Digging in: 2013 Research on ‘Level Playing Field’ of 2008 Wetland Mitigation Rules

In 2008, the US EPA and Army Corps of Engineers released their final rule on Compensatory Mitigation for Losses of Aquatic Resources (2008 Rules). The 2008 Rules were intended, in part, to right some wrongs of earlier wetland mitigation. For one, originally compensatory mitigation was steered towards mitigating close to the site of impact. But that could lead to postage-stamp mitigation, isolated from other resources and minimal ecosystem services. So the 2008 Rules gave preference to larger-scale wetland restoration in a watershed context.

Small mitigation plots rarely work(Image credit: Kerry ten Kate presentation, BBOP, circa 2010)

Another wrong to right was temporal loss of wetland functions and values. Let’s say I start restoring a wetland. Year 1 doesn’t look pretty – muddy, goopy mess with some tiny sticks trying to become trees. But it starts looking better and better as hydrophilic plants get established, as the hydrology is restored, etc. And as the wetland gets better, so do its functions – like its ability to filter water, its ability to absorb and slowly release storm flows, its ability to provide a home for critters. Mitigation banks have to have restoration in place before selling credits,*so the restoration is in place before the impact. Prior to the 2008 Rules, In Lieu Fee programs (ILFs) could collect funds and then perform the mitigation. Permittee-responsible mitigation didn’t and still doesn’t have to happen in advance of impacts.

Prior to 2008, there was not a ‘level playing field’ for mitigation. In-advance, larger-scale mitigation was costlier and riskier than at-the-time-of-impact mitigation. Cheaper, smaller-scale permittee-responsible mitigation could beat out other forms of mitigation even if it wasn’t the best thing for the environment.

The 2008 Rules set out a preference hierarchy for mitigation**:

“In order to reduce risk and uncertainty and help ensure that the required compensation is provided, the rule establishes a preference hierarchy for mitigation options. The most preferred option is mitigation bank credits, which are usually in place before the activity is permitted. In-lieu fee program credits are second in the preference hierarchy, because they may involve larger, more ecologically valuable compensatory mitigation projects as compared to permittee-responsible mitigation. Permittee-responsible mitigation is the third option, with three possible circumstances: (1) conducted under a watershed approach, (2) on-site and in kind, and (3) off-site/out-of-kind.” (Source: [2008 Rule] Questions and Answers, see also 40 CFR Chapter I § 230.93(b)(2))

So how’s that been going? Mitigation bankers say the preference hierarchy has not been followed in many US Army Corps of Engineers Districts. There is not, however, a national analysis of this (that I’ve seen). So it takes some digging at the District scale to see what’s going on. Like:

  • What are these “consolidated mitigation areas” that are being used in Arkansas for frac pond mitigation? There is zero mention of the term in the 2008 Rules.
  • Why did an Alaskan ILF sit on mitigation funds for more than 10 years before figuring out what to do with it?

The latter question is something that I wrote about on Scoop.It. Following that post, I was contacted by a law firm who asked that I dig into questions like these. So I’ll be digging in to the ‘level playing field’ question, FOIAs and all, and posting white papers and blog posts synthesizing the research. Wish me luck!

*Actually, they get to sell a small amount of credits after legal protections have been put in place.
**The 2008 Rules include a caveat to the preference hierarchy of mitigation:
“However, these same [see above] considerations may also be used to override this preference, where appropriate, as, for example, where an in-lieu fee program has released credits available from a specific approved in- lieu fee project, or a permittee- responsible project will restore an outstanding resource based on rigorous scientific and technical analysis.” (40 CFR Chapter I § 230.93(b)(2))

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