CHEYENNE - Wyoming needs to address the issue of sprawling residential development to help preserve the sage grouse and its habitat, Gov. Dave Freudenthal said.

The state's Sage Grouse Implementation Team gave Freudenthal its recommendations on Monday. The team suggested increasing the acreage exemption for subdividing land from the current 40 acres to 640 acres. The result would be to subject more subdivision developments to government oversight.

In a press conference Tuesday, Freudenthal said he hasn't yet endorsed any of the team's recommendations. He said he will probably follow the team's suggestion to seek funding to map where the birds exist in the state.

Freudenthal appointed the sage grouse team this year to come up with ways to keep the birds from being listed under the federal Endangered Species Act. Listing the birds would impose costly restrictions on energy development.

Recent studies concluded that sage grouse populations in Wyoming's Powder River Basin dropped by 86 percent from 2000 to 2005 in areas where there was coal-bed methane activity. Grouse populations just outside those areas dropped by 35 percent, the studies found.

The U.S. Bureau of Land Management has imposed seasonal restrictions on energy development in northeast Wyoming to protect the birds.

The team this week called for spending $27.3 million on recovery efforts, of which $20 million would go for conservation easements and the rest going to support mapping, monitoring and local projects. The team stated that hunting of sage grouse in the state should be allowed to continue.

On the team's suggestion of requiring subdivision approval for dividing land in parcels smaller than 640 acres, Freudenthal said, "I don't know if their answer is the right one, but I'm delighted that they had the courage to step up and focus again on a problem that everybody knows is out there."

Freudenthal said people tend to think of oil and gas development as being responsible for reducing sage grouse habitat. However, "If you look at the numbers in terms of the acreage that's being removed, from habitat, the primary driver in that, turns out to be rural housing, rural subdivisions."

John Gibbs, president of the Wyoming Association of Realtors, said Tuesday his group likely would oppose any push to increase the acreage exemption for subdividing land from the current 40 acres to 640 acres.

"That's just a matter of economics; it just makes for less properties to sell," Gibbs said of the proposal. "Not that we're not for the conservation part of things."

Gibbs, a member of the Wyoming Real Estate Commission, said many areas of Wyoming already have problems paying for necessary infrastructure to support development.

"We can't afford the infrastructure we've got now," Gibbs said. "How can we afford the infrastructure on something that big? I don't think the 640 rule over the 40-acre rule is the solution to that problem."

The implementation team also recommended that the state encourage energy companies to "reduce the footprint of energy development." It recommended incentives such as tax exemptions and streamlined permitting to entice industry to reduce disruption of the land where sage grouse live.

Freudenthal said he's not sure he will end up supporting tax incentives for energy companies to reduce their effect on the land. He said most of the companies are already doing what they can.

Bruce Hinchey, president of the Petroleum Association of Wyoming, said Tuesday that companies are already working to reduce their presence on the ground.

If sage grouse are listed under the Endangered Species Act, Hinchey said the effects would go far beyond his industry. "It would affect not only our industry, but ranching, mining and everything that goes on in the state," he said.

Freudenthal said he hopes Wyoming can convince the U.S. Fish and Wildlife Service to enter into a statewide agreement that could allow the state to continue agricultural activity and energy development even if the sage grouse gains federal protection nationwide.

The Endangered Species Act contains a provision that allows private landowners to enter into "candidate conservation agreements." Such agreements could allow Wyoming landowners who take steps to protect sage grouse and their habitat to continue their normal operations if the birds are listed.

If the state can get a candidate conservation agreement in place, Freudenthal said, regional changes to the sage grouse population that might cause it to be listed as an endangered species won't affect Wyoming. "We will still be able to continue doing business in the way we have done it," he said.