Obama to overhaul process for offsetting environmental harm

By Corbin Hiar | 09/24/2015 01:16 PM EDT

The White House is preparing a presidential memorandum that seeks to streamline how the government offsets damage to public lands, waters and wildlife, according to several sources.

The White House is preparing a presidential memorandum that seeks to streamline how the government offsets damage to public lands, waters and wildlife, according to several sources.

The memo aims to consolidate separate mitigation policy reform efforts that are already underway at federal agencies and learn from past mistakes, sources said. It would affect everything from energy production on the federal estate to the construction of government buildings.

"It has the potential to create a new, more collaborative relationship between industry and the government that would serve both interests," said an Obama administration official who was not authorized to speak to the press. "Industry would be able to use federal resources in a way that would contribute to sustaining the yield of resources over time and growing them."


That proactive mitigation for timber harvesting and other land uses is necessary, the source said, "because the population is growing and changing. So if you’re going to continue to provide those goods and services off that resource base, you need to conserve it or grow it."

But oil and gas industry groups are skeptical about the effort, which sources suggested could promote closer ties between regulators and drillers, because the changes are being crafted behind closed doors.

"It’s a great goal, but collaboration doesn’t happen by dropping a policy on people that they can’t see beforehand," said Kathleen Sgamma, a vice president at the Western Energy Alliance who hadn’t heard about the effort until she was contacted by Greenwire. "That’s not collaboration."

The White House didn’t respond to requests for more information about the forthcoming mitigation memo, but sources said they believe it will draw from agencies’ existing plans to deal with the negative environmental impacts of federal actions.

Interior Secretary Sally Jewell unveiled a landscape-level mitigation strategy last year in an attempt to shift her agency’s permitting decisions away from narrowly focused project-by-project assessments. The report prioritized improving assessments of Interior resources, developing regional plans for managing them, creating compensatory mitigation programs for unavoidable impacts, and monitoring and evaluating those mitigation efforts (Greenwire, April 10, 2014).

The Forest Service followed suit in May, when it internally circulated draft principles for mitigating a broad array of potential effects from its land management decisions.

The service’s stated goal for the principles is to "use the best science to implement landscape-scale mitigation planning, banking, in-lieu fee arrangements and other measures; both on-site and off-site."

"At a minimum," the document says, "this framework will require the avoidance, reduction, repair and compensation for unavoidable impacts … to biological, ecological, cultural, recreational, wilderness, roadless, socioeconomic and aesthetic values."

The presidential memorandum "just calls for consistent processes," the administration official explained. "The idea being that, if you’ve got a project application that comes in and crosses several federal jurisdictions, the processes by which those federal agencies address mitigation requirements should be similar and understandable and predictable."

The source added that the forthcoming memo "doesn’t really specify how to" offset the impact of, say, a concentrated solar power plant on protected species and their desert habitat.

The interagency collaborations that helped to keep the wide-ranging greater sage grouse from being listed under the Endangered Species Act helped to "spur" the shift to landscape-scale mitigation, the administration source said.

White House officials began thinking, the source said, "maybe we should adopt this as an approach that we take across the board."

Lessons of wetland banking

Sources on K Street and in the environmental community also indicated the memo would draw on lessons learned from the federal government’s early struggles to preserve wetlands.

The George H.W. Bush administration initially set a national goal of no net loss of wetlands in 1989. But over a decade later, the National Academy of Sciences found that more wetlands were still being lost than gained (Greenwire, June 27, 2001).

U.S. EPA and the Army Corps of Engineers then moved to encourage developers whose projects destroyed wetlands to buy credits for mitigating damage from companies that conserve or improve large tracts of marshes, swamps and bogs (E&ENews PM, March 31, 2008).

Clear regulations and monitoring of such conservation banks helped to stem the tide of wetland loss and have stoked the Obama administration’s interest in fostering the spread of mitigation banking into new markets, such as the recovery of endangered or threatened species.

"The experience of the wetland banking program is that clear standards made the difference between a troubled program and a successful one that integrated real competition and market principles into the delivery of a very important public benefit," said Thomas Jensen, a partner at the law firm Holland & Hart LLP.

Jensen’s firm has been paid $20,000 so far this year to lobby on mitigation issues for LPC Conservation LLC, a conservation bank established to permanently protect habitat for the lesser prairie chicken. Until a court ruling overturned the listing earlier this month, the prairie chicken was listed as threatened under the Endangered Species Act (Greenwire, Sept. 2).

With the White House memo, Jensen said his mitigation banking clients hope "new markets become available to them under rules that they can know in advance and follow."

"The prairie chicken experience," he said, "has been very discouraging to them, and they’re hoping that whatever happens next moves in the direction of correcting, or at least avoiding, a repeat of the problems that they saw."

LPC Conservation was stunned by a Fish and Wildlife Service decision to extend the compliance period for state wildlife regulators to obtain permanent lesser prairie chicken conservation land. The bank said its investors had spent around $5 million based on that deadline to, among other things, find ranchers whose properties were home to the rare birds and entice the landowners to change their grazing practices (Greenwire, April 7).

Unclear scope and timing

It remains to be seen how wide and deep the White House mitigation effort will reach.

"One of the things that will be interesting from the presidential memorandum is whether it sets new and clear standards for identifying the circumstances in which mitigation is appropriate," Jensen said.

For instance, he asked, will the memo affect the size of federal office building windows, which can harm migratory songbirds, or permitting for parking lots, which increase polluted runoff into waterways?

No one knows exactly when the memo will be released, but many sources expect it to surface before President Obama leaves office.

Improving mitigation is "a potential legacy issue for this administration," according to an environmentalist who spoke on the condition of anonymity. "There is a desire to see a lot of these policies get finalized."

The measure of the memo’s success, according to the environmentalist, will be "the degree to which there is consistency across agencies on these policies." That would allow "the regulated public to feel like they support efficient decisionmaking," she said, and for greens to see that "environmental outcomes are improved."

But even if the memo yields the broadly shared benefits that its supporters believe it will, for the Western Energy Alliance, the ends don’t justify the means.

"The problem is that, when you’re looking at these sweeping changes that will affect millions of acres of public lands, the public should have an opportunity to evaluate the policies and provide comment," Sgamma said. "This should not be something that is being done just by agencies in collaboration with certain favored stakeholders."

This story was updated on Friday, Sept. 25, to more accurately describe the amount of money LPC Conservation invested in lesser prairie chicken conservation.