Imagine 675 miles of backhoe-scooped trench and road, snaking across sagebrush through Wyoming, Utah, Nevada and Oregon. In late July, El Paso Corp. secured federal approval for construction of a pipeline that will transport 1.5 billion cubic feet of natural gas daily from the Rocky Mountains to the West Coast starting next March. Given that this landscape -- home to tenuous enclaves of greater sage grouse and pygmy rabbits -- has already been hammered by livestock grazing and fragmented by development, you'd expect two key environmental watchdog groups to oppose the Ruby Pipeline.

But they don't. At least, not anymore.

The Idaho-based Western Watersheds Project and the Oregon Natural Desert Association announced in July that they would not sue over the $3 billion project. In a deal initiated by El Paso, the company would donate $22 million over 10 years to two conservation trusts, each overseen by a three-person board that includes a representative of El Paso, the conservation groups, and a third independent member. The money would let the groups shift their focus from the 8,800 acres of sagebrush that the pipeline will destroy toward the millions of acres affected by another industry: livestock grazing, which Western Watersheds executive director Jon Marvel calls the "single largest negative impact on Western public lands," causing desertification, erosion and water pollution and threatening endangered species.

The $15 million Sagebrush Habitat Conservation Fund, partially administered by Western Watersheds, would buy private land and purchase and retire federal grazing permits in the nine counties the pipeline passes through, as well as in adjacent counties. The $7 million Greater Hart-Sheldon Conservation Fund, administered in partnership with the Oregon Natural Desert Association, would pay for land acquisition and habitat restoration on 5 million acres in and surrounding the Sheldon National Wildlife and Hart Mountain National Antelope refuges near the pipeline corridor in southeastern Oregon.

Some consider the funds an innovative solution to public-land conflicts; rather than relying on litigation or cumbersome collaboration, they provide for voluntary, market-based conservation. But due to the sheer number of stakeholders here, the deal hasn't worked out all that neatly. In fact, so far it's created as much conflict as it's resolved -- and it's failed to prevent litigation.

Rural counties had supported the pipeline for its more than 5,000 promised jobs. But when the settlement was announced, "we felt we were stabbed in the back," says J.J. Goicoechea, president of the Nevada Cattlemen's Association. Ranching interests along the pipeline's length, alienated by Western Watersheds' confrontational anti-grazing tactics, fear the deal threatens their livelihood, heritage and political clout.

Although the conservation fund cannot be used for litigation (Western Watersheds' usual tactic) and can buy out only willing ranchers, paying them up to 200 times what they fork out yearly for permits, opposition has been formidable. Ranchers started calling their lawyers to get out of the right-of-way agreements they'd signed with El Paso. Local stockgrowers' associations demanded the company rescind the conservation deals outright. And county commissioners who previously offered support have promised to sue. "How much more extortion, ransom and tribute will be paid to these modern Barbary pirates before we go to war?" asked Elko, Nev., attorney A. Grant Gerber at an angry meeting.

Despite the furor, individual ranchers may have all kinds of reasons to seek buyouts of their grazing allotments, and the conservation fund would provide a big pool of money and its administrators would undertake the complicated negotiations with federal agencies necessary to make that happen. While national forest supervisors have the authority to retire (and in theory to reopen) permits, most allotments along the pipeline corridor are on Bureau of Land Management lands, which fall under the 1934 Taylor Grazing Act. Here, the only ways to retire grazing are to negotiate an amendment to the Resource Management Plan -- something the Grand Canyon Trust has successfully achieved in Utah and Arizona -- or to pass legislation allowing retirements in a specific area, as has happened in and adjacent to designated wilderness in Owyhee County, Idaho, and in Cascade-Siskiyou National Monument, Ore. In the past, conservation groups have sought changes to the Taylor Grazing Act to allow permanent grazing retirements; the most recent attempt was cut from the Interior and Environment Appropriations Act in July by a vote of 13-to-1. No such sweeping legal changes are currently being pursued.

Meanwhile, the pipeline company has tried to cool ranchers' ire with a counteroffer: another $15 million fund that will establish an endowment to "protect, enhance and preserve the public lands grazing industry." This fund would be overseen by the Public Lands Council, which represents a coalition of ranching and stockgrowing groups. It cannot be used for litigation, but it would give ranchers a line of defense against the Sagebrush Habitat Conservation Fund by paying for media campaigns and research showing how grazing benefits plant diversity and wildlife.

And the deal-making may not be over. About two weeks after the settlement was announced, the Center for Biological Diversity sued over the pipeline, arguing that construction or gas leaks could harm endangered fish. A week later, the Sierra Club appealed the BLM's approval of the right of way, saying that the pipeline should follow Interstate 80, a route 55 miles longer than the proposed corridor, in order to keep development on already-disturbed lands. The conservation deals, says Elko County Commissioner Sheri Eklund-Brown, have opened "a Pandora's box for other environmental groups to continually file suit and be rewarded."

For additional analysis of this deal and others, listen to High Country Views, episode 9, below.