TEXAS CITY, Texas --8/20/02 -  On a swath of grassland, tucked among belching refineries, a power plant and a busy highway, sits the last known breeding ground on Earth for one of North America's most endangered birds. There are fewer than 40 of the ungainly Attwater's prairie chickens left in the wild, half of them here at the Nature Conservancy's Texas City Prairie Preserve.

Yet when the Nature Conservancy, the world's wealthiest environmental organization, was given this 2,263-acre oil field by Mobil Oil Corp. in 1995 because of low production levels, the nonprofit organization did not shut off the petroleum spigots.

Instead, it drilled new natural gas wells, and kept cattle grazing too. The conservancy—the 10th largest charity of any kind in the United States—has reaped $5.2 million in royalties from the preserve so far.

Conservancy officials insisted that, under their careful management, neither gas lines nor cattle hoofs will harm the endangered bird. The conservancy called its prairie chicken preserve cum petroleum patch a "working" landscape, a harmonious mixture of commerce and conservation.

Long noted for its low-key, apolitical philosophy of acquiring land from willing sellers or donors, the conservancy under a new boss is forging closer ties with industries that other environmentalists often think of as the enemy.

"Maybe it's time we all took a walk in the oilman's shoes," said Niki McDaniel, spokesman for the Texas Nature Conservancy. "We believe the opportunity we have in Texas City to raise significant sums of money for conservation is one we cannot pass up, provided we are convinced we can do this drilling without harming the prairie chickens and their habitat. And we are convinced."

Others disagreed, saying that, even if there has not been a pipeline blowout, for instance, it is impossible to eliminate all risk. They said that development, including oil and gas refineries, is what devastated the bird's habitat to begin with.

"Let me be generous," said Clait E. Braun, president of the Wildlife Society, and one of the nation's leading experts on prairie chickens and other grouse. "There are no data to indicate that the Attwater's prairie chicken can coexist with oil and gas drilling. All the evidence indicates clearly that what you get is a fragmentary population straggling toward extinction."

Nearly half of the 7 million acres that the conservancy said it is protecting in the United States is now being grazed, logged, farmed, drilled or put to work in some fashion. The money earned from such activities—about $7 million this year—is less than 1% of the group's $732 million in annual revenues.

The Nature Conservancy, which turned 50 last year, was founded by New York state residents who bought a small piece of land near the Hudson River to keep it from being developed. That "bucks for acres" concept caught on, spawning other national land trusts, open space initiatives and preservation efforts. The conservancy distinguished itself by focusing on acquiring biologically significant lands.

The organization has long prided itself on collaboration, rather than confrontation. That has paid off handsomely in corporate donations and government contracts, from the world's largest oil, paper, automobile and software companies and the U.S. military.

A list of donors to its recent $1-billion Campaign for Conservation is a who's who of American industry—in the $20 million or more category are General Motors and the David and Lucille Packard Foundation of Silicon Valley fame. In the $10-million to $20-million category are mega-developer Donald Bren and American Electric Power. Chevron Texaco Corp. pitched in $5 million to $10 million, and Centex Homes, Georgia Pacific timber and paper company, Arrow Last & Livestock Inc. and Public Service Co. of New Mexico each gave between $2.5 million and $5 million. The organization also has nearly 1 million individual members, who pitched in more than $200 million last year.

In the last several years, under the leadership of John Sawhill, the organization adopted new fund-raising and conservation tactics, from licensing its name to granola bar and coffee bean companies to doing research funded by General Motors on climate change. GM could win mitigation credits for greenhouse gas emissions it causes as a result of the research, according to a footnote in the conservancy's latest tax filings.

"Land acquisition will always be an important tool, but not necessarily the major tool" of the organization, said its national spokesman, Jordan Peavey.

A key in-house architect of the changes was Steve McCormick, 50, longtime head of the California Nature Conservancy, who became executive director of the entire organization last year, after Sawhill died.

Petroleum, timber and farming royalties made up the bulk of the Texas chapter's budget in 2001—$6.5 million of $7.6 million—and the lion's share of that was gas royalties from the Texas City Prairie Preserve. But McCormick said the primary aim of the "working" landscapes is not to make money. In numerous cases, the conservancy is paying ranchers, farmers and others to use more environmentally friendly practices, he said.

McCormick conceded that there are potential biological risks to a strategy that puts industry side by side with conservation. But it is a necessary strategy, he said, because buying isolated fragments of land has not been enough to protect rare species that need whole mountain ranges or watersheds stretching hundreds of square miles.

There will never be enough money to buy such vast stretches, he said. The solution, he said, is to stitch together habitat by forging partnerships with ranchers, timber companies and other rural landowners who have often opposed environmental laws, such as the Endangered Species Act.

"Our desire is to work with those rural communities in ways that respect their culture, respect their economies ... but in a fashion that is compatible with preservation of endangered species," McCormick said.

"Is that risky terrain? Yes, it is, because it puts us in a position of working with extractive uses" such as oil drilling, he said. "But the alternative is to stand on the side wishing it weren't so."

Critics said that doesn't justify the conservancy's taking similar risks on its own land.

"I knew the founders of this organization on a first-name basis, and they would be turning over in their graves," said Huey Johnson, a Northern California environmentalist who was the Nature Conservancy's first Western region manager, 40 years ago. "It would take just one dumb move to destroy the integrity accumulated over 50 years by this organization."

"There are millions of acres being logged already by timber companies, millions of acres being grazed by private cattle ranches. Why does the Nature Conservancy have to become a timber baron?" asked Kieran Suckling, executive director of the Center for Biological Diversity, which has the same mission as the conservancy, but uses lawsuits and other adversarial tactics.

Conservancy officials and supporters said they provide a valuable example by demonstrating on their own lands that conservation and commerce can go hand in hand.

In New England, as paper companies have sold off whole forests in recent years, the conservancy has participated in deals on nearly a million acres of Maine and New Hampshire woods, McCormick said. Though some small pieces will be preserved, most of the land will continue to be logged. The forests will be thinned rather than shorn of trees, using "sustainable" forestry practices.

That strategy is far different from those of other environmental groups in the region, which have pushed for the creation of a national park.

But the idea of a park, with a loss of forestry jobs and restrictions on motorized recreation, is not popular with many residents. That includes workers at paper factories, hunters and snowmobilers who have ranged freely on the privately owned backwoods for centuries. Under the conservancy's stewardship, those traditions will continue.

In the Southwest, where conservancy staff members said encroaching subdivisions represent the single greatest environmental threat, the group now controls 2.1 million acres of livestock range, including ranches it has bought and interests in other lands. The conservancy has even funded a business venture called Conservation Beef to market hormone-free steaks described on the venture's Internet site as "rapturously tender, undeniably charismatic" and "like the free-range beef our grandparents grew up on."

"Your purchase of Conservation Beef is worth feeling good about. You're becoming a partner in helping us protect the Great American West," the Web site says.

Conservancy officials said they are moving cattle from place to place to protect stream beds and using other ecologically sound measures. They said that all ranchers they work with must follow rigorous plans for land stewardship.

Still, the partnerships have on occasion put the conservancy in the position of siding with ranchers against other environmentalists. In 1999, 18 Arizona environmental groups wrote a joint letter to the organization, asking the conservancy to stop siding with ranchers in negotiations to change federal and state environmental laws governing grazing and to stop perpetuating "myths about environmental protection and rancher(s) which are flatly untrue."

As for the conservancy's argument that by "working" its own land it is showing private landowners that business ventures can prosper under an environmental ethos, some of those landowners disagree.

"I would say it's the opposite, in fact. It would be our view that they would learn from us," said a spokesman for Exxon Mobil Corp., Bob Davis, noting that many of the environmentally sensitive industry practices used by the conservancy on its Texas City preserve had been developed by Exxon and Mobil researchers. But Davis said that the company supports sustainable development and that the conservancy's petroleum production on the preserve is "admirable."

Some ranchers and property-rights advocates said the nonprofit's deep pockets enable it to take steps that private, for-profit owners would find difficult—grazing fewer cattle per acre, for example, or keeping the animals out of stream beds during drought years.

The larger question is whether working landscapes actually provide protection for fragile terrain and wildlife.

"The question is not whether working landscapes are a good idea in the abstract, but whether it's a good or a bad idea for a particular species," said Michael Bean, director of the wildlife division of Environmental Defense. "I certainly am not prepared to say it's always a good idea."

But Bean said that the conservancy has an "outstanding track record" of preserving land and that, in specific cases, research has shown the approach could work.

"The Nature Conservancy fills an important niche. [It] accepts money from large corporations and big polluters who we could not take money from," said Robert F. Kennedy Jr., head of the Waterkeeper movement, which works to clean up U.S. waters. "But it's possible to compromise your ideology, your reputation by making too risky choices."

Braun, the grouse expert, is more critical: "The Nature Conservancy is speaking out of both sides of its mouth: 'We can have this wildlife, and we can make money too.' ... Well, that's not true," he said. "They're exploiting the Attwater's prairie chicken to make money."

At the conservancy's Texas City Prairie Preserve, none of the more than $2 million set aside to help in the bird's recovery had been spent as of this spring. Conservancy officials and others said the money will be vital to fund captive breeding programs; to try to persuade a host of other wary private landowners to set aside additional habitat for the birds; and to reseed prairie grasses.

The homely bird once numbered about a million, its habitat stretching across the Texas and Louisiana coastal prairies. In pioneer days, it was a familiar figure, strutting across dusty farmyards and oil fields, the males flapping and "booming" loudly during the spring mating season.

They are a Southern cousin of another bird greatly reduced in number—the prairie chickens of the Midwestern prairies.

Like them, the Attwater's has been pushed almost out of existence by over-hunting, overgrazing, farming, roads and other development.

"Their habitat is now Houston, NASA and Galveston," said Mark Klym, a biologist who runs a fund-raising effort—"Adopt-A-Prairie-Chicken"—for Texas Parks and Wildlife.

The prairie chickens aren't the only ones crowded onto this remnant coastal grassland.

Dozens of bird species are visible on a given day—many of them raptors that could wipe out the tenuous Attwater's population for breakfast.

As for the drilling and grazing on the preserve, conservancy officials insisted that rigorous protections are in place and that there is no evidence of harm from the commercial activities.

Surface pumping is confined to small areas, and drilling is limited to months when there is no mating and nesting.

Close to 50,000 nonnative Chinese tallow trees that threatened to choke out native grasses vital to the chicken's survival have been ripped out.

As for grazing, state fish and game biologists said the cattle help to create the clumpy patches of grassland that the bird needs, much as bison historically did.

But even those who think that the conservancy is making valiant efforts to preserve the bird have misgivings.

Staff members at the Lone Star Chapter of the Sierra Club, the Houston branch of the Audubon Society and area federal regulators said there always will be a risk, however small, of a major pipeline blowout, a bad spill or even the gradual sinking of the bird's mating ground as natural gas is sucked out from underneath.

And for all the intensive restoration work, without the regular release of captive-bred birds here and elsewhere, the species probably would already be gone, said Braun and others.

"The Attwater's prairie chicken doesn't really exist anymore," said Braun, noting that many of the introduced birds have been crossbred with Midwestern prairie chickens.

"They're not extinct, but that's in name only," Braun said. "All I can say is, it's a poor end for a fine American bird."