information to a community about the sensitive ecological nature of a
geographic region, potentially triggering additional economic impacts
under other State or local laws.

### Additional Analytic Considerations

Previous economic impact analyses prepared to support critical habitat
decisions have considered other types of economic impacts related to
conservation activities associated with CHD, including time delay,
regulatory uncertainty, and stigma impacts. This analysis considers
these types of economic impacts and has determined that the CHD for the
BVLS is unlikely to have economic impacts of this nature.

### Benefits

The published economics literature has documented that real social
welfare benefits can result from conservation and recovery of endangered
and threatened species. Such benefits have also been ascribed to
preservation of open space and biodiversity, both of which can be
associated with species conservation, but which are not the purpose of
critical habitat. Likewise, regional economies and communities can
benefit from the preservation of healthy populations of endangered and
threatened species, and the habitat on which these species depend.

In Executive Order 12866, OMB directs Federal agencies to provide an
assessment of costs and benefits of proposed regulatory actions.[^27] In
its guidance for implementing Executive Order 12866, however, OMB
acknowledges that often, it may not be feasible to monetize, or even
quantify, the benefits of environmental regulations.[^28] Where benefits
cannot be quantified, OMB directs agencies to describe the benefits of a
proposed regulation qualitatively. *Given the limitations associated
with estimating the benefits of* *critical habitat designation for the
BVLS, the Service believes that the benefits of the proposed rule are
best expressed in biological terms that can be weighed against the
expected cost impacts of the rulemaking.*

## Analytic Time Frame

The analysis examines activities taking place both within and adjacent
to the CHD, and considers activities that have occurred since the
listing (2002) and prior to designation (2004), as well as activities
anticipated to occur after designation. The analysis estimates impacts
based on activities that are "reasonably foreseeable," including, but
not limited to, activities that are currently authorized, permitted, or
funded, or for which proposed plans are currently available to the
public. The analysis estimates economic impacts to activities through
2024 (20 years from the year of final CHD). The analysis time frame is
further discussed in Section 2.3, "Project Life, Period of Analysis, and
Discount Rate."

## Information Sources

The analysis contained in this report is based on information collected
from a wide range of sources. Numerous individuals were consulted within
the Action agencies, including the Service and Federal Highway
Administration. Many other individuals with local, State, and special
districts were also contacted. Special districts included water agencies
and districts: Kern County Water Agency, Wheeler Ridge-Maricopa Water
Storage District, Semitropic Water Storage District, and Buena Vista
Water Storage District. Kern County offices contacted include the
Planning Department, Agricultural Commissioner, and Farm Advisor.
California State agencies contacted included Department of
Transportation (Caltrans), Department of Fish and Game (DFG), Department
of Pesticide Regulation (DPR), and Water Resources Control Board. Legal
counsel for the City of Bakersfield, Kern County Water Agency, and the
Kern Water Bank Authority were also contacted.

Publicly available data from the U.S. Census Bureau, U.S. Department of
Commerce, and California Employment Development Department were used to
characterize the regional economy. Other publicly available documents
consulted include Federal Register notices related to listing and CHD
rules for the BVLS and the Service's 1998 recovery plan for upland
species of the San Joaquin Valley, which includes the BVLS. A full list
of information sources is provided in the reference section at the end
of this report.

## Background of the BVLS Listing[^29]

The BVLS was included as a Category 2 candidate species in the September
18, 1985, Notice of Review.[^30] The BVLS was proposed for listing by
the Service as endangered under the Act on June 1, 2000.[^31] The final
rule was delayed because insufficient funds were appropriated for
listing action for the species in Fiscal Year 2001.

Several organizations in Kern County filed a lawsuit following the
listing of the BVLS by the Service. The suit alleged that the listing
violated several provisions of the Act, National Environmental Policy
Act, Administrative Procedures Act, and Regulatory Flexibility Act.[^32]
The plaintiffs allege that the listing could have serious impacts on
delivering irrigation water, maintaining canals and reservoirs, growing
crops, using pest control materials, harvesting, grazing, flood control,
mosquito control, and groundwater recharge.

The Service entered into a consent decree for settlement of listing
litigation with several parties on October 2, 2001. Under that decree,
the Service was required to make final listing decisions for several
species previously proposed for listing, including the BVLS, and to
publish a final listing determination for the species by March 1, 2002.
The final rule was published in the March 6, 2002, edition of the
Federal Register with an effective date of April 5, 2002.[^33] The final
rule incorporated information regarding species distribution, status,
and threats obtained after publication of the proposed rule. The
proposed rule designating critical habitat was published August 19,
2004.[^34]

The recovery plan for the BVLS was included in a multi-species plan for
upland species in the San Joaquin Valley of California.[^35] Details on
the recovery plan are included in Section 4.2.3 of this report.

## Background of the BVLS Critical Habitat Designation

The final rule to list the BVLS as endangered was published on March 6,
2002, and became effective April 5, 2002.[^36] At the time, the listing
of the BVLS was completed without designation of critical habitat
because the budget of the Service was limited.[^37] The Service noted in
the March 2002 final rule that it would prepare a CHD when available
resources and priorities allowed it to do so. On January 12, 2004, the
United States District Court for the Eastern District of California
issued a Memorandum Opinion and Order which required the Service to
publish a proposed CHD by July 12, 2004, with a final rule by January
12, 2005.

By Section 3(5)(a)(i) of the Act and regulations at 50 CFR 424.12, the
Service is required to base CHD on the best scientific and commercial
data available. Further, the Service is to consider physical and
biological features, "primary constituent elements" (PCEs), essential to
species conservation and which may require special management
considerations and protection. Regarding the BVLS, the Service has
determined that there are three PCEs, but that not all may be present in
suitable habitat.[^38] The first is riparian or wetland communities
which support complex vegetative structures having a thick cover of leaf
matter or dense mats of low-lying vegetation. The second is suitable
moisture from a shallow water table, irrigation, or proximity to
permanent or semi-permanent water. The third is a reliable, varied
supply of prey.[^39] The Service notes that all of the proposed CHUs
contain extant occurrences of the BVLS and all contain the PCEs.[^40]

## Description of the Species and Habitat[^41]

The BVLS is one of nine subspecies of ornate shrew. Of these, eight are
reported to occur in California. The BVLS had been found commonly in
Kern County, but by 2002 was known in only four locations. The species
is insectivorous and is about the size of a mouse. Coloration varies
from black or brown to grey, and the mammals have long pointed snouts.
They are active virtually any time at night or during the day.

The BVLS was initially described by Grinnell in 1932. He asserted that
the BVLS formerly occurred in wetlands around Buena Vista Lake and
likely throughout the Tulare Basin. In particular, the animals were
believed to have been located throughout the margins of Kern, Buena
Vista, Goose, and Tulare lakes. The draining and cultivating of these
lakes are believed to have resulted in the reduction of available
habitat for the species.

Shrews primarily are insectivorous mammals. They have high metabolic
rates because they are small and lose heat quickly from their body
surface areas. They eat a variety of aquatic and terrestrial insects as
well as spiders, centipedes, slugs, snails, and earthworms. There is
scant knowledge available regarding their reproduction or longevity. For
the BVLS, the breeding season typically begins in February or March and
culminates with the onset of dry weather in May or June. Like other
long-tailed shrews, the BVLS is believed to be capable of giving birth
to two litters of four to six young per year.

Geographical distinctions among North American shrews are reported to be
primarily in the darkness or paleness of their coat; their size,
external and cranial; length of tail; shape of the skull; and in
characteristics of their teeth. On the basis of recent taxonomy studies,
the Service concluded that populations of ornate shrew sub-species are
genetically diverse.

BVLS have been found more commonly in moist than in dry habitats, and it
is generally concluded that they prefer moist habitat with diverse
aquatic and terrestrial insect prey. BVLS noted at the Kern National
Wildlife Refuge (KNWR) were commonly found associated with dense
riparian areas which provide food, moisture, and cover. However, because
of the scarcity of the BVLS, little is known about their home range
size, breeding territory size, and population densities.

At the time of the proposed rule to list the BVLS in June 2000, the only
known surviving population of the species was found on the 83 acre Kern
Lake Preserve, south of Bakersfield. Since June 2000, several other BVLS
have been trapped, primarily at the KNWR. Two were trapped by staff from
the University of California, Los Angeles, at KNWR in 1998. In 1999,
staff from the Endangered Species Recovery Program (ESRP) at California
State University Stanislaus captured five BVLS within ½ mile from where
captures were made the year before. The seven were around a marsh of
approximately 800 acres with emergent vegetation and a covering of
willow and cottonwood trees. The area remains moist longer than most
other marshes on the KNWR.[^42] In addition, ESRP staff found nine BVLS
at Coles Levee and five in the water recharge area along the Kern River
Fan.

The Service has enumerated several factors believed to be most
responsible for the decline of the BVLS. The first is the loss and
fragmentation of available habitat over time because of the drainage of
land for agricultural production and because of urban and energy
development in the San Joaquin Valley. Second is uncertainty of water
availability and delivery to habitat areas. With diversion of water for
irrigation and other purposes, less water remained for riparian habitat.
Reliable water supplies are thus considered critical for the maintenance
of habitat desirable for the BVLS. Third is the possibility of disease
and associated threats. Because of the small BVLS population and its
limited geographical distribution, the species is believed vulnerable to
epidemic diseases and other threats. The significance of these threats,
however, is not known. In addition, while many predators are reported to
find shrews unpalatable, others are known to prey on the animals.
Similar to the disease threat, however, the overall impact of predation
on the number and densities of BVLS is unknown.

The Service reports other potential threats to the BVLS include selenium
toxicity; exposure to agricultural pesticides; loss or alteration of
elements essential for breeding, feeding, and sheltering; introduction
of poisons or predators into the limited geographic environment of the
BVLS; and catastrophic random events such as floods, droughts, or
disease. BVLS could be injured or killed or their reproduction reduced
by exposure to pesticides through drift or direct spraying of crops,
canals, and roadsides where they live.

Selenium toxicity is believed to be a serious threat to BVLS throughout
the Tulare Basin. The soils on the west side of the San Joaquin Valley
have naturally-elevated levels of the element, which often accumulates
in the shallow groundwater characteristic for many parts of this area.
Because of increased amounts of imported water and little or no exported
drain water, groundwater has increasingly accumulated near the surface,
the depths to groundwater on the west side have fallen, and selenium
concentrations have increased. As surface vegetation absorbs selenium,
the element may become part of the BVLS food chain by becoming
concentrated in the insects which feed on the vegetation or which reside
in the soils that concentrate these salts.

An additional potential source of selenium concentrations is the
concentrated animal feeding operations and resultant liquid and solid
manure throughout the Tulare Basin, in particular dairies, beef cattle,
swine, and poultry operations. The number of dairy cows in both Tulare
and Kern counties has increased sharply in the last decade.

Agricultural pesticides are a potential threat to the BVLS. In addition
to injuring or killing the BVLS themselves, pesticides may also kill the
many types of prey which constitute the food supply of the BVLS.
Further, the chemicals may bioaccumulate as the BVLS feed on insects
which have ingested the pesticides themselves. Certain types of
pesticides have been found to adversely affect behavior and motor
activity in some types of shrews. Depression of behavior and motor
activities could result in increased vulnerability of the animals to
predation and starvation.

## Proposed Critical Habitat Designation

The Service has proposed five CHUs for the BVLS.[^43] The five CHUs
cover a total of 4,649 acres, and are shown in Map 1 (see Map
Attachment). All proposed CHUs are located in Kern County, California,
and BVLS have been found within all. The Service selected areas for CHD
that are within the historical range of the BVLS and which exhibit
desirable factors indicated by occurrences of the BVLS, known riparian
habitat, and availability of adequate water for required moisture. The
Service examined, by field visit or aerial photography, all remaining
areas of riparian habitat within the historical range of the BVLS. The
five units are:

**The Kern National Wildlife Refuge (KNWR) CHU** in northwestern Kern
County includes 387 acres in three separate units of 274 acres, 66
acres, and 47 acres. KNWR is an important location for migratory birds.
Ten extant occurrences of the BVLS have been recorded in two locations,
one with standing water from September 1 through approximately April 15
and which is dry for about three months in the summer. The second area
has standing water from mid-August through June or early July and is dry
for only a brief time during the summer.

In 1985, the Service completed a Master Plan for KNWR. Preparation of
the Master Plan included a section 7 consultation and ultimate issuance
of a Biological Opinion (BO).[^44] The Plan did not include the BVLS.
Subsequently, KNWR completed a draft Comprehensive Conservation Plan
(CCP) for the refuge in June 2004, an update of the Master Plan.[^45] A
final copy of the document was completed in September 2004.

**The Goose Lake CHU** of 1,277 acres is about 10 miles south of KNWR in
the historic lake bed of Goose Lake. The Goose Lake area includes a
total of about 8,000 acres nearly equally divided between former marshes
and wetlands, and upland communities. In January 2004, five BVLS were
captured in the CHU. Semitropic Water Storage District (SWSD), which
receives State Water Project (SWP) from SWP contractor Kern County Water
Agency, owns and operates canal conveyance facilities in the Goose Lake
area. SWSD, Ducks Unlimited, and the landowners in a joint venture are
finalizing a plan for a multipurpose program that will provide wetlands
improvement, duck hunting, temporary storage of flood water, and some
recovery wells in the Goose Lake area. In wet years or years in which
water is otherwise abundant, water is transferred from the California
Aqueduct and temporarily stored on the surface, then removed and
conveyed to long term aquifer storage. A formal section 7 consultation
is underway at this CHU.

**The Kern Fan Water Recharge CHU** includes 2,682 acres in which have
been found two extant occurrences of the BVLS. This CHU is within the
2,800 acre Kern Fan Water Recharge Area owned by the City of
Bakersfield. The Kern Water Bank is contiguous to the CHU and includes
19,900 acres owned by the Kern Water Bank Authority. The CHU is adjacent
to, but not included within, the Kern Water Bank HCP/Natural Community
Conservation Plan (NCCP) permit area. Parts of the area flood
occasionally and provide pockets of wetland communities.

**The Coles Levee CHU** includes 214 acres owned by Aera Energy, and
serves as a mitigation bank to compensate for the take of habitats for
listed upland species. There are many oil and natural gas wells in the
area, which is also traversed by pipelines carrying those products as
well as water. There is a road to each well, but not to several parts of
the pipelines.[^46]

The area was established as a mitigation bank in 1992, in an agreement
between Atlantic Richfield Company (ARCO) and DFG. An HCP was in place
for the Coles Levee Ecological Preserve Area, but expired when ARCO sold
the property to Aera Energy and is no longer operative. The current
owner is reported to be considering preparation of a new HCP covering
multiple species.[^47] Based on discussions with consultants who have
completed similar types of plans, the range of expected costs is from
\$500,000 to \$1,000,000. Alternatively, the previous HCP could be
amended to include a management plan specifically for the BVLS at a cost
of about \$50,000.[^48] Either would include actions specific to
preservation of the BVLS, and the affected land could be removed from
critical habitat. It is unknown whether the operators of the wells and
pipelines will agree to either.[^49] However, with the designation of CH
for the BVLS, the risk of a take of the species has risen, and it is
reasonable to assume that the operators of wells and pipelines in the
area will pursue either a new HCP (for an estimated \$750,000) or a
management plan for the shrew (for an estimated \$50,000) which would
amend the existing HCP.

**The Kern Lake CHU** is comprised of about 90 acres of privately owned
land, and located approximately 16 miles south of Bakersfield, between
California State Highway 99 and Interstate 5. It was leased to and
managed for the owner, J.G. Boswell Corporation, by The Nature
Conservancy (TNC) from 1986‑1995.[^50] During the lease period, water
was supplied to the Kern Preserve by the owner only during years of high
runoff, when excess water was available at the end of the growing
season, and after commercial crop irrigation needs were met. The Service
reported in 2002 that absent a dependable water supply to maintain
wetlands in the Kern Preserve, the continued existence of the BVLS was
unlikely. Moreover, the lack of a guaranteed water supply was reported
to be a key reason for the refusal of TNC to renew the lease with the
landowner.[^51] The potential cost of a water supply to maintain
adequate moisture in the Kern Lake CHU is discussed in a later section
of this report.

### Land Included and Excluded in the Proposed Units

The Service notes that in determining boundaries for the proposed CHUs,
efforts were made to exclude all developed areas, such as towns, housing
developments, roads, and other lands not likely to contain PCEs for the
conservation of the BVLS. The Service has selected areas which have the
physical and biological features vital to species conservation and which
may require special management considerations or protection. In doing
so, the Service used identified PCEs or principal biological elements
essential to the conservation of the species, together with data on
occurrence, geographic distribution, GIS data layers, vegetation,
topography, watersheds, current land uses, conservation principles, and
scientific information on the biology and ecology of the species.

The Service also notes that the proposed CHUs may not include all of the
area occupied by the BVLS which may eventually be determined to be vital
for the conservation of the species. It notes that CHDs do not imply
that areas outside the designated areas are unimportant to the BVLS.
Thus, areas outside the CHUs are subject to conservation actions which
may be implemented under Section 7(a)(1) of the Act, as well as to the
regulatory protections under the Section 7(a)(2) jeopardy standard and
the Section 9 take prohibition.

## Organization of the Report

The remainder of this report is divided into six sections. Section 2.0
describes the framework for the economic analysis, considering
efficiency and distributional as well as retrospective and prospective
effects among Federal and non-Federal entities. Section 3.0 presents a
socioeconomic profile of the area, including a geographic description,
demographics, and economic activity. Section 4.0 contains a discussion
of the regulatory environment which applies in the area, considering
other Federal and State listed species, HCPs, and the recovery plan for
the BVLS. A detailed review of the economic effects on agriculture of
conservation activities for the BVLS is presented in Section 5.0. This
is followed by Section 6.0, which presents a similar analysis of
economic effects on non-agricultural sectors or activities, including
road maintenance and transportation, groundwater recharge projects,
mosquito abatement, and Federal agencies. A summary and analysis of the
economic effects in Section 7.0 completes the report.

Two appendices are included with this report. Appendix A addresses the
economic effects of BVLS conservation activities on small entities and
the nation's energy supply. Appendix B includes a list of the acronyms
used in the report. A Map Attachment is also provided and contains the
two maps referenced in the text of the report.

### Categories of Costs Delineated 

Subsections that address specific categories of economic efficiency
effects are organized in this report by the types of costs that are
incurred. These types include:

-   Section 7 Consultation Costs: These are costs incurred by Federal
    agencies and the Service in consultation, and preparation of
    biological assessments and biological opinions. Consultation costs
    for agencies include both retrospective and prospective costs.

-   Non-Section 7 Project Modification Costs: These are costs incurred
    by private entities associated with project modifications that are
    necessary to avoid incidental take of listed species. Both
    retrospective and prospective costs are addressed.

-   Retrospective Costs: These are costs incurred by private entities
    (in addition to project modification costs) between the time of the
    BVLS listing and the CHD, and include the economic effects on
    private entities caused by restrictions to behavior or actions.

-   Prospective or Forecasted Costs: These costs include future or
    anticipated economic effects on private entities (in addition to
    project modification costs) that would result from the listing or
    conservation activities associated with BVLS.

These types of economic effects are discussed in detail in Section 2.2.
In addition to these efficiency effects, some distributional and
secondary effects may also be associated with the costs identified
above, particularly where there are costs borne by private sector. These
are also discussed in Section 2.2.

#  Framework for Economic Analysis

This section describes the framework for analyzing the economic impact
of conservation actions taken to protect BVLS and its habitat.[^52] This
section first describes the general analytic approach to estimating
economic costs of a CHD, as well as protective measures taken as a
result of the species' listing or Federal, State, and local laws that
aid habitat conservation in the areas designated, including a discussion
of efficiency and distributional effects, as well as retrospective and
prospective effects. Methods used to evaluate each of the different
general categories of economic effects, such as Federal and private
efficiency effects, as well as distributional effects, are also
described. The time frame and discount rate used in the analysis are
described, as well as general caveats and assumptions that apply to all
categories examined.

Several conceptual issues were important for the design and
implementation of this study. The first issue relates to the relevance
of the collection of different types of information for the economic
analysis. The proposed CHUs for BVLS in Kern County of the San Joaquin
Valley encompass a variety of land use, ownership, and economic
activities. As a result, the degree of available information, specific
recovery actions, and associated economic impacts vary substantially
across the units. While all known or potential impacts are explored and
discussed, the analysis of some impacts is necessarily more qualitative
than quantitative.

A second issue is the relatively scant knowledge about the optimum
habitat for the BVLS. It is believed that the species was found
previously in wetlands around Buena Vista Lake and throughout the Tulare
Basin, including the margins of Kern, Buena Vista, Goose, and Tulare
lakes.[^53] It is believed that because of the widespread cultivation of
Tulare Basin land, the frequency of BVLS appearances has been reduced to
five locations along a 70-mile stretch of the west Tulare Basin.
Overall, the BVLS appears to prefer moist habitat with many types of
insect prey. However, because few BVLS have been found, little is known
about their population density, home range size, and breeding territory
size.

A third conceptual issue important for this analysis is uncertainty
about the volume, source(s), and cost(s) of water which may be required
to provide adequate moisture for the CHUs. Adequate moisture is
essential for ample food supplies and for breeding. A 1990 publication
by the U.S. Bureau of Reclamation stated that wetlands in the San
Joaquin Valley area require 10 AF per acre per year.[^54] It has been
estimated that 25,000 acre-feet (AF) of water would be needed annually
for optimal coverage of 7,100 acres of wetlands in the KNWR, equivalent
to about 3.5 AF per acre per year.[^55] The Service has stated that
habitat for the BVLS generally requires a reliable water source to
maintain a moist environment for between eight and ten months per year,
but that the volume of water required to support the BVLS is
unknown.[^56] The economic analysis includes a discussion of impacts
potentially related to maintenance of moist habitat for the BVLS, and
quantifies these impacts where water supplementation is reasonably
foreseeable.

## Retrospective and Prospective Effects

The economic analysis includes both retrospective and prospective
effects. Retrospective effects include those that have occurred since
the time that the BVLS was listed as endangered but prior to designation
of critical habitat. This retrospective analysis begins with the April
2002 rule listing the BVLS as endangered.[^57] Prospective impacts
include likely future costs associated with BVLS conservation activities
through 2024. This prospective analysis attempts to forecast the costs
of conservation activities likely to be within the proposed designation.

For each of the proposed CHUs, it is assumed that, regardless of other
costs such as those for section 7 consultations, the Federal government
has used one person-week of time to review maps, visit sites, and
analyze other data to identify the location of essential habitat for the
BVLS. It is estimated that the cost for that person-week, including
benefits and incidental expenses, is \$3,540.[^58] These costs, assumed
invariant among the CHUs, are included in the summary tables in Section
7.0 and in the discussion of effects on Federal agencies in Section 6.5.

Prospectively, it is assumed that annual monitoring by the Service for
the BVLS will require an average of five person-days for each CHU other
than KNWR. It is assumed that the cost would be at the same daily rate
as that referenced above, \$708. Costs presented relate as closely as
possible to CHD for the BVLS. In some cases, other costs, those
associated more directly with the recovery plan for the BVLS, are
presented as well.

## General Categories of Economic Effects

### Federal

Federal agencies incur costs that are directly attributable to
compliance with the Act. As noted above, the Service is charged with
enforcement, administration, consultation, and monitoring; these costs
are predominantly programmatic, and some may be discernable to the BVLS
listing. However, action agencies--those responsible for authorizing or
carrying out projects or activities that could have an impact on an
endangered species or its habitat--also incur costs through
consultations, environmental studies, or necessary project modifications
that can be directly or indirectly attributable to conservation
activities associated with the BVLS.

#### Section 7 Consultations, Technical Assistance, and Project Modifications

All Federal agencies are required by the Act to ensure the activities
they authorize, fund, or carry out do not jeopardize a listed species or
adversely modify or destroy designated critical habitat. Consultations
may be formal or informal, but in either case the action agency incurs
costs to interact with the Service. Costs include preparing Biological
Assessments, meeting with Service staff to discuss project details, and
implementing project modifications to avoid, minimize, or offset impacts
to listed species. Federal agencies may also incur costs for monitoring
a species' population status and habitat conditions.

To date, no formal or informal section 7 consultations have been
completed for any of the proposed CHUs for the BVLS. A section 7
consultation for the BVLS has been underway since 2002 for the Goose
Lake CHU because surveys there revealed occurrences of the BVLS. A draft
of the resulting BO was prepared in June 2004, and a revised draft was
completed in September 2004.[^59] The retrospective and prospective
Federal government and private sector costs of the consultation are
discussed in Section 6.0 of this report.

### Private

The CHD for the BVLS or any other endangered species has the potential
to directly impose costs on private individuals or groups of individuals
if there is a connection or nexus between private activities and Federal
actions. For example, if a Federal permit is required before developers
can begin construction or if there is Federal funding for a private
activity, then it is possible that the provisions of the Act, including
CHD, may potentially restrict private actions if the action results in a
section 7 consultation.

This section identifies and briefly discusses some of the categories of
economic activity that may occur in or near the proposed CHUs. These
include, for example:[^60]

-   Flood channel maintenance on rivers, creeks, and streams;

-   Operation and maintenance of groundwater recharge projects;

-   Maintenance and operation of irrigation canals by water districts;

-   Crop and livestock production on cultivated lands adjacent or
    proximate to proposed CHUs;

-   Mosquito abatement; and

-   Oil and gas production and other energy-related activities.

In addition, some re-allocation of water from current uses may be
required to keep the CHUs moist for the BVLS. The Service has indicated
that habitat for the BVLS requires a reliable source of water to
maintain a moist environment for eight to ten months per year.[^61] The
Service also notes that the BVLS lives in some CHUs as they are
currently operated and that supplemental water is not required.[^62] The
Service also notes that the BVLS lives in some CHUs as they are
currently operated and that supplemental water is not required.[^63] The
final rule listing the BVLS as endangered stated that without a reliable
water supply of 15 to 20 AF per year, continued existence of the species
at the Kern Lake Preserve CHU would be unlikely.[^64] The optimal
management of habitat at KNWR requires 3.5 AF per acre of habitat
annually.[^65] For this analysis, therefore, it is assumed that
supplemental water is *required* for the KNWR and Kern Lake Preserve
CHUs, but that supplemental water is not necessary for the other three
CHUs.

Specific concerns have also been raised with respect to the effect of
designating the Kern Fan Water Recharge CHU. These include the effects
on:[^66]

-   City of Bakersfield recharge operations;

-   Management or reoperation, if required by the Service, of Lake
    Isabella, which is upstream of the Kern Fan Water Recharge CHU on
    the Kern River;

-   Changes in diversions upstream on the Kern River; and

-   Recharge operations of other entities.

Each category of effect is analyzed in Sections 5.0 and 6.0 of this
report. Effects are quantified as permitted by available data. Other
effects are discussed and analyzed qualitatively due to the lack of
available data.

### Secondary and Regional Effects

Regional economic impact analysis can provide an assessment of the
potential localized effects of conservation activities. Specifically,
regional economic impact analyses produce a quantitative estimate of the
potential magnitude of the initial change in the regional economy
resulting from a fundamental change in a particular economic sector's
output. Regional economic impacts are commonly measured using regional
input/output models, such as those created using IMPLAN modeling
software and databases. These models rely on multipliers that
mathematically represent the relationship between a change in one sector
of the economy (e.g., agricultural production) and the effect of that
change on economic output, income, or employment in other local
industries (e.g., suppliers of goods and services to agricultural
producers). These economic data provide a quantitative estimate of the
magnitude of shifts of jobs and revenues in the local economy. These
additional impacts are referred to as "secondary effects."

The use of regional input/output models in an analysis of the impacts of
species and habitat conservation efforts can overstate the long-term
impacts of a regulatory change. Most importantly, these models provide a
static view of the economy of a region. That is, they measure the
initial impact of a regulatory change on an economy but do not consider
long-term adjustments that the economy will make in response to this
change. For example, these models provide estimates of the number of
jobs lost as a result of a change, but do not consider re-employment of
these individuals over time or other adaptive responses by impacted
businesses. In addition, the flow of goods and services across the
regional boundaries defined in the model may change as a result of the
change, compensating for a potential decrease in economic activity
within the region.

Despite these and other limitations, in certain circumstances regional
economic impact analysis may provide useful information about the scale
and scope of localized impacts. It is important to remember that
measures of regional economic effects generally reflect shifts in
resource use rather than efficiency losses. Thus, these types of
distributional effects are reported separately from efficiency effects
(i.e., not summed). In addition, measures of regional economic impact
cannot be compared with estimates of efficiency effects, but should be
considered as distinct measures of impact.

### Effects on Small Entities 

This analysis considers how small entities, including small businesses,
organizations, and governments, might be affected by future BVLS
conservation activities. The analysis follows guidelines appropriate for
the Regulatory Flexibility Act (RFA).[^67] Those activities involving
small entities are identified, affected small entities described, and
potential effects estimated, depending on the availability of data. This
analysis is included in Appendix A of this report.

### Effects on Energy Supply 

In adherence with Executive Order 13211, "Actions Concerning Regulations
That Significantly Affect Energy Supply, Distribution, or Use," the
analysis considers the future impacts of conservation activities on the
energy industry and its customers.[^68] This involves analyzing impacts
associated with changes in existing or proposed energy generating
facilities as a result of the CHD. If the designation results in a
reduction of more than 500 megawatts of installed capacity, the
potential electricity price impacts are also considered. This analysis
is also included in Appendix A of this report.

## Project Life, Period of Analysis, and Discount Rate

The period of analysis and discounting is guided by the availability of
information concerning the start date and duration of the activity. Each
potential cost component has a time period that is appropriate for that
specific activity or investment. The time period used is therefore
discussed in each section describing the effects of individual types of
activities.

The time frame associated with each activity is important because as the
time horizon for an economic analysis is expanded, the forecast of
future projects becomes increasingly speculative. As a result, a
consistent time frame of 20 years is applied to all activities. This
provides a time frame within which economic assumptions and forecasts
are likely to remain viable. Also, from a practical standpoint, any
values beyond 20 years will be rendered insignificant by the process of
discounting, and thus would have little effect on the present value of
the activity or action in question.

Some costs are recurring while others are one time costs. These costs
are presented both as net present values and as annualized costs. The
total cost per unit of designated habitat represents the summation of
annualized costs obtained for each of the component economic impacts.
Prospective (future) costs are presented using both a seven percent and
three percent discount rate.

## Caveats and Assumptions

The assumptions presented here include only those which apply in general
to all areas included in the analysis. These general caveats describe
factors that introduce uncertainty into the results of this analysis.
The Service therefore solicits from the public further information on
any of the issues presented in the discussions and tables of caveats.
Additionally, information pertaining to the following questions is
requested:

-   Are data available to develop more accurate estimates of the number
    of future consultations, project modifications, and costs for the
    activities related to private lands?

-   Are data available on additional land use practices, or current or
    planned activities in proposed critical habitat areas, that are not
    specifically or adequately addressed in this analysis?

-   Are data available on additional co-extensive impacts (such as
    additional regulatory burdens from State or local laws triggered by
    the designation of critical habitat) that are not specifically or
    adequately addressed in this analysis?

-   Are there water district canals that would be affected by
    incremental costs incurred for vegetation control as a result of
    conservation activities for the BVLS, and if so, what is the length
    of the affected area and the nature of those costs?

#  Socioeconomic Profile of the Critical Habitat Area

Key economic and demographic information, including population
characteristics and general economic activity, for the county containing
proposed CHUs for the BVLS is presented in this section. The smallest
area for which socioeconomic data are available most reliably is at the
county level, so county data are presented in order to provide context
for the discussion of potential economic impacts later in this report.
The county data also might serve to illuminate trends within the CHD
area that could influence the potential economic impacts, and therefore
aid in the analysis of those impacts. Although county level data may not
precisely reflect the socioeconomic characteristics of the areas
immediately surrounding the proposed CHD for the BVLS, these data
provide the best context for the broader analysis.

## Geographic Description of the Region 

Kern County occupies 8,162 square miles, including 8,141 square miles of
land and 20.5 square miles of water.[^69] It is bordered by Tulare and
Kings counties on the north, San Bernardino County to the east, San Luis
Obispo County to the west, and Ventura and Los Angeles counties to the
south. Kern County is approximately 135 miles by 60 miles and is the
third largest county in California. There are 11 incorporated cities in
the county, of which Bakersfield is the largest and serves as the county
seat. The next three largest cities in population are Delano,
Ridgecrest, and Wasco.

A large portion of Kern County is devoted to production agriculture, and
nearly all commercially-farmed land is irrigated. Much of the valley
floor is primarily field crops, pasture, vineyards, and grain and hay
crops, while deciduous fruits, nuts, and grapes are grown in the north,
northwest, and west parts of the county. Irrigation is essential because
annual precipitation averages only 6.49 inches.[^70] Normal maximum
temperature during July is 98.5 degrees.

## Population Characteristics and Demographics

All of the proposed CHUs for the BVLS are within Kern County. Table 1
presents the population size, change in population from 1990 to 2000,
per capita income, and poverty rates for Kern County and the State of
California as a whole.

The estimated population of Kern County in 2003 was 713,087, or about
two percent of California's total population. Kern County is one of the
larger counties in the State, ranking 13^th^ in terms of population
among California's 58 counties. Kern County population grew by nearly 22
percent between 1990 and 2000, while the State population grew 14
percent over the same time period. The per capita income for Kern County
is \$21,021, while the State average is \$32,655. The poverty rate for a
region is the percentage of people who are estimated to live below the
poverty level, which is based on national levels set for minimum income
requirements for various sizes of households. The poverty rate for Kern
County is 18.6 percent, while that for the State is 12.7 percent.

Table 1\
Socioeconomic Profile of Kern County

  -------------------------------- ------------------- -------------------
                                   **Kern County**     **California
                                                       State**

  Population (2003)                713,087             35,484,453

  Percent of State Population      2.0%                100.0%
  (2003)                                               

  Change in Population (1990-2000) +21.7%              +13.8%

  Per Capita Income (2001)         \$21,021            \$32,655

  Poverty Rate (2000)              18.6%               12.7%
  -------------------------------- ------------------- -------------------

Sources:\
2003 population estimates: U.S. Census Bureau, "Annual Population
Estimates 2000-2003," downloaded from
http://eire.census.gov/popest/data/counties/CO-EST2003-01.php, June 3,
2004.\
2000 poverty estimates: U.S. Census Bureau, "Small Area Income and
Poverty Estimates," downloaded from
http://www.census.gov/hhes/www/saipe/estimatetoc.html, May 12, 2004.\
1990-2000 population change: U.S. Census Bureau, "Ranking Tables for
Counties," downloaded from
http://www.census.gov/population/www/cen2000/phc-t4.html, May 12, 2004.\
2001 per capita income: U.S. Department of Commerce, May 2003, Bureau of
Economic Analysis, *Regional Economic Information System 1969-2001,*
CD-ROM.

## Employment 

Employment is a key economic indicator, as patterns of growth and
decline in a region's employment are largely driven by economic cycles
and local economic activity. Current employment figures can be examined
to provide a "snapshot" of a region's economy, highlighting key
industries. Recent employment data for Kern County are presented in
Table 2. Employment is given for each industry group in terms of the
number of jobs, which includes both full-time and part-time jobs, and as
a percentage of the total jobs for each county.

Kern County's economy has traditionally been associated with oil
production and agricultural industries, but in recent years, the county
economy has become increasingly diversified.[^71] Approximately six
percent of the jobs in the county are in agricultural production, while
another eight percent of county employment is in forestry, hunting,
fishing, and related industries, which includes agricultural services.

Table 2\
2001 Employment in Kern County\
(Number of Jobs and Percentage of Total Jobs)

+----+---------------------------------------------+-------------------+
|    |                                             | **Kern**          |
+----+---------------------------------------------+-------------------+
|    | **Total Employment**                        | **316,778**       |
+----+---------------------------------------------+-------------------+
| >  | Agricultural Production (Farm)              | 19,676            |
|  * |                                             |                   |
| *G |                                             |                   |
| oo |                                             |                   |
| ds |                                             |                   |
| >  |                                             |                   |
| Pr |                                             |                   |
| od |                                             |                   |
| uc |                                             |                   |
| in |                                             |                   |
| g: |                                             |                   |
| ** |                                             |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(6.2%)*          |
+----+---------------------------------------------+-------------------+
|    | Forestry, Hunting, Fishing, and Related     | 26,712            |
|    | Activities^a/^                              |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(8.4%)*          |
+----+---------------------------------------------+-------------------+
|    | Mining                                      | 9,592             |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.0%)*          |
+----+---------------------------------------------+-------------------+
|    | Construction                                | 18,569            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(5.9%)*          |
+----+---------------------------------------------+-------------------+
|    | Manufacturing                               | 11,377            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.6%)*          |
+----+---------------------------------------------+-------------------+
| >  | Trade, Transport, and Utilities^b/^         | 51,310            |
|  * |                                             |                   |
| *S |                                             |                   |
| er |                                             |                   |
| vi |                                             |                   |
| ce |                                             |                   |
| >  |                                             |                   |
| Pr |                                             |                   |
| ov |                                             |                   |
| id |                                             |                   |
| in |                                             |                   |
| g: |                                             |                   |
| ** |                                             |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(16.2%)*         |
+----+---------------------------------------------+-------------------+
|    | Leisure and Hospitality^c/^                 | 21,634            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(6.8%)*          |
+----+---------------------------------------------+-------------------+
|    | Financial Activities^d/^                    | 17,869            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(5.6%)*          |
+----+---------------------------------------------+-------------------+
|    | Information                                 | 3,271             |
+----+---------------------------------------------+-------------------+
|    |                                             | *(1.0%)*          |
+----+---------------------------------------------+-------------------+
|    | Professional and Business Services^e/^      | 35,043            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(11.1%)*         |
+----+---------------------------------------------+-------------------+
|    | Educational and Health Services^f/^         | 26,274            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(8.3%)*          |
+----+---------------------------------------------+-------------------+
|    | Other Services                              | 16,494            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(5.2%)*          |
+----+---------------------------------------------+-------------------+
|    | Government                                  | 58,957            |
+----+---------------------------------------------+-------------------+
|    |                                             | *(18.6%)*         |
+----+---------------------------------------------+-------------------+

a/ Also includes Agricultural Services\
b/ Includes Utilities, Transportation and Warehousing, Retail Trade, and
Wholesale Trade\
c/ Includes Accommodation and Food Services, and Arts, Entertainment,
and Recreation\
d/ Includes Finance and Insurance, and Real Estate and Rental and
Leasing\
e/ Includes Professional, Scientific, and Technical Services,
Administrative Support, Waste Management, and Remediation Services, and
Management of Companies and Enterprises\
f/ Includes Education Services and Heath Care and Social Assistance\
Source: U.S. Department of Commerce, Bureau of Economic Analysis, May
2003, *Regional Economic Information System 1969-2001*, CD-ROM.

Mining employment, which includes jobs related to petroleum production,
represents three percent of total county employment. Significant
employers in the county include government, with nearly 19 percent of
county jobs, and trade, transportation, and utilities, with over 16
percent of total jobs.

Earnings represent the sum of three components of personal income: wage
and salary disbursements, other labor income (includes employer
contribution to pension and profit-sharing, health and life insurance,
and other non-cash compensation), and proprietors' income. Earnings
reflect the amount of income that is derived directly from work and
work-related factors. Earnings can be used as a proxy for the income
that is generated within a geographical area by industry sectors, and
can be used to identify the significant income-producing industries of a
region or to show trends in industry growth or decline. Earnings from
employment in Kern County are presented in Table 3, broken out by
industry group as employment was in the previous table.

## Economic Activity

While agriculture and energy remain important, new industries, such as
light manufacturing and food processing, have broadened the economic
base of the county. Kern County is an attractive area for company
re-locations due to its central location, easily accessible
transportation, low labor costs, and affordable housing costs. The
median selling price of a home in Bakersfield in January 2003 was
\$138,980, far less than the median for all of California,
\$336,740.[^72]

Table 3\
2001 Earnings from Employment in Kern County\
(Millions of Dollars and Percentage of Total Earnings)

+----+---------------------------------------------+-------------------+
|    |                                             | **Kern**          |
+----+---------------------------------------------+-------------------+
|    | **Total Employment**                        | **\$10,196.9**    |
+----+---------------------------------------------+-------------------+
| >  | Agricultural Production (Farm)              | \$347.2           |
|  * |                                             |                   |
| *G |                                             |                   |
| oo |                                             |                   |
| ds |                                             |                   |
| >  |                                             |                   |
| Pr |                                             |                   |
| od |                                             |                   |
| uc |                                             |                   |
| in |                                             |                   |
| g: |                                             |                   |
| ** |                                             |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.4%)*          |
+----+---------------------------------------------+-------------------+
|    | Forestry, Hunting, Fishing, and Related     | \$437.3           |
|    | Activities^a/^                              |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(4.3%)*          |
+----+---------------------------------------------+-------------------+
|    | Mining                                      | \$595.4           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(5.8%)*          |
+----+---------------------------------------------+-------------------+
|    | Construction                                | \$731.0           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(7.2%)*          |
+----+---------------------------------------------+-------------------+
|    | Manufacturing                               | \$464.6           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(4.6%)*          |
+----+---------------------------------------------+-------------------+
| >  | Trade, Transport, and Utilities^b/^         | \$1,619.6         |
|  * |                                             |                   |
| *S |                                             |                   |
| er |                                             |                   |
| vi |                                             |                   |
| ce |                                             |                   |
| >  |                                             |                   |
| Pr |                                             |                   |
| ov |                                             |                   |
| id |                                             |                   |
| in |                                             |                   |
| g: |                                             |                   |
| ** |                                             |                   |
+----+---------------------------------------------+-------------------+
|    |                                             | *(15.9%)*         |
+----+---------------------------------------------+-------------------+
|    | Leisure and Hospitality^c/^                 | \$336.6           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.3%)*          |
+----+---------------------------------------------+-------------------+
|    | Financial Activities^d/^                    | \$382.7           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.8%)*          |
+----+---------------------------------------------+-------------------+
|    | Information                                 | \$145.4           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(1.4%)*          |
+----+---------------------------------------------+-------------------+
|    | Professional and Business Services^e/^      | \$1,077.1         |
+----+---------------------------------------------+-------------------+
|    |                                             | *(10.6%)*         |
+----+---------------------------------------------+-------------------+
|    | Educational and Health Services^f/^         | \$823.1           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(8.1%)*          |
+----+---------------------------------------------+-------------------+
|    | Other Services                              | \$331.9           |
+----+---------------------------------------------+-------------------+
|    |                                             | *(3.3%)*          |
+----+---------------------------------------------+-------------------+
|    | Government                                  | \$2,905.0         |
+----+---------------------------------------------+-------------------+
|    |                                             | *(28.5%)*         |
+----+---------------------------------------------+-------------------+

a/ Also includes Agricultural Services\
b/ Includes Utilities, Transportation and Warehousing, Retail Trade, and
Wholesale Trade\
c/ Includes Accommodation and Food Services, and Arts, Entertainment,
and Recreation\
d/ Includes Finance and Insurance, and Real Estate and Rental and
Leasing\
e/ Includes Professional, Scientific, and Technical Services,
Administrative Support, Waste Management, and Remediation Services, and
Management of Companies and Enterprises\
f/ Includes Education Services and Heath Care and Social Assistance\
Source: U.S. Department of Commerce, Bureau of Economic Analysis, May
2003, *Regional Economic Information System 1969-2001*, CD-ROM.

#  Regulatory Environment

## Other ESA Listed Species

Within California, there are currently 83 Federally-listed endangered
and 40 Federally-listed threatened species, as well as one species
proposed for Federal endangered status, and one species proposed for
Federal delisting. The 1998 recovery plan for the upland species of the
San Joaquin Valley published by the Service covers 34 species of plants
and animals in the San Joaquin Valley, including 11 listed species and
23 candidates or species of concern.[^73] The 11 listed species cover
five endangered plants, one threatened plant, and five endangered
animals. Based upon maps in the 1998 recovery plan, several of the plant
and animal species both listed and of concern are distributed throughout
areas for which critical habitat has been proposed for the BVLS.
However, there are no other riparian dependent species found within the
range of the BVLS.[^74] Species included in the recovery plan and which,
from maps in the plan, appear to be located in similar areas as the BVLS
critical habitat, include:

1.  Hoover's woolly-star (*Eriastrum hooveri);*

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1.  San Joaquin woolly-threads (*Lembertia congdonii*);

2.  Bakersfield smallscale (*Atriplex tularensis);*

3.  Lost Hills saltbush (*Atriplex vallicola*);

4.  Munz's tidy-tips (*Layia munzii*);

5.  Oil neststraw (*Stylocline citroleum*);

6.  Giant kangaroo rat (*Dipodomys ingens);*

7.  Tipton kangaroo rat (*Dipodomys nitratoides nitratoides*);

8.  Blunt-nosed leopard lizard (*Gambelia sila*);

9.  San Joaquin kit fox (*Vulpes macrotis mutica*);

10. San Joaquin antelope squirrel (*Ammospermophilus nelsoni*); and

11. Short-nosed kangaroo rat (*Dipodomys nitratoides brevinasus*).

State-listed species in California are classified as endangered or
threatened, as are State candidate species. Currently there are 79
animals listed by the State of California as either endangered or
threatened, including 47 endangered and 32 threatened. There is some
overlap between State and Federal listings, as 54 species are currently
listed by both, while 31 are State listed only and 69 are Federal listed
only.[^75] The BVLS is Federally listed only.

## Federal and California State Statutes and Regulations

### Habitat Conservation Plans

There are currently nine HCPs approved or in development in various
parts of the eight-county San Joaquin Valley. Of these nine HCPs, only
one, the Kern Valley Floor HCP, includes the BVLS and proposed
CHUs.[^76] A second, the Kern Water Bank Authority HCP, covers areas
around the Kern Fan Water Recharge CHU, but does not include the BVLS.
It covers 19,900 acres in southwestern Kern County, and was completed in
1997, prior to the listing of the BVLS. Finally, the Coles Levee HCP,
which covers one CHU, has expired and was not renewed by the new owner
when the property was sold several years ago.

Specific conservation documents or measures have not been specified for
other proposed CHUs. The Comprehensive Conservation Plan (CCP) for the
entire KNWR has been completed, with an internal Service cost estimated
at slightly more than \$182,000.[^77] The KNWR CCP covers goals,
operating practices, and other activities related to the many unlisted
fish, amphibians, reptiles, birds, and mammals species in the Refuge as
well as the 11 Federally-listed species, including the San Joaquin kit
fox, Tipton kangaroo rate, blunt-nosed leopard lizard, and BVLS. For
purposes of this study, it is assumed that the cost of the Plan is
distributed equally among the 11 Federally-listed species, and thus that
\$16,545 of costs are attributable to the BVLS.

The most extensive HCP in Kern County to date is the Kern Valley Floor
HCP, which has been in development for more than ten years and is
believed to be within a year of completion.[^78] It encompasses about
3,100 square miles (nearly two million acres) in Kern County. The HCP
will cover 28 State and Federal listed species, including the BVLS.[^79]

Estimated non-Federal costs to date for the Kern Valley Floor HCP are
\$450,000 and estimated non-Federal costs to complete the HCP are
\$70,000.[^80] Although the HCP was begun well before the listing, for
the purposes of this analysis the HCP costs will be attributed in part
to the BVLS.

### California Endangered Species Act

The California Endangered Species Act (CESA)[^81] is generally
comparable to the Act and is directed by DFG. CESA prohibits the
"taking" of listed species except as otherwise provided in State law.
CESA applies take provisions both to species that are listed and that
are candidates for listing by the State of California, whereas the Act
applies take provisions only to species listed by the Federal
government. The BVLS is not listed as threatened or endangered by the
State of California.[^82] It is, however, a mammalian species of special
concern in California.[^83] Analogous to the Act, a State lead agency
for a project or activity is required to consult with DFG to assure that
any such project or action it undertakes will not jeopardize the
continued existence of any endangered or threatened species or result in
destruction or adverse modification of essential habitat.

CESA was amended in 1991 to include the Natural Community Conservation
Planning Act (NCCPA).[^84] Provisions in the NCCPA establish a framework
for voluntary cooperation among DFG, landowners, and others in
establishing plans which provide for coordinated activities to protect
species both listed and candidates for listing. The objective of the
NCCPA is to concurrently allow reasonable development on affected land
while preserving species and their habitats.

### California Environmental Quality Act (CEQA)

CEQA is a California State statute requiring State and local agencies to
identify the significant environmental impacts of their actions and to
avoid or mitigate those impacts, if feasible. CEQA regulations require a
lead agency to prepare an Environmental Impact Report (EIR) if the
proposed project may produce certain types of impacts, including when:

"\[t\]he project has the potential to substantially degrade the quality
of the environment, substantially reduce the habitat of a fish or
wildlife species, cause a fish or wildlife population to drop below
self-sustaining levels, threaten to eliminate a plant or animal
community, reduce the number or restrict the range of an endangered,
rare, or threatened species, or eliminate important examples of the
major periods of California history or prehistory."[^85]

State law instructs the lead agency (typically a county or city
community development or planning department) to examine impacts from a
very broad perspective, taking into account the value of animal and
plant habitats to be modified by the project. The lead agency must
determine which, if any, project impacts are potentially significant
and, for any such impacts identified, whether feasible mitigation
measures or feasible alternatives will reduce the impacts to a level
less than significant. It is within the power of a lead agency to decide
that negative impacts are acceptable in light of economic, social, or
other benefits generated by the project.

Projects without a mandatory finding of significance and in which the
applicant finds no significant impact according to CEQA regulations may
be approved by a lead agency in what is known as a "negative
declaration." Alternative project scenarios are not examined in a
negative declaration, and the expenditures are typically much lower than
what would be required to complete an EIR.

Alternatively, an applicant may request that a lead agency issue a
permit or some other discretionary approval for a project that is
redesigned to either avoid or mitigate all impacts to the environment.
Typically, the project is accompanied by mitigation measures in the form
of a "mitigated negative declaration." Similar to a negative
declaration, the expenditures required for the approval of a project
with a mitigated negative declaration are on average much lower than
costs associated with an EIR.

Finally, minor projects that fit one of eleven classifications as
defined by the CEQA statutes may be found to have no significant effect
on the environment. Some of these classifications are listed here:

-   Certain alterations of existing facilities;

-   Replacement or reconstruction of existing structures;

-   Smaller development projects such as restaurants smaller than 2,500
    square feet;

-   Certain projects involving landscaping or temporary trenching;

-   Lot line adjustments;

-   Experimental management or research;

-   Habitat restoration;

-   Certain safety inspections and mortgage lending; and

-   Signs and small parking lots.

Many of these types of minor projects are eligible for a categorical
exemption from the provisions of CEQA altogether, and compliance costs
are usually limited to completion of the paperwork required by the lead
agency.

### Elements of the Recovery Plan

The recovery plan for the BVLS was included in a multi-species plan for
upland species in the San Joaquin Valley of California.[^86] The plan
included three general criteria for the long-term conservation of the
BVLS:

1.  Secure and protect at least three disjoint occupied sites with,
    collectively, at least 4,940 acres of occupied habitat;

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12. Approve and implement a management plan for recovery areas that
    includes survival of the BVLS as an objective; and

13. Monitor the recovery areas to demonstrate the continued presence of
    the BVLS at known occupied sites.

The total area of the five proposed CHUs is 4,649 acres, quite close to
the minimum acreage stipulated in the first point above.

The recovery plan pointed out that the systematic status of the species
was uncertain because few specimens had been available, to that date,
for comparison. It also indicated that a DNA analysis of the species was
underway and that the BVLS is a distinct evolutionary unit of ornate
shrew. It also noted that the BVLS was formerly found in wetlands around
Buena Vista Lake and presumably throughout the Tulare Basin. At the time
of the recovery plan, nothing specifically was known about the
reproduction and mating characteristics, population numbers, home range,
or territoriality of the species. However, the recovery plan noted that
the establishment of habitat which can support expansion and
introduction efforts is critical to conservation of the BVLS.

The conservation strategy discussed in the recovery plan includes
several specific recommendations for the preservation of the BVLS. Among
others, it recommends that the Kern Lake location should be preserved in
perpetuity and that greater efforts should be made to locate the species
in other locations within the Tulare Basin. It recommends several areas
which are included among the proposed CHUs, including Goose Lake Slough,
Kern River west of Bakersfield, and the Goose Lake bed. The plan
emphasizes that the establishment of habitat which can support expansion
and introduction efforts is critical to the conservation of the BVLS.

#  Economic Effects on Agriculture

## Description of Agriculture in the Region 

Kern County is home to one of the most productive, diversified
agricultural sectors in the world and is regularly among the top three
to five agricultural counties in the United States in terms of value of
output. In 2003, Kern County farmers produced crops and livestock
products worth nearly \$2.5 billion at the farm gate (see Table 4).
Fruit and nut crops accounted for nearly a third of the harvested
acreage and 45 percent of the value. Vegetables were 11 percent of
acreage and 20 percent of value. Field crops were 56 percent of acreage
and 16 percent of value. Livestock and poultry and their products
contributed 14 percent of value. Agriculture also directly supported
30,900 jobs (see Table 5).

Table 4\
Kern County Value of Agricultural Production, 2003

  ----------------------------- -------------------- -----------------------
  **Commodity Group**           **Harvested Acres**  **Total Value**

  Fruit and Nut Crops           275,808              \$1,115,963,000

  Field Crops and Rangeland     487,455\*            \$386,928,000

  Vegetable Crops               96,976               \$502,360,000

  Nursery Crops                 3,959                \$100,702,000

  Industrial and Wood Crops     n/a                  \$7,717,000

  Seed Crops                    2,028                \$9,024,000

  ***Subtotal (Crops)***        ***866,226***        ***\$2,122,694,000***

  Livestock and Poultry         n/a                  \$81,240,000

  Livestock and Poultry         n/a                  \$256,764,000
  Products                                           

  Apiary Products               n/a                  \$17,018,000

  ***Subtotal (Livestock)***    ***n/a***            ***\$355,022,000***

  **Total (Crop and             **866,226**          **\$2,477,716,000**
  Livestock)**                                       
  ----------------------------- -------------------- -----------------------

\* Acreage figure does not include rangeland (1,974,000 acres).

Source: Kern County Agricultural Commissioner, *Kern County Crop Report
-- 2003,* available from website: http://www.co.
kern.ca.us/kernag/crop00_09/crop03/contnts.htm.

Agriculture contributed a further \$1.8 billion in output and 27,600
jobs to the Kern County economy in 2003 through indirect and induced
impacts.[^87] Thus, the total economic impacts on Kern County of the
agricultural and related sectors in 2003 were over \$4.2 billion of
output and 58,500 jobs (see Table 5). This represents about 15 percent
of total output for all industries in Kern County, and nearly one-fifth
of the county's total employment.[^88]

Table 5\
Regional Economic Benefits of Agricultural Production in Kern County

  ------------------------ ---------------- ------------- ---------------- ------------- -------------- ------------
  **Industry**             **Output                       **Income                       **Employment   
                           (\$millions)**                 (\$millions)**                 (jobs)**       

                           **Direct**       **Total**     **Direct**       **Total**     **Direct**     **Total**

  Agriculture              \$2,478          \$2,869       \$736            \$904         30,900         45,150

  Mining                   \$0              \$87          \$0              \$15          0              350

  Construction             \$0              \$49          \$0              \$29          0              500

  Manufacturing            \$0              \$166         \$0              \$13          0              300

  Transportation and       \$0              \$161         \$0              \$41          0              1,000
  Public Utilities                                                                                      

  Trade                    \$0              \$315         \$0              \$137         0              4,700

  Finance, Insurance, and  \$0              \$275         \$0              \$45          0              1,400
  Real Estate                                                                                           

  Services                 \$0              \$280         \$0              \$146         0              4,900

  Government               \$0              \$24          \$0              \$9           0              150

  Other\*                  \$0              \$2           \$0              \$1           0              50

  **Total**                **\$2,478**      **\$4,227**   **\$736**        **\$1,341**   **30,900**     **58,500**
  ------------------------ ---------------- ------------- ---------------- ------------- -------------- ------------

\* "Other" consists primarily of domestic services (such as cleaning and
maid services).

Note: Numbers may not sum due to rounding.

Source: Input-Output model for the Kern County economy developed using
IMPLAN software and databases from MIG, Inc., with modifications and
interpretation by NEA.

In 2002, nearly 812,000 acres of Kern County farmland were
irrigated.[^89] The average size of the 2,147 farms in the county that
year was 1,272 acres, but the median size was 167 acres, with the
majority of farms (57 percent) smaller than 180 acres. Virtually all
cropland harvested in Kern County is irrigated because of limited
precipitation and high temperatures during the growing seasons for most
crops. In 2002, over 789,000 acres of harvested cropland and 22,000
acres of pasture were irrigated. Sources of water in the county include
SWP, Central Valley Project (CVP), Kern River, other local streams, and
groundwater. Several water agencies serve the area, shown in Map 2 (see
Map Attachment). Generally, farms in the eastern areas of the county
have access to groundwater as well as surface water. Those on the west
side usually have access to surface water only, other than their access
to groundwater through the Kern Water Bank.

As shown in Table 4, the acreage and value of crops vary considerably by
type. For example, fruit and nut crops accounted in that year for 32
percent of total crop acreage, but 45 percent of total agricultural
(both crop and livestock) value. Field crops accounted for 56 percent of
total crop acreage, but 16 percent of total agricultural value. The
production of each crop requires multiple inputs, including seed,
fertilizers and chemicals, labor, machinery, water, and finance. Annual
water use depends on the type of crop, with wheat and other grains
requiring about 1.5 AF per acre, cotton about 2.5 AF per acre, fruits
and nuts from 3.0 to 4.5 AF per acre, and alfalfa about 4.5 AF per
acre.[^90] If an average of 3.0 AF per acre is assumed as a
representative irrigation rate for all irrigated harvested cropland of
789,000 acres, then it can be reasonably estimated that irrigation water
use in Kern County exceeds 2.3 million AF per year.

Each proposed CHU location was visited in June 2004 to identify current
land uses in the area. It was found that a variety of crops is grown on
land adjacent or proximate to some of the proposed CHUs. Field, hay, and
grain crops were found to the north, east, and west of the Kern Lake
Preserve CHU. Nursery and berry crops were found to the north and south,
and field crops to the south of the Kern Fan Water Recharge CHU.
Deciduous fruits and nuts were found to the northwest, north, and
southeast of the Goose Lake CHU. Field crops and grain and hay crops
were found to the north and east of the Goose Lake CHU.

## Retrospective Costs

To date, the impacts on Kern County agriculture of the listing of the
BVLS have been minimal. Federal or State permits are not required for
most farm operation activities undertaken in Kern County, as elsewhere,
such as disking, preparation, pruning and thinning, and harvesting. The
use of pesticides, however, does require a permit from the County
Agricultural Commissioner, which implements regulations of the U.S. EPA
and California DPR. Users who comply with restrictions on pesticide
labels or from the Agricultural Commissioner would not be in danger of
violating ESA regulations relative to incidental take due to pesticides;
these procedures have not varied with announced changes in the
regulations, implementing the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA), published August 5, 2004.[^91] In addition,
discussions with staff at Wheeler Ridge-Maricopa Water Storage District
and University of California Cooperative Extension Service indicate that
few, if any, farmers have made adjustments to their operations as a
result of the listing of the BVLS.[^92]

## Prospective or Future Costs

Three of the proposed CHUs, Goose Lake, Kern Fan Water Recharge, and
Kern Lake, are adjacent to cropland. The map of the KNWR CHU provided by
the Service shows that parts of that CHU are within a mile of
cropland.[^93] Another map provided by the Service showed that parts of
the Coles Levee CHU are within three miles of cropland. Crops most
commonly grown on areas adjacent or proximate to the CHUs are field,
grain and hay, nursery crops, and fruit and nut orchards. Field and
grain and hay crops make up most of the acreage.[^94]

The primary agricultural issues related to the BVLS are the
possibilities of incidental take by pesticide application or drift, and
runoff of contaminated surface water from cropland or dairies. In its
final rule listing the BVLS, the Service stated that the species is
exposed to wide-scale use of pesticides throughout its range.[^95] It
noted that the BVLS could be exposed to lethal and sublethal doses of
pesticides from both drift and direct spraying of crops, canals, ditch
banks, wetland or riparian edges, and roadsides where the species
exists. However, farmers who control field run-off and use best
management practices (BMPs) with pesticides, including following label
directions, are not likely to face further restrictions on those
products because the BVLS exist on the CHUs under current practices.

The U.S. EPA, through the California DPR, has issued interim guidelines
on pesticide use for all counties in California.[^96] Information in the
guidelines is noted as being similar to what the U.S. EPA expects to
distribute when the Endangered Species Protection Program is in effect.
The guidelines note that until that time, compliance with pesticide
label requirements would satisfy all legal requirements relative to
pesticides and endangered species protection. The guidelines were issued
to ensure that the use of pesticides registered by U.S. EPA will not
harm threatened or endangered species or their critical habitat. At the
time they were issued, the final listing for the BVLS had not been
completed, and the species was not included in the guidelines. The
guidelines, when finalized, will include any pesticide restrictions
specific to the BVLS.[^97]

The interim guidelines include tables of pesticide active ingredients
and maps that show the areas of the subject county for which
restrictions apply. The restrictions are grouped according to such
criteria as type of pesticide (herbicide, insecticide, fungicide, or
rodenticide); type of species (aquatic animal, dicotyledonous plant,
monocotyledonous plant, insect, carnivorous or granivorous birds, and
specific terrestrial species such as the kit fox and kangaroo rats), and
active ingredients in the products. Maps in the publication for Kern
County indicate that all of the BVLS CHUs are within the areas for which
the guidelines apply.[^98] The Kern County guidelines do not include the
BVLS, but do include the Valley Elderberry Longhorn Beetle, Blunt-nosed
Leopard Lizard, San Joaquin Kit Fox, Tipton Kangaroo Rat, Vernal Pool
Fairy Shrimp, San Joaquin Adobe Sunburst, Giant Kangaroo Rat, Western
Snowy Plover, and Desert Tortoise. It is unclear whether the BVLS will
be subject to similar restrictions as other species included when
revised guidelines are issued.

The interim guidelines list restrictions on terrestrial species only for
rodenticides. Insecticide, herbicide, and fungicide restrictions
relative to terrestrial species are not included. The Service has given
its approval only for the rodenticide restrictions.[^99] Until a section
7 consultation is completed, the final form of the restrictions,
including the approval of the Service, is unknown. However, assuming the
restrictions for insecticides applied to the BVLS, the impacts on
farming for some types of products could increase because the BVLS feeds
on insects. For example, applications of some sprayable or dust
formulations, when air currents are moving toward habitat, are not to be
made within 40 yards of habitat with ground application or 200 yards
with aerial application. The Guidelines point out that the County
Agricultural Commissioner may reduce or waive such buffer zones if there
is an adequate hedgerow, windbreak, riparian corridor, or other physical
barrier which substantially reduces the likelihood of drift.

For this analysis, it is assumed that a 15-yard buffer would provide
ample area for placing a hedgerow or some other physical barrier to
reduce or eliminate drift. If a turning area of 20 feet is assumed for
farm equipment,[^100] an additional 25 feet would be adequate for the
development of a buffer strip.

BVLS may migrate from critical habitat onto farmland. If that occurred
and a farmer "takes" a BVLS incidental to his or her farming operations,
assuming no HCP or other agreement is in place for the farmland, the
farmer would be in violation of section 9 of the Act. Given the
implications of such a violation, it is assumed for this analysis that
farmers with land adjacent to the proposed CHUs (i.e., Goose Lake, Kern
Fan Water Recharge, and Kern Lake) would need to implement measures to
minimize the probability of incidental take. Conversations with local
farm advisors and staff in irrigation districts suggest that farmers
have not changed their operations because of the listing of the BVLS.
However, it may be the case that the proximity of designated critical
habitat to farmers' cultivated fields would result in additional
prudence to reduce the possibility of incidental take. It is assumed
that they do so by idling part of their land adjacent to the critical
habitat to serve as a buffer zone.

The final rule listing the BVLS reported that selenium toxicity is a
serious threat to the continued existence and recovery of the
species.[^101] Selenium is present at elevated concentrations in western
San Joaquin Valley soils and has been concentrated in shallow
groundwater as a result of leaching due to irrigation. The Service
reports that the element may enter the BVLS food chain by becoming
concentrated in insects that forage on vegetation or reside in soils
which concentrate the salts. The buffer zones discussed above are not in
response to the potential hazard to the BVLS from selenium, however.

The Service also reported in the final rule listing the BVLS that liquid
and solid manure from dairies, beef cattle, swine, and poultry
operations in the Tulare Basin are an additional potential source of
selenium exposure, and that the potential of additional exposure to
toxic levels of the element appears to be increasing.[^102] It reports
that selenium, which may be used as a supplement in livestock feed, can
accumulate by land applications of manure and that a form of the element
is easily transported to aquatic ecosystems where it can bioaccumulate
to toxic levels. The Service states that the BVLS and its prey could be
exposed to potentially toxic levels of the element from the application
of manure around the aquatic and moist habitats that support them.[^103]

In subsequent discussions, the Service has indicated that, regarding
dairies and BVLS, the focus of conservation activities is on reducing
surface runoff, reducing selenium concentration, and implementing
BMPs.[^104] The implications for individual dairy operations are likely
to be minor. Dairy wastewater and manure handling are under regulations
of the U.S. EPA and the State and Regional Water Quality Control Boards.
One of the requirements of these regulations is that discharges of
wastewater to disposal fields are not to result in surface runoff from
those fields and are to be managed to minimize percolation to
groundwater.[^105] Application of wastewater to cropland is to be "at a
reasonable rate," meaning that the quantities of nutrients in the animal
wastes are not to exceed the nutrient requirements of the crops on which
the wastes are applied. The Service has indicated that dairies operated
according to BMPs have allowed the BVLS to exist in the locations where
they have been found. Consequently, for this analysis, it is assumed
that dairy operations are not affected by conservation activities for
the BVLS. None of the proposed CHUs are adjacent to dairies. In
addition, assuming dairies are currently in compliance with regulations
on runoff containment and manure spreading, no additional restrictions
should be required because of the BVLS.

### Development and Cost of Buffer Zones

#### Foregone Crop Production

For this analysis, it is assumed that a buffer zone of 45 feet is
established between cultivated cropland and designated critical habitat.
Assuming machinery turnaround area of 20 feet,[^106] an additional 25
feet is assumed to be included in the buffer to allow for the
establishment and maintenance of suitable vegetation and for any
maintenance activities required on the ground.

An estimate of the linear feet of cropland adjacent to proposed CHUs was
developed using GIS analysis on preliminary maps of the proposed CHUs
provided by the Service and land use maps from the U.S. Department of
Agriculture, Natural Resources Conservation Service. The number of feet
of cropland adjacent to proposed CHUS was multiplied by 45 feet, the
assumed buffer, to develop estimates of the number of square feet of
each affected crop type. The number of square feet for each crop was
then divided by 43,560 to calculate the number of affected acres. The
results are shown in Table 6. For example, there are estimated to be
7,097 linear feet of field crops adjacent to the Kern Lake CHU.
Multiplying this figure by 45 feet, the assumed crop buffer size, yields
319,365 square feet, or 7.3 acres, of affected crop land that could
otherwise be used to grow field crops.

As cropland is set aside for the establishment of buffer zones, the
stream of income that would have been produced by that land will be
lost. The farm-level impact of this loss is expressed as gross margin
(i.e., gross revenue less variable costs of production) less rent.[^107]

Table 6\
Estimation of Idled Acreage for Buffer Adjacent to Critical Habitat, by
Crop and CHU

  -------------------- ------------- ---------------- ----------------- --------------- ---------------
  **Measure and CHU**  **Field       **Vegetables**   **Fruits/Nuts**   **Hay/Grain**   **Total**
                       Crops**                                                          

  **Linear Feet**                                                                       

  Kern Lake            7,097                                                            7,097

  Kern Fan             1,812         6,079                                              7,891

  Goose Lake           6,480                          2,638             6,200           15,318

  **Total**            **15,389**    **6,079**        **2,638**         **6,200**       **30,306**

  **Square Feet**                                                                       

  Kern Lake            319,365                                                          319,365

  Kern Fan             81,540        273,555                                            355,095

  Goose Lake           291,600                        118,710           279,000         689,310

  **Total**            **692,505**   **273,555**      **118,710**       **279,000**     **1,363,770**

  **Acres**                                                                             

  Kern Lake            7.3                                                              7.3

  Kern Fan             1.9           6.3                                                8.2

  Goose Lake           6.7                            2.7               6.4             15.8

  **Total**            **15.9**      **6.3**          **2.7**           **6.4**         **31.3**
  -------------------- ------------- ---------------- ----------------- --------------- ---------------

Note: Totals shown may differ from sums because of rounding.

Table 7 shows, by type of crop, the number of acres of buffer zone
likely to be required; per acre gross production value, variable costs,
rent, and gross margin less rent, and total foregone gross margin less
rent. Representative crops include cotton, processing tomatoes, almonds,
and alfalfa for field, vegetable, permanent, and hay crops,
respectively. For example, 15.9 acres of field crops would be idled (as
shown above), each at a gross margin less rent of \$247. Total foregone
margin less rent of the idled field crops would therefore be \$3,927 per
year. Values for all crops, calculated similarly are estimated at
\$1,803 for the Kern Lake CHU, \$9,314 for the Kern Fan Water Recharge
CHU, and \$3,707 for the Goose Lake CHU. Total annual foregone gross
margin less rent for all CHUs is estimated to be \$14,824.

Table 7\
Acres and Annual Gross Value, Variable Costs, Rent, and Foregone Gross
Margin Less Rent of Crop Production Foregone, by Crop Type and CHU

  -------------- ----------- ------------- ------------ ----------- ----------- --------------
  **CHU/Crop     **Acres**   **Per Acre**                                       **Total Gross
  Type**                                                                        Margin Less
                                                                                Rent**

                             **Gross       **Variable   **Rent**    **Gross     
                             Value**       Costs**                  Margin Less 
                                                                    Rent**      

  **Kern Lake**                                                                 

  Field Crops    7.3         \$1,102       \$730        \$125       \$247       \$1,803

  **Subtotal**   **7.3**     **\$1,102**   **\$730**    **\$125**   **\$247**   **\$1,803**

  **Kern Fan**                                                                  

  Field Crops    1.9         \$1,102       \$730        \$125       \$247       \$469

  Vegetables     6.3         \$3,146       \$1,617      \$125       \$1,404     \$8,845

  **Subtotal**   **8.2**                                                        **\$9,314**

  **Goose Lake**                                                                

  Field Crops    6.7         \$1,102       \$730        \$125       \$247       \$1,655

  Permanent      2.7         \$2,969       \$2,168      \$342       \$459       \$1,239

  Hay/Grain      6.4         \$771         \$519        \$125       \$127       \$813

  **Subtotal**   **15.8**                                                       **\$3,707**

  **Total (All   **31.3**                                                       **\$14,824**
  Units)**                                                                      
  -------------- ----------- ------------- ------------ ----------- ----------- --------------

Note: Totals shown may differ from sums because of rounding.

Sources for gross values, variable costs, and rent:

Field crops: Gross value from Kern County Agricultural Commissioner,
2004, "Annual Crop Report," average of upland/acala and pima cotton.
Variable costs and rent from University of California Cooperative
Extension, 2003, "Sample Costs to Produce Cotton, Acala Variety, 40-Inch
Row, San Joaquin Valley," Davis.

Vegetables: Gross value from Kern County Agricultural Commissioner,
2004, "Annual Crop Report," figures for potatoes. Variable costs from
University of California Cooperative Extension, 2002, "Sample Costs to
Produce Processing Tomatoes," Davis. Rent assumed equal to that for
cotton, since vegetables and cotton are often grown in rotation.

Permanent crops: Gross value from Kern County Agricultural Commissioner,
2004, "Annual Crop Report," figures for almonds. Variable costs from
University of California Cooperative Extension Service, 2003, "Sample
Costs to Establish an Almond Orchard and Produce Almonds, San Joaquin
Valley South, Micro-Sprinkler Irrigation," Davis. Rent based on land
value and interest rate from University of California, Ibid., annualized
for 30-years assumed orchard life.

Hay: Gross value from Kern County Agricultural Commissioner, 2004,
"Annual Crop Report," figures for alfalfa. Variable costs from
University of California Cooperative Extension Service, 2003, "Sample
Costs to Establish and Produce Alfalfa," Davis. Rent assumed equal to
that for cotton, since alfalfa and cotton are often grown in rotation.

#### Establishment and Ongoing Costs

In addition to foregone crop production, there are costs associated with
the development of the buffer zones. The farm advisor for Kern County
noted that many permanent crop and vegetable crop growers use
pomegranate trees to keep people out of their fields.[^108] The trees
have very thick, thorny foliage and are very effective for that purpose.
The trees would also likely serve as effective buffers to contain
pesticides because they have a large amount of leaf surface. Trees with
an average height of five to seven feet sell for approximately \$10
apiece. A supplier of the trees recommends spacing of 10 feet by 10 feet
when the trees are used for hedgerows.[^109]

The costs for establishing the buffer zones are shown in Table 8. The
number of trees required for each CHU is found by dividing the linear
feet of cropland in the buffer for that CHU by 10 feet, the assumed
spacing between trees. Thus, for example, the Kern Fan Water Recharge
CHU, with 7,891 linear feet of buffer, would require 790 trees,
including one at each end. The cost of the trees is the product of the
number of trees and \$10, the estimated unit price.[^110] The cost of
land preparation is found by dividing the square feet per acre by the
total space required per tree, which provides an estimate of the number
of trees required per acre, then using a land preparation charge of
\$899 per acre.[^111] Using the recommended 10 feet by 10 feet spacing,
each tree requires 100 square feet. For an acre (43,560 square feet),
436 trees would be required. Land preparation costs are thus estimated
to be \$2.06 per tree. Thus, for example, land preparation costs for the
790 trees required for the Kern Fan unit would be (at \$2.06 per tree)
\$1,627.

Table 8\
Establishment Costs for Buffer Zones, by CHU

  ------------- ------------- ------------- -------------- ---------------
  **CHU**       **Linear Feet **Number of   **One-Time\    **One-Time Land
                of Cropland** Trees         Tree Cost**    Preparation
                              Required**                   Cost**

  Kern Lake     7,097         711           \$7,110        \$1,465

  Kern Fan      7,891         790           \$7,900        \$1,627

  Goose Lake    15,318        1,533         \$15,330       \$3,158

  **Total**     **30,306**    **3,034**     **\$30,340**   **\$6,250**
  ------------- ------------- ------------- -------------- ---------------

The annual cost equivalents for the establishment costs and recurring
annual costs for cultural operations are shown in Table 9. The annual
amortized costs for the one time expenses of the trees and land
preparation are found by assuming a 30 year life for the trees and an
interest rate of 6.23 percent.[^112] It is reported as the USDA's
ten-year average of California's agricultural sector long-run rate of
return to production assets from current income. For example, the annual
amortized cost of trees for the Goose Lake unit, \$1,141, is found by
calculating the uniform annual payment over 30 years at 6.23 percent of
a one-time payment of \$15,330, i.e., \$10 for each of 1,533 trees.

Table 9\
Annual Costs for Establishment of Buffer Zones, by CHU

  -------------- -------------- -------------- -------------- --------------
  **CHU**        **Amortized\   **Amortized    **Annual       **Total Annual
                 Tree Cost**    Land           Cultural       Cost**
                                Preparation    Cost**         
                                Cost**                        

  Kern Lake      \$529          \$109          \$2,746        \$3,384

  Kern Fan       \$588          \$121          \$3,051        \$3,760

  Goose Lake     \$1,141        \$235          \$5,921        \$7,297

  **Total**      **\$2,258**    **\$465**      **\$11,718**   **\$14,441**
  -------------- -------------- -------------- -------------- --------------

Note: Totals shown may differ from sums because of rounding.

Other annual costs include such cultural activities as pruning,
fertilizing, irrigating, and frost protection. Production budgets for
oranges, almonds, and pistachios, noted previously, were used to
estimate these costs, \$1,684 per acre. The annual cultural cost per
tree in the buffer zone was found by dividing the per acre figure by
436, resulting in \$3.86 per tree. Thus, for example, the annual
cultural costs for the Kern Lake CHU would be for 711 trees at \$3.86
per tree, or \$2,746.

## Summary of Direct Effects on Agriculture

This section summarizes the estimated direct economic effects on Kern
County agriculture of conservation activities for the BVLS. The
quantified effects include the following:

-   Lost value of income stream from land used for buffers; and

-   Cost of setting up buffers, including annual amortized costs of
    trees and labor for planting trees, pruning, thinning, and other
    cultural practices.

The total annual costs attributable to the buffer zones include the sum
of value of foregone crop production, amortized tree and land
preparation costs, and annual cultural costs. These figures are shown in
Table 10, by CHU. The largest effect would be about \$13,100 for the
Kern Fan Water Recharge CHU, with \$11,000 for the Goose Lake CHU, and
\$5,200 for the Kern Lake CHU. The annual total for the three CHUs
combined is about \$29,300.

Table 10\
Total Annual Costs Attributable to Buffer Zones, by CHU

  --------------- -------------- ----------------- -------------- --------------
  **CHU**         **Foregone     **Amortized       **Cultural**   **Total**
                  Crop           Establishment**                  
                  Production**                                    

  Kern Lake       \$1,803        \$638             \$2,746        \$5,187

  Kern Fan        \$9,314        \$709             \$3,051        \$13,074

  Goose Lake      \$3,707        \$1,376           \$5,921        \$11,004

  **All Units**   **\$14,824**   **\$2,723**       **\$11,718**   **\$29,265**
  --------------- -------------- ----------------- -------------- --------------

Note: Totals shown may differ from sums because of rounding.

Table 11 contains the estimated costs to agriculture due to BVLS
conservation measures for the 20-year prospective period. The
prospective annual costs for each CHU are the sum of those related to
foregone gross margin less rent and to establishment costs for buffer
zones. For example, the prospective annual cost of \$13,074 for the Kern
Fan Water Recharge CHU is the sum of \$9,314 of foregone (gross margin
less rent) attributable to agricultural production and \$3,760 of
annualized establishment costs. The largest prospective total costs are
for the Kern Fan Water Recharge CHU, \$194,512 at a three percent
discount rate and \$138,509 at a seven percent rate.

Table 11\
Summary of Costs to Agriculture, by CHU

  ------------------ ----------------- --------------- --------------- ---------------
  **CHU**            **Retrospective   **Prospective                   **Prospective
                     (Total)**         (Total)**                       (Annual)**

                                       **3%**          **7%**          

  Kern Lake          \$0               \$77,172        \$54,953        \$5,187

  Kern Fan           \$0               \$194,512       \$138,509       \$13,074

  Goose Lake         \$0               \$163,712       \$116,577       \$11,004

  **All Units**      **\$0**           **\$435,396**   **\$310,039**   **\$29,265**
  ------------------ ----------------- --------------- --------------- ---------------

Note: Totals shown may differ from sums because of rounding.

## Distributional Effects: Secondary and Regional Impacts

Based upon the quantified impact estimates provided above, the secondary
and regional effects of the changes in agricultural activities are
minimal. As shown, the development of buffer zones along agricultural
fields adjacent to proposed CHUs would result in idling the equivalent
of 31 acres of land, with 16 acres in field crops, six each in
vegetables and hay/grain, and three in permanent crops, with an
aggregate estimated annual gross margin less rent of about \$14,800 (see
Table 7). Total annual gross value for these crops is approximately
\$50,000, based on reports from the Kern County Agricultural
Commissioner.[^113] Total gross production value for all Kern County
crops in 2003 was \$2.1 billion (see Table 4), and the foregone
production value would therefore be 0.0024 percent of the total.[^114]
Relative to all of Kern County, with total irrigated crop land exceeding
800,000 acres annually, 0.003 percent of permanent crops may be
affected. In addition, normal variation in total Kern County harvested
cropland is 45,183 acres between years.[^115] That is, harvested
cropland fluctuates by an average of 45,183 acres per year within the
county. Thus, the effect of creating buffers with an equivalent cropland
area of 31 acres would be small relative to total agricultural
production in the area.

It is noted that idling any crop land may have third party impacts, in
particular on farm labor and suppliers of farm inputs such as machinery,
chemicals, and seed. However, it is likely that much or all of the labor
displaced by the reduction in crop acreage would be used in preparation
and maintenance of the buffer areas because trees require periodic
maintenance, such as pruning, fertilizing, and weeding. Moreover, there
would likely be some offsetting benefits to other affected third parties
as trees are purchased and land is prepared to establish those zones.
For example, the nurseries which sell the trees would benefit from the
establishment of the buffer zones.

#  Economic Effects on Non-Agricultural Areas

## Introduction

### Federal Consultations

The Service notes in the proposed CHD rule for the BVLS that Federal
agencies already consult with the Service on activities in areas
currently occupied by the BVLS.[^116] Agencies undertake these
consultations to ensure that their activities do not jeopardize the
continued existence of the BVLS. The proposed CHD rule reports that, in
general, these activities may include, but are not limited to, the
following:

1.  Regulation of activities affecting U.S. waters by the U.S. Army
    Corps of Engineers under section 404 of the Clean Water Act;

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14. Regulation of water flows, channelization, and similar activities;

15. Road construction, right-of-way designation, and regulation funded
    or permitted by the Federal Highway Administration;

16. Private landowners' voluntary conservation measures funded by the
    Natural Resources Conservation Service;

17. Regulation of airport improvement activities by the Federal Aviation
    Administration;

18. Licensing of construction of communication sites by the Federal
    Communications Commission; and

19. Funding of activities by the U.S. Environmental Protection Agency,
    Department of Energy, or any other Federal agency.

In the course of our investigation of economic effects, we found that
only the second type of activity has been the subject of consultations
between the Service and other Federal agencies relative specifically to
the BVLS.[^117] These are discussed in sections 6.2 and 6.3 as they
relate to conservation plans and potential need for supplemental water
for CHUs.

### Private and Non-Federal Effects

As noted earlier in section 2.2.2, various private and non-Federal
entities have identified a number of potential effects of the BVLS
listing and proposed CHD. These include maintenance and operation of
irrigation canals, mosquito abatement, effects on oil and gas
development, and flood control activities. The investigation and
discussion associated with each of these categories of effects are
presented in section 6.3.3 through 6.3.8.

In addition, representatives for the City of Bakersfield and water
associations identified four categories of potential effects with
respect to the Kern Fan Water Recharge CHU. The city owns the Kern Fan
Water Recharge Area containing the proposed CHU, which is also adjacent
to the Kern Water Bank. The Kern River flows through the CHU. The City
raised concern over effects on their recharge operations, recharge
operations of other entities, reservoir operation of Lake Isabella
upstream on the Kern River, and changes in diversions by upstream water
users on the Kern River.

We understand through discussions with persons knowledgeable about these
concerns that they are in the very early stages of their own
investigation. As such, the details associated with the concerns and the
manner in which they could affect various entities have not yet been
fully articulated.[^118] We are aware that the concern stems from
anticipation of what the Service may require of the City or water users
on the Kern River in terms of protection for the BVLS as a result of
CHD. The Service has indicated that it does not anticipate requiring any
new activities if operations continue as they have in the past.[^119] As
such, we do not have sufficient information at this time to address the
specific issues regarding the Kern Fan Recharge CHU, and have not
developed costs. We seek public comment that will assist us in fully
addressing these cost categories.

## Retrospective Costs

The available information indicates that entities in Kern County that
may be burdened by future conservation efforts for the BVLS have not
been measurably affected to date by the listing of the species.
Retrospective costs attributable to conservation activities for the BVLS
are not measurable for such activities as irrigation canal and flood
channel maintenance and mosquito abatement because the listing of the
BVLS itself has not yet caused entities to operate differently.[^120]

Retrospective costs can be estimated for the proposed KNWR and Goose
Lake CHUs because of the ongoing conservation-related activities at
those locations. Federal retrospective costs at the KNWR CHU are
associated with preparation of the Comprehensive Conservation Plan (CCP)
and Environmental Assessment for that refuge. Retrospective Federal and
private costs at the Goose Lake proposed CHU are associated with the
formal section 7 consultation underway specifically for the BVLS. Both
are discussed below or in Section 6.5.

### Goose Lake CHU

A project was initiated at Goose Lake in 2001 to convert land primarily
in native vegetation and some previously-cultivated agricultural land to
wetlands more favorable for waterfowl. The project proponent is
Gooselake Holdings, in cooperation with Ducks Unlimited (DU) and SWSD.
The project would include construction of spillways and other facilities
for the enhancement of waterfowl habitat. The BVLS would be an indirect
beneficiary of the project because the habitat created would benefit the
BVLS.[^121] Surveys completed in late 2002 and 2003 revealed the
presence of the BVLS.[^122] A formal intra-Service section 7
consultation was initiated after the surveys were complete. The Service
completed a draft BO for the Goose Lake area in September 2004.[^123] DU
paid for survey work and coordination, and DU estimates total costs for
that activity to date of \$35,000.[^124] SWSD estimates that its staff
and miscellaneous costs to date have been \$10,000. Costs incurred by
Gooselake Holdings for meetings and consultations were not available,
but are estimated to be comparable to those of SWSD, or approximately
\$10,000. Total non-Federal retrospective costs are thus estimated to be
\$55,000. Federal government costs are shown in Section 6.5.

### Other CHUs

Retrospective costs associated with the other CHUs relate to the Federal
costs involved in researching and mapping the units. These costs are
discussed in Section 6.5. The Service estimates that each unit required
five days of a biologist's time, with each day's cost at \$708.[^125]
Thus, Federal retrospective costs for each of the Kern Fan Water
Recharge, Kern Lake, and Coles Levee CHUs are estimated to be \$3,540.

In addition, because the BVLS will be included in the Kern Valley Floor
HCP, some of the costs of that Plan, both retrospectively and
prospectively, may be allocated to the BVLS. Estimated non-Federal costs
to date for the Kern Valley Floor HCP are \$450,000.[^126] Because the
Plan will cover 28 listed species for which there is no objective
mechanism to allocate these costs, the BVLS share of the costs is
estimated to be 1/28 of the total, or about \$16,100.

## Prospective Costs

This section includes prospective costs, those likely future costs
associated with the conservation activities associated with BVLS between
2004 and 2024. Prospective costs include estimated expenditures for the
completion of the BO at Goose Lake and the expected completion of a new
HCP at the Coles Levee CHU. In addition, they include impacts related to
water requirements and surface water requirements in certain units.
Other potential impact categories are discussed qualitatively.

### Goose Lake CHU

DU expects additional costs of \$3,000 to that organization from the
time the draft BO was completed in June 2004 until the BO is
finalized.[^127] DU also expects costs of \$5,000 to \$10,000 for
administrative and monitoring costs attributable specifically to the
BVLS during construction of the enhanced waterfowl habitat, for which a
midrange cost of \$7,500 is used in the analysis.[^128] SWSD estimates a
cost of \$10,000 of additional staff time during construction
attributable specifically to the BVLS.

### Coles Levee CHU

As discussed above, the HCP permit that was previously in place for the
Coles Levee fields (and which did not include the BVLS) was not
transferred when the fields were sold to a new owner; the HCP is no
longer operative. From discussions with the Service and the consultants
who prepared the previous HCP, there is some likelihood that a either a
new HCP or a management plan specifically for the BVLS, which would
amend the existing HCP, will be developed for the fields. The costs for
the HCP and management plan are assumed to be \$750,000 and \$50,000,
respectively, as discussed in Section 1.8. Because there are eight
Federally-listed species (including the BVLS) that would be covered by
the new HCP, it is assumed that one-eighth of this cost would be
attributable to the BVLS, i.e., \$93,750. Annual BVLS-related costs for
HCP preparation are assigned 1/20 of this figure, or \$4,688, assuming a
20 year life for the HCP. If instead the existing HCP is amended with a
management plan for the BVLS, then the annual cost would be 1/20 of the
\$50,000 estimated cost, or \$2,500.

On an ongoing basis, some annual costs for the HCP (whether the old plan
amended to include a management plan for the BVLS or a new plan) are
relatively invariant with regard to the area covered, e.g., construction
and maintenance of a database and education program and preparation of
an annual report (estimated at \$25,000 by Quad Knopf). Other annual
costs such as mammal surveys and trapping and mapping are more closely
related to the size of the area. Because the Coles Levee field covers
6,000 acres and an HCP in development in the Goose Lake area (outside
the proposed critical habitat) covers 2,687 acres, it is assumed that
the Coles Levee variable monitoring costs are a multiple of those for
Goose Lake, i.e., (6,000/2,687) = 2.23. The total estimated monitoring
costs for Coles Levee are thus assumed to be \$25,000 +
\[2.23\*(\$67,144-\$25,000)\] = \$118,981. Because eight Federally
listed species would be covered by the HCP, the share of these annual
monitoring costs attributable to the BVLS is \$14,873.

### Maintenance and Operation of Irrigation Canals by Water Districts

Four of the five proposed CHUs are within or nearly adjacent to the
service areas of water districts. The KNWR and Goose Lake CHUs are
within the service area of SWSD, which receives SWP water through Kern
County Water Agency (KCWA). The Coles Levee CHU is closest to West Kern
and Henry Miller Water Districts, primarily to west and south,
respectively, of the CHU. Both receive SWP water through KCWA. The Kern
Lake CHU is within the service area of Kern Delta Water District, which
also receives SWP water through KCWA.

Each district has a distribution system to convey water to its
customers. The system must be capable of delivering water to farmers at
the time and rate and for the required duration to meet crop water
demands. The distribution system includes canals, some of which are
unlined and which facilitate groundwater recharge. These canals annually
require maintenance and repairs, which activities include, among others,
control of vegetation in order to maintain efficient water delivery
capacity. These activities are completed during the times of year when
the canals are dry, i.e., prior to or after the irrigation season.

In addition, the proposed CHU for Goose Lake includes about one-half
mile of SWSD canal and adjacent maintenance roads on both side of the
canal. Annual SWSD maintenance expense for its approximate 40 miles of
canals is about \$200,000, thus \$5,000 per mile and \$2,500 for
one-half mile.[^129] For the one-half mile of canal which includes CH
for the BVLS, SWSD estimates an increment of 50 percent annually for
increased diligence and maintenance attributable specifically to the
BVLS. Thus, annual SWSD costs for canal maintenance, attributable
specifically to the BVLS, would be \$1,250.

There could potentially be an effect on the water districts operating
the irrigation canals if the Service requires changes in canal operation
because of conservation activities for the BVLS. However, no information
exists indicating whether or how such changes might be implemented.

### Mosquito Abatement

The Kern County Farm Bureau has asserted that the listing of the BVLS
may cause significant restriction or prohibitions on certain activities,
including mosquito abatement,[^130] cited as well in the lawsuit filed
by the Kern County Farm Bureau, Kern County Water Agency, and other
parties following listing of the BVLS.[^131] Stated objectives of the
mosquito abatement districts within Kern County vary, but generally
include the elimination of mosquito-breeding places, source reduction,
and abatement. Typical abatement products are "Teknar," "Methoprene,"
"Golden Bear 1111," and "Temephos." Teknar is a bacterial toxin, Bti or
*Bacillus thuringiensis israelensis*, which infects and kills mosquito
larvae and black flies. Methoprene is a juvenile growth hormone, and
both it and Teknar are permitted for use anywhere other than in potable
drinking water.[^132] Golden Bear 1111 is a spray product which coats
water surfaces with a light oil and which suffocates mosquito pupa. It
remains in the water for up to about four hours before evaporating.
Teknar and Methoprene have been used in critical habitat locations,
including those for small mammals such as the kangaroo rat.[^133] The
Kern County Agricultural Commissioner notes that Teknar, Methoprene, and
Golden Bear 1111 are permitted around small mammals.[^134]

Temephos is an organophosphate insecticide. It was registered by the
U.S. EPA in 1965 to control mosquito larvae. It helps prevent mosquitoes
from developing resistance to bacterial larvicides.[^135] It is applied
directly to water, and the U.S. EPA reports that it is not expected to
have a direct impact on terrestrial animals or birds. Typically it is
used as a larvicide only for sudden increases in the adult mosquito
population.[^136] Currently in Kern County, it is used infrequently.
When applied, it is primarily for treatment of sewage treatment ponds
and street drains.[^137] In California, no organophosphates are
currently labeled for control of adult mosquitoes.[^138]

Restrictions on pesticide use due to the BVLS could affect agricultural
producers. However, since the time of the listing, there have been no
pesticide restrictions attributed to the BVLS. Given the current state
of regulations, producers who follow pesticide labels will not be
further impacted, and there is no reasonably foreseeable chance for
future restrictions. Thus, this category is presented and discussed
qualitatively only.

### Water Requirements and Surface Water Purchases for Habitat

#### KNWR

Since 2000, the U.S. Bureau of Reclamation has attempted to provide KNWR
with a more reliable and consistent water supply in order to maintain
wetland habitat for waterfowl and other wildlife, including the
BVLS.[^139] The Service has indicated that KNWR would need about 3.5 AF
per acre for optimal management of habitat.[^140] For this analysis,
therefore, it is assumed that the 387 acres of BVLS critical habitat in
the KNWR CHU would require 1,355 AF of supplemental water per year. It
is assumed that this water will be provided by the U.S. Bureau of
Reclamation as part of its program of purchasing water for wildlife
refuges.

The cost of such water depends on many factors. For reported Central and
Southern California transactions in 2003, the average one-year lease
price was \$206 per AF, with a range of \$65 to \$352 per AF. The
average permanent sale price was \$1,332 per AF, with a range of \$1,000
to \$1,600 per AF.[^141]

Using the range of annual lease costs for surface water of \$65 to \$352
per AF, total annual surface water purchases for the 387 acres of BVLS
critical habitat in KNWR, using 3.5 AF per acre, are estimated to range
from about \$88,100 to \$477,000. At the midpoint of that range, \$209
per AF, total annual costs would be about \$283,200. At \$209 per AF,
the midpoint of that range, total prospective costs are estimated at
about \$4,213,200 and \$3,000,200 at three and seven percent discount
rates, respectively (see Table 12).

Table 12\
Estimated Annual Volume and Cost of Surface Water Required\
for BVLS Habitat, KNWR CHU

  ----------- ----------- ----------- ------------ --------------- -------------
  **Unit**    **Acres of  **Total AF  **Annual     **Prospective   
              Habitat**   @ 3.5       Cost @       (Total)**       
                          AF/Acre**   \$209/AF**                   

                                                   **3%**          **7%**

  KNWR        387         1,355       \$283,195    \$4,213,226     \$3,000,172
  ----------- ----------- ----------- ------------ --------------- -------------

#### Kern Fan Water Recharge Unit

The Kern Fan Water Recharge CHU is moist an average of two months per
year across all water year types. In some years, particularly dry years,
there may be no water recharged.[^142] While the Service has indicated
that the presence of open water does not appear to be necessary for the
survival of the BVLS, it also indicates that the availability of water
contributes to improved vegetation structure and diversity. Those
improve cover availability, and the presence of water attracts potential
prey species for the BVLS.[^143] Because the BVLS currently lives in
this CHU as it is currently operated, it is uncertain whether
supplemental water would be required to conserve the species. In this
analysis, an estimate is made of the cost of providing supplemental
water, should it be necessary.

Wheeler Ridge-Maricopa Water Storage District (WRMWSD), which has wells
near the area, indicates that the costs for groundwater pumping in the
area, including energy and operations and maintenance, average \$40 to
\$45 per AF.[^144] WRMWSD also indicates that a well and pump cost
approximately \$450,000 and that a pump used continuously requires
repair approximately every five years and is not repairable beyond some
point. In addition, the District estimates that well casings have an
average life of 30 years, although some may last longer. Considering
both wells and pumps, a 20 year combined life is reasonable.[^145] Total
costs, assuming \$42.50 per AF for energy, operations, and maintenance
(the midpoint of the \$40 to \$45 range estimated by WRMSD), and between
\$8 and \$12 per AF for capital costs, would be \$50.50 per AF and
\$54.50 per AF. These conditions are believed to be comparable to those
which would be applicable for the Kern River Fan CHU. Prospective
groundwater pumping costs are estimated as the midpoint, \$52.50 per AF.

Assuming 3.5 AF per acre required for habitat management, a total of
9,405 AF would be required per year. At 10 AF per acre, 26,870 AF would
be required. Because the CHUs are in different areas, the
evapotranspiration (ET) of habitat in each is unknown. As an indication
of the range, a recent publication shows estimated annual Kern County ET
rates of 29.1 inches for miscellaneous field crops and 58.4 inches for
grass.[^146] The midpoint is 43 inches, or approximately 3.5 AF per
acre, which is consistent with the lower number of the range estimated
above. Thus, for this analysis, it is assumed that average
evapotranspiration of habitat in the CHUs is 3.5 AF per acre. It is also
assumed that irrigation efficiency averages 85 percent and that required
water thus averages 4.1 AF per acre.[^147] For 2,682 acres of habitat in
the Kern Fan Water Recharge CHU, a total of 10,996 AF would be required
per year. Assuming uniform monthly water requirements throughout the
year and pumping for 10 of the 12 months, 9,163 AF of groundwater would
need to be pumped to keep the habitat moist.

The cost of pumped groundwater for the Kern Fan Water Recharge CHU is
shown in Table 13, based on an estimated average pumping cost of \$52.50
per AF.[^148] Assuming this activity would be attributable solely to
conservation measures for the Buena Vista Lake shrew, the annual cost is
estimated at about \$481,000. The present value of those costs over 20
years would range from about \$7,157,000 to \$5,096,000 at three percent
and seven percent interest rates, respectively.

Table 13\
Estimated Annual Volume and Cost of Groundwater Pumped\
for BVLS Habitat, Kern Fan Water Recharge Unit

  ------------------------------------------------- ---------------------
  Acres                                             2,682

  Application Rate (AF per Acre per Year)           4.1

  Total Water Required (AF per Year)                10,996

  Groundwater Required (AF per Year)^a/^            9,163

  Cost per AF                                       \$52.50

  Total Annual Cost                                 \$481,058
  ------------------------------------------------- ---------------------

a/ Assuming pumping is required for 10 months per year for 2,682 acres
of designated critical habitat, and assuming surface water in recharge
area two months per year.

#### Purchase of Surface Water For Other CHUs

The purchase of water for the Buena Vista Lake shrew may affect federal
agencies, particularly the U.S. Bureau of Reclamation, which frequently
purchases and transfers water to refuges. The cost of such water depends
on many factors. For reported Central and Southern California
transactions in 2003, the average one-year lease price was \$209 per AF,
with a range of \$65 to \$352 per AF. The average permanent sale price
was \$1,332 per AF, with a range of \$1,000 to \$1,600 per AF.[^149]

The total area in all proposed CHUs is 4,649 acres. The Kern Fan Water
Recharge CHU includes 2,682 acres, and the remaining CHUs include a
total of 1,968 acres.[^150] On the basis of an average application rate
of 3.5 AF per acre per year in KNWR and 4.1 AF per acre per year in the
Goose Lake, Coles Levee, and Kern Lake CHUs, a total of 7,488 AF of
surface water would be required to keep habitat moist year round in
those four CHUs (see Table 14).[^151]

The water requirement and cost for KNWR, 1,355 AF and about \$283,200
per year, are attributable exclusively to the BVLS. The water
requirement and cost for the Kern Lake CHU, 20 AF and \$4,180 per year,
are also attributable exclusively to the BVLS.[^152] Based on the number
of Federally-listed species in the Goose Lake and Coles Levee CHUs, it
is assumed that one-tenth of the annual costs for these CHUs would be
attributable to the Buena Vista Lake shrew, i.e., approximately
\$109,200 and \$18,300, respectively, also at \$209 per AF. Total
prospective surface water costs are estimated at about \$415,400
annually, or \$6,176,000 and \$4,398,000 at three and seven percent
discount rates, respectively.

Table 14\
Estimated Annual Volume and Cost of Surface Water Required\
for BVLS Habitat, KNWR, Goose Lake, Coles Levee, and Kern Lake CHUs

  ----------- ----------- ----------------- --------------- ----------------- -----------------
  **Unit**    **Acres of  **Total           **Annual Cost @ **Prospective     
              Habitat**   Acre-Feet^a/^**   \$209/AF**      (Total)**         

                                                            **3%**            **7%**

  KNWR        387         1,355             \$283,195       \$4,213,226       \$3,000,172

  Goose Lake  1,277       5,236             \$109,432       \$1,628,078       \$1,159,328

  Coles Levee 214         877               \$18,329        \$272,694         \$194,181

  Kern Lake   90          20                \$4,180         \$62,188          \$44,283

  **All       **1,968**   **7,488**         **\$415,137**   **\$6,176,186**   **\$4,397,964**
  Units**                                                                     
  ----------- ----------- ----------------- --------------- ----------------- -----------------

a/ Assumes 3.5 AF per acre at KNWR, 4.1 AF per acre at Goose Lake and
Coles Levee, and a fixed amount of 20 AF at Kern Lake.

Note: Totals shown may differ from sums because of rounding.

### Potential Effects on Oil and Gas Development

Kern County is the largest producer in California of oil and natural
gas. In 2002, the latest year for which data are available, Kern County
produced 198.8 million barrels of oil and 209.4 trillion cubic feet of
natural gas, representing 77 percent and 43 percent, respectively, of
total California production that year.[^153] Energy production in Kern
County is regulated by agencies at the county, State, and Federal
levels. Land use and zoning are directed principally by the county,
while the California Department of Oil, Gas, and Geothermal Resources
(DOGGR) regulates drilling of all new wells and, as a lead agency for
CEQA, requires that the applicant have a biological survey done.[^154]
The results are provided to the Service. DOGGR also oversees testing
wells for leakage or contamination of areas around wells and procedures
for abandoning wells.

Two of the proposed CHUs are adjacent to or within areas of oil and gas
exploration. Oil fields are located to the north, northwest, and
northeast of the Kern River Fan Recharge CHU. The Coles Levee CHU is
surrounded by oil fields, oil tanks, and related infrastructure. Wells
proximate to the Kern River Fan Recharge CHU are in the "Kern River
Field." Production in 2002 from that field included 38.7 million barrels
of oil and 585,000 cubic feet of natural gas.[^155] The Coles Levee area
is divided into two separate fields, Coles Levee North and Coles Levee
South. The North field is the larger producer of oil and the South field
is the larger producer of natural gas. In 2002, production from the two
fields included 256,761 barrels of oil and over 2.1 billion cubic feet
of natural gas.

Access roads have been developed for the facilities in Coles Levee, and
the roads are not considered to be critical habitat, and current
operations have not been affected by the listing. In addition, it is
difficult with available information to assess whether impacts from BVLS
conservation efforts will be engendered in the future. For example, to
the extent that these operations expand into critical habitat, it is
unclear how or whether these expansions would be constrained. There are
currently no wells in critical habitat, and no plans to add new
pipelines.[^156] We have not been able to confirm a requirement for
increased maintenance around existing pipelines attributable to the
BVLS. However, for purposes of this analysis, we apply increased
diligence and maintenance attributable to the BVLS costs of \$2,000 per
year along the four mile length of the Coles Levee CHU. This estimate is
comparable to the cost of canal maintenance suggested by SWSD.

A multi-species HCP for the area, completed prior to the listing of the
BVLS, expired several years ago. Currently, the new owners and operators
are considering development of a new HCP or updating the previous HCP.
Should a new HCP be developed, cost is expected to be approximately
\$750,000 based on other completed HCPs and industry contacts. Assuming
the permit will extend 20 years and cover eight Federally listed
species, annual cost would be \$37,500, of which a pro rata share of
\$4,688 could be assumed allocable to the BVLS.

### Effects on Recreational Visitation

Conservation efforts for the BVLS are not expected to have measurable
impacts on recreation in Kern County. Waterfowl hunters in the KNWR use
areas that are not included in the CHU, and it is not expected that
non-consumptive wildlife activities will either increase or decrease
because of conservation activities for the BVLS.[^157]

### Flood Risks

Flood channels are kept free of vegetation in order to provide maximum
carrying capacity for flood water. No recommended or required changes to
current flood control operations in any of the CHUs have been
identified. However, several of the proposed CHUs include or are
proximate to irrigation canals, e.g., Goose Lake, Kern Fan Water
Recharge, and Kern Lake. To the extent that all canals in the area would
convey water during flood events, there is a potential for a change in
risk if canals operation change because of conservation activities for
the BVLS. However, no information exists indicating whether or how such
changes might be implemented.

### Other Prospective Costs

The prospective non-Federal costs of the Kern Valley Floor HCP, through
completion of the Plan, are estimated to be \$70,000.[^158] Because the
Plan will cover 28 listed species for which there is no objective
mechanism to allocate these costs, the BVLS share of the costs is
estimated to be 1/28 of the total, or \$2,500. The annual costs
attributable to the BVLS are 1/20 of this amount, or \$125.

## Distributional Effects: Secondary and Regional Impacts

The quantifiable secondary and regional impacts related to conservation
activities for the BVLS are minimal. The principal effects will be on
the agricultural sector and have been described and summarized in
Section 5.0 of this report. The resultant impacts on Kern County
agricultural or total output are likely to be immeasurable. Similarly,
the secondary impacts of the non-agricultural impacts discussed above
are likely to be minimal. However, as noted previously in this report,
several potential impacts of conservation activities for the BVLS could
not be quantified.

## Effects on Federal Agencies

This section summarizes the effects on Federal agencies of the BVLS
conservation activities. The principal potential effects are the section
7 consultations and forthcoming BO for the Goose Lake area and purchases
of surface water for KNWR.

### Goose Lake BO

The ongoing consultations for the Goose Lake area are part of a formal
section 7 consultation. Meetings, initially informal but more recently
formal, began about four years ago. A draft BO has been prepared, and
the final report is expected later in the fall of 2004. Costs to the
private sector of the consultation process have been described
previously. The Service estimates that its costs to date for the
consultations (retrospective costs), attributable specifically to the
BVLS, have been \$24,000.[^159] For prospective costs, it is assumed
that an additional ten Federal person-days will be required to complete
the consultations and ultimately to issue the BO and incidental take
permit, or \$7,080.[^160] The annual cost for each of the 20 years of
the recovery period is \$354. The annual cost for each of the ten
covered species is estimated to be \$35. Annual monitoring costs are
estimated on the basis of five person-days, each at \$708, i.e.,
\$3,540. Costs attributable to the BVLS are assumed to be one-tenth of
this amount or \$354 per year.

### Other Federal Costs

Retrospective costs associated with the Kern Fan Water Recharge, Kern
Lake, and Coles Levee CHUs relate to the Federal costs involved in
researching and mapping the units. The Service estimates that each unit
required five days of a biologist's time, with each day costing an
average of \$708.[^161] Thus, Federal retrospective costs for each of
the Kern Fan Water Recharge, Kern Lake, and Coles Levee CHUs are
estimated to be \$3,540. These costs are assumed to be attributable
solely to the BVLS.

#  Summary and Analysis of Effects

## Summary and Discussion of Findings

### General

This economic analysis of conservation activities for the BVLS examined
the impacts on agricultural production, groundwater pumping, surface
water purchases, operation of irrigation canals, mosquito abatement, oil
and gas production, and Federal agencies. The goal was to estimate
impacts attributable to conservation efforts for the BVLS. Some of the
anticipated impacts could be addressed quantitatively, while others
could only be analyzed qualitatively because of limited or unavailable
data, or an unreasonable level of speculation and assumptions that would
be required for quantification.

Table 15 summarizes the types of impacts considered and whether for this
report they are analyzed quantitatively or qualitatively.

Table 15\
Types of Impacts Considered Quantitatively or Qualitatively

  ----------------------- ----------------------- -----------------------
  **Type of Impact**      **Type of Analysis**    

                          **Quantitative**        **Qualitative**

  Agricultural Production X                       X

  Goose Lake Modification X                       

  Groundwater Recharge    X                       

  Irrigation Canal                                X
  Operation                                       

  Mosquito Abatement                              X

  Habitat Water           X                       
  Requirements                                    

  Oil and Gas Production  X                       X
  ----------------------- ----------------------- -----------------------

### Summary of Quantified Impacts

Table 16 summarizes the economic impacts due to BVLS conservation
activities in critical habitat for each activity or sector included in
this analysis. Retrospective costs total \$122,237, including \$51,165
to Federal agencies and \$71,071 to non-Federal entities. Total annual
prospective costs are \$452,000 to \$956,000, with all but \$51,726
applied to Federal entities. Total prospective costs range from \$6.7 to
\$14.2 million at a three percent discount rate, including \$770,000 to
non-Federal entities. The total prospective costs at seven percent
discount rate range from \$4.8 to \$10.1 million, including \$548,000 to
non-Federal entities.

The single largest Federal cost component is estimated to be for
supplemental water purchases. They are assumed to be required for the
KNWR and Goose Lake CHUs, but may or may not be necessary for the
remaining three CHUs. The single largest non-Federal component is
estimated to be for foregone crop production and establishment costs for
buffer zones adjacent to proposed critical habitat.

Table 16\
Total Retrospective Costs and Total and Annual Prospective Costs\
at 3 and 7 Percent Discount Rates, by Category of Impact

  ------------------------ ----------------- ------------------------------ ------------------------------ -------------------------
  **Category of Impact**   **Retrospective   **Prospective (Total)**                                       **Prospective (Annual)**
                           (Total)**                                                                       

                                             **3%**                         **7%**                         

  **Non-Federal:**                                                                                         

  Agriculture              \$0               \$435,396                      \$310,039                      \$29,265

  Goose Lake BO            \$55,000          \$22,688                       \$16,156                       \$1,525

  Goose Lake Canal Maint.  \$0               \$18,597                       \$13,243                       \$1,250

  Coles Levee HCP          \$0               \$291,018                      \$207,230                      \$19,561

  Kern Valley Floor HCP    \$16,071          \$1,860                        \$1,324                        \$125

  **Total Non-Federal**    **\$71,071**      **\$769,559**                  **\$547,991**                  **\$51,726**

  **Federal Agencies:**                                                                                    

  Consultations            \$51,165          \$117,711                      \$83,820                       \$7,912

  Supplemental Water       \$0               \$5,841,304-\$13,333,114       \$4,159,500-\$9,494,299        \$392,627-\$896,195

  **Total Federal**        **\$51,165**      **\$5,847,092-\$13,450,825**   **\$4,163,621-\$9,578,119**    **\$393,016-\$904,107**

  **TOTAL**                **\$122,237**     **\$6,728,574-\$14,220,384**   **\$4,791,311-\$10,126,110**   **\$452,266-\$955,833**
  ------------------------ ----------------- ------------------------------ ------------------------------ -------------------------

Note: Numbers may not sum due to rounding.

Table 17 shows the estimated average annual and present value of
prospective costs at the Federal and non-Federal levels BVLS
conservation measures, by CHU. These costs include effects on
agricultural producers on three CHUs, biological monitoring, HCP
development, and supplemental water purchases. The ranges shown for Kern
Lake, Coles Levee, and Kern Fan Water Recharge CHUs reflect totals with
and without supplemental water. Both the KNWR and Goose Lake CHUs are
assumed to require supplemental water, and thus are not shown as a
range. Present values shown are calculated at three and seven percent
discount rates. Total prospective costs range from \$6.7 to \$14.2
million under a three percent discount rate, and \$4.8 to \$10.1 million
under a seven percent rate.

The largest effects are expected to be for the Kern Fan Water Recharge
CHU, followed by the KNWR CHU. The large range of costs for the Kern Fan
Water Recharge CHU is reflective of the "with" and "without"
supplemental water scenarios.

Table 17\
Annual and Total Prospective Federal and Non-Federal Costs\
Attributable to the BVLS, by CHU

  ---------------------- ----------------- ------------------------------ ------------------------------ -------------------------
  **CHU**                **Retrospective   **Prospective (Total)**                                       **Prospective (Annual)**
                         (Total)**                                                                       

                                           **3%**                         **7%**                         

  Kern National Wildlife \$19,760          \$4,213,598                    \$3,000,437                    \$283,220
  Refuge                                                                                                 

  Goose Lake             \$82,214          \$1,839,234                    \$1,309,690                    \$123,625

  Kern Lake              \$6,754           \$130,210-\$192,398            \$92,720-\$137,003             \$8,752-\$12,932

  Coles Levee            \$6,754           \$297,981-\$570,675            \$212,188-\$406,368            \$20,029-\$38,358

  Kern Fan Water         \$6,754           \$247,551-\$7,404,479          \$176,277-\$5,272,612          \$16,639-\$497,697
  Recharge                                                                                               

  **TOTAL**              **\$122,237**     **\$6,728,574-\$14,220,384**   **\$4,791,311-\$10,126,110**   **\$452,266-\$955,833**
  ---------------------- ----------------- ------------------------------ ------------------------------ -------------------------

## Discussion of Results

Among non-Federal parties, the largest prospective costs are likely to
be on agricultural producers. An annual cost of \$29,265 is anticipated,
which reflects foregone crop production in buffer areas, plus the cost
associated with planting and maintaining buffer zones. Total prospective
costs are \$435,396 using a three percent discount rate and \$310,039
using a seven percent discount rate.

Among Federal costs, the largest prospective expenditure will be that
expected for surface water. At an average of \$209 per AF for purchased
surface water, annual Federal expenditures for water would be \$283,000
for the KNWR CHU, but if required for the Kern Fan Water Recharge CHU
would be an additional \$485,000.

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02-5376 AWIDLB.

Kunde, Robert, Chair, Kern County Farm Bureau Endangered Species
Committee, March 14, 2002, "Impacts of Listing the Buena Vista Lake
Shrew (BVLS) as Endangered," Bakersfield.

*New Mexico Cattle Growers Association v. U.S. Fish and Wildlife
Service,* 248 F.3d 1277 (10^th^ Cir. 2001).

Pub. Law No. 104-121.

Stratecon, February 2004, "Water Strategist," Claremont, CA.

U.S. Bureau of Reclamation and California Resources Agency, September
1990, "A Management Plan for Agricultural Subsurface Drainage and
Related Problems on the Westside San Joaquin Valley, Final Report of the
San Joaquin Valley Drainage Program," Sacramento.

U.S. Census Bureau, June 3, 2004, "Annual Population Estimates,
2000-2003,"
http://www.eire.census.gov/popest/data/counties/CO-EST2003-01.php.

U.S. Census Bureau, May 12, 2004, "Ranking Tables for Counties,"
http://www.census.gov/\
population/www/cen2000/phc-t4.html.

U.S. Census Bureau, May 12, 2004, "Small Area Income and Poverty
Estimates," http://\
www.census.gov/hhes/www/saipe/estimatetoc.html.

U.S. Department of Agriculture Index of Farm Prices Paid,
http://www.usda.gov/nass/graphics/\
data/paid.txt.

U.S. Department of Agriculture, 2004, *2002* *Census of Agriculture --
County Data, California*,
http://www.nass.usda.gov/census/census02/volume1/ca/index2.htm.

U.S. Department of Commerce, Bureau of Economic Analysis, May 2003,
*Regional Economic Information System 1969-2001*, CD-ROM.

U.S. Environmental Protection Agency, June 21, 2004, "What is Temephos?"
http://www.epa.gov/\
pesticides/factsheets/larvicides4mosquitos.htm.

U.S. Environmental Protection Agency, March 2000, "Protecting Endangered
Species: Interim Measures for Use of Pesticides in Kern County,"
Sacramento.

U.S. Environmental Protection Agency, September 2000, *Guidelines for
Preparing Economic Analyses,* EPA 240-R-00-003,
http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html.

U.S. Fish and Wildlife Service and NOAA Fisheries, August 5, 2004,
"Joint Counterpart Endangered Species Act Section 7 Consultation
Regulations," Federal Register, Vol. 69, No. 150, p. 47732-47762.

U.S. Fish and Wildlife Service, 1998, "Recovery Plan for Upland Species
of the San Joaquin Valley, California," Portland, Oregon.

U.S. Fish and Wildlife Service, August 19, 2004, "Proposed Designation
of Critical Habitat for the Buena Vista Lake Shrew, Proposed Rule,"
*Federal Register*, Vol. 69, No. 160, pp. 51417-51442.

U.S. Fish and Wildlife Service, February 2004, "ESA Basics,"
http://endangered.fws.gov/\
pubs/esa_basics.pdf.

U.S. Fish and Wildlife Service, June 1, 2000, "Proposed Endangered
Status for the Buena Vista Lake Shrew, Proposed Rule," *Federal
Register*, Vol. 65, No. 106, pp. 35033-35040.

U.S. Fish and Wildlife Service, June 2004, "Kern and Pixley National
Wildlife Refuges: Draft Comprehensive Conservation Plan and
Environmental Assessment," Sacramento and Delano.

U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status for
the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final Rule,"
*Federal Register*, Vol. 67, No. 44, pp. 10101-10113.

U.S. Fish and Wildlife Service, September 18, 1985, "Review of
Vertebrate Wildlife, Notice of Review," *Federal Register,* Vol. 50, No.
181, pp. 37958-37967.

U.S. Office of Management and Budget, February 3, 2003, "Draft 2003
Report to Congress on the Costs and Benefits of Federal Regulations;
Notice," *Federal Register,* Vol. 68, No. 22.

U.S. Office of Management and Budget, March 22, 2000, "Appendix 4:
Guidelines to Standardize Measure of Costs and Benefits and the Format
of Accounting Statements," in *Report to Congress on the Costs and
Benefits of Federal Regulations*.

U.S. Office of Management and Budget, September 17, 2003, "Circular
A-4," http://www.whitehouse.\
gov/omb/circulars/a004/a-4.pdf.

U.S. Small Business Administration, January 28, 2004, "Table of Small
Business Size Standards Matched to North American Industry
Classification System Codes," http://www.sba.gov/size/\
indextableofsize.html.

U.S. Small Business Administration, Office of Advocacy, May 2003, "A
Guide for Government Agencies: How to Comply with the Regulatory
Flexibility Act."

University of California Cooperative Extension Service, 2002, "Sample
Costs to Establish an Orange Orchard and Produce Oranges, San Joaquin
Valley-South, Low Volume Irrigation," OR-VS-02.

University of California Cooperative Extension Service, 2003, "Sample
Costs to Establish an Almond Orchard and Produce Almonds, San Joaquin
Valley South, Flood Irrigation," AM-VS-03-1.

University of California Cooperative Extension Service, 2003, "Sample
Costs to Establish an Almond Orchard and Produce Almonds, San Joaquin
Valley South, Micro-Sprinkler Irrigation," AM-VS-03-2.

University of California Cooperative Extension Service, 2004, "Sample
Costs to Establish and Produce Pistachios, San Joaquin Valley-South, Low
Volume Irrigation," PI-SJ-04.

University of California Cooperative Extension Service, Davis, 1998,
"Sample Costs to Establish a Vineyard and Produce Table Grapes, San
Joaquin Valley, Thompson Seedless Variety."

University of California Cooperative Extension Service, Davis, 1999,
"Sample Costs to Produce Wheat, San Joaquin Valley, Double Cropped."

University of California Cooperative Extension Service, Davis, 2003,
"Sample Costs to Establish and Produce Alfalfa, San Joaquin Valley, 300
Acre Planting."

Williams, Daniel F., and Adam C. Harpster, October 29, 2001, "Status of
the Buena Vista Lake Shrew (*Sorex ornatus relictus*)," Endangered
Species Recovery Program, Department of Biological Sciences, California
State University, Stanislaus, submitted to U.S. Bureau of Reclamation,
Fresno.

**[Personal communication with]{.underline}:**

Blake Sanden, University of California Cooperative Extension Service,
October 8, 2004.

California Department of Pesticide Regulation, August 17, 2004.

Chris Hildebrandt, Ducks Unlimited, June 29, and October 11, 2004.

David Sunding, Charles River Associates, contractor to City of
Bakersfield, October 15, 2004.

Donald Black, West Side Mosquito and Vector Control District, Kern
County, June 18, June 29, and July 8, 2004.

Jim Jones, Quad Knopf, Inc., June 21, and June 30, 2004.

Joe Grant, University of California Cooperative Extension Service,
August 19, 2004.

Kent Brittan, University of California Cooperative Extension, August
2004.

Kern County Agricultural Commissioner, Pesticide Desk, July 8, 2004.

L.E. Cooke Nursery, Visalia, June 28, and August 11, 2004.

Linda Campion, California Division of Oil, Gas, and Geothermal
Resources, June 28, and June 29, 2004.

Mark Poe, AERA, June 29, 2004.

Martin Viveros, Kern County Farm Advisor, June 28, 2004.

Rich Marovich, California Department of Pesticide Regulation, June 24,
and October 11, 2004.

Richard Takahashi, Kern Mosquito and Vector Control, June 18, 2004.

Robert Kunde, Wheeler Ridge-Maricopa Water Storage District, June 18,
June 28, July 1, and July 8, 2004.

Robert Thornton, Nossaman, Gunther & Know, attorney retained by the City
of Bakersfield, California, October 7, 2004.

Service Biologist, Sacramento Fish and Wildlife Office, May 21, June 24,
June 30, July 1, July 2, July 8, October 6, and October 7, 2004.

Service Manager, Kern National Wildlife Refuge, June 8, June 29, June
30, August 7, and October 7, 2004.

Service personnel, June 2004.

Ted James, Kern County Planning Department, June 28, 2004.

Waring Laurendine, Quad Knopf, Inc., August 20, August 23, and October
7, 2004.

Wes Roadhamel, Quad Knopf, Inc., October 7, 2004.

[]{#__RefHeading___Toc85905802 .anchor}Appendix A:\
Economic Effects to Small Entities and Energy

This appendix contains an examination of the extent to which the
analytic results presented in the main report reflect impacts to small
entities. The analysis of the effect on small entities is conducted
pursuant to the Regulatory Flexibility Act (RFA), as amended by the
Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996. The
appendix also contains an analysis of the effects of the rulemaking on
energy markets, as required by Executive Order No. 13211.

## Potential Effects on Small Entities {#potential-effects-on-small-entities .ES-Heading-2}

Under the RFA (as amended by SBREFA), whenever a Federal agency is
required to publish a notice of rulemaking for any proposed or final
rule, it must prepare and make available for public comment a regulatory
flexibility analysis that describes the effect of the rule on small
entities. However, no regulatory flexibility analysis is required if the
head of an agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities.[^162] SBREFA
amended the RFA to require Federal agencies to provide a statement of
the factual basis for certifying that a rule will not have a significant
economic impact on a substantial number of small entities. Accordingly,
the following represents a screening level analysis of the potential
effects of habitat conservation activities for the BVLS on small
entities.

Small entities include small businesses, small governments, or small
organizations, as defined by the U.S. Small Business Administration
(SBA). Size standards for small businesses are established for different
types of economic activity or industry within the North American
Industry Classification System (NAICS), and are commonly expressed in
terms of the number of employees or annual revenues. These size
standards were most recently published by the SBA in "Table of Small
Business Size Standards Matched to North American Industry
Classification System Codes," effective January 28, 2004.[^163] Small
organizations are defined as "any non-profit enterprise ... which is
independently owned and operated and not dominant in its field."[^164]
These may include organizations such as irrigation districts, water
associations, public utilities, or agricultural co-ops. A small
government is defined as any government serving populations of 50,000 or
less, and might include county, city, town, or school district
governments.

This analysis is intended to facilitate determination of whether the
BVLS CHD potentially affects a "substantial number" of small entities in
counties and/or supporting critical habitat areas. It is also intended
to quantify, to the extent possible, the probable number of small
entities that are likely to experience a "significant effect."

In the sections that follow, a screening process is used to identify and
describe the small entities that would be subject to this analysis. This
is followed by a determination of the economic effects on the small
entities.

### Definition of Small Entities {#definition-of-small-entities .ES-Heading-3}

The SBA defines three types of small entities: small business, small
organization, and small governmental organization. Within the category
of small business, the SBA has developed size standards that vary
depending upon the business type. For most industries, the size standard
is based upon annual revenue for the business. The revenue standard
varies from \$750,000 for most of agriculture to \$28.5 million for
general and heavy construction. The size standard is based on number of
employees for two industry types: manufacturing (500 employees) and
wholesale trade (100 employees). The SBA publishes a table of current
small business size standards on their website (www.sba.gov/size).[^165]
The SBA definition of "small government organization" includes
governments of cities or counties with a population of fewer than 50,000
persons.

### Identification of Activities that May Involve Small Entities {#identification-of-activities-that-may-involve-small-entities .ES-Heading-3}

The analysis in the main report determined that costs related to
conservation activities for the BVLS would be incurred for activities
affecting agricultural enterprises, irrigation water districts, and
Federal agencies. This section considers the extent to which the costs
presented in the main report reflect impacts to small entities.

#### Agriculture {#agriculture .ES-Heading-4}

There is no agricultural activity at present within any of the CHUs. It
is assumed that following the designation of critical habitat for the
BVLS, farmers with cropland adjacent to any of the CHUs would establish
buffer zones along the boundary of their fields in order to minimize or
avoid an incidental take. There is a cost to farmers in terms of
foregone crop production in the buffer zone, plus a cost of establishing
and maintaining the buffer. Many farmers would fall below the SBA small
business revenue threshold, and therefore be considered small entities.

#### Water Districts {#water-districts .ES-Heading-4}

A project was initiated at Goose Lake in 2001 to convert land primarily
in native vegetation and some previously cultivated agricultural land to
wetlands more favorable for waterfowl. The project proponent is Goose
Lake Holdings, in cooperation with Ducks Unlimited (DU) and Semitropic
Water Storage District (SWSD). SWSD is in the process of completing an
HCP to include the BVLS. In addition to SWSD, three other water
districts (West Kern, Henry Miller, and Kern Delta) in the vicinity of
BVLS CHUs may be affected by changes to irrigation canal operation and
maintenance schedules in order to avoid an incidental take of the BVLS;
this may or may not result in incremental costs to the districts. No
attempt was made to quantify these effects. Water purchases may be
necessary to provide adequate moisture for ample food and breeding in
some or all of the CHUs; however, this could be beneficial for the water
districts.

For this analysis, only effects on SWSD are considered. The NAICS code
for water districts is 221310, "Water Supply and Irrigation Systems."
Although the water district is not-for-profit, the SBA revenue threshold
of \$6 million was considered. Annual revenues for SWSD are greater than
the threshold, so effects on the SWSD were not considered further.

### Estimated Number of Potentially Affected Small Entities {#estimated-number-of-potentially-affected-small-entities .ES-Heading-3}

Information on farms in Kern County, California, is available from the
U.S. Department of Agriculture "2002 Census of Agriculture," and
specific data on farms and sales are presented in Table A-1. Although
the SBA threshold for the agricultural businesses of concern is
\$750,000, the Census of Agriculture provides information on farms with
sales above and below \$500,000. Therefore, the number of small farms by
SBA standards is understated in this table. In addition, the average
sales per small farm is understated (lower than actual) because it does
not include those farms with annual sales of \$500,000 to \$750,000. As
shown in Table A-1, small farms predominate in number (77 percent of all
farms in Kern County have revenues less than \$500,000), but overall
revenues for these farms are small (six percent of all sales).

Specific farm size data are not available by commodity group. For the
four commodity groups considered in this analysis, the average sales per
farm indicate that more than half of the cotton and "other crops and
hay" farms would be considered small farms by SBA standards.

Table A-1\
Market Value of Agricultural Products Sold, by Farm Size and\
Select Commodity Groups, Kern County, California, 2002

+-------------------------------------+---------+-----------+---------+
| **Farm Type**                       | **No.   | **Annual  | **      |
|                                     | of      | Sales**   | Average |
|                                     | Farms** |           | Sales   |
|                                     |         |           | /Farm** |
+-------------------------------------+---------+-----------+---------+
| All Farms                           | 2,147   | \$2,05    | \$      |
|                                     |         | 8,705,000 | 958,875 |
+-------------------------------------+---------+-----------+---------+
| > Farms with sales less than        | 1,660   | \$13      | \       |
| > \$500,000                         |         | 0,296,000 | $78,492 |
+-------------------------------------+---------+-----------+---------+
| > Farms with sales \$500,000 or     | 487     | \$1,92    | \$3,    |
| > more                              |         | 8,409,000 | 959,772 |
+-------------------------------------+---------+-----------+---------+
| By Commodity Group:                 |         |           |         |
+-------------------------------------+---------+-----------+---------+
| > Cotton                            | 223     | \$13      | \$      |
|                                     |         | 5,224,000 | 606,386 |
+-------------------------------------+---------+-----------+---------+
| > Vegetables, melons, potatoes, and | 194     | \$33      | \$1,    |
| > sweet potatoes                    |         | 3,134,000 | 717,186 |
+-------------------------------------+---------+-----------+---------+
| > Fruits, tree nuts, and berries    | 812     | \$1,08    | \$1,    |
|                                     |         | 1,149,000 | 331,464 |
+-------------------------------------+---------+-----------+---------+
| > Other crops and hay               | 362     | \$8       | \$      |
|                                     |         | 3,645,000 | 231,064 |
+-------------------------------------+---------+-----------+---------+

Source: U.S. Department of Agriculture, 2004, *2002* *Census of
Agriculture -- County Data, California*, National Agricultural
Statistics Service,
http://www.nass.usda.gov/census/census02/volume1/ca/index2.htm.

In the case of the BVLS, as demonstrated in Section 5.0 of the main
report, 31.3 acres of agricultural land would be affected, which
represents 0.004 percent of harvested acres (see Table 4 of the main
report). Table A-2 provides details on the acreage distribution by
commodity type, CHU, and expected cost as foregone revenue and buffer
zone costs, per acre and in total. Assuming that each affected crop type
within a CHU represents one farm, the effects on each of those farms
ranges from \$1,577 to \$12,518 per year.

It is not known whether the specific farms adjacent to the CHUs and
included in Table A-2 would meet the small business threshold. For the
purposes of this analysis, it is assumed that *all* of the farms in
Table A-2 are small entities, and that each crop type and CHU represents
a separate farm. When the total costs are compared to the average sales
per farm for all farms with annual sales of less than \$500,000, they
would account for 2.0 to 15.9 percent of annual revenues. Since the SBA
revenue threshold for small farms is \$750,000 per year, these
percentages actually represent an overstatement of the potential effect
on these farms. It should also be noted that for tree nuts and
vegetables, the effects shown in Table A-2 are likely to be overstated,
since the average sales per small farm for those commodity groups are
likely to be greater than for all farms (which include lower valued
commodities such as field crops and hay), as indicated by the average
sales per farm reported in Table A-1.

Table A-2\
Effects in Terms of Foregone Revenue and Buffer Zone Costs,\
and Share of Small Farm Revenue, by Crop Type and CHU

  ---------------- ----------- --------------- ----------- -------------- ---------------
  **CHU/Crop       **Acres**   **Per Acre**                **Total Cost** **Share of
  Type**                                                                  Small Farm
                                                                          Revenue^b/^**

                               **Foregone      **Buffer                   
                               Revenue^a/^**   Zone                       
                                               Costs**                    

  **Kern Lake**                                                           

  Field Crops      7.3         \$372           \$463       \$6,096        7.8%

  **SubTotal**     **7.3**                                 **\$6,096**    

  **Kern Fan**                                                            

  Field Crops      1.9         \$372           \$458       \$1,577        2.0%

  Vegetables       6.3         \$1,529         \$458       \$12,518       15.9%

  **SubTotal**     **8.2**                                 **\$14,095**   

  **Goose Lake**                                                          

  Field Crops      6.7         \$372           \$462       \$5,585        7.1%

  Tree Nuts        2.7         \$801           \$462       \$3,409        4.3%

  Hay/Grain        6.4         \$252           \$462       \$4,567        5.8%

  **SubTotal**     **15.8**                                **\$13,561**   

  **Total (All     **31.3**                                **\$33,752**   
  Units)**                                                                
  ---------------- ----------- --------------- ----------- -------------- ---------------

a/ Based upon *Kern County Agricultural Commissioners Report for 2003*
and University of California Cooperative Extension enterprise budgets.

b/ From Table A-1, average sales for farms with sales less than
\$500,000 per year in Kern County, or \$78,492. The SBA revenue
threshold for small farms is \$750,000 per year, so this average
represents an underestimate for *all* small farms in Kern County.

### Estimated Effects on Small Entities {#estimated-effects-on-small-entities .ES-Heading-3}

Table A-3 provides a summary of the effects on small farms and the
proportion of small farms that would be affected by BVLS conservation
activities. As noted in Table A-2, the effects as a percent of small
business (farm) sales range from 2.0 to 15.9 percent depending upon
commodity group. Based upon the number of affected farms, the proportion
of all businesses in the commodity group affected is 0.12 to 1.35
percent. The proportion would be lower if not all of the affected
businesses in the commodity group are considered small.

Table A-3\
Summary of Effects on Small Businesses of BVLS Conservation Activities

  ---------------------------------- ------------- ---------------- ---------- ---------
                                     **Commodity                               
                                     Group**                                   

                                     **Field       **Vegetables**   **Fruits   **Other
                                     Crops\                         and Tree   Crops and
                                     (incl.                         Nuts**     Hay**
                                     Cotton)**                                 

  Effects as a Percent of Small      2.0 - 7.8%    15.9%            4.3%       5.8%
  Business Sales^a/^                                                           

  Number of Affected Farms^a/^       3             1                1          1

  Number of Farms in Affected        223           194              812        362
  Commodity Group^b/^                                                          

  Proportion of Businesses           1.35%         0.52%            0.12%      0.28%
  Affected^c/^                                                                 
  ---------------------------------- ------------- ---------------- ---------- ---------

a/ From Table A-2, assuming *all* affected farms are small businesses.

b/ From Table A-1.

c/ Determined by dividing "Number of Affected Farms" by "Number of Farms
by Commodity Group" in Table A-1.

### Caveats {#caveats .ES-Heading-3}

The estimated effects on small businesses provided above contain several
important assumptions that are likely to overstate the actual effects.
These include:

-   The SBA revenue threshold for small businesses engaged in farming is
    \$750,000 annually. For this analysis, the threshold is assumed to
    be \$500,000 based on data available. As a result, the average
    revenue per small farm (\$78,492) is understated, and the effect of
    costs as a percent of annual revenue is similarly overstated.

-   Data are not available on the average revenue per small farm by
    commodity group, so the average for all small farms was applied to
    each commodity group. This likely overstates the effect on vegetable
    and fruit and tree nut farms, which are likely to have higher
    revenue than the average for all small farms.

-   All of the affected farms are assumed to be small, which may
    overstate the proportion of small businesses affected.

-   Parsing farms by crop types within the CHUs may overstate the actual
    number of farms that are affected, since a single farm may produce
    more than one crop type.

## Potential Effects on Energy Supply  {#potential-effects-on-energy-supply .ES-Heading-2}

Executive Order No. 13211, "Actions Concerning Regulations that
Significantly Affect Energy Supply, Distribution, or Use," issued May
18, 2001, requires Federal agencies to submit a "Statement of Energy
Effects" for all "significant energy actions" in order to present
consideration of the impacts of a regulation on the supply,
distribution, and use of energy.[^166] Significant adverse effects are
defined in the EO by the OMB according to the following criteria:

1.  Reductions in crude oil supply in excess of 10,000 barrels per day;

```{=html}
<!-- -->
```
20. Reductions in fuel production in excess of 4,000 barrels per day;

21. Reductions in coal production in excess of five million tons per
    year;

22. Reductions in natural gas production in excess of 25 million mcf per
    year;

23. Reductions in electricity production in excess of one billion
    kilowatt-hours per year or in excess of 500 megawatts of installed
    capacity;

24. Increases in energy use required by the regulatory action that
    exceed any of the thresholds above;

25. Increases in the cost of energy production in excess of one percent;

26. Increases in the cost of energy distribution in excess of one
    percent; or

27. Other similarly adverse outcomes.

The CHD is expected to have minimal impacts on the energy industry.
There is a very small likelihood of energy-related impacts occurring in
any CHU of the size established by the criteria. Regulatory cost
evidence does not exist to suggest that any project modifications were
part of section 7 consultations.

[]{#__RefHeading___Toc85905803 .anchor}Appendix B:\
List of Acronyms

BMP Best Management Practice

BO Biological Opinion

BVLS Buena Vista Lake Shrew

CCP Comprehensive Conservation Plan

CESA California Endangered Species Act

CHD Critical Habitat Designation

CHU Critical Habitat Unit

CVP Central Valley Project

DFG California Department of Fish and Game

DOGGR California Department of Oil, Gas, and Geothermal Resources

DPR California Department of Pesticide Regulation

DPS Distinct Population Segment

DU Ducks Unlimited

ESA Endangered Species Act of 1973

ESRP Endangered Species Recovery Program

EIR Environmental Impact Report

HCP Habitat Conservation Plan

KCWA Kern County Water Agency

KNWR Kern National Wildlife Refuge

KWB Kern Water Bank

KWBA Kern Water Bank Authority

NCCP Natural Community Conservation Plan

NCCPA Natural Community Conservation Planning Act

NEA Northwest Economic Associates

OMB Office of Management and Budget

PCE Primary Constituent Element

RFA Regulatory Flexibility Act

SBREFA Small Business Regulatory Enforcement Fairness Act

SWP State Water Project

SWSD Semitropic Water Storage District

TNC The Nature Conservancy

USBR U.S. Bureau of Reclamation

[]{#__RefHeading___Toc85905804 .anchor}Map Attachment

[^1]: U.S. Fish and Wildlife Service, June 1, 2000, "Proposed Endangered
    Status for the Buena Vista Lake Shrew, Proposed Rule," *Federal
    Register*, Vol. 65, No. 106, pp. 35033-35040.

[^2]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, pp. 10101-10113.

[^3]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, pp.
    51417-51442.

[^4]: Ibid., p. 51421.

[^5]: Ibid., p. 51422.

[^6]: Ibid., p. 51421.

[^7]: Ibid., p. 51422.

[^8]: Gross revenues (measured as the product of yield per acre and
    price per unit of crop) less variable costs less rent (or rent
    equivalent) is a measure of the income which landowners would forego
    by removing land from production. When agricultural land is removed
    from production, the owner loses the crop revenue which would have
    been forthcoming from the land had it remained in production. Once
    the land is removed from production, however, such typical operating
    costs as seed, fertilizer, and chemicals need not be incurred for
    that land. In addition, the owner loses the rent or rent equivalent
    from the land. Thus, the efficiency loss when land is taken out of
    production is measured as gross revenue less variable costs and
    rent.

[^9]: Personal communication with Waring Laurendine, Quad Knopf, Inc.,
    October 7, 2004.

[^10]: Personal communication with Robert Kunde, Wheeler Ridge-Maricopa
    Water Storage District, July 1, 2004.

[^11]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, p. 51421.

[^12]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, p. 10106.

[^13]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 8, 2004.

[^14]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, p. 10106.

[^15]: 16 U.S.C. §1533(b)(2).

[^16]: Executive Order 12866, September 30, 1993, "Regulatory Planning
    and Review;" Executive Order 13211, May 18, 2001, "Actions
    Concerning Regulations That Significantly Affect Energy Supply,
    Distribution, or Use;" 5. U.S.C. §§601 *et seq*.; and Pub. Law No.
    104-121.

[^17]: In 2001, the U.S. 10th Circuit Court of Appeals instructed the
    Service to conduct a full analysis of all of the economic impacts of
    proposed critical habitat designation, regardless of whether those
    impacts are attributable co-extensively to other causes (*New Mexico
    Cattle Growers Ass'n v. U.S.F.W.S*., 248 F.3d 1277 (10th Cir.
    2001)).

[^18]: For additional information on the definition of "surplus" and an
    explanation of consumer and producer surplus in the context of
    regulatory analysis, see Gramlich, Edward M., 1990, *A Guide to
    Benefit-Cost Analysis (2^nd^ Ed.)*, Prospect Heights, Illinois:
    Waveland Press, Inc.; and U.S. Environmental Protection Agency,
    September 2000, *Guidelines for Preparing Economic Analyses*, EPA
    240-R-00-003, http://yosemite.epa.gov/ee/epa/\
    eed.nsf/webpages/Guidelines.html.

[^19]: U.S. Office of Management and Budget, September 17, 2003,
    "Circular A-4," http://www.whitehouse.gov/omb/\
    circulars/a004/a-4.pdf.

[^20]: 5 U.S.C. § 601 *et seq.*

[^21]: Executive Order 13211, May 18, 2001, "Actions Concerning
    Regulations That Significantly Affect Energy Supply, Distribution,
    or Use."

[^22]: 16 U.S.C. § 1533.

[^23]: 16 U.S.C. § 1532.

[^24]: U.S. Fish and Wildlife Service, February 2004, "ESA Basics,"
    http://endangered.fws.gov/pubs/esa_basics.pdf.

[^25]: Ibid.

[^26]: For example, the Sikes Act Improvement Act (Sikes Act) of 1997
    requires Department of Defense (DoD) military installations to
    develop Integrated Natural Resources Management Plans (INRMPs) that
    provide for the conservation, protection, and management of wildlife
    resources (16 U.S.C. 670a - 670o). These plans must integrate
    natural resource management with the other activities, such as
    training exercises, taking place at the facility.

[^27]: Executive Order 12866, September 30, 1993, "Regulatory Planning
    and Review."

[^28]: U.S. Office of Management and Budget, February 3, 2003, "Draft
    2003 Report to Congress on the Costs and Benefits of Federal
    Regulations; Notice," *Federal Register,* Vol. 68, No. 22, p. 5492;
    and U.S. Office of Management and Budget, March 22, 2000, "Appendix
    4: Guidelines to Standardize Measure of Costs and Benefits and the
    Format of Accounting Statements," in *Report to Congress on the
    Costs and Benefits of Federal Regulations*.

[^29]: Details may be found in the final rule listing the BVLS as
    endangered: U.S. Fish and Wildlife Service, March 6, 2002,
    "Endangered Status for the Buena Vista Lake Shrew (*Sorex* *Ornatus
    Relictus*), Final Rule," *Federal Register*, Vol. 67, No. 44, pp.
    10101-10113.

[^30]: U.S. Fish and Wildlife Service, September 18, 1985, "Review of
    Vertebrate Wildlife, Notice of Review," *Federal Register,* Vol. 50,
    No. 181, pp. 37958-37967. Category 2 species were those for which
    the Service had information which indicated that a threatened or
    endangered classification might be appropriate, but for which
    sufficient data on biological vulnerability and threats were not
    available at that time to support such a listing.

[^31]: U.S. Fish and Wildlife Service, June 1, 2000, "Proposed
    Endangered Status for the Buena Vista Lake Shrew, Proposed Rule,"
    *Federal Register*, Vol. 65, No. 106, pp. 35033-35040.

[^32]: California Farm Bureau Federation, April 10, 2002, "Listing of
    shrew prompts farm groups to file suit," *Ag Alert*, Sacramento.

[^33]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, pp. 10101-10113.

[^34]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, pp.
    51417-51442.

[^35]: U.S. Fish and Wildlife Service, 1998, "Recovery Plan for Upland
    Species of the San Joaquin Valley, California," Portland, Oregon.

[^36]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, p. 10101.

[^37]: Ibid., pp. 10111.

[^38]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, October 6, 2004.

[^39]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, p. 51422.

[^40]: Ibid.

[^41]: Information on the BVLS and its habitat is taken from U.S. Fish
    and Wildlife Service, March 6, 2002, "Endangered Status for the
    Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final Rule,"
    *Federal Register*, Vol. 67, No. 44, pp. 10101-10113, and Williams,
    Daniel F., and Adam C. Harpster, October 29, 2001, "Status of the
    Buena Vista Lake Shrew (*Sorex ornatus relictus*)," Endangered
    Species Recovery Program, Department of Biological Sciences,
    California State University, Stanislaus, submitted to U.S. Bureau of
    Reclamation, Fresno.

[^42]: Prior to the 1998 and 1999 surveys, KNWR staff reported
    occurrences of BVLS three other times.

[^43]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, pp.
    51417-51442.

[^44]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, October 7, 2004.

[^45]: U.S. Fish and Wildlife Service, June 2004, "Kern and Pixley
    National Wildlife Refuges: Draft Comprehensive Conservation Plan and
    Environmental Assessment," Sacramento and Delano.

[^46]: Personal communication with Waring Laurendine, Quad Knopf,
    October 15, 2004. Access to parts of some pipelines is available on
    utility corridors in the area. However, roads do not provide access
    to other parts.

[^47]: Personal communication with Jim Jones, Quad Knopf, Inc., June 21,
    2004.

[^48]: Personal communication with Waring Laurendine, Quad Knopf,
    October 15, 2004.

[^49]: Personal communication with Waring Laurendine, Quad Knopf,
    October 15, 2004.

[^50]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, p. 10106.

[^51]: Ibid.

[^52]: Much of the general framework discussion represents guidance from
    the Service and incorporates language employed in prior economic
    analyses of CHD.

[^53]: Grinnell, 1932, 1933; Hall 1981; Williams and Kilburn 1984;
    Williams 1986; Service 1998.

[^54]: U.S. Bureau of Reclamation and California Resources Agency,
    September 1990, "A Management Plan for Agricultural Subsurface
    Drainage and Related Problems on the Westside San Joaquin Valley,
    Final Report of the San Joaquin Valley Drainage Program,"
    Sacramento, p. 158.

[^55]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 8, 2004.

[^56]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, May 21, 2004.

[^57]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, p. 10106.

[^58]: Based on an estimated \$708 per day for a Federal biologist.
    Personal communication with Service Biologist, Sacramento Fish and
    Wildlife Office, June 30, 2004.

[^59]: Personal communication with Wes Roadhamel, Quad Knopf, Inc.,
    October 7, 2004.

[^60]: Based on U.S. Fish and Wildlife Service, March 6, 2002,
    "Endangered Status for the Buena Vista Lake Shrew (*Sorex* *Ornatus
    Relictus*), Final Rule," *Federal Register*, Vol. 67, No. 44, pp.
    10101-10113; and personal communication with Robert Kunde, Wheeler
    Ridge‑Maricopa Water Storage District, June 2004, including
    information provided by Kern County Farm Bureau to Kern County Board
    of Supervisors.

[^61]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, May 21, 2004.

[^62]: Internal Service communication, September 23, 2004.

[^63]: Internal Service communication, September 23, 2004.

[^64]: The periodicity of the water supply is not explicit in the
    notice, but is assumed to be annual.

[^65]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 8, 2004.

[^66]: Personal communication with Robert Thornton, Nossaman, Gunther &
    Know, attorney retained by the City of Bakersfield, California,
    October 7, 2004; and David Sunding, Charles River Associates,
    October 15, 2004.

[^67]: Regulatory Flexibility Act, Public Law No. 96-354, 94 Stat. 1164
    (codified at 5 U.S.C., Section 601, *et seq.).*

[^68]: Executive Order 13211, May 18, 2001, "Actions Concerning
    Regulations That Significantly Affect Energy Supply, Distribution,
    or Use."

[^69]: California Department of Finance, December 2003, *California
    Statistical Abstract 2003,* p. 2.

[^70]: Ibid., p. 7.

[^71]: California Employment Development Department, Labor Market
    Information Division, 2003, *County Snapshots: Kern County*,
    http://www.calmis.cahwnet.gov/file/cosnaps/kernSnap.pdf.

[^72]: Ibid.

[^73]: U.S. Fish and Wildlife Service, 1998, "Recovery Plan for Upland
    Species of the San Joaquin Valley, California," Portland, Oregon.

[^74]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, May 21, 2004.

[^75]: California Department of Fish and Game, Habitat Conservation
    Branch, August 2004, "State and Federally Listed Endangered and
    Threatened Animals of California,"
    http://www.dfg.ca.gov/whdab/pdfs/TEAnimals.pdf

[^76]: Cylinder, Paul, Kenneth Bogdan, and David Zippin, 2004,
    "Understanding the Habitat Conservation Planning Process in
    California: A Guidebook for Project and Regional Conservation
    Planning," published by Institute for Local Self Government,
    Sacramento.

[^77]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 30, and August 7, 2004.

[^78]: Personal communication with Ted James, Kern County Planning
    Department, June 28, 2004.

[^79]: Patricia Fisher (contact), Office of the Secretary, July 11,
    2003, "Secretary Norton Announces 70 Million in Grants to Support
    Land Acquisition and Conservation Planning for Endangered Species,"
    http://www.libertymatters.org.

[^80]: Personal communication with Ted James, Kern County Planning
    Department, June 28, 2004.

[^81]: California Fish and Game Code §§ 2050, *et seq*.

[^82]: California Department of Fish and Game, Habitat Conservation
    Branch, August 2004, "State and Federally Listed Endangered and
    Threatened Animals of California,"
    http://www.dfg.ca.gov/whdab/pdfs/TEAnimals.pdf.

[^83]: California Department of Fish and Game, Habitat Conservation
    Branch, "California's Plants and Animals,"
    http://www.dfg.ca.gov/hcpb.

[^84]: California Fish and Game Code §§2800-2840.

[^85]: California Natural Resources Code §15065(a). Categories of
    "environmental impact" evaluated in the context of CEQA review
    and/or EIR preparation typically include geological, air quality,
    water quality, noise, light/glare, land use planning, population,
    housing, transportation/circulation, public service, utility system,
    energy, human health, aesthetic, recreational, and cultural resource
    impacts.

[^86]: U.S. Fish and Wildlife Service, 1998, "Recovery Plan for Upland
    Species of the San Joaquin Valley, California," Portland, Oregon.

[^87]: Additional ouput calculated as \$4.3 billion (from Table 5) less
    \$2.5 billion; and additional employment calculated as 58,500 (from
    Table 5) less 30,900.

[^88]: Employment data and output comparison based on input-output model
    for the Kern County economy developed by NEA using IMPLAN software
    and databases from MIG, Inc.

[^89]: U.S. Department of Agriculture, 2004, *2002 Census of Agriculture
    -- County Data, California*, Washington, D.C.

[^90]: University of California Cooperative Extension Service, Davis,
    production budgets for various crops, various years: 1999, "Sample
    Costs to Produce Wheat, San Joaquin Valley, Double Cropped;" 2003,
    "Sample Costs to Establish an Almond Orchard and Produce Almonds,
    San Joaquin Valley South, Micro-Sprinkler Irrigation;" 1998, "Sample
    Costs to Establish a Vineyard and Produce Table Grapes, San Joaquin
    Valley, Thompson Seedless Variety;" 2004, Sample Costs to Establish
    and Produce Pistachios, San Joaquin Valley, Low-Volume Irrigation;"
    and 2003, "Sample Costs to Establish and Produce Alfalfa, San
    Joaquin Valley, 300 Acre Planting."

[^91]: U.S. Fish and Wildlife Service and NOAA Fisheries, August 5,
    2004, "Joint Counterpart Endangered Species Act Section 7
    Consultation Regulations," Federal Register, Vol. 69, No. 150, p.
    47732-47762, and personal communication with California Department
    of Pesticide Regulation, August 17, 2004.

[^92]: Personal communication with Robert Kunde, Wheeler Ridge-Maricopa
    Water Storage District, June 28, 2004; and personal communication
    with Blake Sanden, University of California Cooperative Extension
    Service, October 8, 2004.

[^93]: Based upon NEA analysis of GIS maps.

[^94]: Based upon NEA site visits and NEA analysis of California
    Department of Water Resources GIS coverages of land use.

[^95]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered Status
    for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*), Final
    Rule," *Federal Register*, Vol. 67, No. 44, pp. 10110.

[^96]: See, for example, U.S. Environmental Protection Agency, March
    2000, "Protecting Endangered Species: Interim Measures for Use of
    Pesticides in Kern County," Pesticides and Toxic Substances
    (H-7506C).

[^97]: Personal communication with Rich Marovich, California Department
    of Pesticide Regulation, October 11, 2004.

[^98]: U.S. Environmental Protection Agency, March 2000, "Protecting
    Endangered Species: Interim Measures for Use of Pesticides in Kern
    County," Sacramento.

[^99]: Personal communication with Rich Marovich, California Department
    of Pesticide Regulation, June 24, 2004.

[^100]: Personal communication with Joe Grant, University of California
    Cooperative Extension Service, August 19, 2004.

[^101]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered
    Status for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*),
    Final Rule," *Federal Register*, Vol. 67, No. 44, pp. 10107-10108.

[^102]: Ibid., pp. 10109-10110.

[^103]: Ibid., p. 10109.

[^104]: Personal communication with Service personnel, June 2004.

[^105]: California Regional Water Control Board, Central Valley Region,
    undated, "Dairy Waste Management for Protection of Water Quality,"
    Fact Sheet No. 2 for Dairies,
    http://www.swrcb.ca.gov/\~rwqcb5/available\_\
    documents/dairies/factsheet2.pdf.

[^106]: Personal communication with Joe Grant, University of California
    Cooperative Extension Service, August 19, 2004.

[^107]: Gross margin is calculated as gross value of production less
    variable costs. Fixed costs such as interest and taxes must be paid
    regardless of the use of the land and thus are excluded from the
    figures. Rent is deducted from gross margin because the
    establishment of the buffer zones will remove that land from
    production.

[^108]: Personal communication with Martin Viveros, Kern County Farm
    Advisor, June 28, 2004.

[^109]: Personal communication with L.E. Cooke Nursery, Visalia, June
    28, and August 11, 2004.

[^110]: Average delivered price, based on personal communication with
    Martin Viveros, Kern County Farm Advisor, June 28, 2004.

[^111]: Land preparation includes such activities as chiseling, disking,
    floating, irrigating, and raking. Because a current crop production
    budget for pomegranates was not available, the figure shown is based
    on an average of such charges for other permanent crops grown in
    Kern County, including oranges, almonds, and pistachios. University
    of California Cooperative Extension, 2002, "Sample Costs to
    Establish an Orange Orchard and Produce Oranges, San Joaquin
    Valley-South, Low Volume Irrigation," OR-VS-02; University of
    California Cooperative Extension, 2003, "Sample Costs to Establish
    an Almond Orchard and Produce Almonds, San Joaquin Valley South,
    Flood Irrigation," AM-VS-03-1; University of California Cooperative
    Extension, 2003, "Sample Costs to Establish an Almond Orchard and
    Produce Almonds, San Joaquin Valley South, Micro-Sprinkler
    Irrigation," AM-VS-03-2; and University of California Cooperative
    Extension, 2004, "Sample Costs to Establish and Produce Pistachios,
    San Joaquin Valley, Low-Volume Irrigation," PI-SJ-04. Figures from
    the 2002 and 2003 budgets were indexed to 2004 using the U.S.
    Department of Agriculture Index of Farm Prices Paid,
    http://www.usda.gov/nass/graphics/data/paid.txt.

[^112]: Because a current or recent production budget for pomegranates
    was not available, the interest rate, used to amortize establishment
    cost to an annual cost, is taken from a 2004 production budget for
    the establishment of and production from a pistachio orchard.
    University of California Cooperative Extension, 2004, "Sample Costs
    to Establish and Produce Pistachios, San Joaquin Valley-South, Low
    Volume Irrigation," PI-SJ-04.

[^113]: Calculated as the sum across proposed CHUs and crop types of the
    product of gross value per acre and the number of acres for each
    crop in Table 7.

[^114]: Data are only for crops in Table 4 and exclude livestock and
    apiary activities.

[^115]: Based on crop reports from the Kern County Agricultural
    Commissioner for years 1985 through 2000. During that time, average
    cropland harvested was 838,731 acres, the standard deviation of
    acres harvested was 45,183, and the resultant coefficient of
    variation was (45,183)/(838,731), or 5.4 percent.

[^116]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, p. 51426.

[^117]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, October 6, 2004.

[^118]: Personal communication with David Sunding, Charles River
    Associates, contractor to the City of Bakersfield, October 15, 2004.

[^119]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, May 21, 2004.

[^120]: Personal communication with Robert Kunde, Wheeler Ridge-Maricopa
    Water Storage District, June 28, 2004.

[^121]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    October 13, 2004.

[^122]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    October 11, 2004.

[^123]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    June 29, 2004.

[^124]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    October 13, 2004.

[^125]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, July 1, 2004.

[^126]: Personal communication with Ted James, Kern County Planning
    Department, June 28, 2004.

[^127]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    June 29, 2004.

[^128]: Personal communication with Chris Hildebrandt, Ducks Unlimited,
    June 29, 2004.

[^129]: Personal communication with Drew Hamilton, SWSD, October 15,
    2004.

[^130]: Kunde, Robert, Chair, Kern County Farm Bureau Endangered Species
    Committee, March 14, 2002, "Impacts of Listing the Buena Vista Lake
    Shrew (BVLS) as Endangered," Bakersfield.

[^131]: California Farm Bureau Federation, April 10, 2002, "Listing of
    shrew prompts farm groups to file suit," *Ag Alert*, Sacramento.

[^132]: Personal communication with Donald Black, West Side Mosquito and
    Vector Control District, Kern County, June 18, 2004.

[^133]: Ibid., July 8, 2004.

[^134]: Personal communication with Kern County Agricultural
    Commissioner, Pesticide Desk, July 8, 2004.

[^135]: U.S. EPA, "What is Temephos?"
    http://www.epa.gov/pesticides/factsheets/larvicides4mosquitos.htm.

[^136]: Personal communication with Richard Takahashi, Kern Mosquito and
    Vector Control, June 18, 2004.

[^137]: Personal communication with Donald Black, West Side Mosquito and
    Vector Control District, Kern County, June 29, 2004.

[^138]: Ibid.

[^139]: U.S. Fish and Wildlife Service, March 6, 2002, "Endangered
    Status for the Buena Vista Lake Shrew (*Sorex* *Ornatus Relictus*),
    Final Rule," *Federal Register*, Vol. 67, No. 44, p. 10106.

[^140]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 8, 2004.

[^141]: Stratecon, February 2004, "Water Strategist," Claremont, CA.

[^142]: Personal communication with Robert Kunde, Wheeler Ridge-Maricopa
    Water Storage District, July 1, 2004.

[^143]: U.S. Fish and Wildlife Service, August 19, 2004, "Proposed
    Designation of Critical Habitat for the Buena Vista Lake Shrew,
    Proposed Rule," *Federal Register*, Vol. 69, No. 160, p. 51421.

[^144]: Robert Kunde, Wheeler Ridge-Maricopa Water Storage District,
    June 18, 2004, personal communication.

[^145]: Well and pump cost and expected life from Robert Kunde, Wheeler
    Ridge-Maricopa Water Storage District, July 1, 2004, personal
    communication. Interest rate based on discount rate used in this
    analysis.

[^146]: Irrigation Training and Research Center, California Polytechnic
    State University, 2003, "California Crop and Soil Evapotranspiration
    for Water Balances and Irrigation Scheduling/Design," ITRC Report
    03-001, San Luis Obispo.

[^147]: Based on representative crop production budgets and
    evapotranspiration estimates for alfalfa and irrigated pasture in
    the Central Valley of California. See University of California
    Cooperative Extension Service: 2003, "Sample Costs to Establish and
    Produce Alfalfa, San Joaquin Valley, 300 Acre Planting;" and
    Irrigation Training and Research Center, California Polytechnic
    State University, 2003, "California Crop and Soil Evapotranspiration
    for Water Balances and Irrigation Scheduling/Design," ITRC Report
    03-001, San Luis Obispo.

[^148]: Midpoint of \$50.50 per AF and \$54.50 per AF.

[^149]: Stratecon, February 2004, "Water Strategist," Claremont, CA.

[^150]: FR 69 51423, Table 1. Figures in Table 1 of that publication for
    KNWR and other individual units are as shown and sum to 4,650,
    although sum shown in table is 4,649.

[^151]: Application rate for KNWR based on information provided by the
    Service Manager of KNWR. Application rates for other proposed CHUs
    as discussed previously.

[^152]: The quantity of 20 AF per year is taken from FR 67 10106.

[^153]: California Division of Oil, Gas, and Geothermal Resources, 2003,
    "2002 Annual Report of the State Oil and Gas Supervisor,"
    Publication PR06, Sacramento. Total state oil production was 257.6
    million barrels and total state natural gas production was 485.3
    trillion cubic feet.

[^154]: Personal communication with Linda Campion, California Division
    of Oil, Gas, and Geothermal Resources, June 29, 2004.

[^155]: California Division of Oil, Gas, and Geothermal Resources, 2003,
    "2002 Annual Report of the State Oil and Gas Supervisor,"
    Publication PR06, Sacramento.

[^156]: Personal communication with Mark Poe, AERA, June 29, 2004.

[^157]: Personal communication with Service Manager, Kern National
    Wildlife Refuge, June 29, 2004.

[^158]: Personal communication with Ted James, Kern County Planning
    Department, June 28, 2004.

[^159]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, July 2, 2004.

[^160]: Based on an assumed daily rate of \$708, including benefits and
    incidental expenses, for a Federal biologist. Personal communication
    with Service Biologist, Sacramento Fish and Wildlife Office, June
    30, 2004.

[^161]: Personal communication with Service Biologist, Sacramento Fish
    and Wildlife Office, July 1, 2004.

[^162]: Thus, for a regulatory flexibility analysis to be required,
    impacts must exceed a threshold for "significant impact" *and* a
    threshold for a "substantial number of small entities." See 5 U.S.C.
    § 605(b).

[^163]: This table and other information on size standards are available
    from http://www.sba.gov/size.

[^164]: Regulatory Flexibility Act, 5 U.S.C. § 601 *et seq*.

[^165]: U.S. Small Business Administration, January 28, 2004, "Table of
    Small Business Size Standards Matched to North American Industry
    Classification System Codes," http://
    www.sba.gov/size/indextableofsize.html.

[^166]: Daniels, Mitchell E., July 13, 2001, "Memorandum for Heads of
    Executive Departments and Agencies, and Independent Regulatory
    Agencies," M-01-27,
    http://www.whitehouse.gov/omb/memoranda/m01-27.html.