Seeking to Accelerate Development, Alaska Aims to Take Over Federal Government’s Clean Water Act Enforcement

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JUNEAU — The Alaska Legislature, at the request of Governor Mike Dunleavy’s administration, is considering state ownership of a major federal environmental licensing process. The goal, administration officials said, is to accelerate construction of roads, bridges, mines and drilling projects.

The House’s proposed state budget for the coming year includes a $4.9 million increase in the budget for the Alaska Department of Environmental Conservation. This agency plans to hire 28 new staff members – the largest single-year increase in decades.

If the budget increase is included in the state budget, DEC officials anticipate a two-year process to take over part of the federal drinking water law known as Section 404.

Permits issued under this section determine whether or not a builder can fill wetlands, rivers, streams and other bodies of water during construction. It also determines whether a project builder should take action to compensate for wetlands destroyed by construction.

“We’re obviously very excited about getting this project started,” Jason Brune, commissioner of the Department of Environmental Conservation, told the Senate Finance Committee March 15.

“We think we can develop this appropriately, submit it to the EPA … and ask them to make a good decision for us, with implementation in 2024,” Brune said.

Despite this interest, several lawmakers, including key members of the Senate Finance Committee, have expressed concerns about the cost and scope of the project, and the idea has become a topic of debate as lawmakers work on a version. final state budget.

Under federal law, states can take control of the program as long as they meet federal standards. Three states have done so – Michigan, New Jersey and Florida.

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The Alaska legislature authorized a takeover in 2013, but scrapped the idea after oil prices plummeted. This year, oil prices — and government revenues — rebounded, and Dunleavy revived the idea.

The EPA supported the takeover, Brune said, by providing grants and technical support. The Army Corps of Engineers, which typically administers 404 permits, remained neutral in the legislative hearings.

“A HUGE deal”

Industry groups have praised the idea of ​​a state takeover, saying the current federal licensing process is too slow.

“I don’t think it can get any worse than it is right now when I talk to our contractors,” said Alicia Amberg, executive director of Associated General Contractors of Alaska.

“I think it’s worth it for the state to try to take over this process to allow the state to work more effectively through this process,” she said.

About 90% of blanket permits — those that affect minimum amounts of wetlands — are issued in less than 60 days, according to John Budnik, spokesman for the U.S. Army Corps of Engineers Alaska District. About 70% of the most complicated individual permits are issued in less than 120 days.

Brune said he expects “similar or faster turnaround times, particularly for general permits” under a state takeover, as well as improved performance.

He gave an example: when the proposed Donlin gold mine in southwest Alaska applied for its wetland permits, its owners wanted to clean up the defunct Red Devil mercury mine as compensation for damage caused by Donlin. The Corps rejected this proposal, and Donlin instead paid to preserve wetlands elsewhere.

It was a silly result, Brune said — Alaska has more wetlands than the rest of the United States combined, and the land that was preserved was not likely to be developed.

“We could have cleaned up that Red Devil mine and that would have had significant positive benefits for that watershed,” he said.

Environmental and fisheries organizations have been alarmed by the prospect of a takeover. Although the state must still follow federal standards, opponents say the state has traditionally favored development and underfunded oversight. They think this attitude could lead to more damage to wetlands.

” I am very worried. From a fish habitat perspective, this is a HUGE deal,” said Lindsay Bloom, campaign strategist for SalmonState, a group dedicated to preserving wild salmon.

“We believe DEC’s takeover of the program threatens Alaska’s wetlands and salmon rivers that support our fisheries,” United Fishermen of Alaska, the state’s largest commercial fishing organization, said. in an April letter to the Senate Finance Committee.

Cost, personnel issues

As an example of their concern, opponents point to what happened the last time DEC assumed responsibility for a federal program. In 2005, the state began to take over the administration of wastewater treatment permits.

During a routine review of the EPA in 2014, the federal agency found that the DEC was significantly understaffed for the wastewater program and did not perform enough inspections to meet federal standards. DEC itself determined it needed more than 21 full-time employees to meet federal guidelines, but in 2019 it still had just 13.

Asked about this issue, Brune said that when the EPA raised the issue, it lobbied for more staff at the agency. Today, the department that deals with sewage issues is adequately staffed to meet federal standards, the budget documents show.

He said he would make similar requests to the Legislative Assembly if the takeover project needed more staff or funding.

The $4.9 million state funding request is based on a 2014 estimate by DEC that was updated by current staff.

“That’s the number we think is needed,” Brune said, “and if at the end of the day we need more, I’m committed to doing more, but I believe that number that’s been done and reviewed by both this team then and my team in the water now, I trust their analysis.

Michelle Hale, now retired from DEC and a member of the Juneau Assembly, led the team that conducted the analysis in 2014.

“It’s probably too low,” she said of the cost estimate.

The Army Corps in Alaska has a regulatory team of about 50 people and a budget of about $8.5 million a year to manage wetland clearances, Budnik said.

“It does not include legal fees, and the Department of Justice does not charge us for support. That can be around $1 million a year,” he said.

The state of Virginia considered taking over wetland permits in that state in 2012, but ultimately concluded that the costs outweighed the benefits. When Florida took over the wetlands permitting that state in late 2020, the project turned out to be more expensive than expected.

Environmental legal group Earthjustice has challenged the EPA’s approval of the Florida takeover, and Florida itself is in a legal battle with the EPA over ending state authority and the beginning of federal authority. As a result of this dispute, dozens of permits have been suspended.

Like Florida, Alaska would not be able to support all wetland permits – those that affect the ocean, tidal-influenced wetlands, and navigable rivers or lakes still have to go through a federal process. . These account for about 25% of Section 404 permits in the state, the DEC estimated in 2014, but that proportion could change, depending on the outcome of an ongoing lawsuit in the U.S. Supreme Court. .

The bottom line, according to Brune and others, is that major development projects like the proposed Pebble mine, the Donlin mine and the North Slope oil development will still have to go through a federal process. That comes with a caveat: Developers could split their projects into multiple pieces, with some pieces going through the federal process and others through a state-only process.

“I know there are project developers who would be very interested in bifurcation,” Brune said, but added that he wasn’t sure it would happen.

Before becoming a commissioner, Brune worked for the Anglo American mining conglomerate. This company supported the Pebble mine until 2013.

“The reason we’re pursuing this has nothing to do with Pebble. Pebble certainly impacts our state’s investment climate…but the reason we’re doing this is for the state to monitor our licensing authority,” he said.

A spokesperson for the Army Corps of Engineers said it was unclear whether projects like Donlin or Pebble should go through a federal process.

Caution in the Legislative Assembly

Development groups supporting the state takeover have significant influence in the Alaska Legislature, where even Democrats support drilling in the Arctic National Wildlife Refuge. As the budget is debated in the state Senate, opponents of the takeover are using tax concerns to make their case.

On April 19, in part because of these concerns, the Senate Finance Committee removed funding for the takeover from its proposed state operating budget.

Sen. Bert Stedman, R-Sitka, is co-chair of the Senate Finance Committee and said he was personally opposed to the idea. In addition to costs, he is concerned about starting a major new project in the last year of a governorship.

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“If we do that, we should really start at the beginning of a governor’s term so that he has the ability to address the issues that arise from that,” he said.

“I think there’s a schedule issue, there’s a budget growth issue, and there’s a lot of concern in my district with respect to growth and the involvement of DEC and EPA in the global economy. I’m a little cautious,” Stedman said.

The decision to withdraw funds from the Senate budget does not kill the idea. Funding could be restored in a Senate amendment, and even if it doesn’t reappear in the Senate budget, it will be a matter of debate as lawmakers undermine House and Senate proposals before the adjournment of the House. legislature on May 18.

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