Chapter 7 The Trajectory of Compensatory Mitigation in Public Lands Management

• Jurisdiction: United States

Chapter 7 The Trajectory of Compensatory Mitigation in Public Lands Management
Kathleen C. Schroder Kathleen Pritchard Davis Graham & Stubbs LLP Denver, CO

KATHLEEN C. SCHRODER is a partner at Davis Graham & Stubbs LLP in Denver, where her practice focuses on all aspects of energy development on federal lands. Ms. Schroder counsels clients on oil and gas leasing and development on federal lands and agency compliance with the National Environmental Policy Act and the National Historic Preservation Act. She has extensive experience with the Endangered Species Act and advises on federal royalty issues. Ms. Schroder regularly represents oil and gas operators in administrative appeals before the Bureau of Land Management, Office of Natural Resources Revenue, and Interior Board of Land Appeals. She has defended and challenged agency decisions and rulemakings in federal courts across the country. Ms. Schroder is active with the Rocky Mountain Mineral Law Foundation and serves on its Board of Directors. Previously, she has served on the board of directors of Western Energy Alliance and chaired the Public Land and Resources Committee within the ABA's Section of Environment, Energy, and Resources. Ms. Schroder began her career as an attorney-advisor in the U.S. Department of the Interior's Office of the Solicitor as part of the Solicitor's Honors Program. She then spent 10 years with a boutique law firm in Denver. She holds a B.A. from Rice University and a J.D. from the University of Colorado School of Law. After law school, she clerked for Justice Alex J. Martinez of the Colorado Supreme Court.

KATHLEEN PRITCHARD is an associate at Davis Graham & Stubbs LLP, where she counsels private and public clients on environmental and energy matters. In her practice, Kathleen pairs her technical knowledge of environmental science garnered in undergrad with the strategic thinking and risk assessment skills she's developed as a litigator. Prior to joining DGS, Ms. Pritchard served as a judicial law clerk for the Honorable Sam Sparks of the U.S. District Court for the Western District of Texas. Ms. Pritchard earned her J.D., with high honors, from the University of Texas School of Law, where she served as a teaching assistant in the first-year legal writing program and editor of the Texas Environmental Law Journal. While in law school, Ms. Pritchard received the Beck Award for Legal Research and Writing Excellence and Dean's Achievement Awards in Legal Writing, Environmental Law, and Oil and Gas Law. She graduated magna cum laude from Wake Forest University with a B.A. in Political Science and minors in Environmental Science and Biology. Ms. Pritchard maintains an active pro bono practice and is committed to mission-driven organizations tackling social and environmental issues in the Denver Metro area. Ms. Pritchard serves as a board member for GRID Alternatives Colorado, which strives to make renewable energy technology and job training accessible to underserved communities. Ms. Pritchard is also a member of the Mile High United Way Catalyst Society, a group of business leaders in the Denver Metro area focused on philanthropic and leadership development.

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I. Introduction

The trajectory of compensatory mitigation in managing the public lands has not been a straight line. Since the 1990s, the Bureau of Land Management's (BLM) views toward compensatory mitigation have vacillated from apprehension in the 1990s and early 2000s, to acceptance in the mid-2000s, to appreciation in the early 2010s, to hostility after 2016, and now back to appreciation. At times, the BLM's attitude reflected political winds. At other times, however, the BLM's approach to mitigation reflected it was grappling with the concept of compensatory mitigation—whether and how it could be used as a tool in managing the public lands, consistent with the multiple-use mission that Congress established in the Federal Land Policy and Management Act (FLPMA).¹

This paper will trace the evolution of the BLM's compensatory mitigation policies to the present. The paper will first describe the earliest iterations of compensatory mitigation. Then, the paper will explain how the BLM came to embrace compensatory mitigation during President Barack Obama's second term. Next, the paper will discuss changed attitudes toward compensatory mitigation and the efforts to limit the use of compensatory mitigation during President Donald Trump's administration. Further, the paper will outline the role of compensatory mitigation in the current presidential administration. Finally, the paper will highlight potential issues that may yield controversy as the BLM adopts and implements compensatory mitigation policies for the public lands.

This examination of the BLM's compensatory mitigation policies reveals themes and issues that have shifted over time. One such theme is the role or purpose of compensatory mitigation in public lands management and, particularly, how compensatory mitigation has been used as a tool to achieve administrative priorities, whether they be infrastructure permitting or conservation objectives. Additionally, over time, many of the same questions emerge as to the limits of compensatory mitigation on the public lands—namely, whether the BLM may require compensatory mitigation to offset the impacts of land use authorizations, the BLM may require compensatory mitigation in amounts to offset an impact or to improve conditions above baseline (i.e., concepts of equivalency), the BLM may use compensatory mitigation to ameliorate unnecessary or undue degradation of the public lands,² and compensatory mitigation on non-federal lands may be used to offset impacts on public lands. Although the BLM and Department of the Interior have attempted to answer these questions, their answers remain untested; thus, these issues remain unresolved.

II. Mitigation and Agency Decision-making

Mitigation, including compensatory mitigation, has long been a component of agency decision-making. The 1978 Council on Environmental Quality (CEQ) regulations implementing the National Environmental Policy Act (NEPA) required that agencies evaluate mitigation measures in environmental

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impact statements (EISs), even if an agency did not ultimately adopt the mitigation measures in its final decision.³ These regulations set forth the "mitigation hierarchy," which are a series of measures to be implemented sequentially to alleviate the impact of an agency action:

(1) Avoiding the impact altogether by not taking a certain action or parts of an action.

(2) Minimizing impacts by limiting the degree or magnitude of the action and its implementation.

(3) Rectifying the impact by repairing, rehabilitating, or restoring the affected environment.

(4) Reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action.

(5) Compensating for the impact by replacing or providing substitute resources or environments.⁴

Notably, the final step in the mitigation hierarchy is to compensate for any residual or remaining impacts by replacing the impacted resources. This final step codifies the concept of compensatory mitigation.

Although the CEQ's NEPA regulations introduced the mitigation hierarchy and defined it to include compensatory mitigation, the BLM did not adopt any kind of mitigation policy specific to the public lands until decades later.⁵

III. BLM Mitigation in the 1990s and 2000s: The Early Evolution of Compensatory Mitigation

In the 1990s and early 2000s, the BLM adopted a series of policies addressing mitigation. These policies wrestled with the question of whether the BLM possessed authority to require project proponents to implement compensatory mitigation, which the BLM described as "off site" mitigation.

Over time, these policies evolved from firmly finding that the BLM lacked authority to require compensatory mitigation to finding that the BLM could deny project approvals that lacked necessary mitigation. They also introduced mitigation concepts that would become central elements of BLM mitigation policies during the Obama administration, such as durability and equivalency standards. The development of large-scale conventional and renewable energy projects on public lands appear to have driven the BLM's shifting views on mitigation during this time.

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A. Instruction Memorandum No. WY-96-21: Wyoming's Apprehension

In 1995, the BLM Wyoming State Director issued an instruction memorandum announcing a policy on "compensation mitigation," which he defined as "off-site" mitigation or, in the case of mineral development, off-lease or off-unit mitigation.⁶

In the policy, the State Director declared that "compensation mitigation . . . is not to be a routine operation of BLM in Wyoming."⁷ The State Director acknowledged, however, some "rare circumstances" in which compensation mitigation has "validity" but directed that, in such circumstances, compensation mitigation is "strictly voluntary."⁸ The State Director elaborated that "no party is to be coerced, or forced to comply under duress, with a compensation proposal" and that the BLM could not hold a land use authorization "ransom" to compensation mitigation.⁹

The BLM's approval of an oil and gas project based, in part, on a compensatory mitigation plan prompted the State Director to announce the policy. The BLM had approved infill development in the Moxa Arch area of southwest Wyoming that would occur, in part, on public lands and that would affect antelope crucial winter range.¹⁰ The BLM's approval was contingent on the development of a voluntary compensatory agreement to offset the impacts of oil and gas activities on antelope.¹¹ The State Director explained that the BLM's reliance on compensatory mitigation was justified because impacts to antelope would occur regardless of the BLM's approval and mineral development would become the dominant use of the area.¹² The State Director, however, remained...