This week the Trump Administration rolled out a new policy (Memo No. 2018-093) discontinuing certain mitigation practices involving natural resource impacts on public lands managed by the Bureau of Land Management (BLM).  While the policy states that “voluntary” compensatory mitigation will be allowed in certain circumstances, it ends the practice of BLM accepting monetary payment to mitigate impacts of a proposed action.  This policy shift was promised early in the President’s administration through his executive order involving a push for energy independence and review of federal mitigation policy.

The new policy, effective immediately, is in response to critics of past policies, inlcluding the Obama Administration’s 2016 mitigation strategy, that authorized BLM to receive monetary payments for compensatory mitigation.  Industry critics of the practice have alleged that the policy has led to instances of regulatory coercion, where issuance of permits was contingent upon a cash payment to mitigate against environmental damage.  For example, in 2015, BLM required ConocoPhillips to pay $8M in mitigation beyond what it paid for mitigation required to offsite wetlands impacts.  In that case, $1M was set aside to develop a strategy on how to spend the remaining $7M.  Many critics of the Obama-era policy have criticized BLM’s actions as arbitrary and a way to slow down the permitting process for resource extraction.

The new policy states that measures to reduce or avoid adverse impacts will be considered primarily through the National Environmental Policy Act process of assessing project alternatives and impacts.  The policy states in part,

The BLM has an obligation to ensure that actions do not result in “unnecessary and undue degradation” (UUD). 43 U.S.C. §1732(b).

This obligation provides authority to require project proponents to avoid, minimize, rectify, and/or reduce anticipated harms, as necessary and appropriate.

Compensatory mitigation cannot prevent what would otherwise constitute UUD.  If a proposed use of the public lands would result in UUD, then the BLM cannot authorize that use, even if compensatory mitigation is proposed.

Preventing unnecessary or undue degradation does not mean preventing all adverse impacts upon the land.  The negative inference of the words “unnecessary” and “undue” is that a certain level of impairment may be necessary and due under a multiple use mandate.

Any compensatory mitigation that a project proponent proposes must be voluntary.

Except as described herein, the BLM will not impose, and will not build mechanisms for it to enforce, mandatory compensatory mitigation into its official actions, authorizations to use the public lands, and any associated environmental review documents, including, but not limited to, permits, rights-of-ways, environmental impact statements, environmental assessments, and resource management plans.

To ensure compensatory mitigation is voluntary, the BLM must not explicitly or implicitly suggest that project approval is contingent upon proposing a “voluntary” compensatory mitigation component, or that doing so would reverse or avoid an adverse finding.

This policy does not affect the ability of any State government or other non-federal party to require and enforce mandatory compensatory mitigation as authorized under state law.

The BLM may consider voluntary compensatory mitigation proffered by a project proponent, including as a means to reach a Finding of No Significant Impact (FONSI) or as part of a proposed design feature of a project. 

Where a project proponent has voluntarily proffered compensatory mitigation in an application, including in conjunction with a State requirement or as the result of other Federal law, BLM may incorporate it into and consider it as part of the project analysis. When BLM is considering compensatory mitigation as a component of the project proponent’s submission, BLM’s NEPA analysis should evaluate the need for compensatory mitigation by 1) considering the effectiveness of compensatory mitigation in reducing, resolving, or eliminating impacts of the proposed project(s), and 2) comparatively analyzing the proposal with and without the offsite compensatory mitigation.

Any requests to include voluntary offsite compensatory mitigation as a term and condition or condition of a permit or authorization must be evaluated and, where appropriate, authorized solely by the BLM State Director, upon notification to the BLM Director, if the State Director finds that the project proponent has specifically stated a preference to mitigate, through an existing NEPA decision, versus conducting additional NEPA process.

If requested by the project proponent, the BLM may identify voluntary compensatory mitigation opportunities to address impacts of the project proposal, but unless any such measures are volunteered by the project proponent, BLM should not carry them forward for detailed analysis in a NEPA document.

BLM must not deny authorization for a project or activity based upon a project proponent’s refusal to adopt a compensatory mitigation proposal that BLM has identified.

A numbe of key takeaways:

• The policy only impacts offsite compensatory mitigation, not onsite mitigation.
• The policy does not affect compensatory mitigation required by other federal laws, e.g., Clean Water Act, other than the Federal Lands Protection and Management Act (FLPMA).
• Although monetary contributions to BLM are expressly prohibited, where a state has an offsite compensatory mitigation program, such as an in-lieu fee program, BLM may enter into an agreement with the state to provide additional information which the proponent may then “voluntarily” decide to move forward with state led mitigation.
• The policy puts greater focus on the concept of “unnecessary and undue degradation” (UUD), which is the standard under FLPMA. Courts have construed UUD to mean the balancing of multiple uses, e.g., mineral extraction, grazing, timber harvesting, etc. – and their potential degrading impacts with sustained conservation of the natural environment.  Theodore Roosevelt Conservation P’ship v. Salazar, 661 F.3d 66 (D.C. Cir. Nov. 18, 2011).  UUD does not contemplate no impacts.
• Because the policy authorizes mitigated FONSIs under NEPA and in some instances state compensatory programs, we are likely to see more frontloading of mitigation proposals earlier in the project design and scoping phases. This invariably will help expedite the permitting process.
• The policy is likely to result in less overall compensatory mitigation on public lands than prior practice.
• The Deputy Secretary is charged with the responsibility for overseeing implementation and enforcement of the policy.