May 01, 2017

Resource mitigation boldly goes where it had not gone before—but the new administration promptly calls back the fleet

Jill E.C. Yung

The second term of the Obama administration witnessed a significant evolution in how federal resource agencies would evaluate and mitigate the impacts of government-sanctioned development with the potential for environmental impacts. The progression began slowly, with subtle direction to ensure that federally permitted infrastructure projects were designed to avoid, minimize, and mitigate adverse impacts (see Executive Order 13604), and it culminated in the visionary November 3, 2015 Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment (Presidential Memorandum). Several initiatives to reorient how federal agencies manage natural resources to achieve better outcomes followed, but barely two months into the Trump administration the groundwork has been laid to erase it all.

Obama’s call to action

The Presidential Memorandum articulated several themes intended to drive more uniform policy development among federal agencies responsible for the protection of natural resources. Chief among these was a directive to follow the longstanding concept of a mitigation hierarchy, whereby agencies would first avoid harmful effects, then minimize them, and, finally, compensate for them. The memorandum encouraged agencies to rely on landscape-level planning (an approach that looks broadly at ecosystem functions and other holistic, ecological considerations) to ensure that the most valuable habitats are preserved, and, where that fails, to rely on mitigation that establishes a “net benefit goal or, at a minimum, a no net loss goal” and that “encourage[s] advance compensation . . . to provide resource gains before harmful impacts occur.”

A mix of agency responses

The Presidential Memorandum also provided concrete directives to a select group of resource management agencies, including the U.S. Forest Service (USFS), the Bureau of Land Management (BLM) and the U.S. Fish and Wildlife Service (USFWS), to produce conforming rules and policies on explicit timelines. In response, BLM and USFWS generated new guidance in 2016, with BLM releasing a new manual (MS-1794) and handbook (MS-1794-1) on compensatory mitigation and USFWS publishing changes to the mitigation policy that had guided its decisions since 1981, along with a separate policy specifically for Endangered Species Act Compensatory Mitigation (ESA Mitigation Policy). These guidance documents expounded on the principles in the memorandum by providing a framework for implementing a landscape-scale approach to development and mitigation planning and by expanding application of market-based mitigation programs to improve predictability and provide efficiencies. Building on an Interior Department-wide Landscape-Scale Mitigation Policy released in 2015 (600 DM 6), these documents also recognized the importance of additionality (mitigation that improves the baseline conditions) and demonstrated durability (mitigation that is sustained, as demonstrated by rigorous monitoring, for the life of the impact) when selecting compensatory strategies.

The USFS’s progress was much slower and did not advance in accordance with the schedule proposed in its March 2016 request for information. Given the developments described below, it seems unlikely that USFS will be allowed to finish its work.

The Trump administration’s response

On March 28, 2017, as part of a self-proclaimed attempt to promote energy independence, economic growth, and job creation, President Trump signed a sweeping executive order to unwind the new mitigation policies and directives along with a host of other critical environmental programs to address climate change. The order revoked the Presidential Memorandum and directed all agencies, within given timelines, to revise, suspend, or rescind all actions arising from the memorandum to the extent that they “potentially burden the development or use of domestically produced energy resources . . . .” The next day, Interior Secretary Ryan Zinke issued Order No. 3349, which echoed these instructions to dismantle recent conservation strategies. Zinke’s order was particularly significant because it also revoked Secretary Jewel’s October 13, 2013 Order 3330, which articulated many of the same policy directives as the memorandum but preceded it by two years and was arguably not, as Zinke’s order suggested, “directly related to the rescinded Presidential Memorandum on mitigation.”

These actions were not particularly surprising. The Trump administration and the current Congress had already demonstrated their willingness to use executive orders, authority under the Congressional Review Act, and the reinitiation of rulemaking proceedings to systematically demolish the “smart from the start” development principles the mitigation policies embodied. Congress had already voted to overturn BLM’s “Planning 2.0” rule, which like the policies discussed here, was designed to codify a landscape-scale approach to resource management planning and incorporate the mitigation hierarchy into the resulting plans. And, if the president had not taken the action he did, Congress was poised to eliminate the ESA Mitigation Policy (see House Joint Resolution 60).

Legal defenses to mitigation policy critics

The cancellation of all the mitigation policies seems imminent. If there is any chance for survival, it lies in the analyses the agencies prepared to ground the policies in their existing statutory authorities. Specifically, BLM obtained an opinion from the Department of the Interior Solicitor (M-37039, dated December 21, 2016, and temporarily suspended on February 6, 2017), which determined that BLM’s “bold, forward-looking stewardship mandate” under the Federal Land Policy and Management Act (FLMPA) can encompass mitigation that “improve[s] resource conditions above the preexisting baseline conditions,” especially when the effectiveness of the required mitigation is uncertain or there will be “a temporal lag between realization of the benefits of mitigation and the impacts of a project.” USFWS has more simply asserted that the authority for its mitigation policies is implicit in the collective whole of all of its enforcement and consultative roles, which exceed its hallmark responsibilities under the ESA to regulate habitat and species-level impacts.

Can innovative new mitigation policies be saved?

Republicans might find that these mitigation policies have important virtues. Distracted by the “net benefit” requirement, opponents of these new market-based policies miss the fact that coordinated, landscape-level mitigation planning and the promotion of mitigation banks could reduce the transaction costs of providing mitigation on a project-by-project basis. Rather than having to negotiate the requirements for each project and then having to hunt down the appropriate mitigation, a well-implemented, credit-based mitigation policy could provide higher-quality mitigation at a comparable cost and with more certainty upfront regarding the requirements for and availability of suitable mitigation. The ability of any of the existing policies to deliver on this promise remains to be seen; however, with a combination of patience on the part of lawmakers and restraint on the part of implementing agencies, at least some of these well-intentioned, forward-thinking strategies might be salvaged.

Jill E.C. Yung

Jill E.C. Yung is of counsel in the Energy and Environment Practice at Paul Hastings, LLP, where she specializes in counseling, compliance, and litigation matters involving environmental, renewable energy, land use, and natural resource issues.