This week President Trump released the Energy Independence Executive Order that focuses on the Trump Administration’s energy strategy. Although much focus is on lifting the restrictions on American energy and on job promotion, the Executive Order also rescinds the Presidential Memorandum of November 3, 2015, “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment,” and directs a reexamination of the mitigation policies and practices of the federal government to balance conservation strategies and policies with the need for creating jobs.
The 2015 Presidential Memorandum established policies premised upon “a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them.” In furtherance of this moral obligation, President Obama made it the policy of the federal bodies to establish a net benefit goal or, at a minimum, a no net loss goal, for mitigation of the natural resources each agency manages. 80 Fed. Reg. 68743. The Memorandum applied to all permits and authorizations issued by the Department of Defense, Department of Agriculture, Department of Interior, EPA and National Oceanic and Atmospheric Administration, including actions taken by the U.S. Fish and Wildlife Service (“USFWS”) and the National Marine Fisheries Service (“NMFS”) pursuant to the Endangered Species Act (“ESA”). The Presidential Memorandum spurred a number of policies under the ESA, including the following:
- USFWS Mitigation Policy issued on November 21, 2016 (81 Fed. Reg. 83440).
- ESA Compensatory Mitigation Policy issued on December 27, 2016 (81 Fed. Reg. 95316).
- USFWS and NMFS Habitat Conservation Planning Handbook published on December 21, 2016 (81 Fed. Reg. 93702).
- USFWS Interim Guidance on Implementing the Final Endangered Species Act Compensatory Mitigation Policy, issued on January 17, 2017.
In furtherance of the Executive Order, Interior Secretary Zinke issued Secretarial Order 3349. The purpose of this Order is to “direct[] a reexamination of the mitigation policies and practices across the Department of the Interior … in order to better balance conservation strategies and policies with the equally legitimate need of creating jobs for hard-working American families.” The Order, among other things, implements a mitigation policy review by each bureau and office to identify relevant actions related to the Presidential Memorandum and to evaluate whether to proceed with reconsideration, modification or rescission. The entire process is required to be completed by June 28, 2017.
It is likely that implementation of the Order will lead to rescinding the USFWS Mitigation Policy, ESA Compensatory Mitigation Policy and USFWS Interim Guidance on Implementing the ESA Compensatory Mitigation Policy. It is less clear whether the USFWS and NMFS 2016 Habitat Conservation Planning Handbook will be included. The Presidential Memorandum’s goal of “net benefit” or “no net loss” was in conflict with the ESA because the ESA provides no authority for the USFWS to impose upon permit applicants mitigation measures that are intended to result in a net benefit or no net loss. For example, when federal agencies consult with USFWS regarding actions they authorize, fund or carry out under Section 7(a)(2) of the ESA, the USFWS is charged with ensuring that such action is not likely to jeopardize the continued existence of listed species or destroy or adversely modify their critical habitat. 16 U.S.C. § 1536(a)(2). Additionally, in the context of a private party obtaining ESA “take” coverage using a habitat conservation plan under Section 10(a)(1)(B) of the ESA, the USFWS must ensure that the permit applicant will “to the maximum extent practicable, minimize and mitigate the impacts” of incidental take authorized by the permit. 16 U.S.C. § 1539(a)(2)(B). Neither of these ESA processes requires or authorizes imposition of a net benefit or no net loss standard. Therefore, the practical reality is that projects will continue to proceed under Sections 7 and 10 of the ESA but with greater clarity of the legal framework consistent with the statute and regulations.
It is likely that, with the USFWS’s increasing workload and budget constraints, the agency will be inclined to prioritize approving projects that more clearly meet or exceed standards through the use of compensatory mitigation based upon their conservation benefits. However, it would be in the USFWS’s interest to recognize, document and rely on applicants’ voluntary conservation measures when they go above and beyond the ESA requirements to encourage voluntary private investments in conservation. Additionally, private applicants will likely voluntarily continue to evaluate offering compensatory mitigation as part of project proposals in discrete circumstances where doing so would help meet or exceed the Section 7 or 10 standards described above to allow projects to proceed.