Dunleavy requests state funding so Alaska can take over wetlands permitting from feds

Gov. Mike Dunleavy wants the state of Alaska to revisit the idea of taking over one of the most complex and contentious development authorizations in the country.

The governor included just more than $4.9 million in his 2023 fiscal year state budget proposal for the Department of Environmental Conservation to start work toward taking over Clean Water Act Section 404 permitting for development in wetlands and other water bodies with federal jurisdiction. Section 404 permitting, as it is often known, is currently administered by the U.S. Army Corps of Engineers and overseen by the Environmental Protection Agency across the vast majority of the country.

Development-minded state officials have long insisted the national standards for wetlands impact avoidance and mitigation are too onerous in Alaska, which is more than 40% wetlands and contains more wetlands than all other states combined. More specifically, development advocates argue federal standards for compensatory mitigation widely used in the Lower 48 — restoring, enhancing or preserving wetlands likely to be developed — aren’t practical in Alaska given the relative lack of damaged and at-risk wetlands in the state.

EPA leaders in the Trump administration urged Army Corps officials to develop Alaska-specific mitigation standards as a means to give permit reviewers more flexibility in approving wetlands mitigation plans for projects in the state.

Dunleavy noted during his budget rollout briefing that the state taking primacy of Section 404 permits doesn’t mean any federal standards or requirements will be waived and the EPA will retain oversight. But he claimed Alaska is the best in the nation at hitting permitting deadlines and said his administration is confident it can run the program “more efficiently” than the federal government.

Environmental impact statement reviews are often spurred by the need for a Section 404 wetlands permit, and for large development projects they typically take several years to complete.

“This will allow this (Section 404) permitting process to be under the umbrella of the state, which we believe will have better outcomes,” Dunleavy said.

To date, just three states have taken on wetlands permitting from the federal government: Michigan, New Jersey and Florida.

Dunleavy spokesman Jeff Turner wrote in response to follow-up questions that state primacy over Section 404 permitting will produce faster decisions on permits that could make development projects more feasible. That should ultimately mean more job growth and improved revenue to the state, according to Turner.

Army Corps of Engineers Alaska District officials rejected the proposed Pebble mine’s development plan in November 2020 based on their belief the large project would have significant impacts on the aquatic ecosystem of the Bristol Bay region and could not meet Clean Water Act Section 404 mitigation standards. The Dunleavy administration attempted to appeal the corps’ decision last year on Pebble’s behalf before corps officials ruled the state lacked jurisdiction to do so.

Alaska most recently investigated taking over Section 404 permitting in 2013 under Republican Gov. Sean Parnell, when lawmakers passed a bill authorizing the state to pursue the program and providing $1.5 million to do it. However, the funding was cut the following year as the state’s financial situation worsened.

This time, the $4.9 million requested from the state’s general fund would cover 28 new full-time positions in the Department of Environmental Conservation to staff the state’s 404 program. An additional four positions would need to be added in 2024 to fully implement the program, according to an Office of Management and Budget report.

DEC officials say the Legislature’s 2013 Section 404 program approval is sufficient for today so no additional legislation is needed beyond the budget request. They also acknowledge the plan is aggressive but hope to have the program implemented in fiscal year 2024.

While the plan is to fund it with general fund money to start, the state could shift to an applicant fee-for-service model similar to what is used by the corps or a hybrid of the two, DEC spokeswoman Laura Achee wrote via email.

Brian Litmans, legal director for the Anchorage-based environmental law firm Trustees for Alaska, said he believes the effort will prove too costly once again. Trustees attorneys regularly challenge permit approvals for development projects in court.

“It’s an incredibly expensive program to administer,” Litmans said. “As a result, there are only three states that have primacy over the program.”

He added that he would have concerns with the adequacy of the Section 404 permits if the state does take over given the volume of work it entails.

“Ensuring that each project that is looking to get authorization to fill wetlands — there’s quite a bit that goes into showing that they comply with the Clean Water Act’s requirements, and the Army Corps of Engineers has always been running the program and is familiar with what is required. It is asking quite a bit of the state of Alaska,” Litmans said. “There’s no indication right now the state is able to take on a program of this size and nature.”

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.