Murkowski, Sullivan grill EPA on wetlands issues

WASILLA — Alaska’s U.S. senators pointedly questioned federal officials over the impact of recent rule changes on development in Alaska at a Senate committee hearing in Wasilla on Monday.

The majority of the testimony focused on areas far removed from the Mat-Su Borough; questions about wetland mitigation measures on the North Slope, in Fairbanks, and other areas consumed much of the hearing’s time. However, a borough white paper points to at least one EPA rule change with potentially millions of dollars worth of ramifications for local development projects.

The senators established a recurring theme during opening remarks: potential financial and economic ramifications of administrative rule changes intended to preserve or conserve wetlands.

Policies applied to other states were sometimes ill suited to the 49^th State, Murkowski said during her opening remarks.

“In some instances we (Alaskans) are being held back by ill-designed, ill-fitted, or ill-applied policies,” she said.

For example, in the last 200 years, she said about half the wetlands in the lower 48 have disappeared, while one tenth of one percent of wetlands in Alaska have been reduced. Wetlands — which fall under the jurisdiction of the U.S. Army Corps of Engineers — comprise 43 percent of the total land area of Alaska, or about 285,000 square miles.

The federal government is the largest landowner in the state, meaning administrative rule changes — interpretations of laws by executive agencies, including the US Bureau of Land Management, the corps, and the US Environmental Protection Agency — can have outsized impacts on local villages, which Murkowski and US Sen. Dan Sullivan both labeled overreach.

She cited a recent decision by the US Department of the Interior to mirror parts of its regulatory process to echo provisions of the Clean Waters Act requiring mitigation for development that impacts wetlands. Mitigation is the process of restoring parts of a stream impacted by economic development or construction. In particular, the Interior department has adopted language from the act for its regulatory regime.

“There is something fundamentally flawed about an agency that borrows theories and regulations which are born from wholly different laws and adopting them as its own when it’s authorizing language is so markedly different,” she said.

Sullivan pointed to several examples provided by development groups of instances where land sales had been effectively cancelled, or fees charged, because of administrative decisions.

“The power to require payment and other concessions 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,” he said.

For example, a 1983 decision by the U.S. Fish and Wildilife Service local government requires agencies to establish so-called wetlands banks — essentially land set aside by a state or local agency for preservation to off-set impacts elsewhere. Agencies that need to demonstrate mitigation efforts can then buy the credits at a fixed rate from the bank. The Mat Su Borough obtained certification for their 12,000-acre bank in 2009, and began offering mitigation credits for sale.

However, the Corps “recently permitted the filling of 7.38 acres of waters of the US, including wetlands without requiring compensatory mitigation,” a borough white paper reads in part.

Borough officials estimated the lack of mitigation credit sales for that permit cost the borough $160,000 in revenue, according to the white paper. The borough only learned of the policy change by filing a Freedom of Information Act Request with the US Army Corps of Engineers. Officials from the state were not involved in the decision making process.

“The Borough could potentially lose millions of dollars in wetland mitigation credit sales from credits already released and available for sale if this policy of permitting the filling waters of the US without requiring compensatory mitigation continues to be allowed by the Corps,” the paper reads in part.

The bank’s impacts aren’t limited to private development, said borough manager John Moosey.

“It allows us to really be able to mitigate some of our projects, like the rail project, when we do the Knik Arm bridge project,” he said. “Having our own wetlands bank allows us to kind of keep the cost down for the project.”

The Corps’ decision is based around the fact that while the borough has surface rights for the land in question, it’s unable to legally transfer subsurface rights along with them, said David Hobbie, Chief of the corps’ Alaska District Regulatory Division.

However, the entire regulatory scheme is struggling with variations of state property laws, which allow for subsurface rights to be transferred in some cases, but not in others. Mitigation must include sub-surface water as well, Hobbie said.

“Locking up the surface may be fine, but that doesn’t exclude people coming in, literally, and mining the area because in most states, the subsurface rights are not bound by the restrictions,” he said. “Therefore, the easement doesn’t mean much.”

Contact Reporter Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.