The Nickel Report

In 2016, the US Fish and Wildlife Service (FWS or the Service) issued two policies on how to mitigate the impact of projects affecting fish and wildlife and natural resources: one overarching policy and one policy specific to Endangered Species Act implementation. Raising eyebrows, these mitigation policies were not limited to offsetting project impacts, but instead set a goal of improving the condition of affected resources.

Regulated parties voiced concerns that such a standard exceeded FWS authority, shifted the burden of implementing broader FWS goals onto the regulated public, conflicted with other federal mitigation requirements, and provided FWS staff with potentially boundless discretion to impose costly mitigation requirements. FWS now has initiated a process to reconsider its mitigation policies–a significant part of a broader effort  by the Administration to improve the implementation of the ESA.

The 2016 FWS actions followed a November 3, 2015, memorandum from President Obama directing agencies to adopt specified mitigation policies. The President directed agencies to set a net-benefit goal or, at minimum, a no-net-loss goal for natural resources.

In response, FWS issued both an overarching mitigation policy and an ESA compensatory mitigation policy. The overarching policy set a mitigation planning goal “to improve (i.e., a net gain) or, at minimum, to maintain (i.e., no net loss) the current status of affected resources.” The ESA-specific policy encouraged federal agencies to implement the ESA in a manner designed to achieve a “net gain” through compensatory mitigation requirements. In calculating “net conservation gain,” the Service indicated that the mitigation goal “is not necessarily based on habitat area, but on numbers of individuals, size and distribution of populations, [or] the quality and carrying capacity of habitat…after the action.” The policies afforded significant discretion to Service staff to approve mitigation measures “based on local conditions and tailored to the specific species that are impacted.”

Many wondered how FWS would go beyond offsetting impacts and require project proponents to improve wildlife or habitat conditions. How much gain would be enough? Without an upper bound or limiting principle, project costs and delays could be difficult to forecast. In addition, regulated parties voiced concern that achieving a net gain standard could conflict with the “reasonable and prudent alternative” standard under ESA section 7 and with other long-established federal mitigation standards, such as the US Army Corps of Engineers’ “no net loss” of wetlands standard under Clean Water Act Section 404. For example, without a consistent mitigation standard, the Corps and the Service will likely have difficulty reaching consensus on the appropriate mitigation during section 7 consultation, leading to unnecessary delays during the permitting process.

The Service has now taken steps to reconsider the mitigation policies. In accordance with Executive Order 13783, Secretary of Interior Ryan Zinke ordered the Department of Interior on March 29, 2017, to review all actions relating to the 2015 Presidential Memorandum, including the FWS mitigation policies, for possible reconsideration, modification, or rescission. On November 6, 2017, FWS published a Federal Register notice announcing its request for public comments on the policies’ mitigation planning goals. 82 Fed. Reg. 51,382 (Nov. 6, 2017). In particular, the Service asked commenters to address whether FWS should retain or remove references to the net conservation gain standard. Following the 60-day comment period (concluding January 5, 2018), the Service will decide whether and how to revise the policies.