Net Negative: The Bureau of Land Management Prohibits Offsets

How does a much-loved car, over time, end up looking like this? You can imagine the owner always getting it repaired after an accident. They were probably always on the lookout for ways to prevent unnecessary damage. They washed it and waxed it occasionally and kept it in a garage some of the time. But years later, it ends up looking like this.

Without taking public comment, the Department of Interior has put in place a new policy that will leave more of our public lands looking a little bit more like this car, over decades to come. A new ‘instructional memo‘ dictates that when the Bureau of Land Management allows oil drilling, mining or other activities on public lands, industry doesn’t have to fully offset the damage they cause unless absolutely required by statute to do so. Unless taxpayers pay more to fix damage caused by those uses, small impacts will accumulate, caused by private companies who no longer have to pay for or fix the damage they cause.

Net negative

It’s a shame that the Interior Department cannot see the benefits to industry, local communities, the public and our environment from setting the bar higher than they have. When public land uses are held to a standard of maintaining the status quo (a President George H.W. Bush innovation) or leaving our resources a little bit better off, future users and communities have more options. For example, if a mine fully avoided and offset its damages on a piece of public land, a rancher coming along a decade later will likely have fewer constraints on their use of the land. But when agencies allow each project to leave its own scars, eventually those scars accumulate such that the next project would cause undue degradation, and is therefore rejected. In addition, by limiting the use of environmental offsets, the Bureau ties its hands when a company would rather offset damage by funding a project elsewhere instead of more difficult, expensive or slow restoration on the site.

Cash for the Bureau

The memo restricts the agency from ever receiving outside funds to offset damages: “In no circumstance may BLM agree to accept a monetary contribution for the implementation” of offsets. I find this and other summaries of the Miscellaneous Receipts Act helpful because it’s never seemed like a great idea – perverse incentives – for agencies to accept compensation in the context of approving land uses. I don’t think this restriction is a bad thing if third parties (private companies, state agencies, nonprofits or universities) are allowed to accept such funding to carry out restoration on the Bureau’s lands – the memo doesn’t preclude them from doing so. Those third parties can often provide more efficient and effective offsetting projects, delivered faster, than if the agency receives the funding itself. However, I expect the intent of the memo was also to prohibit others from being paid to restore Bureau lands or nearly private lands as a form of offsets.

Fonsie? No FONSI!

A bright spot in the memo is the clarity it adds regarding the use of environmental offsets voluntarily built into a project as a way for an applicant to reach a ‘Finding of No Significant Impact (FONSI)’ under the National Environmental Policy Act. This allows them to avoid the lengthy and costly production of an Environmental Impact Statement (instead the applicant uses an Environmental Assessment, typically shorter and faster to produce). And it leaves the public better off because, by definition, there would be no significant net environmental impact. In 2011, the White House provided guidance to all federal agencies on how this could work, but few agencies made use of it. This memo helps push the Bureau in the right direction in potentially encouraging companies to offer offsets as a tool to avoid a significant net impact to public resources and avoid a lot of additional paperwork.

It’s a tribute to the first President Bush that our federal agencies have been on a path to greater professionalization of how economic growth and the public’s natural resources can be balanced through the use of environmental offsets. There are good reasons to try to make sure that companies can predict, budget and plan for what it takes to meet agency standards and to make sure that agencies have a standard and don’t just negotiate permit outcomes. This Administration could have worked to make public land use standards more predictable, to clarify permit requirements, to set up environmental markets that would make make a supply of offsets faster and easier to use. But instead they just took a big step backward by significantly lowering the bar projects have to meet.

Sad.

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