If you haven’t heard, the Alaska Mental Health Trust Authority (AMHTA) announced on December 17, 2018 that it finalized its first conservation agreement with Donlin Gold, LLC to enter into a long-term deed restriction agreement to preserve just under 2,000 acres of Trust wetlands near Tyonek for wetland compensatory mitigation of 2,800 acres of disturbed wetlands in the Middle Kuskokwim. As a part of this agreement, Donlin Gold paid the Trust $200,000 upfront for the ability to purchase a deed restriction in the future and will continue to pay $20,000 per year over the next 10 years to maintain this mitigation option until the mine is officially under construction. If the mine comes into fruition, Donlin will pay the Trust $1.3 million to secure 1,933 acres Trust’s existing wetlands and limit surface development of the wetlands as compensatory mitigation for 99 years. All earnings with the agreement will be used to support programs that serve Alaska Mental Health Trust beneficiaries.
So what is compensatory mitigation?
The EPA and U.S. Army Corps of Engineers (USACE) revised the definition of Compensatory Mitigation in 2008 as “…the restoration (re-establishment or rehabilitation), establishment (creation), enhancement, and/or preservation of wetlands, streams, and other aquatic resources to offset unavoidable adverse impacts of development after all appropriate and practicable avoidance and minimization efforts have been achieved.”
Meaning that compensatory mitigation allows for companies that are irreversibly changing or adversely affecting the environment on their site to protect, restore, or enhance wetlands or other aquatic environments in other locations to make up for lost habitat and environmental resources.
Generally, there are three types of compensatory mitigation:
- Mitigation Banks – A site, or suite of sites, where resources (e.g., wetlands, streams, riparian areas) are restored, established, enhanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by Department of the Army permits. In general, a mitigation bank sells compensatory mitigation credits to permittees whose obligation to provide compensatory mitigation is then transferred to the mitigation bank sponsor. The operation and use of a mitigation bank are governed by a mitigation banking instrument.
- In-lieu fee programs – Defined as a program involving the restoration, establishment, enhancement, and/or preservation of aquatic resources through funds paid to a governmental or non-profit natural resources management entity to satisfy compensatory mitigation requirements for DA permits.
- Permittee-Responsible Mitigation – This is an aquatic resource restoration (reestablishment or rehabilitation), establishment (creation), enhancement, and/or preservation activity undertaken by the permittee (or an authorized agent or contractor) to provide compensatory mitigation for which the permittee retains full responsibility. (This is what Donlin Gold is currently pursuing with AMHTA)
In comparison to the lower 48 with only 5.2% of its surface area classified as wetlands, Alaska’s wetlands occupy 43.3 % of the state’s surface area. This creates a unique challenge for development in Alaska which is most likely why Donlin Gold is pursuing this avenue for mitigation efforts. Donlin Gold did explore other options to directly impact the Middle Kuskokwim, but those options were not selected as their final mitigation plan.
If you’re interested in learning more about compensatory mitigation in Alaska, the EPA and USACE signed and released a Memorandum of Agreement on June 15, 2018 which gave guidance on flexibilities for compensatory mitigation in the state of Alaska including the following six principles:
- Avoiding wetlands may not be practicable where there is a high proportion of land in a watershed or region which is jurisdictional wetlands;
- Restoring, enhancing, or establishing wetlands for compensatory mitigation may not be practicable due to limited availability of sites and/or technical or logistical limitations;
- Compensatory mitigation options over a larger watershed scale may be appropriate given that compensation options are frequently limited at a smaller watershed scale;
- Where a large proportion of land is under public ownership, compensatory mitigation opportunities may be available on public land;
- Out-of-kind compensatory mitigation may be appropriate when it better serves the aquatic resource needs of the watershed; and
- Applying a less rigorous permit review for small projects with minor environmental impacts is consistent with the Section 404 program regulations.
You can find the memorandum document on EPA’s website.
If you have any comments on Donlin Gold or want to learn more please reach out to our Environmental Department at Meredith.firstname.lastname@example.org or at 907.274.2196. We will do our best to keep everyone informed on Donlin Gold’s progress.
Featured image by Donlin Gold