ENVIRONMENT : Spotted Owl’s Fate Is Up to ‘God Squad’ : Federal panel has been asked to rule for first time since snail darter imbroglio.

For the first time since the imbroglio over a tiny minnow jeopardized a $120-million Tennessee dam, a committee with authority to sweep aside protection of the Endangered Species Act has been impaneled to weigh the future of the northern spotted owl.

The Cabinet-level panel, summoned by Interior Secretary Manuel Lujan Jr. and nicknamed the “god squad,” received its instructions last week. It then adjourned until February, when it will receive a staff report from which it will determine whether timber-cutting should be permitted on nearly 4,600 acres of the threatened owl’s habitat in western Oregon.

At stake, besides the owl’s future, are harvests totaling about 224 million board feet of lumber, and, by some estimates, thousands of jobs.

Whatever the outcome, the convening of the panel and its subsequent decision are viewed as a harbinger of things to come.

“The decision made . . . is likely to send a clear signal as to how future timber sales will be handled,” said Michael Bean of the Environmental Defense Fund. “If an exemption is granted . . . it is hard to imagine how and why an exemption would not be granted for others down the road in the years ahead.”

BACKGROUND: The struggle pitting environmentalists fighting to save old-growth forests and the owl versus communities in the Northwest fearing economic ruin has raged since 1987, when the U.S. Fish and Wildlife Service was petitioned to list the owl under the Endangered Species Act.

After a bitter dispute and a scientific panel report showing that the owl was “imperiled over significant portions of its range,” the Fish and Wildlife Service officially designated the bird as threatened. It has since proposed designating 8.2 million acres of old-growth forest in Washington, Oregon, and Northern California as protected--a move that restricts commercial activity. A final decision on the habitat is expected before the end of the year, as is a report from a committee appointed to draw up a recovery plan for the owl.

Lujan, meanwhile, has brought the controversy to a head by calling together the Endangered Species Committee to decide whether to overturn a finding by the Fish and Wildlife Service that logging on 44 federally owned tracts in five counties would jeopardize the owl’s existence. Of about 150 timber sales proposed in 1991, Fish and Wildlife officials issued jeopardy opinions only for the 44 tracts.

Lujan acted in response to a petition from the Bureau of Land Management, which conducts annual timber sales on federal lands.

The committee could uphold the finding of Fish and Wildlife scientists and leave all the tracts off-limits, or it could decide that economic concerns prevail and permit the sale of the timber on some or all of the tracts.

The Interior secretary named Harvey C. Sweitzer, an administrative law judge in the department, to hold extensive public hearings in Portland, beginning Jan. 8. The record compiled in those public hearings will be used to prepare the report to be submitted to the Endangered Species Committee in February.

The “god squad”--so dubbed because of its power to permit actions that could condemn a creature to extinction--was created by Congress in the wake of a fight in the late 1970s when discovery of an endangered minnow called the snail darter interrupted completion of the Tennessee Valley Authority’s Tellico Dam.

The panel then barred the project from being completed. Subsequently, the decision on the Tennessee dam was reversed by an act of Congress, and the project was finished.

In another decision, the panel ruled the Grayrocks Dam in Wyoming could proceed because arrangements had been made to mitigate its destruction of whooping crane habitat.

Four petitions to call the “god squad” into action have been filed since the two 1979 cases, but all of the cases were withdrawn or dismissed without the committee’s acting.

Besides Lujan, the panel’s members are Secretary of Agriculture Edward R. Madigan, Secretary of the Army Michael P. W. Stone, EPA Administrator William K. Reilly, National Oceanic and Atmospheric Administration chief John A. Knauss and Council of Economic Advisers’ Chairman Michael J. Boskin.

Interior Department solicitor Thomas L. Sansonetti, the committee’s counsel, said one petition already has been filed by companies, unions and trade organizations, asking to testify in the hearings before the administrative law judge.

THE ISSUES: To overturn the Fish and Wildlife conclusion that harvesting the 44 tracts would jeopardize the owl’s existence, the committee must conclude: first, that there is no reasonable and prudent alternative to the proposed sales; second, that the benefit of the sales outweighs any alternative course of action; third, that the issue has regional and national significance; and fourth, that no irreversible commitment has been made.

Plans to harvest the timber have predictably strong support among residents of the Northwest whose incomes depend on the industry. It is also supported by local governments that would benefit through taxes.

Environmentalists and Fish and Wildlife biologists say, however, that the logging would leave gaps in the forests of the Coast Ranges that house Oregon’s spotted owls.