Senators push against wetlands requirements at field hearing

WASILLA — With Congress on its annual August recess, Alaska’s senators took the opportunity Aug. 17 to commiserate with Alaskans troubled by federal wetlands regulations and grill the federal officials tasked with implementing the requirements at a Senate field hearing in Wasilla.

Invited testimony during the first hearing panel was heard from mining and construction industry representatives, North Slope region Alaska Native corporations and the State of Alaska through Department of Natural Resources Deputy Commissioner Ed Fogels.

A second panel comprised of Alaska-based federal land and environment management officials heard the senators’ frustrations.

Sen. Lisa Murkowski, chair of the Senate Energy and Natural Resources Committee, said the purpose of the hearing was to examine the regulatory practices that “impact and often delay and prevent development in our state.”

Murkowski also noted the oft-cited statistic that roughly half of Alaska is deemed wetlands by the federal government and that the U.S. Bureau of Land Management oversees 72 million acres of Alaska.

“The federal government is in many ways both a gatekeeper and a landlord here in Alaska,” Murkowski said.

Sen. Dan Sullivan, who chairs the Senate Subcommittee on Fisheries, Water and Wildlife, drove home the theme that all federal regulations must be based in statute or the U.S. Constitution throughout the hearing.

“Many agencies forget or even ignore this bedrock principle of the rule of law,” he said.

Sullivan is a former Alaska attorney general and Department of Natural Resources commissioner under former Gov. Sean Parnell.

He said compensatory wetlands mitigation requirements dictated by the U.S. Army Corps of Engineers and the Environmental Protection Agency can seem arbitrary and punitive, particularly when applied on private and state land.

Dredging and filling of wetlands under federal jurisdiction is strictly regulated by the EPA through Section 404 of the Clean Water Act. If wetlands adjacent to navigable waterways are to be disrupted by a development project, some sort of compensatory mitigation must occur as a reaction to offset the original loss of wetlands.

Compensatory mitigation can be achieved through direct restoration, enhancement or preservation of other onsite wetlands by the 404 permittee. A mitigation bank, or offsite wetlands improvement or preservation area can also be established to compensate for future development in wetlands. Finally, an in-lieu fee program, in which the permittee pays a third party to handle its compensatory mitigation responsibilities, can be used.

The type of mitigation is typically left up to the permittee or developer. However, the amount of wetlands that must be mitigated, or the cost to an in-lieu fee program, is dictated by the federal agencies and can vary depending on the determined ecological value of the disrupted area.

Kuukpik Corp. Vice President Joseph Nukapigak testified that the EPA required 292 acres of Kuukpik property be set aside in permanent conservation status as compensation for construction of a 5.8-mile road from the North Slope village of Nuiqsut proposed in 2013. Negotiations with the agency ultimately led to 127 acres being set aside for a project with a 51-acre footprint, he said.

Kuukpik’s other option was to pay $1.8 million for offsite mitigation, according to Nukapigak.

Kuukpik Corp. is the Native village corporation for Nuiqsut.

Nukapigak testified that there is an “inherent conflict” between the Alaska Native Claims Settlement Act, which awarded Kuukpik its land, and the Clean Water Act, which demands the same land be set aside through a conservation easement. He proposed Alaska Native corporations be exempted from Clean Water Act requirements when a project is on Native corporation land.

“The power to require payment and other concession on what occurs on private and state lands effectively grants federal agencies the ability to zone the whole state and that should concern all of us,” Sullivan said. “A dollar spent on mitigation is a dollar not spent building Alaska.”

Sullivan requested the BLM, Corps, and EPA officials to each provide the statute that gives their respective agencies the authority to calculate and mandate mitigation fees and requirements.

Murkowski likened unchecked fee requirements for in-lieu fee mitigation to extortion.

At the same time, the Native Village of Nuiqsut Tribal government complained in an Aug. 14 release that it was left out of the hearing, despite holding the responsibility of protecting subsistence resources for the community.

“(Native Village of Nuiqsut) supports mitigation requirements that protect natural and cultural resources, and routinely provides comments and position statements with respect to industrial activities as well as land management proposals and decisions,” the release stated. “Native corporations, in contrast are structured to maximize profits to Native shareholders.”

Nuiqsut Village President Sam Kunaknana was part of a group of plaintiffs in an unsuccessful lawsuit filed in 2013 against ConocoPhillips’ for its nearby CD-5 oil development.

Kuukpik and Arctic Slope Regional Corp. sided with ConocoPhillips in the matter.

Army Corps of Engineers Regulatory Division Chief for Alaska David Hobbie testified that the goal of the Corps, which oversees 404 permits for the EPA, is to “ensure no net loss of wetlands function and values, while remaining as flexible as possible to allow reasonable and sustainable development.”

In the 2015 federal fiscal year, the Corps has granted 431 wetlands permits in Alaska, according to Hobbie. Of those, approximately 6 percent required compensatory mitigation.

Murkowski said that nearly half of the wetlands in the Lower 48 have been filled over the past 200 years, while less than 0.1 percent of Alaska’s wetlands have been lost over that time.

“Our consideration (in Alaska) should simply be different from those in the Lower 48 and yet Alaska is again categorically analyzed through the lense of national and regional portfolios,” she said.

Fogels, of DNR, said duplicative requirements often slow and complicate development project permitting.

“Federal regulators, especially the BLM, need to increase coordination and transparency in permitting,” Fogels testified. “This is especially important in the area of mitigation for the impacts of permitted projects, where overlapping federal authorities are burdening applicants and delaying progress on critical state and private projects.”

He said federal cooperation through project permitting is inconsistent.

Sullivan encouraged the BLM and the Corps to institute a program similar to the Alaska DNR Office of Project Management and Permitting, which helps environmental permit applicants navigate the process. The permit applicant pays for DNR staff time dedicated to their project.

Hobbie said the Alaska Department of Environmental Conservation sits on an inter-agency review team and regularly comments on wetlands permit applications in the state being reviewed by the Corps.

The state and the Corps should be “co-regulators,” Sullivan said, for projects on private and state lands.

Elwood Brehmer can be reached at [email protected].