CHAPTER 6 CONFIGURING NATURAL RESOURCE PROJECTS TO AVOID, MINIMIZE, OR MITIGATE WETLAND IMPACTS

• Jurisdiction: United States

Wetland Issues in Resources Development
(Nov 1993)
CHAPTER 6
CONFIGURING NATURAL RESOURCE PROJECTS TO AVOID, MINIMIZE, OR MITIGATE WETLAND IMPACTS
Brian R. Hanson
Holland & Hart
Denver, Colorado

Natural resource project proponents who hope to develop projects and stay in business avoid "wetlands" assiduously. They know that ecological swamps have become permitting quagmires. Thus, it is somewhat ironic that the public and regulators devote so much attention to urging project proponents to do what they are already inclined to do--avoid or limit project impacts to wetlands. Yet regulators must comply with statutory and regulatory provisions mandating their consideration of alternatives to wetland impacts or ways to mitigate unavoidable impacts. While the regulators' review of alternatives and mitigation may be frustrating when it occurs late in project development, the proponent can take steps to limit disruption caused by the review.

This paper discusses why wetland alternatives analysis and mitigation requirements are imposed, what those requirements entail, and how the project proponent can address those requirements in a timely and cost-effective way.

I. Why Wetland Alternatives Analysis and Mitigation Requirements are Imposed—"No Overall Net Loss of Wetlands."

Wetlands perform functions within and offer values to the aquatic ecosystem,¹ which has led to a national agenda of reversing historic loss of wetlands and slowing future losses.² The Corps of Engineers ("Corps") and Environmental Protection Agency ("EPA") through the Clean Water Act Section 404 regulations seek "to avoid the unnecessary destruction or alteration of waters of the U.S., including wetlands, and to

[Page 6-2]

compensate for the unavoidable loss of such waters."³ Finding alternatives to use of wetlands or ways to mitigate impacts on wetlands is a central component of achieving this agenda. Thus, the subjects discussed below lie at the heart of federal efforts to preserve and enhance wetlands.

The goal of slowing or reversing wetland loss is popularized in the slogan "no net loss of wetlands." This battle cry was enunciated by the National Wetlands Policy Forum in 1988, adopted by the Bush administration, and embraced by the Clinton wetland program as the first of five principles of federal wetland policy.⁴ President Clinton intends to implement the "no overall net loss" goal by issuing an Executive Order.⁵ The "no overall net loss" goal has not been substantively reviewed by the courts.⁶

Policymakers may argue about how "no overall net loss" should be implemented nationally, but project proponents must struggle with its application to particular wetlands. As applied, the slogan tends to be interpreted as "no loss of this wetland," which compels the proponent to remind project opponents that the slogan was not intended as a blanket rejection of any impact on wetlands. Indeed, the Mitigation Memorandum of Agreement⁷ explicitly "recognized that no net loss of wetlands functions

[Page 6-3]

and values may not be achieved in each and every permit action."⁸ This point frequently gets lost in efforts to preserve particular wetlands from impacts. In any case, the no overall net loss of wetlands goal provides strong incentive for project proponents to avoid wetlands to the greatest extent possible or to minimize unavoidable wetland impacts when necessary.

II. Legal Basis for Alternatives Analysis and Mitigation Requirements.

The Federal Clean Water Act Section 404 program establishes stringent requirements for alternatives analysis and mitigation. State or local wetland programs may add requirements to consider alternatives or mitigate impacts, but those requirements are beyond the scope of this paper.⁹

While the federal alternatives analysis and mitigation requirements both spring from a common source in the Clean Water Act, for analytical purposes this paper discusses the requirements separately. However, this analytical clarity may not be maintained in review of an individual project, which may be characterized by seemingly random reoccurrence of alternatives or mitigation questions that appeared to be long since resolved. Resolution of one issue often triggers reexamination of other issues, and circularity is the norm.

In principle, the Corps must conclude that no practicable alternative to the proposed wetland discharge is available before the Corps can consider mitigating project impacts. In practice, use of the Mitigation MOA sequencing approach¹⁰ may lead regulators and the public to argue with the proponent about project alternatives at the same time the entities are negotiating ways to limit or mitigate wetland impacts.

A. Section 404(b)(1) Guidelines.

Clean Water Act Section 404(b) directed EPA, in consultation with the Corps, to promulgate Guidelines for Section 404 permitted discharges.¹¹ The Corps emphasizes

[Page 6-4]

that the Guidelines are "substantive environmental criteria" that "form an essential component of the Corps' environmental protection of the Nation's wetlands."¹²

The Guidelines, which were promulgated as "binding substantive rules,"¹³ require the Corps to address potential impacts on the physical, chemical, and biological characteristics of the aquatic ecosystem, on special aquatic sites, and on human use characteristics.¹⁴ Additionally, the Guidelines mandate evaluation and testing procedures and actions to minimize adverse effects,¹⁵ including the potential loss of wetland values.¹⁶ The Guidelines prohibit a regulated discharge that "will cause or contribute to significant degradation of the waters of the United States."¹⁷ The Corps' regulations specifically require denial of a permit application if the proposed discharge would not comply with the Guidelines.¹⁸

The Guidelines regard "degradation or destruction" of wetlands "to be among the most severe environmental impacts covered by these Guidelines," and establish a guiding principle that degradation or destruction of wetlands "may represent an irreversible loss of valuable aquatic resources."¹⁹ Quite simply, discharges into wetlands "should not occur unless it can be demonstrated that such discharges, either individually or

[Page 6-5]

cumulatively, will not result in unacceptable adverse effects on the aquatic ecosystem."²⁰ Natural resource projects that impact wetlands face a daunting challenge of demonstrating the impacts are acceptable. The project proponent must demonstrate the impacts do not result in "unacceptable adverse effects on the aquatic ecosystem," and demonstrate compliance with the Guidelines.²¹ The remainder of this paper discusses how the proponent can accomplish these tasks and obtain the project permits.

B. Alternatives Analysis.

The Guidelines starkly state that no discharge is allowed under Section 404 "if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem, so long as the alternative does not have other significant adverse environmental consequences."²² The search for alternatives, or stated differently, the demonstration that all reasonable alternatives were considered and rejected, can delay or derail Section 404 permit applications, particularly when alternatives analysis occurs as an afterthought late in project development.

1. Project Purpose.

Before embarking on an "alternatives analysis," one might reasonably ask: "Alternative to what"? A critical component of the project proponent's strategy is helping the Corps describe the "project," because the wetland alternatives analysis is driven by the project's purpose.²³

[Page 6-6]

Defining the project purpose is inherently abstract. For example, one might describe a project's purpose as harvesting timber or mining ore; just as easily, one could describe the purpose as harvesting these particular trees or mining this particular deposit; one also could define both activities as seeking financial gain from timbering or mining; greater or lesser degrees of abstraction are equally fair. All of these examples define the project from the standpoint of the proponent, which clearly is where the proponent would choose to start. But the purpose could be defined from some other entity's perspective since the Guidelines do not specify from whose perspective the project purpose must defined.

Thus, some commentators have suggested that the project purpose should be assessed from the public's perspective.²⁴ If one looks at the public's purpose, one might imagine many ways timber might be harvested or ore might be mined without impacting wetlands, or even how society might avoid or limit timbering or mining altogether. Louisiana Wildlife Federation v. York²⁵ determined that the Guidelines do not require evaluation of project purpose from the "public" perspective. Yet this issue is far from resolved, and some EPA or Corps permit decisions appear to use the public's perspective in defining the project purpose.²⁶

The Corps has ultimate authority to define the basic project purpose,²⁷ but the Corps must consider the applicant's views,²⁸ which necessitates careful balancing.²⁹

[Page 6-7]

The Corps observes that "[t]he basic project purpose can be neither so broadly defined nor alternatively so narrowly defined so as to render the alternative analysis meaningless or impracticable."³⁰ If the project purpose is defined too narrowly, an incomplete analysis of alternatives may occur; conversely, if the project purpose is defined too broadly, meaningful analysis of practicable alternatives is impossible. Thus, defining the

[Page 6-8]

project purpose requires careful drafting and coordination with the Corps. To add to the challenge, the Corps says that "the project purpose should be concisely stated in one or two sentences."³¹

The Corps has demonstrated a willingness to reject project purpose descriptions that limit the availability of practicable alternatives.³² As one court...