[Senate Hearing 114-73]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 114-73

FEDERAL MITIGATION REQUIREMENTS AND INTERAGENCY COORDINATION RELATED TO 
     THE ECONOMIC DEVELOPMENT ON FEDERAL, STATE, AND PRIVATE LANDS

=======================================================================

                          JOINT FIELD HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                                AND THE

             Subcommittee on Fisheries, Water, and Wildlife

                                 OF THE

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      AUGUST 17, 2015-WASILLA, AK











                       Printed for the use of the
    Committee on Energy and Natural Resources and the Committee on 
                      Environment and Public Works

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota            ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
SHELLEY MOORE CAPITO, West Virginia

                    Karen K. Billups, Staff Director
                Patrick J. McCormick III, Chief Counsel
                         Heidi Hansen, Counsel
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
           Spencer Gray, Democratic Professional Staff Member
                                 ------                                

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                  JAMES M. INHOFE, Oklahoma, Chairman
DAVID VITTER, Louisiana              BARBARA BOXER, California
JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska
                 Ryan Jackson, Majority Staff Director
               Bettina Poirier, Democratic Staff Director
                                 ------                                

             Subcommittee on Fisheries, Water, and Wildlife

                     DAN SULLIVAN, Alaska, Chairman
JOHN BARRASSO, Wyoming               SHELDON WHITEHOUSE, Rhode Island
SHELLEY MOORE CAPITO, West Virginia  THOMAS R. CARPER, Delaware
JOHN BOOZMAN, Arkansas               BENJAMIN L. CARDIN, Maryland
JEFF SESSIONS, Alabama               BERNARD SANDERS, Vermont
ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California (ex 
    officio)                             officio)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
Sullivan, Hon. Dan, Subcommittee Chairman and a U.S. Senator from 
  Alaska.........................................................     3

                               WITNESSES

Fogels, Ed, Deputy Commissioner, Alaska Department of Natural 
  Resources......................................................     7
Brand, Randy, Vice President, Great Northwest, Inc...............    19
Crockett, Deantha, Executive Director, Alaska Miners Association.    26
Nukapigak, Joseph, Vice President, Kuukpik Corporation...........    31
Clark, Theresa, Vice President of Lands and Shareholder Service, 
  Olgoonik Corporation...........................................    38
Shephard, Phil, Executive Director, Great Land Trust.............    43
Murphy, Ted, Associate State Director, Bureau of Land Management, 
  U.S. Department of the Interior................................    58
Hobbie, David, Chief, Regulatory Division, Alaska District, U.S. 
  Army Corps of Engineers........................................    65
Thiesing, Dr. Mary Anne, Wetlands Coordinator for the Office of 
  Ecosystems, Tribal and Public Affairs in Region 10, U.S. 
  Environmental Protection Agency................................    70

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Arctic Slope Regional Corporation:
    Statement for the Record.....................................   112
Brand, Randy:
    Opening Statement............................................    19
    Written Testimony............................................    21
Clark, Theresa:
    Opening Statement............................................    38
    Written Testimony............................................    40
Coons, Michael:
    Letter for the Record........................................   119
Crockett, Deantha:
    Opening Statement............................................    26
    Written Testimony............................................    29
Ecological Land Services, Inc.:
    Letter for the Record........................................   121
Fogels, Ed:
    Opening Statement............................................     7
    Written Testimony............................................    10
    Responses to Questions for the Record........................    95
Fortymile Mining District:
    Letter for the Record........................................   122
Hobbie, David:
    Opening Statement............................................    65
    Written Testimony............................................    67
    Responses to Questions for the Record........................   105
Matanuska-Susitna Borough:
    Statement for the Record.....................................    79
Murkowski, Hon. Lisa
    Opening Statement............................................     1
Murphy, Ted:
    Opening Statement............................................    58
    Written Testimony............................................    61
    Responses to Questions for the Record........................   100
Nukapigak, Joseph:
    Opening Statement............................................    31
    Written Testimony............................................    34
    Responses to Questions for the Record........................    97
    Supplemental Statement for the Record........................   132
Shephard, Phil:
    Opening Statement............................................    43
    Written Testimony............................................    45
Sullivan, Hon. Dan:
    Opening Statement............................................     3
Thiesing, Dr. Mary Anne:
    Opening Statement............................................    70
    Written Testimony............................................    72
    Questions for the Record.....................................   110

 
FEDERAL MITIGATION REQUIREMENTS AND INTERAGENCY COORDINATION RELATED TO 
       ECONOMIC DEVELOPMENT ON FEDERAL, STATE, AND PRIVATE LANDS

                              ----------                              


                        Monday, August 17, 2015

         Committee on Energy and Natural Resources,
         Committee on Environment and Public Works,
             U.S. Senate Subcommittee on Fisheries,
                                Water and Wildlife,
                                                        Wasilla, AK
    The Committees met, pursuant to notice, at 2:30 p.m. at the 
Curtis D. Menard Memorial Sports Complex, 1001 South Mack 
Drive, Wasilla, Alaska, Hon. Lisa Murkowski, Presiding.

  OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM 
                             ALASKA

    The Chairman. I call to order the meeting of the Energy and 
Natural Resources Committee and Environment and Public Works 
Subcommittee hearing on BLM and U.S. Army Corps of Engineers 
mitigation.
    I would like to welcome everybody. I want to start off this 
afternoon by thanking Senator Sullivan for working with me to 
arrange what is probably a pretty unprecedented hearing.
    Senator Sullivan. Yes.
    The Chairman. To have a joint hearing between the Energy 
and Natural Resources Committee and the Environment and Public 
Works Committee.
    I would also like to thank Wasilla for hosting us this 
afternoon. I want to welcome and thank our witnesses for 
joining us and participating in an important dialogue for 
Alaskans.
    We have brought our committees to Alaska to examine the 
regulatory practices that impact and often delay or prevent 
development in our state. Specifically, our focus today will be 
on the Bureau of Land Management's (BLM) policies for 
mitigation and land use and the Army Corps of Engineers and 
EPA's regulation of water and wetlands and related mitigation 
issues.
    We here in Alaska are keenly aware of the challenges that 
current regulatory practices impose. We have heard the 
statistics before, and you will hear them a lot today. 
Approximately 43 percent of our state is categorized as 
wetlands. That does not include the lakes and the streams and 
the rivers and the adjacent waters to them. The BLM also 
manages 72 million acres of Alaska's land and in many ways, 
given the reach of its regulations and its ownership of lands 
in our state, the Federal Government, is sort of a gatekeeper 
and a landlord here in Alaska.
    So how the Federal Government chooses to approach those 
rules has a big impact on our daily lives and our ability to 
grow as a state. Right now there is a lot to be desired. In 
some instances we are being held back by ill-designed, ill-
fitted or ill-applied policies.
    It is estimated that the acreage of wetlands in the lower 
48 has halved over the last 200 years while here in Alaska, 
over the same period of time, we have lost only one tenth of 
one percent of our wetland acreage. So it is really a different 
comparison set when you are talking State of Alaska verses the 
rest of the country.
    Despite this strong record, our state is still pigeonholed 
into the same regulations as the limited fill of wetlands in 
drier climates like Arizona or in more heavily populated 
regions like California or New York. The BLM employs many land 
management regulations including national and regional policies 
and those concerning mitigation. These are not well-suited for 
Alaska which has some unique history, geography, remoteness and 
work force needs. We all know our considerations should simply 
be different from those in the lower 48, yet Alaska is again 
categorically analyzed through the lens of national and 
regional portfolios.
    Like many Alaskans, my concern about Federal overreach has 
grown dramatically over the years. As I go around the state, 
and I know Senator Sullivan hears the same, if there is one 
unifying theme amongst Alaskans, whether you are down on Prince 
of Wales Island, up in the Interior of the Fortymile region or 
up on the North Slope, a concern consistently is we see 
ongoing, rapidly developing, encroachment, overreach and 
overregulation that is stifling us.
    The regulatory scheme within the Department of the Interior 
has significantly departed from the fundamental principle of 
multiple use as defined in and required by law. Instead it is 
tilted toward conservation, more conservation, and is followed 
by what appears to be mere lip service toward other uses 
protected under law.
    Though the Department of the Interior's authorities are 
rooted in very different principles from that of the EPA's 
Clean Water Act, Interior has decided to adopt its regulatory 
principles on mitigation anyway. Secretary Jewell published an 
order highlighting Interior's mitigation priorities, and it 
mirrors the language from the Section 404 sequence of 
mitigation.
    There is something fundamentally flawed about an agency 
that borrows theories and regulations which are born from 
wholly different laws and adopting them as its own when its 
authorizing language is so markedly different, and that is what 
we are seeing here.
    Then we come to the Corps of Engineers and the EPA. We have 
seen time and time again in Alaska instances where individuals 
and companies have pre-coordinated desired projects, redesigned 
those projects based on the Corps recommendations and paid 
millions and millions of dollars toward mitigation only to 
learn, at the very end, that the agency wants additional 
conditions. This moving of the regulatory goalpost has a 
serious, chilling effect on project development and it limits 
the growth of our economy. It hurts the livelihoods of the 
Alaskan people, and it cripples our ability to fulfill promises 
of our statehood.
    I think, in fairness, that the Corps really does try to get 
to yes. I wish that I could say the same for EPA, but its 
perogative often seems to be finding a way to get to, or to 
perhaps stay at, no.
    We have reached a point where Federal agencies are 
unreasonably binding the hands of well-intentioned, 
environmentally-principled, hard-working Alaskans. And whether 
it is the layering on of new regulations like the recent waters 
of the United States rule, reasonable litigation ratios or 
something else, we have reached a point where it often looks 
like the goal in Alaska is to stop new development in its 
tracks rather than helping it to reasonably and responsibly 
advance. So the question then is what do we do about it? What 
do you do about it?
    Well, it begins with oversight. I hope that the desire 
would be a constructive and an open conversation amongst us all 
here today. We will renew our demands that the agencies 
faithfully apply the law, thoughtfully analyze each and every 
permit sought in this state, and work with us, not against us, 
but with us as Alaskans. If that is not enough, we will turn to 
the legislative and appropriations process to secure the fair 
treatment that we deserve.
    Again, I want to welcome our witnesses. I am going to turn 
to Senator Sullivan for his opening comments, and then for 
those of us gathered here today, we will kind of, blow out the 
program here this afternoon in terms of what you can expect for 
the timing.
    It is a delight and a privilege to be here with my 
colleague, Senator Sullivan. I appreciate his leadership for 
Alaska on the Environment and Public Works Committee. It is key 
and it is so important to so many of the issues that we are 
working on in the Senate.
    Thank you, Senator Sullivan.

    STATEMENT OF HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you.
    Well, thank you, Madam Chair, and I want to thank everybody 
for attending.
    You know, these issues that we are discussing today, I 
think, sometimes can be viewed as rather technical. These 
regulatory issues sometimes are viewed as only impacting large 
companies.
    Well, I thank you for the turn out here of many state 
legislators. Certainly I want to thank Representatives Gattis 
and Keller and Hughes, but there are others in the audience 
today--I really want to thank you, for everybody coming. I have 
seen so many Alaskans from so many different parts of the state 
come out today and show that you are interested in this topic 
because it is a huge topic for all of us.
    I want to thank the witnesses. I know we have an 
outstanding panel both in terms of the first panel and the 
second panel. And I do want to thank Senator Murkowski, the 
Chairman of the Energy and Natural Resources Committee in the 
U.S. Senate.
    This is, I think, a rather new approach. This is a 
combination of the Energy and Natural Resources and the 
Environment and Public Works Committees. I chair the 
Subcommittee on Fisheries Waters and Wildlife. So this is an 
official U.S. Senate hearing, and to have Senator Murkowski's 
leadership on this is critical.
    As I mentioned, I think that there's a tendency on some of 
these issues that we dismiss them or say this is kind of 
technical. It doesn't really impact us or it just impacts large 
companies which certainly impact us, but how does this affect 
the lives of our citizens throughout the state?
    Well, I think that you are going to see today in testimony 
that these kinds of regulations do hugely impact all of us. And 
whether it's small placer miners or other examples that we hear 
about constantly, this really matters to Alaska. Let me provide 
just a couple of examples.
    Recently the Alaska Association of Realtors shared with us 
a story about a land transaction that fell through because the 
Army Corps acknowledged that the land may include wetlands. 
After disclosing this information to perspective buyers and 
even after lowering the sale price by a significant amount, the 
mere suggestion that property could include wetlands in our 
state made an important real estate transaction fall through.
    A few months ago, a Fairbanks company wrote to my office 
and explained that they previously had a 404 permit to fill a 
portion of their land. A few years later, their permit expired. 
After reapplying for another permit they were told that it 
would only be issued after placing a permanent, non-development 
deed restriction on one fifth of their property. This was all 
after paying an undefined sum to a mitigation bank in-lieu of 
fee program. The power to require payment and other concessions 
on what occurs on private and state lands effectively grants 
Federal agencies the ability to zone the whole state, and that 
should concern all of us.
    Finally, at an EPW Subcommittee hearing earlier this year 
in Alaska, Mayor Charlotte Brower testified that the North 
Slope Borough paid over $1 million in mitigation fees for 
simply trying to expand their landfill on the North Slope. In 
testimony before an EPW Committee she stated, ``That's $1 
million less to pay for teachers, health aides, police officers 
and many other services we need on the North Slope.'' It is 
important to remember every dollar spent on mitigation is a 
dollar not spent building Alaska.
    I want to conclude by mentioning one other thing that I 
think is very important. In many ways, I think we're going to 
see compensatory mitigation often appears arbitrary and even 
punitive to those of us trying to navigate this complex 
process.
    One critical issue that I certainly want to discuss today 
is the legal authority, the statutory authority for Federal 
agencies to undertake these actions. All Federal agencies, all 
Federal actions, whether an action or a regulation, has to be 
based on a Federal statute or the Constitution. That is a fact.
    Unfortunately, I think many agencies forget or downright 
ignore this bedrock principle of the rule of law, that they 
have to have statutory authority to do what they do. And when 
they do this, when they ignore that, it's what we in Alaska 
refer to, and Chairman Murkowski has already mentioned this, as 
Federal overreach.
    It is not just us talking about it. It's not just us 
claiming it. In the last two terms of the U.S. Supreme Court, 
in two different cases, the U.S. Supreme Court has found that 
the EPA has violated either statutes or the Constitution of the 
United States, zero for two, on two different cases. So this is 
a concern for all of us, and it should be.
    I want to thank everybody who is here again. I want to 
thank the witnesses. I look forward to an informative hearing 
so that we can take additional action to address what is a huge 
concern for our state and, I think, a concern for most of you.
    Again, I want to thank everybody for coming out today.
    Thank you.
    The Chairman. Thank you, Senator Sullivan.
    With that we will now hear testimony from two panels.
    The first panel is the six Alaskans that you have in front 
of you today. I will introduce them in just a moment, and we 
will hear their comments.
    Let me just outline to you the process that we will use and 
follow today which is a little bit different than what you 
would see if you were attending a hearing in Juneau. In the 
Senate we have hearings set up so that the witnesses will each 
provide five minutes of oral testimony. Their full statements 
will be included as part of the record. But hopefully this will 
be an opportunity for you to basically outline the issues that 
you have been dealing with, not only to inform those who are 
here in the room, but to inform the Senate Committee records, 
the Committee records for both the Energy Committee and the EPW 
Committee. We will hear comments from each of the witnesses, 
and then Senator Sullivan and I will pose questions to each of 
them after the six have presented. When they have concluded 
that Q and A exchange we will excuse the first panel and we 
will turn to the second panel, which is comprised of three 
representatives from our agencies.
    Senator Sullivan and I agreed coming in that typically back 
in Washington we see the agency people are on the first panel. 
And no disrespect to the gentlemen and lady that make up that 
first panel, but we thought it was very important to hear the 
actual stories, the issues on the ground that these Alaskans 
have been dealing with so that it would better help form your 
comments and responses when we get to that panel. So we do 
appreciate the deference that you have shown us, no disrespect 
to the titles, but we are just making sure that you all are 
fully informed as to where they are coming from as well.
    There will not be an opportunity for you, as audience, to 
then come up and also present testimony. As much as we would 
like to be able to do that, that is not a format that we 
typically use. Perhaps at a Town Hall we might be able to look 
at that as one alternative.
    If you would like to submit written commentary for the 
public record, we are going to be holding the Committee record 
open for an additional two weeks. If you or your companies 
would like to provide a written statement, it is welcome.
    I also want to acknowledge and thank the representatives 
who are here today. Senator Sullivan has mentioned 
Representatives Gattis, Keller and Hughes. I do believe that I 
saw Senator Stoltze walk into the room a minute ago, and we 
appreciate him being here as well. And a former colleague of 
mine, former Senator Scott Ogan, is also with us. So thank you 
for not only being here today but the good work that you are 
doing working with us in Juneau.
    With that, unless, Senator Sullivan, you think we need to 
add anything more in process, I think we are ready to go to our 
first panel.
    Senator Sullivan. I think we are good to go.
    You should know though, we do read the submissions for the 
record. I think some of us will be staying around after the 
hearing so we can hear from you then. We want to hear from 
everybody.
    But if you are not able to make comments or we don't hear 
the comments today, we certainly want to encourage you, 
particularly if you have your own stories on how this has 
impacted you, we certainly want to hear that because that 
becomes part of the official record of this hearing. I think it 
can have a good impact in terms of legislative actions that we 
want to take to address some of these challenges.
    The Chairman. Good.
    We will turn to our panel to receive testimony on the 
implications of the regulatory actions that are taken by 
Federal agencies to which these witnesses will speak. We 
anticipate they will discuss the affects of regulatory actions 
on project proponents and the State of Alaska Attorney General, 
if not--on Federal, State and private lands.
    I will go ahead and introduce each of the panelists, and 
then we will begin with Mr. Fogels.
    At the end here is Mr. Ed Fogels, who is Deputy 
Commissioner of the Department of Natural Resources for the 
State of Alaska. He is here to talk about the development 
challenges he experiences in his role both as Deputy 
Commissioner of the Department of Natural Resources and as a 
conduit for project proponents who are seeking assistance from 
the State of Alaska to navigate the maze of Federal 
regulations. We are pleased that Mr. Fogels is here.
    Next to Mr. Fogels is Mr. Randy Brand. He is the Vice 
President of Great Northwest, and he will speak about his 
experiences in the construction industry in Fairbanks and the 
evolution of increasingly complex and costly mitigation and 
permitting requirements that his business has encountered. I 
think it is almost legend in Fairbanks what Great Northwest has 
had to go through, so we look forward to your testimony.
    Next to Mr. Brand is Deantha Crockett, the Executive 
Director of the Alaska Miners Association, representing miners 
both large and small across our state. She will discuss the 
challenges they face with a complex and unclear regulatory 
scheme required by the BLM and also speak to miner's 
experiences with 404 mitigation.
    We also have Mr. Joe Nukapigak, the Vice President of 
Kuukpik. He is here to highlight permitting challenges that we 
experienced on the Spur Road, what might be expected for 
proposed roads in the Colville Delta, and what the community 
would like to see on GMT1 mitigation funds.
    Next to Joe we have Theresa Clark, the Vice President of 
Lands and Shareholder Services at Olgoonik. She is here to talk 
about the challenges the villages face when they try to marry 
mitigation and regulatory requirements for growing villages.
    Rounding out the panel we have Phil Shephard of the Great 
Land Trust. We greatly appreciate you being here, Phil, to 
present the interests and the perspectives of the Great Land 
Trust.
    So thank you all for being here. We will lead off with Mr. 
Fogels.
    Again, if you can try to limit your comments to about five 
minutes, your full statements will be incorporated as part of 
the official hearing record.
    I will note that we have the hearing room until five 
o'clock, so we are going to try to keep moving on this.
    Mr. Fogels, welcome to the Committees.

STATEMENT OF ED FOGELS, DEPUTY COMMISSIONER, ALASKA DEPARTMENT 
                      OF NATURAL RESOURCES

    Mr. Fogels. Thank you, Chairwoman Murkowski, Chairman 
Sullivan.
    My name is Ed Fogels. I'm Deputy Commissioner at the Alaska 
Department of Natural Resources, and on behalf of Governor Bill 
Walker, I thank you for this opportunity to testify.
    The focus of my testimony today is to first discuss permit 
coordination process employed by the State of Alaska and second 
is to discuss some concerns we have with current mitigation 
requirements. I'll focus primarily on some BLM mitigation 
requirements that we are afraid might start duplicating and 
confusing the mitigation requirements required under the Clean 
Water Act.
    The state has established a sophisticated coordination 
office for large projects within my department. This office, 
the Office of Project Management and Permitting, coordinates 
the environmental review and permitting process for major 
development projects. The state has found this leads to real 
permitting efficiencies for several reasons.
    First, public processes are integrated across different 
agency timelines, which prevents repetitive and confusing 
public notices. It gives the public an accessible source of 
information about projects in one place.
    The state processes are synched with corresponding Federal 
processes to minimize duplication of effort, permit 
collaboration and avoid duplication. The state can speak with a 
highly coordinated and well-informed voice in the Federal and 
local permitting process and in National Environmental Policy 
Act reviews.
    Our services are unique in that they are voluntary for 
project proponents. If a project proponent wants to pursue the 
efficiency of coordination they must enter into a memorandum of 
understanding with the state which also requires reimbursement 
of state expenses. The state has long advocated that the 
Federal Government establish a similar coordination process for 
large and complex projects based on the same principles and 
structures.
    Next let me speak to our concerns about the Bureau of Land 
Management's draft regional mitigation strategy manual, which 
is a guidance document that will direct Federal staff on how to 
require mitigation for impacts to Federal lands that occurs as 
a consequence for permitted activities. The manual mentions 
different types of mitigation and how they may be applied, but 
we feel there is little to no discussion of what impacted 
resources would require mitigation or how those impacts will be 
calculated in order to determine what mitigation requirements 
would be required.
    We are also very concerned about duplication with the 
compensatory mitigation requirements for permits issued under 
Section 404 of the Clean Water Act.
    We're also concerned the manual has not been developed 
through a public process. As it has been formulated as a 
guidance document, the manual has not gone through a formal 
rulemaking process.
    Next I would like to briefly discuss one example which we 
believe illustrates where the process could be improved, the 
Greater Mooses Tooth well or GMT1 in the National Petroleum 
Reserve.
    First, let me start by emphasizing, however, how grateful 
we are to BLM and all the Federal agencies for permitting this 
project. GMT1 is anticipated to add about 30,000 barrels per 
day in the Trans-Alaska Pipeline system, making it a critical 
priority for the State of Alaska and furtherance of the 
national strategic interest; however, the state has some 
concerns about the process, and we believe they should be 
addressed for future projects.
    The EIS and BLM's record of decision layered additional 
mitigation measures on the project. These mitigation measures 
are in addition to numerous requirements already required by 
other BLM EIS' and lease stipulations.
    Cooperating agencies including the state were surprisingly 
excluded from the development of the mitigation measures. BLM 
required a number of oil spill-related measures for the project 
despite the fact that this authority falls mainly under the 
Alaska Department of Environmental Conservation. Consultation 
with the cooperating agencies would have prevented this 
duplication.
    Next let me touch briefly on an issue of these new Areas of 
Critical Environmental Concern. This is, I'm sorry, another 
concerning area on the BLM planning and regulatory activities 
have a proposal to designate multiple Areas of Critical 
Environmental Concern, or ACECs.
    BLM is increasingly proposing excessively restrictive ACECs 
across Alaska. If designated as proposed, these ACECs will 
create uncertainty for development projects of critical public 
and economic importance such as the natural gas pipeline for 
the North Slope and the Donlin Gold project's proposed natural 
gas pipeline. Specifically, two ACECs in the Eastern Interior 
RMP, Resource Management Plan, would close approximately 
713,000 acres from mineral location and leasing, providing 
blanket closures on restrictions for off-highway vehicles, 
including snow machines.
    We're also concerned that these ACECs could potentially 
hamper the state's ability to fulfill its statehood land 
entitlement as most of these ACECs are layered on top of 
existing withdrawals.
    In closing, I would like to say that regardless of these 
issues that I've brought before these Committees, we do have an 
excellent working relationship with our Federal agency 
partners, especially the Alaska staff, and we continue to work 
to make that relationship better.
    Our intent here is to highlight the areas where we must 
improve. The state needs to be viewed as an equal partner by 
the Federal Government. Additionally, the Federal Government 
should draw from the success of the state permitting 
coordination model to improve its own process.
    We at the state applaud the efforts of the oversight of 
your Committees to drive Federal improvements in these areas.
    Thank you.
    [The prepared statement of Mr. Fogels follows:]
    
    
  
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    The Chairman. Thank you.
    Mr. Brand, welcome.

STATEMENT OF RANDY BRAND, VICE PRESIDENT, GREAT NORTHWEST, INC.

    Mr. Brand. Thank you.
    If you visit the EPA website, you're bombarded with why we 
need the clean water rule to protect our streams and wetlands. 
Ironically, EPA workers accidentally caused a toxic wastewater 
release in Colorado. If this had happened to any of us in the 
industry, we would soon be out of business and in handcuffs.
    For the past 22 years my firm has either had a controlling 
interest or outright ownership of 300 acres of heavy 
industrial-zoned land in Fairbanks. We have developed this 
property to serve the construction needs of the greater 
Fairbanks area. Originally all that was required for a wetland 
permit was to submit a written development plan to show the 
purpose and need. Over the years, things became gradually more 
difficult.
    The first change was the requirement that any plan for pit 
development had to include a restoration plan to include 
littoral zones. Restricting development of a 20-foot wide zone 
around an old pit may not sound like much, but it adds up 
quickly. A 20-foot strip around a five acre pond equals about 
0.85 acres. A geometric calculation of this set-aside equals a 
volume of 206,000 cubic yards with a potential value of over 
$600,000. Requirements gradually worsened to the point we are 
at today with the requirement of compensatory mitigation.
    In 2006, my firm needed to update our existing wetlands 
permit. The U.S. Army Corps of Engineers required that we 
contribute $55,000 to The Conservation Fund to provide for 
offsite mitigation of 16 acres of lost wetlands. We were also 
required to permanently set aside an additional 10.64 acres of 
our land to be protected wetlands in perpetuity.
    As we were aware of two U.S. Supreme Court rulings that 
might affect our determination, we held off executing the 
permit. After those rulings were published, we requested on 
July 12th, 2006 the Corps revisit the jurisdictional 
determination for our property. This remained unanswered until 
March 28th, 2007 when the Corps offered a proffered permit 
which included a condition that the in-lieu fee for 
compensatory mitigation would be held in escrow until a new 
jurisdictional determination was issued under the new guidance.
    On July 28th, 2008 the Corps determined that this property 
was jurisdictional wetlands. With the help of the Pacific Legal 
Foundation, we fought this determination on our property all 
the way to the 9th Circuit Court and won at a cost of $89,000. 
The new rulemaking by the EPA will reverse that determination, 
potentially forcing us to re-enter the permitting process for 
our ongoing development. To hopefully protect ourselves from 
that situation, we have cleared and disked much of this land at 
a cost of $73,000 to convert it to uplands beyond the EPA's 
reach.
    In other private cost impacts, a business associate of mine 
with a development on North Slope Borough leased land in 
Deadhorse was required to pay $90,000 in fees to develop seven 
and a half acres in 2011. Three years later he applied to 
develop an adjoining seven and a half acre parcel. The price 
doubled to $180,000 without any explanation. That's about 
$24,000 per acre.
    This impact is not limited to private landowners. Our 
ability to improve public infrastructure is also impacted by 
these rules. Mayor Brower has previously testified that the 
Barrow landfill project had to pay $1 million in compensatory 
mitigation.
    I would like to add that Northern region transportation 
projects paid $3.4 million in mitigation payments in 2014 and 
$1.3 million in mitigation payments in 2015 to date. During 
2014 the credit cost increased from $2,200 per credit to as 
much as $33,000 per credit.
    [Audio problems.]
    Mr. Brand. So last but not least is an agreement reached in 
December 2007 whereby the Juneau Airport project paid $5.3 
million to the Southeast Alaska Land Trust as compensatory 
mitigation for impacts to 73 acres of wetlands. That's about 
$73,000 per acre.
    Another interesting note is the government's failure to 
recognize court rulings. Several of us individually own 
property upstream of the Great Northwest property that was 
deemed non-jurisdictional wetlands. The government claimed 
jurisdiction over my property last week, just as they had done 
to other property owners in the same neighborhood.
    To further complicate matters, the EPA has shut down The 
Conservation Fund until they do an audit of the expenditures. 
Permits cannot now be obtained as there is no organization to 
receive the required funds. Progress for future paying projects 
is now at risk.
    These payments are impacting our ability to deliver 
worthwhile infrastructure improvements, predominately within 
long dedicated rights-of-way. Additionally, these payments are 
re-directing taxpayer dollars to NGO's with their own self-
serving interests, salaries, and expenses. One could even argue 
these payments constitute extortion due to the fact you will 
not get a permit to fill your wetlands without making the 
appropriate payment.
    These new regulations will take large tracts of land not 
currently under the authority of the Clean Water Act and 
redefine them as waters of the U.S. This egregious Federal 
overreach has more to do with the largest land grab in history 
than with expanding protection under the Clean Water Act. The 
net result will be changing the Clean Water Act into a Wetlands 
Protection Act.
    If there is a need for a Wetlands Protection Act, Congress 
should enact one and leave public rights-of-way and privately 
held properties out of it. If the public wants to set these 
areas aside then the public should purchase the land outright 
at fair market value.
    Thank you.
    [The prepared statement of Mr. Brand follows:]
    
    

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    The Chairman. Randy, thank you, we appreciate your 
testimony. I think sometimes those costs that are associated 
are just astounding.
    Deantha Crockett, welcome.

   STATEMENT OF DEANTHA CROCKETT, EXECUTIVE DIRECTOR, ALASKA 
                       MINERS ASSOCIATION

    Ms. Crockett. Thank you, Senators.
    For the record my name is Deantha Crockett, and I'm the 
Executive Director of the Alaska Miners Association (AMA).
    I know that you two are quite aware of what AMA is. But for 
the record, we are the statewide membership-funded trade 
association that represents all aspects of the mining industry. 
You described the vast affect of the areas of the state that 
these polices have an effect on our membership spans. We've got 
branches in Nome and we have a branch in Ketchikan, Prince of 
Wales and six in between. Members really do operate in every 
corner of our state.
    I represent six large operating mines, but around 400 
permitted placer operations. A vast majority of my job on a 
day-to-day basis is advocating and helping placer miners to sum 
up Federal policies in five minutes. I think I heard Mr. Fogels 
use this word as well, and I'm sorry to say that the word I've 
got to use is uncertainty.
    Right now I have the large operations that I referenced 
evaluating what source of investments they'll make of those big 
projects, but I've got the vast majority of my placer miners 
evaluating whether or not they'll still have a livelihood.
    I do have one of my members, someone I've become great 
friends with, in the third row, Bronk Jorgensen. He is here 
from the Forty-mile Mining District and watches that every 
single day in terms of how Federal management policies affect 
placer mining on Federal land in Alaska.
    I will begin with the BLM. I think we're seeing multiple 
policies come from multiple field offices throughout different 
levels of management in the agency whether it's land planning, 
regulatory enforcement or how permitting is conducted. But a 
lot of times policies are introduced in draft form to which the 
industry scrambles to digest multiple volumes, I'm not 
exaggerating, about this high, of different plans and policy 
changes that come out. Sometimes the polices come to fruition, 
sometimes they don't, and sometimes in the meantime we see them 
used by the agency as legitimate land management tools.
    To be specific, BLM recently reevaluated its implementation 
of the regulations in which mineral activity is permitted and 
managed in Alaska, which is essentially new regulation that 
doesn't add any additional environmental protection. It doesn't 
fix any problems, and it burdens the miners with increasing 
costs and delays.
    For many years placer mining operations have applied for 
permits and been regulated under the Annual Placer Mining 
Application, the APMA process, which is managed by three State 
of Alaska agencies and BLM. For a long time these agencies got 
together and made sure that the APMA was a good program that 
placer miners could effectively manage permitting for but still 
establish the objectives of all the agencies involved.
    That certainly changed into a different animal, and now BLM 
has proposed seven new supplemental documents for the APMA. 
There is also a requirement to gather new data and a possible 
Reclamation cost estimate to determine the cost of reclaiming 
an operation that doesn't have any non-compliance issues in the 
first place.
    So outside of the permitting, the agency has also released 
a number of land management plans as part of an overarching 
landscape level process. The RMPs cover really large acreages 
and often contain management prescriptions that guide polices 
of the land users in the area outside of what is current land 
regulation and statute.
    Deputy Commissioner Fogels did a phenomenal job of 
explaining the ACECs, so I was able to cross out a little of my 
testimony here.
    Recently we've seen two, a newly proposed and then an 
expanded one, that was in existence in the Fortymile region, 
and it really has that district very concerned. It's hundreds 
of thousands of acres that are being proposed for closure to 
mineral entry, an area that's known to be highly mineralized.
    There is an additional component within the land managing 
process called rapid ecological assessment. And I have to be 
honest with you, I'm still not totally sure what it does or 
what it doesn't do. But these are all examples of, frankly, 
what is a puzzle and us trying to understand BLM's land 
management philosophy and how it applies to placer mining on 
Federal lands in Alaska.
    When the National Director, Neil Kornze, visited Chicken 
earlier this year, which we profusely thank you for your help 
on, I had the opportunity to talk to him. I told him that I 
think there are really good, intelligent and hard working staff 
within the BLM Alaska offices here. I firmly believe that. 
They're all sitting in this row right here. They are wonderful 
about communicating with me. They're asking for different ways 
to provide outreach to miners.
    And what I told Director Kornze is that they've got a lot 
of good ideas on how placer mining can be regulated and the 
agency's objectives can still be established. I hope that the 
communication between the Alaska staff and the national staff 
is a two way street, and they're being allowed to implement 
ideas. I think they are the best ones to understand placer 
mining in Alaska.
    So switching to wetlands mitigation, we certainly do have 
our struggles with jurisdiction over Section 404. But one thing 
I can say at this time is kudos to that agency for its recent 
internal review of how wetlands jurisdiction and regulation is 
conducted in Alaska. I know that they are evaluating the 1994 
Alaska Wetlands Initiative, and is it a tool that is there for 
the agency to manage projects specific to mining in Alaska.
    I know that the agency has committed to reviewing whether 
the entire suite of tools is being utilized to regulate 
operations and wetlands in Alaska. We saw these words put into 
action with the recently released general permit for placer 
mining that the agency went through. They extended the existing 
permit because they readily admitted we're not done. This is 
not a forum with which we're happy and ended up striking out 
the compensatory mitigation for certain small placer mining 
projects.
    So they really did put their money where their money is, so 
to speak, and ended up taking multiple stages of revisions from 
placer miners into that final product. And it's one that there 
are some things we don't like about it. There's a lot of things 
we like about it, and I think they did a great job of meeting 
us in the middle, if you will, on that one.
    So I think I've exceeded my time allotment. For that, I 
apologize. But I thank you again for the opportunity to testify 
for placer miners today.
    [The prepared statement of Ms. Crockett follows:]
  
  
  
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    The Chairman. Thank you, Deantha.
    Joe, welcome.

    STATEMENT OF JOSEPH NUKAPIGAK, VICE PRESIDENT, KUUKPIK 
                          CORPORATION

    Mr. Nukapigak. Thank you.
    Thank you, Senator Murkowski and Senator Sullivan and the 
Committees for allowing me the opportunity to provide testimony 
on Federal mitigation requirements. I hope to add local content 
and offer some suggestions for the committees to consider.
    Kuukpik Corporation is the Alaska Native Land Settlement 
Act Village Corporation for Nuiqsut, which is an almost 
entirely Native community on the North Slope of Alaska. 
Approximately 90 percent of our residents of Nuiqsut are 
shareholders in Kuukpik Corporation or are married to Kuukpik 
Corporation shareholders or descendants of Kuukpik 
shareholders.
    Kuukpik is one of the largest private landowners in the 
National Petroleum Reserve-Alaska, having received title to 
approximately 74,000 acres of ANCSA lands surface estate. The 
balance of Kuukpik's lands, totaling about 69,000 acres, are 
just east of the NPR-A in and around the Colville River Delta.
    Nuiqsut is the community most affected by oil development 
on the North Slope to date. Alpine is only eight miles away 
from the village and can be seen from the village, day and 
night. Nuiqsut is a traditionally Inupiat community where over 
70 percent of households get more than half their food from 
subsistence hunting.
    The oil industry has been active on the eastern side of 
Nuiqsut's traditional subsistence lands at Prudhoe Bay and 
Kuparuk for over 50 years, but construction of the Alpine field 
in 1998 put the oil field and Nuiqsut in close daily contact. 
Three new satellite oil fields have been built around Nuiqsut 
since Alpine and at least two more are planned. Impacts to 
subsistence activities and resources are continuing and 
persistent issues.
    Our challenge as a community and a corporation was to 
realize the economic benefit of ANCSA land ownership through 
oil development, while protecting our Native culture. Our 
leadership has consistently worked to protect subsistence and 
our natural surroundings.
    As oil development occupied more and more subsistence lands 
to the east and north, Kuukpik decided that better access to 
subsistence land to the west was the one part of dealing with 
oil development impact, while the other part was better access 
to jobs and training at Alpine oil field.
    Our solution was to build a Spur road from the village to 
the industrial CD-5 road. The road has three purposes. One is 
to open up more area for subsistence to the west. Two is to 
allow Nuiqsut residents and shareholders to drive to training 
and employment opportunities at home. Three expanded health, 
life, and safety options.
    Projects such as the Spur Road are a key part of ANCSA's 
purpose, to protect Native land and culture while promoting 
economic development of Native land, jobs, and training for 
Alaska Natives. Yet the Federal permitting process has created 
substantial barriers to the project.
    The Permit Process. In January 2013, Kuukpik submitted an 
application to the U.S. Army Corps of Engineers. The proposed 
road was 5.8 miles long and called for placing gravel on 51 
acres of our land that we own. Over several months Kuukpik 
submitted information to improve our application. In August 
2013, the EPA commented on our application. Like many 404 
applicants, they sent Kuukpik a letter stating that they 
reserved the right to elevate our ANCSA project if their 
concerns are not addressed, or could not be addressed.
    Specifically, the EPA argued that mitigation for Kuukpik's 
51-acre road required that we set aside an additional 294.2 
acres in permanent conservation status. Under the EPA 
calculation, the 51-acre footprint of our community road would 
actually impact a minimum of 343.2 acres of Kuukpik-owned 
property. The proposed mitigation acreage would be almost six 
times the actual footprint.
    Kuukpik continued to meet with the Corps of Engineers and 
the EPA throughout the fall of 2013. We repeatedly argued that 
the size of parcel needed as an offset for the project was 
smaller than required by the EPA and that the purpose of the 
road is an extension of our right as a landowner under ANCSA 
and served to mitigate oil development impacts.
    Our negotiations lead Kuukpik to the conclusion that 
despite the inherent conflict between ANCSA and the Clean Water 
Act, we needed the 404 permit. We eventually agreed to set 
aside a 127-acre parcel in the area known as Fish Creek, so 
that the Spur Road's 51-acre footprint impacts 178 acres of 
Kuukpik land. The mitigation acreage is more than twice as much 
as the actual footprint even though the mitigation acreage is 
made up of higher value wetland than those occupied by the 
project footprint.
    Kuukpik is still in the process of finalizing the easement. 
One of the many byzantine requirements of the Clean Water Act 
is that a qualified third-party entity hold the easement, and 
that an entitlement be set up to fund future costs of managing 
that easement.
    We are in the process of identifying a qualified and 
willing third-party that can harmonize our need to continue our 
lifestyle with the demands of the Clean Water Act.
    Kuukpik supports continuing to use all the mitigation-
related tools available under the existing rule, including 
wetland mitigation banks, in-lieu fee programs and permittee 
responsible mitigation; however, Kuukpik also supports 
expansion of the options available to Alaska Native 
Corporations including recent legislation introduced by our 
Congressman calling for preservation leasing for tribal 
organizations, including Alaska Native Corporations. That 
legislation could more closely tie mitigation acreage to the 
actual life of project-related impacts.
    Finally, we think that Alaska Native Corporations should be 
exempt from Clean Water Act requirements where the applicant is 
an Alaska Native Corporation and the project is on Alaska 
Native land.
    BLM Region Mitigation Strategy. The Department of the 
Interior has now stepped into the compensatory mitigation 
equation. BLM negotiated an $8 million mitigation payment to 
offset impacts created by GMT1. Decisions regarding the 
disposition of the funds should be made by the NPR-A Working 
Group.
    The NPR-A Working Group was created as part of the 
Integrated Activity Plan for the NPR-A. The purpose of the 
Working Group is to guide the Federal Government's decision 
making process within the NPR-A. The group has broad 
representation including tribal, local government, and 
corporate groups. It makes perfect sense to allow that group to 
determine the use of the funds.
    Second, we recommend that funding community mitigation be 
the highest priority for the funds.
    We will continue to work with our families and our 
neighbors including the City of Nuiqsut, Native Village of 
Nuiqsut, and the BLM on plans for utilizing the funds.
    Thank you for your time.
    [The prepared statement of Mr. Nukapigak follows:]
    
    
    
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    The Chairman. Thank you, and thank you for representing 
Kuukpik.
    Ms. Clark, welcome.

    STATEMENT OF THERESA CLARK, VICE PRESIDENT OF LANDS AND 
           SHAREHOLDER SERVICE, OLGOONIK CORPORATION

    Ms. Clark. Good afternoon. My name is Theresa Clark. I am 
the Vice President of Lands and Shareholder Services for 
Olgoonik Corporation.
    Thank you, Senator Murkowski and Senator Sullivan and 
members of the Committees for providing Olgoonik the 
opportunity to testify today. I thank you for conducting this 
public hearing here in Alaska on this very important issue of 
Federal wetlands, Federal mitigation requirements, and the 
proposed legislation to address wetlands mitigation.
    Olgoonik Corporation is the ANCSA village corporation for 
Wainwright. Olgoonik privately owns 175,000 acres of surface 
estate, all of which are within the NPRA, so we are one of the 
closest communities to offshore development in the Chukchi Sea. 
Offshore exploration, development, and production will require 
onshore-based support services which we are planning to 
deliver.
    We received our full entitlement to our ANCSA lands. It 
took BLM over 20 years to patent our lands to us. The Clean 
Water Act was amended to address wetlands mitigation just as we 
were receiving the balance of our full entitlement, which 
subjected our lands to new and additional Federal requirements.
    Wainwright residents and Olgoonik Corporation will be 
highly impacted by oil exploration and industry development in 
both a positive and negative manner. We are trying to minimize 
the adverse impacts that development brings to our community, 
especially those affecting our subsistence way of life. The 
positive impacts will be business and job opportunities, and a 
financial future for generations.
    To minimize impacts and to capture benefits we are planning 
and developing Olgoonik lands on the outskirts of Wainwright. 
This will make development of Olgoonik lands subject to 
wetlands mitigation rules.
    We have our own land management plan to develop lands and 
protect certain sensitive areas. Our strategy is to keep 
development of our lands to a minimum by compacting the 
development into a reasonably small footprint.
    We are currently in the process of purchasing lands 
formally utilized by the Air Force as the Early Defense Warning 
System, DEW lines. With your introduction of an amendment to 
the 2015 NDAA and its passage, Senator Murkowski, thank you, we 
are now in the process of purchasing those lands. This property 
is within our ANCSA lands. Our plans for this property is to 
build infrastructure upon the plans already existing to provide 
essential support to oil and gas industries. This will further 
minimize development on wetlands within our ANCSA lands.
    Full mitigation to protect wetlands is good and needed. We 
recognize that fact. We are also mindful that this impacts our 
ANCSA lands or purchased lands, the DEW line.
    For example, there is a social deed in our community to 
build new homes. We are subdividing lands for that purpose. 
Roads will be needed for access. To build roads, we'll have to 
comply with the Federal regulations. This will drive up the 
price of development as the current method we are leaning 
toward is paying an in-lieu fee.
    The current wetlands inventory data for Alaska's North 
Slope is limited and out-of-date. The Arctic Coastal Plain is 
comprised of approximately 80 percent wetlands. This was 
determined by the State of Alaska in 1994. This places the 
burden of more detailed delineation of our lands on us as a 
developer. Currently the average cost per acre to develop is 
approximately $12,000 per acre.
    Using this data, a majority, if not all, of our land is 
considered wetlands. The in-lieu fee program is not available 
or able to pre-sell additional credits at this time. Permittee 
responsibility is challenging in that we are required to triple 
the size of the impacted area when one adds together the 
project with a conservation easement.
    We are certainly watching for and hoping that the Arctic 
Slope Regional Corporation's bank will be certified. In short, 
we feel that having multiple mitigation options is important 
from a permitting standpoint but also a financial standpoint.
    Finally, we do not desire to lock up any of our lands in 
perpetuity to mitigate as we cannot predict the future. 
Decisions made today in regards to our lands may not be 
applicable 20 years down the road. As time passes, corporate 
leaders change, additional development will be needed to take 
place, and we need to keep the options open for our future 
generations to determine.
    Therefore, with these purposes in mind, we support the 
proposed legislation to one, provide ANCs exemption from the 
Clean Water Act requirements where an applicant in an ANC and 
the proposed projects are on ANC lands. And two, to have the 
ability to enter into a preservation easement as a mitigation 
option.
    I thank you for the opportunity to be heard, Senator 
Murkowski and Senator Sullivan and members of the Committees. I 
request your support on this proposed legislation.
    [The prepared statement of Ms. Clark follows:]
    
    
    
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    The Chairman. Thank you, Theresa.
    And finally we will wrap up with Mr. Phil Shephard, welcome 
to the Committees.

  STATEMENT OF PHIL SHEPHARD, EXECUTIVE DIRECTOR, GREAT LAND 
                             TRUST

    Mr. Shephard. Thank you.
    Thank you, Senator Murkowski and Senator Sullivan.
    My name is Phil Shephard. I'm the Executive Director of 
Great Land Trust. We're a private, non-profit land trust that 
operates here in Alaska. We're based in Alaska. We have an all-
Alaskan board.
    We were founded in 1995, so 20 years ago. We work with 
willing landowners, agencies, communities, local governments 
and other partners to conserve south central Alaska's special 
lands and waterways. We have our service area, the area that we 
work is in south central, so from Denali, down to Kodiak, 
Prince William Sound. Primarily we've worked in Anchorage and 
Mat-Su, and we were asked in 1998 by the municipality of 
Anchorage, the State of Alaska, and various regulatory agencies 
to consider starting an in-lieu fee program in Anchorage.
    So there's been discussion today about different mitigation 
options. We happen to operate one that's called an in-lieu fee 
program. There are other options.
    But so what I'm going to talk about today is this public/
private partnership that we happen to run as a land trust to do 
some of the mitigation. I'm not going to weigh in on why 
mitigation happens because that's not our purview. We don't do 
advocacy work. What we do is the mitigation after the fact.
    So when the Army Corps has made the decision that okay, 
here's a permit, you can't fill this wetland, then that 
permittee, whether it's a private developer or an agency, it's 
DOT or some agency that's filling a wetland, they decide that 
the mitigation is formed and the mitigation options and the 
fee. Then that payment is made to us, and we aggregate those 
funds and then we turn around and we purchase those purchase 
properties to permanently protect those wetlands.
    What we have to do in order to do that, in order to operate 
this is in the fee program, is we spend a great deal of time 
using the current data on wetlands in Anchorage and the Mat-Su 
to know, okay, well where are the best wetlands to mitigate? 
And so what we've done to date is partner with dozens of 
private landowners and agencies. We've created seven new parks, 
we've built a number of trails, we've conserved about 45 miles 
of salmon habitat here in Upper Kuukpik arm, we've provided six 
access points to public lands, and we've worked in eight 
different estuaries.
    One of the things that we've focused on is if there's a 
wetland and it's privately owned and if we only work with 
willing landowners and the landowners that have these wetlands, 
and for whatever reason they decided they, you know, they don't 
want them anymore, we purchase those and then oftentimes they 
are adjacent to say, a state game refuge or a state park, and 
then we add those to the park. And then that way that property 
provides access to these public lands.
    So we are blessed with a lot of public lands in Alaska. In 
some cases, especially around Anchorage, access is very 
limited. Actually right near here we just purchased property 
near Machetanz Elementary School and added it to Palmer 
Hayflats State Game Refuge and are building a boardwalk for the 
kids at Machetanz who are helping us. That's an example of a 
project, a type of project, that we do.
    When we try to figure out where to do the mitigation we 
spend, I already said, a great deal of time with maps and GIS 
to figure out the best possible mitigation to do. We work 
closely with the boroughs, the municipal governments, state 
agencies, to find the best property. When we get frequent 
feedback from these agencies and resident experts that choose 
these properties we're really proud of all of the projects 
we've done.
    One of our--several of our main partners have been Native 
Corporations. We've got--we've conserved almost 7,000 acres of 
Native Corporation lands in Upper Turnagain Arm that were 
mitigation from various projects around Anchorage.
    Obviously there's way more impacts to wetlands around 
Anchorage and the Mat-Su just because there's more people here. 
And so I can't speak to the North Slope and these areas in the 
interior. We only operate or are in the fee program in Mat-Su 
and Anchorage.
    In closing, I'd like to thank the Senators, both Senators 
Murkowski and Sullivan, for coming here and having this 
hearing. I'm sure everyone appreciates the ability to 
understand this issue more fully. I would just like to close 
with we're a, you know, small, private nonprofit in a 
partnership between a private nonprofit and these Federal 
agencies and the public I think has resulted in some really 
sound, high quality mitigation that has been for the good 
citizens of this area.
    [The prepared statement of Mr. Shephard follows:]
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    The Chairman. Thank you.
    Thank you, Mr. Shephard, and thank you to each of you for 
not only your testimony here this afternoon but the work that 
you do within your respective communities, your region, and the 
state.
    I think if I have heard a common theme here it is the 
uncertainty that comes about with any level of requested 
development whether it is housing, as you were talking about in 
Wainwright, Ms. Clark, or whether it is mining activities out 
in the Fortymile region. When you do not have clear and 
consistent policies, it is difficult to make that business 
judgment decision as to how to move forward.
    I have to say to friends here at home I feel like I have to 
apologize sometimes for the alphabet soup. I was listening to 
Mr. Fogels and Ms. Crockett. We have APMAs, we have ACECs, we 
have RMPs, we have REAs, and that's just in the little BLM 
area. It kind of boggles your mind. Unfortunately it just seems 
like that this is the acronym of the day, what is coming next? 
I don't know and I am not sure that our regulators know, and it 
adds to the confusion and complexity of what we are dealing 
with.
    I am concerned as we look at the impact to our 
opportunities to develop. Mr. Fogels, you mentioned some of the 
big ticket items that we think about whether it is the ability 
for Donlin Gold to bring affordable energy to a project out 
there being limited by an ACEC; whether it is our Trans-Alaska 
Pipeline; whether it is further build out and repair of our 
Dalton Highway after the washout; whether it is what we are 
trying to accomplish in GMT1 and recognizing that we are still 
trying to get things moving within the NPRA. It really causes 
you to wonder how we have had the level of progress that we 
have had to date.
    Let me ask, specifically, about these areas of critical 
environmental concern, these ACECs. In 1986, my understanding 
is we had 16 across the state and it encompassed about 2.7 
million acres. Now, well in 2014, we had 52 ACECs overlaid 
across the state accounting for approximately 8.7 million acres 
of additional management. I do not go anywhere without my map 
of things that rile me up. Where is my rile me up map? 
[Laughter.]
    I got so riled up that I put it in another file. Where is 
my colored maps? Those, you have them.
    For those who do not have the areas of withdrawals of 
Alaskan lands, it is not just things like ACECs and the 
withdrawals within each of our public lands. It is what we also 
see withdrawn off of our coastline, with critical habitat 
designations. At the end of the day, Senator Sullivan has seen 
this chart through videos, but it is a colored patchwork that 
just, kind of, reinforces the situation that we are in and 
trying to access what we are dealing with here in this state. 
We are seeing this growth in ACECs. We are seeing this growth, 
this expansion, if you will.
    I am going to ask you, Mr. Fogels. You have been with the 
Department of Natural Resources for some time. Are these 
regulatory measures increasing the health and the welfare to 
Alaskans? Is it helping us in terms of management? Are we 
gaining any benefit by these additional designations?
    Mr. Fogels. Senator Murkowski, I think, in my professional 
opinion, these most recent proposals that we have seen do not 
add to the health and welfare of the Alaskan people.
    We, I should say that these are all, the ones out in the 
Eastern Interior Management Plan that totals up about 713,000 
acres. And then there's another large one that we're watching. 
We're very concerned about the Donnelly project with many 
hundreds of thousands of acres. Those are all still in draft. I 
know those have been finalized. All of those plans are still in 
their planning process. So we're strongly commenting on these, 
on all of these ACECs, and we do not believe they're warranted. 
They're way too big. They don't have the justification.
    In addition, we believe that the BLM already has the 
ability to manage those resources properly with their existing 
tools. They don't need to create these Areas of Critical 
Environmental Concern. I think it's----
    The Chairman. Let me interrupt and ask you, though, even if 
it has not been finalized, what is the impact of this proposed 
designation? What does that do to any potential development?
    Mr. Fogels. Well, Senator, that's a good question. That's 
one that we see in a number of different venues in Alaska when 
an agency typically is studying something, let's say, for 
wilderness, then they're apt to treat it and manage it like a 
wilderness while they're studying it. So, while we do not have 
direct experience with that in these instances, I would imagine 
that's a significant concern on these Areas of Critical 
Environmental Concern.
    The BLM is doing a good job with their planning process. 
I've got high hopes that reason will prevail and the public 
will comment on these things. Until that happens, I don't know.
    The Chairman. But until such time as there is a final 
designation, it is managed as de facto withdrawal effectively?
    Mr. Fogels. Well, Senator, I think you might, I think in 
your next panel you might have BLM folks. You might ask them 
about that.
    It's important to note that wherever these ACECs are 
proposed now, as we understand it, there are already 
withdrawals under those ACECs. And that's one of the things 
that concerns us is that those existing withdrawals, many of 
those, were put in place for a purpose that is no longer valid. 
And so with the layering of the ACEC on top of that, we argue 
that that's essentially repurposing that original withdrawal 
that underlies it.
    That would be contrary to provisions in ANILCA which 
prohibits the designation, the withdrawal of more than 5,000 
acres without Congressional approval.
    The Chairman. Let me ask you, Ms. Crockett. Representing 
the miners in the Fortymile area and Mosquito Flats, Fortymile 
is the area where over 700, what did you say? Seven hundred and 
?
    Ms. Crockett. Eighteen.
    The Chairman. Eighteen thousand acres will be put under 
this designation. Even though it has not been finalized, what 
impact is that having on a small placer miner out there?
    When was the last time we saw a new mine permitted out 
there in the Fortymile region or really anywhere in the state?
    Ms. Crockett. Senator Murkowski, that's an interesting 
question. I actually don't know the answer to when the last 
time a placer mine was permitted in the Fortymile Mining 
District.
    The Chairman. But it has been long enough that you cannot 
remember. [Laughter.]
    Ms. Crockett. I should be a little fair admitting I've only 
been there for three years. So I will research that and get 
back to you.
    The Chairman. Okay.
    Ms. Crockett. Maybe the BLM folks have an answer to that; I 
have not had one brought to my attention in the last three 
years. So I will find that out.
    Ms. Crockett. You also asked me about the impact, and I 
think it has made a lot of them very scared.
    And looking in terms of how did we get here? If you talked 
about the number of ACECs that are in place or proposed now, 
how many more there are. The number is certainly alarming, but 
I think what's more alarming for me is learning about the ACEC 
nomination process and how exactly it works.
    So the two that are within the Fortymile region in one 
meeting with BLM, it was explained there were individuals that 
nominated these, that proposed these ACECs. So any member of 
the public can nominate for an ACEC. And when they were put 
into the Eastern Interior Resource Management Plan there was an 
ACEC nomination process so that individuals could then forward 
that generally had hunting and fishing interests, and foreclose 
that as needed caribou habitat or moose having habitat, 
etcetera.
    When the proposal came out with public comment there was no 
information whatsoever about the mineral potential of the area. 
It was a lot of information about ecological aspects and 
wildlife aspects. We brought that to their attention and they 
said, bring it to us. So we did. We said, okay, we'd like to 
provide you with some information. Here is a known, very large 
deposit here in a number of areas where placer mining activity 
could really increase and diversify and strengthen. And that 
was generally not available to the general public that may have 
been interested in commenting on this.
    So I think that process of how they're brought to the 
public, those of us that are trying to just understand this 
better, and information they don't include, is more alarming to 
me than anything. And I hope that kind of answers your 
question.
    The Chairman. Well, it does.
    I know that Senator Sullivan will go to the issue of 
specific authorization under the law, and I think what we would 
question is whether or not much of this can move forward 
without congressional authority under the parameters of ANILCA.
    Ms. Crockett. Yes, absolutely.
    And the proposals, as they stand now, do designate closure 
to mineral entries. So no mining activity would occur if these 
become effective.
    The Chairman. Again, contrary to ANILCA.
    Ms. Crockett. Yes.
    The Chairman. Senator Sullivan?
    Senator Sullivan. Thank you, Madam Chair.
    Mr. Fogels, I wanted to follow-up on a couple questions.
    You talk about OPMP. I agree with you, the state has done a 
good job of coordinating on large projects. There was an 
Executive Order by the Obama Administration a few years ago 
that tried to replicate that, but from my perspective, it did 
not seem to go anywhere.
    How is the coordination at the federal level and is there a 
need, do you think, from the Federal legislative standpoint to 
mandate that kind of coordination?
    Because right now whether it is the Shell project, whether 
it is a different Alaska natural gas AK LNG project, it seems 
like Federal agencies come in with all kinds of different 
requirements, completely uncoordinated. What do you think needs 
to happen there and is that Executive Order doing enough?
    Mr. Fogels. Senator Sullivan, I would have to say that, in 
my opinion, I see where the coordination can, on the Federal 
level, have flashes of where it actually starts working. But 
it's pretty inconsistent. We've seen places where we tried, at 
a local level, to improve that coordination. We have excellent 
regular meetings with EPA and the Army Corps to discuss large 
projects around the state, trying to avoid blow outs like we 
have with CD5 to head those off at the pass. So that's working.
    I think on a broader scale with President Obama's 
interagency working group, our frustration there was that, as 
you know, we were never invited to sit at that table.
    Senator Sullivan. Yes.
    Mr. Fogels. That was purely a Federal table.
    Much to our pleasant surprise, the local Federal leaders 
decided to build their own mirror group of that and they 
invited us to sit at the table here in Alaska.
    Senator Sullivan. Let me ask you, let me follow-up on that 
in terms of those invited to the table.
    In the Clean Water Act, you agree the Clean Water Act, we 
are supposed to be a co-regulator, on an equal basis with the 
Federal Government. That is the way the Clean Water Act was set 
up.
    Yet on compensatory mitigation are we at all involved in 
the process in terms of laying out these random and, I think, 
arbitrary numbers and amounts and the dollar figures? Are we at 
all a part of that process even though that is under the Clean 
Water Act?
    Mr. Fogels. Senator, in my experience we are really not 
involved in that process at all.
    Senator Sullivan. So you think that clearly goes against 
the spirit if not the actual rule of the law of the Clean Water 
Act?
    Mr. Fogels. Well certainly the spirit, Senator.
    I think in years past we've also tried to evaluate whether 
the state should seek primacy for the 404 process. And almost 
every state in the Nation has primacy over the 404-2 discharge 
program. But only two have primacy over the 404 program. And 
when you read the Clean Water Act and even early EPA guidance 
documents, it clearly says the states should be ultimately 
getting primacy and they should take the lead. And that has not 
happened.
    Senator Sullivan. Let me ask another, kind of, related 
question with regard to mitigation.
    I actually spent a lot of the day yesterday at the Chena 
Hot Springs Alternative Energy Fair, which was a great event. I 
had a lot of time to talk to Governor Walker about a number of 
these issues, and told him we had this hearing coming up.
    We were discussing, both of us were wondering to what 
degree the Federal Government can require mitigation with 
regard to the state. So coequal sovereign under our 
Constitution, and I did not think the Federal Government could 
require if the State of Alaska is building the road, do we have 
to mitigate that under the Federal rules?
    So I took a look at this. I think the answer is not only 
yes, but heck, yes. Almost $3.4 million in 2014 we had to pay 
to the Federal Government for mitigation to build roads in 
Alaska. I think that violates the tenth amendment or any other 
aspect of the Clean Water Act. It certainly seems to me kind of 
an outrageous example of the Federal Government claiming way 
too much authority.
    What is your thought on that?
    Mr. Fogels. My thought?
    Well, I would think a former Attorney General would kind of 
know more about that than I probably do. [Laughter.]
    Senator Sullivan. So Madam Chair, I have a number of more 
questions.
    The Chairman. We will go back and forth.
    Because the question, I think most Alaskans would be 
stunned----
    Senator Sullivan. Stunned.
    The Chairman. To know that, for instance, on the rebuild of 
the Dalton Highway after the substantial flooding, what we need 
to do is we need to elevate that road. We are going to have to 
do something a little bit different than what we had before or 
we will have a repeat. In order for us to move forward with 
that, a level of mitigation is required. I am not sure what the 
dollar amount is, but we do know that the state is basically 
going to be paying the Federal Government for those mitigation 
costs.
    Then it speaks also to the issues that Mr. Nukapigak and 
Ms. Clark have spoken to whether it is coming from Wainwright 
or Nuiqsut. The fact that these are your ANCSA lands that were 
conveyed to you as part of a settlement, and for you to access 
these lands whether it is a road that will allow for additional 
subsistence opportunities for you or whether it is for the 
folk, the people, in Wainwright to be able to access additional 
area for housing that is necessary. That they also will be 
paying the Federal Government, and whether it is six times the 
amount or whether it is negotiated down to just twice the 
amount of the footprint, I think most would be very shocked to 
find that from your native lands that were conveyed upon 
settlement that you, as tribal entities, have a requirement now 
to pay the Federal Government.
    I was in Craig on Prince of Wales last week, and they too 
are looking to build additional housing. The compensation that 
they have to then pay, again, to access their lands and what I 
was told was that the issue of where these mitigation dollars 
go to is of great concern.
    Mr. Fogels, you mentioned that there is an issue right now 
with the availability of mitigation banks that can accept these 
dollars to move forward. I understand that up north there was 
an effort to expand, or build out, a hangar in the area. They 
are all ready to move on the project, and there is nobody that 
can take the mitigation dollars because of this audit that you 
acknowledged.
    What do you do then? You need to build the hangar. You need 
to repair the road. You need to build housing or a connector 
road.
    Mr. Shephard has mentioned the in-lieu system, but he also 
mentioned that is just down here.
    Are we to believe that we are not able to move on anything 
up in the North Slope because we do not have a place to even 
bank it if we can agree that a two-to-one mitigation ratio is 
reasonable and not extortion?
    Mr. Fogels. Well, Senator Murkowski, yes, as we understand 
it, there's a situation that's developed that one of the main 
mitigation banks in the in-lieu fee programs is no longer 
accepting money to further the program. I think it's a fairly 
recent development. I think, I know, that is a huge concern to 
us.
    What we're doing right now is, even with the tight budget 
situation the state has right now, we received a small 
legislative appropriation this year to start investigating 
forming a state in-lieu fee program or possibly even a 
mitigation bank.
    So that's something that, I think, the state can have a 
bigger role in this whole process. That's one place we're 
really looking at trying to put some energy and hopefully help.
    The issue is if for every acre we develop now we have to go 
and protect ten or five or whatever it is. That is just an 
untenable situation. It's just, I mean anyone can see that's 
just not workable.
    So we'd like to use that money as much as possible to do 
environmentally good things, right? I mean, it's kind of ironic 
when Point Thompson thought it was being permitted. Exxon wrote 
some huge multimillion dollar check that's probably going to go 
and protect a block of land somewhere.
    At that same time, when we're talking about how do we 
cleanup these legacy wells, you know, which all have wetlands 
in house. Wouldn't it be nice if we could have just used that 
money to clean up a legacy well? I know that's kind of a reach 
for the Clean Water Act, but I mean, that's what we need to do. 
We need to reach, we need to think outside of the box and 
figure out how to use these dollars to fix real environmental 
problems.
    The Chairman. Mr. Fogels, can you explain what happens 
there then if, for instance, in Wainwright the mitigation 
dollars, the concerns you are under, which are the organization 
is that it is not able to accept funds now? Is there any 
requirement that these mitigation dollars be used to help 
either in the regions of the North Slope Borough or even within 
the State of Alaska?
    The mitigation dollars the Great Northwest paid, are they 
required to be directed somewhere in the region that is 
impacted or even the state that is impacted?
    Mr. Fogels. Well, Senator, you know, our understanding is 
that those dollars should be used to be as close as possible in 
areas related as possible to the area of the impact.
    I think you might have some folks coming in the next panel 
that you may actually get a more clear answer of what the 
latitude is to move those dollars around to other parts of the 
state. I'm not sure I would have been the best person to answer 
that with very much precision.
    The Chairman. Well, know that for the next panel that is 
something that I would like to drill down on because it is my 
understanding that while it is recommended that that happen, 
there is no certainty to that. In fact, these dollars go places 
that you and I may have never heard of.
    I think what Great Land Trust has done to make it be very 
localized is the model that we would like to pursue and 
recognize. You can see that benefit going there. But I am 
afraid that the system that we currently have does not allow 
for an assurance that we are seeking.
    Senator Sullivan?
    Senator Sullivan. Mr. Nukapigak, I thought your testimony 
was very powerful in a couple of ways. You talked about some 
broader themes, kind of the clash of ANCSA and the Clean Water 
Act, which I think is a really important issue.
    But could you unpack that a little bit more? Essentially 
what you are saying is under the Alaska Native Claims 
Settlement Act, regional and village corporations receive the 
allotments of land they own in fee simple, to develop with 
their shareholders. Yet when you are trying to develop these 
for your shareholders, you have to actually give up more land. 
You literally have to give land back, and it is not one for 
one.
    What I am interested in is when you talked about the EPA 
and you said it wanted a 300-acre easement to make it 50 acres. 
Then they came back and said, ah, maybe we'll do a little bit 
less here, a little bit more. Were they giving you any kind of 
sense of where they were coming up with these numbers? You 
mentioned six to one initially then it came down to two to one. 
What was the basis of these negotiations?
    That is one question. But the broader question is do you 
think that what is going on here undermines the spirit and 
again, the letter of the law, what the Federal Government is 
trying to do in regard to ANCSA? The more you develop your 
land, the more you are going to lose your land. I do not think 
that was part of the deal.
    Mr. Nukapigak. Well, Senator Sullivan, there are times that 
my corporation had to contend with some of those issues. You 
see the Tenement Act allowed us to select land to then 
determine what then the population of the village. And so when 
we finally, when Alpine was finally discovered some years ago, 
there was two ways that we had to set aside or come up with 
$1.4 million, which is hard earned money.
    Senator Sullivan. One million four hundred thousand 
dollars?
    Mr. Nukapigak. One million four hundred thousand dollars of 
our hard earned money or set aside a certain piece of land that 
the EPA wanted us to. You know, that's kind of contradictive of 
what the purpose of ANSCA was for.
    And you know, what can we do? I don't know, here we're 
trying to make a pact for the betterment for our people to make 
our life easier by having access to the Alpine for jobs. And 
so, it's only eight miles away and some of our locals and 
without that, we've got no roads.
    I don't think the men of our villages would be willing to 
spend three weeks at a time at eight miles away unless they'd 
be able to come home every night and spend the night with the 
family.
    You know, these are the environments that we strive to make 
better.
    Senator Sullivan. When they came to you initially with this 
six to one proposal, did they give you a sense of why they 
chose six to one?
    Mr. Nukapigak. Well, they, I don't know how that number 
came up but they gave to us some sort of a calculation that, I 
don't like, maybe, of course, somebody might be able to answer 
that----
    But how they calculated that is something that I don't 
know, probably I think it would be, might be easier, might even 
be able to answer that might be a person in this room.
    Senator Sullivan. Okay, well we can, I mean, maybe we can 
take that for the record and if you guys could get back to us 
on it on answering that question, that would be very helpful.
    Ms. Clark, I was going to ask you, you kind of watched that 
whole episode. I would imagine that that also sends a bit of a 
concern. It is kind of random, right, six-to-one and then down 
to two-to-one and then all over the map?
    You guys, as you mentioned, are looking at a whole number 
of important issues with regard to the potential developments 
in your community. I wanted to ask you a question. The 
mitigation rule that we are talking about here encourages 
permittees to first avoid and then minimize impacts on wetlands 
but when that cannot be done you have to mitigate. Is it 
geographically possible to avoid wetlands in your region?
    Ms. Clark. No, no. What we're doing right now because the 
1994 delineation, you know, if you go to the outlet you go to 
probably the Corps of Engineers website. You'll see that the 
wetlands are delineated there in our area. They're not 
delineated. And so we're having to have a consultant come in 
and delineate what is wetlands and what isn't wetlands because 
if we don't do that, then they'll all have to be considered 
wetlands, which would either cost us more dollar wise or more 
land wise. So we're trying to save some money and some land by 
getting our land delineated and determining what is wetlands 
and what isn't wetlands near our community.
    Senator Sullivan. But right now it is looking like pretty 
much?
    Ms. Clark. Wetlands.
    Senator Sullivan. Everything.
    Ms. Clark. Right.
    Senator Sullivan. So you are, again, stuck with a conundrum 
that as you want to develop, you lose land.
    Ms. Clark. Yes, that's correct.
    Senator Sullivan. Again, I am not sure of the Federal law, 
whether it is the Clean Water Act or the ANCSA, that should 
create such a black and white choice. It seems to me that that 
is completely at odds with both the goals of both of those 
statutes.
    So I made a reference to Mayor Brower's comments about 
essentially the tradeoffs. They expanded their land bill, had 
to pay over $1 million. Are your communities struggling with 
similar payoffs? You are having to contemplate right now 
whether it's payment of $1.4 million or the loss of lands that, 
in essence, is making you make a very difficult decision how 
you are going to do this because you really have no choice 
whether it is the wetlands or whether it is payment that could 
cost millions that takes away from all your potential effective 
use of that kind of money.
    Ms. Clark. We're struggling with that right now.
    Senator Sullivan. What do you think would be an answer to 
address that?
    Mr. Nukapigak. What was the question again, sir?
    Senator Sullivan. With regard to the tradeoff, not only in 
terms of money for the ability to develop but also lands like 
we were talking about, that if you are developing your land, 
you are losing your land because all your land is wetlands. The 
exemption you talked about in terms of your testimony.
    Mr. Nukapigak. Well, um, I don't know what the purpose of 
this ANCSA was supposed to be was to keep land for the ancient 
land that we have taken from the path.
    But mitigation may not mean mitigation. Things like that 
is, here, you wanted to hold up one. Your own land but, you 
know, when your hands are tied by EPA or somebody, what can you 
do it to come up with money more or lose that land that is 
highly valued such as ancient land? But how you value, in terms 
of money, monetarily or how you compensate for it is another 
manner.
    Senator Sullivan. Yes.
    Mr. Brand, I wanted to ask you a question. First, I commend 
you for your company's willingness to actually challenge this 
because that takes a lot of guts, a lot of money, a lot of 
time, and a lot of uncertainty. You won in the 9th Circuit, of 
all places, which is kind of a miracle. [Laughter.]
    Well done, from my perspective.
    You are an example of a small business, not one of the 
large companies that has had to not only litigate but seen the 
different increases in these regulatory and permitting 
requirements. Can you give us a sense of how that has grown? 
Your testimony touched on it. You said several years ago, hey, 
you only had to do one thing. Now it looks like it is layer 
upon layer upon layer. Can you give us a little bit of sense of 
that in addition to the kind of litigation that you undertook?
    Mr. Brand. I'll try.
    As I mentioned in my testimony, it used to be 25 years ago 
or so all you had to do was submit a written plan along with 
purpose and need, and you were granted the permit. And then the 
littoral zone came in. Anybody that doesn't know what littoral 
zone is, it's a shallow area if you're digging relative to the 
water. They instituted a plan where we needed to create a 
littoral zone for fish and bird habitat, I believe, that for 
the first 20 feet from the shoreline you couldn't get much more 
than like three feet deep.
    So that created a bit of a restriction where we were only 
able to mine a portion of our property rather than the entire 
property because we had to set aside a littoral zone. And if 
you take it, at best, at a full 150 feet, it's $700,000 worth 
of gravel that you have to leave in the ground to comply with 
this new restriction.
    Then, we've all been talking about the compensatory 
mitigation as well as the time factor. It's a huge amount of 
time to submit and go through the process to get your wetlands 
permit, if you can. And right now in Fairbanks because of The 
Conservation Fund debacle, we couldn't even do that.
    Senator Sullivan. And you mentioned in your testimony that 
you just found out that other land that you own, private land, 
was recently found to be Clean Water jurisdictional by the 
Corps of Engineers. How did that happen and then what are the 
implications for any plans you had for that private land that 
you own?
    Mr. Brand. That's a very good question. I don't know how 
that happened.
    But a little bit of history on our situation. The Great 
Northwest property was deemed to be the closest water was the 
Tanana River. And we were successful on our argument because 
they cannot claim wetlands that are adjacent to adjacent 
wetlands, and in our situation that's I think from the--
decision that you can't, you know, keep on going forever out 
through the water calm. You have to stop at wherever there's a 
barrier.
    And our property was separated by two barriers from the 
Tanana River. The first was the flood control dike built by the 
Corps of Engineers many, many years ago. And then the second 
barrier was the railroad embankment, for the railroad spur that 
runs out to the Fairbanks International Airport. So those two 
embankments separated our property from the Tanana River, and 
that was the whole argument in court. Therefore our wetlands 
were adjacent, and they couldn't be considered jurisdictional 
wetlands. They are or were wetlands, but they're no longer 
jurisdictional wetlands until this new rulemaking becomes 
effective.
    And the properties that I and others own personally are 
further removed from the Tanana River upstream, if you will, 
from The Great Northwest project. So with The Great Northwest 
property non-jurisdictional wetlands because of these barriers, 
anything further removed from it should also be non-
jurisdictional wetlands. But the Government has ignored that 
and continues to assert jurisdiction over the wetlands.
    The Chairman. Why don't you go ahead?
    Senator Sullivan. So, Ms. Crockett, I had a question and I 
know that you are very familiar with the state of the amount of 
wetlands in Alaska which is about 40 percent of the state that 
I think comes to about 60 percent or over 60 percent of all the 
wetlands in the United States. These statistics are why this is 
such an important issue for us.
    But if you add state lands, you remove Alaska Native lands, 
and we are only left with, 60 percent of Alaska, Federal land. 
If you look at that whole menu of lands, we are only left with 
about one percent of Alaska's land base that is in private 
hands. So when we look at mitigation requirements, where is 
industry supposed to find private land mitigation?
    Isn't that part of the huge conundrum that a one-size-does-
not-fit-all for Alaska when it comes to the Clean Water Act as 
we are literally so different from every other state and 
country?
    Ms. Crockett. Senator Sullivan, yes.
    I'd answer that question I have no idea. It's just 
something that we're grappling with every single day. And I 
think Deputy Commissioner Fogels touched on this a bit earlier, 
but we even struggle with that purpose whatsoever.
    And it's not as though the people I represent and companies 
I represent are being forced to just write a check to be able 
to do something. We are being forced to write a check to go 
close up land that could, I mean, we are literally denying our 
future generations or maybe not that far away, the potential to 
develop something in the future. We could, hypothetically, be 
blocking up the next Red Dog or access to the next Red Dog for 
no significant purpose.
    And, you know, I don't know how we got that way, down that 
road, instead of doing things that are actually good for the 
environment, that are actually, you know, why isn't like you 
said with the Exxon example, why isn't the company, if you do 
want to talk about the disturbance that's going into wetlands 
and access a dollar amount then do something good with it. 
Don't just lock up land. Do something good, you know, 
enhancement is something that we talk about all the time and 
really do think outside the box. And I don't think this is a 
naive statement.
    I know there are liability issues and there are things that 
agencies disagree with, but we should find a way to get around 
that. And we should find a way to say, okay, company x, you'd 
like to develop this project. We would like to figure out a 
fair reasonable amount to assess you. We want you to bring a 
project to us, propose to us something good you can do to 
enhance the environment or enhance someplace that's in the 
State of Alaska and do something for the greater good verses 
denying us future opportunities.
    Senator Sullivan. Right.
    Thank you, Madam Chair. I think we have gotten a lot of 
good ideas from this panel.
    The Chairman. There really are, and we could stick to this 
panel all afternoon. Believe me, I have got a lot more 
questions, but I do think in the interest of getting to the 
next panel we will wrap up.
    I want to ask, though, Mr. Fogels, has the state taken a 
position on the proposal that has been introduced, at least in 
the House by Congressman Young, for the preservation easements 
for tribes and Native Corporations?
    Mr. Fogels. Senator Murkowski, I do not know. I'm not 
familiar enough with that legislation. I haven't been involved 
in it, so I don't think I can answer that question right now at 
this time. I can look into it to see if I can get you a 
response.
    The Chairman. I would appreciate it because it is something 
that as we listen to some of the on-the-ground examples of what 
we are dealing with, whether it is Wainwright or Nuiqsut or out 
in Craig. These are very real, very immediate issues. It is 
something that I would like to look at, perhaps dealing with 
legislation in the Senate following Congressman Young on this. 
I would appreciate knowing where the state is on it as well.
    The exemption allowing our even exemption for Clean Water 
Act on ANC lands is perhaps another matter to, again, consider. 
But I think that these are very direct and immediate issues 
that we can look to as we are trying to figure out a path 
forward here.
    The Chairman. So again, I thank you all for what you have 
provided to us today by way of not only your input here but 
that there is follow-up to your comments that you have made 
today that you would like to have presented as part of the 
record.
    Again, we will keep this record open for another couple 
weeks and would welcome them. So thank you. Thank you for being 
here and thank you for making the trip to be here. We 
appreciate it.
    Next we will go to the second panel. We have a diverse 
group of Administration panelists before us this afternoon. We 
appreciate them being here and providing their comments and 
their input to us.
    The panel will be led off by Mr. Ted Murphy. Mr. Murphy is 
the Alaska Associate State Director of BLM. He is here to give 
us a perspective on BLM's regulatory process, internal 
practices such as how it is determined whether guidance and 
policy should receive public comment, and then talk a little 
bit about the evolution of the regulatory framework. Mr. 
Murphy, we welcome you.
    Next to Mr. Murphy is David Hobbie, the Chief of Alaska's 
District Regulatory Division of the Army Corps of Engineers. He 
is here to inform us about what tools are available to the 
Corps, and how he intends to employ those tools going forward 
in his new role as the Chief here.
    We also have Dr. Mary Anne Thiesing, the Regional Wetland 
Ecologist and Wetlands Coordinator in the Office of Ecosystems, 
Tribal and Public Affairs for EPA. She is here to speak to the 
inter-agency cooperation and coordination of EPA and the Corps 
as well as engagement of EPA with individual project 
stakeholders.
    Again, thank you for being here, and thank you for the 
courtesy that you have given in allowing the first panel to 
proceed and offer specific cases of the concerns. My hope is 
that that will better frame your opening comments or certainly 
your responses to questions that Senator Sullivan and I will 
have.
    So we thank you for being here.
    Mr. Murphy, if you would like to lead off with about five 
minutes or so? Again, your full statements will be included as 
part of the official hearing record.
    Thank you.

 STATEMENT OF TED MURPHY, ASSOCIATE STATE DIRECTOR, BUREAU OF 
        LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Murphy. Thank you.
    Chairman Murkowski and Chairman Sullivan, thank you for the 
opportunity to discuss the Bureau of Land Management's efforts 
to facilitate responsible economic development of public lands 
while protecting the natural and cultural resources that 
Americans cherish. I'm Ted Murphy, the BLM Associate State 
Director for Alaska, and I look forward to discussing these 
issues with--from the BLM experience here in Alaska.
    Mitigation is central to the BLM's successfully carrying 
out our multiple use and sustained yield mission. It is 
something we have done for decades and its legal basis comes 
straight from our governmental authorities under FLPMA.
    When you think about mitigation at the BLM you think about 
what is a three step process: avoidance, minimization and 
compensation. Through this process accounts are first divided 
through careful siting that will minimize by using innovative 
design features and best management practices. And then 
sometimes they are compensated for their corresponding offsets 
elsewhere.
    Mitigation programs have been used to solve some of our 
most significant resource challenges and partnerships with 
states, tribes and other Federal entities have been central to 
their success.
    For example, in the early 2000's the BLM faced a major 
challenge with permitting large scale oil and gas projects in 
Wyoming. In response to concerns about impacts to state managed 
game species, the BLM, the State of Wyoming and the oil and gas 
companies came together to develop innovative solutions that 
worked for the companies and helped mitigate impacts to those 
state managed species. This approach was championed by the 
previous Administration as a breakthrough for balancing the 
development and conservation and it has served as a model for 
our agency.
    While recently in Nevada BLM issued mitigation to speed the 
approval of a solar project through Western Solar Plan. The 
plan avoided sensitive areas by establishing focused areas for 
development. They identified key design features and called for 
regional mitigation strategies to direct compensatory 
investments. By identifying mitigation responsibilities up 
front BLM was able to provide certainty to private developers 
and increase the efficiency of its environmental review. 
Innovative mitigation approaches are helping the BLM conserve 
greater safeguards to habitat and support system while economic 
development on portions of public land in ten states across the 
West.
    A recent landmark agreement among the U.S. Fish and 
Wildlife Service, the BLM and Barrick Gold of North America 
established a conservation bank that gives fair certainty for 
the company's planned future mine expansion on public lands. 
Other states are leading efforts to develop similar systems and 
the BLM is working hard to support these efforts.
    Chairman Murkowski and Chairman Sullivan, I know you both 
are familiar with the Greater Mooses Tooth Project in Alaska. 
As you know this project is the first oil and gas development 
project on Federal lands in the National Petroleum Reserve in 
Alaska. As part of our public review of the project the BLM 
identified significant impact to the subsistence resource 
provided by--of ANCSA. In the final project approval the BLM 
included a suite of best management practices approved by the 
company to avoid or minimize project impacts as well as an $8 
million fund to directly address the subsistence impacts. As 
part of the planning for that project BLM is also moving 
forward with regional mitigation strategies for Mooses Tooth 
with--development units that will provide certainty to 
developers coming into these areas in the future. We believe 
this sort of up-front planning is good for subsistence 
resources and good for developers.
    With all of these promising efforts underway on public 
lands, the BLM is recognizing the need to set common standards 
and consistent expectations for mitigation across our lands and 
program areas. Since 2005 BLM has developed a series of 
increasingly detailed policies to assist BLM staff in their 
mitigation work. The latest of these was released in 2013. We 
released this policy on an interim basis which has allowed us 
to gather important lessons as we continue to execute these 
programs on the ground with states and companies. We anticipate 
issuing a final policy in the coming months.
    Chairman Murkowski and Chairman Sullivan, thank you again 
for the opportunity to present this testimony, and I would be 
glad to answer questions you may have.
    [The prepared statement of Mr. Murphy follows:]
    
    
    
  
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    The Chairman. Thank you, Mr. Murphy.
    Mr. Hobbie, welcome to the Committees.

 STATEMENT OF DAVID HOBBIE, CHIEF, REGULATORY DIVISION, ALASKA 
             DISTRICT, U.S. ARMY CORPS OF ENGINEERS

    Mr. Hobbie. Thank you. Thank you.
    Good afternoon, Chairman Murkowski, Chairman Sullivan. 
Thank you for the opportunity to testify today. My name is 
David Hobbie. I am the Chief of the Regulatory Division of 
Alaska's District U.S. Army Corps of Engineers.
    I've served at the Corps for approximately 25 years, have 
worked around the globe, predominantly in the Regulatory 
Program, and I am very happy to be back in Alaska. In my career 
with the Corps and its Regulatory Program, I have witnessed 
many changes over the past quarter century, while gaining an 
understanding and appreciation for the complexity of this 
mission.
    There are some special challenges that come with applying 
the Regulatory Program in a state as varied and as unique as 
Alaska, including identifying and implementing compensatory 
mitigation requirements. Natural resources in Alaska are 
abundant and include a huge percentage of wetlands. Alaska is 
also an extremely large landmass with a low population base and 
a large percentage of the land are publicly held.
    I have been back in Alaska for approximately seven months 
as the Chief of the Regulatory Division. One of the first 
issues I was asked about following my arrival was compensatory 
mitigation. Compensatory mitigation is a key component of the 
Regulatory Program, and reviewing these practices in the state 
has been one of my top priorities.
    The fundamental objective of compensatory mitigation is to 
offset environmental losses resulting from unavoidable impacts 
to waters of the United States caused by activities authorized 
by Clean Water Act permits. Compensatory mitigation enters the 
analysis only after the proposed project has incorporated all 
appropriate and in implementing compensatory mitigation 
requirements. The Alaska Regulatory Program has sought 
opportunities to be more flexible when possible while at the 
same time protecting aquatic resources to the maximum extent 
practicable. One example involves the Alaska Department of 
Transportation replacing culverts fully to increase fish 
passage and assist with fish resources.
    Additionally, we are looking at ways to improve 
communication and collaboration, not only with agency partners 
at the state and Federal level, but also with the public in 
order to better understand their issues. These efforts have 
involved meetings with leadership from the Department of 
Natural Resources, the U.S. Environmental Protection Agency, 
Bureau of Land Management, National Marine Fisheries, Alaska 
Oil and Gas, and CIRI which is an Alaskan Native Corporation, 
just to mention a few. During these meetings we discuss 
mitigation and the opportunities that exist for the Federal 
family and our non-Federal loan partners to work more closely 
together.
    Compensatory mitigation is a complex issue. Our goal, which 
is a national goal within Corps, is to ensure no net loss of 
wetlands functions and values while remaining as flexible as 
possible to allow reasonable and sustainable development. It is 
also our goal to be transparent, as transparent as possible, in 
our decisionmaking process.
    Every project is unique. No two projects are exactly 
identical. Although the structures may look the same, the areas 
and types of impacts associated with individual projects are 
nearly always different. Therefore, the quantity and type of 
compensatory mitigation required will vary depending on the 
site specific nature of each project.
    Before I close, I would like to offer a little general 
information about the Regulatory Program in Alaska. So far in 
Fiscal Year 2015, which starts on October 1st of 2014, the 
Alaska District has authorized 431 projects under the 
Nationwide/Regional General Permit Program. General permits 
streamline the process of meeting the requirements of the Clean 
Water Act for projects with no more than minimal environmental 
impacts.
    Of the 431 projects authorized, 17 required compensatory 
mitigation, approximately four percent. We have completed 75 
Standard Permits/Letters of Permission for larger, more complex 
projects where the impacts were determined to be more than 
minimal, of which 12 required compensatory mitigation, 
approximately 16 percent. I believe the number reflects the 
Corps' ability to work closely with the applicant and partner 
agencies to avoid and minimize impacts so that compensatory 
mitigation is not always a requirement for the authorization of 
a project. At the same time, the Corps remains flexible, so 
that when compensatory mitigation is required, we are able to 
work with the applicant and other agencies to achieve a 
successful outcome.
    Thank you again for the opportunity to speak here today. I 
look forward to questions.
    [The prepared statement of Mr. Hobbie follows:]
    
    
   
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    The Chairman. Thank you, Mr. Hobbie. Welcome to Alaska, or 
welcome back.
    Mr. Hobbie. Thank you.
    The Chairman. Dr. Thiesing.

 STATEMENT OF DR. MARY ANNE THIESING, WETLANDS COORDINATOR FOR 
 THE OFFICE OF ECOSYSTEMS, TRIBAL AND PUBLIC AFFAIRS IN REGION 
            10, U.S. ENVIRONMENTAL PROTECTION AGENCY

    Dr. Thiesing. Good afternoon, Chairman Murkowski and 
Chairman Sullivan. I'm Mary Anne Thiesing, Wetland Coordinator 
for the Office of Ecosystems, Tribal and Public Affairs in 
Region Ten, EPA. I'm pleased to be here to discuss the Clean 
Water Act, Section 404 Mitigation program, compensatory 
mitigation banking and EPA's coordination with the Corps.
    As you know the Clean Water Act was promulgated in 1972 to 
restore and maintain the physical, chemical and biological 
integrity of the waters of the U.S. The Act established the 
Section 404 permit program which authorizes the discharges of 
dredged and fill material to waters in the U.S. discharge that 
can degrade or even destroy those waters.
    The Corps is given responsibility under the Act to issue 
the Section 404 permits. In Alaska permits often are associated 
with activities such as road construction or energy 
development.
    To offset the impacts from permitted activities, the 404 
program is built on the concept that when impacts to waters, 
including their loss, are unavoidable, they shall be 
compensated by establishing, restoring or preserving waters at 
the impact site or at another location, generally within the 
same watershed as the impacts. Consideration of mitigation 
occurs throughout the permit application process and includes 
avoidance and minimization. However, there may still be 
unavoidable impacts to waters. Those require compensatory 
mitigation but it is only considered after a proposed project 
has first looked to trying to avoid and minimize adverse 
impacts.
    Individual permits that are associated with activities with 
more than minimal adverse effects to the aquatic environment 
may include special conditions that require compensatory 
mitigation. And that's to offset degradation or loss of waters 
of the U.S. when avoidance or minimization is not practicable.
    There are basically three mechanisms that will allow 
permittees to offset the aquatic impacts resulting from their 
projects. They can purchase credits from a mitigation bank, 
they can purchase credits from an in-lieu fee program, or they 
can conduct a compensatory mitigation project on their own.
    A mitigation bank is a site that has restored, established, 
enhanced and/or preserved aquatic resources and the Corps, in 
consultation with an Interagency Review Team, approves for the 
use of compensating the losses from future permitted 
activities. The bank approval process establishes the number of 
credits and the bank sponsor is responsible for the success.
    With in-lieu fee mitigation, a permittee provides funds to 
an in-lieu fee program. Those are sponsored by either a 
government or a nonprofit entity or a tribe that conducts 
compensatory mitigation projects consistent, again with an 
agreement, with the Corps in consultation with an interagency 
review team. Typically the in-lieu fee mitigation projects are 
started only after they pool the funds from multiple 
permittees. And the in-lieu fee program sponsor is the one who 
is responsible for the success of the sites.
    The third option, permittee responsible, is basically the 
responsibility of the permittee to conduct and ensure the 
success of mitigation. It's usually, it can occur either at the 
project site or in a different one, preferable within the same 
watershed.
    EPA works closely with the Corps and the Interagency Review 
Team that oversees the review, approval and management of 
mitigation banks and in-lieu fee programs. For proposed 
permittee responsible mitigation, the EPA provides comments to 
the Corps in the review process.
    Congress directed in 2004 that the Corps and EPA publish 
regulations, and they did so in 2008 to revise and clarify 
compensatory mitigation requirements. It ensures a level 
playing field among providers of compensation because it holds 
all the providers to the same standard regardless of whether 
it's a bank, an in-lieu fee program or by the permit applicant. 
It also increased consistency and predictability in 
compensatory mitigation requirements through a number of timing 
of the contents of mitigation plans and also the timelines for 
review. It did not change when compensation is required but 
rather focuses on how and where mitigation is planned, 
implemented and managed to improve its ecological success and 
sustainability.
    Although careful attention is given to compensatory 
mitigation requirements when they are necessary, most of the 
404 authorizations don't require mitigation. Permitting data 
from 2010 through 2014 shows the Corps nationally issued 
approximately 56,400 written authorizations per year under its 
permit authorities, about ten percent required compensatory 
mitigation. This reflects a number of factors, the Corps' 
ability to successfully work with the applicants and also with 
the agencies to try and avoid or minimize any impacts. Most of 
those authorizations occurred under the general permit process 
and they have no more than the minimal adverse impacts.
    Compensatory mitigation is a basic component of the Section 
404 permit program. It is consistent with the act's goals of 
trying to restore and maintain the chemical, physical and 
biological integrity of the nation's waters. We work together 
to ensure that this provision is applied consistently, 
predictably and effectively so that the applicants can proceed 
with projects to achieve their needs while at the same time 
protecting public health and water quality.
    Thank you very much for the opportunity to be here. I will 
be happy to answer any questions you may have.
    [The prepared statement of Dr. Thiesing follows:]
    
    
    
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    The Chairman. Thank you, Doctor, and I apologize that I 
mispronounced your last name.
    You wrapped up your statement by saying that the goal here 
is a level of consistency, predictability and effectiveness. I 
think what you heard with the panel just before you is that 
this process, when it comes to compensatory mitigation, is 
anything but consistent, predictable and in many cases, 
effective.
    I want to ask you a question. You mentioned that nationally 
that with the 404C permits issued, only about ten percent are 
required to be mitigated. Is that correct?
    Dr. Thiesing. Yes, about ten percent of them are, correct.
    The Chairman. How does that compare then, here in Alaska? 
Those are national figures. We recognize that things are just 
entirely different down there. When you are up in the North 
Slope and 90 percent of the area around you is determined to be 
wetlands, what percentage here in Alaska of those 404Cs require 
a compensatory mitigation?
    Dr. Thiesing. Not 404Cs, 404 permits, Ma'am? I believe Mr. 
Hobbie actually answered that in his testimony.
    Mr. Hobbie. Yes, Ma'am.
    If you look at our numbers as a total I wrote my pertinent 
individual permit information and information GPs because the 
small ones would be less. If you combined our new totals we 
issued 431 nationwide GPs and 71 IPs. If you combine those two 
totals about six percent of the time we require mitigation in 
the State of Alaska.
    The Chairman. Does that hold true then for the North Slope?
    Mr. Hobbie. I do not break the numbers down that way and 
I'd have to get back to you. I can't tell you things I don't 
know about the North Slope.
    The Chairman. Well it is something that, I think, would be 
interesting to drill down on because when you have an area that 
is effectively almost all wetlands and the extent of the 
wetlands I would be curious to know exactly what we are talking 
about here.
    Mr. Hobbie. What I would say is most likely the percentage 
is almost always going to be greater. The reason is, percentage 
wise, because of course we, the North Slope is not the area of 
our most predominate permitting. It's typically the Anchorage 
Borough area and Juneau, Wasilla so many of the permits also 
the impacts in the North Slope tend to be much greater.
    A lot of oil and gas, it probably has too many, hundreds of 
acres in size where a lot of the projects within the 
municipality of Anchorage, Wasilla, Juneau are sometimes tens 
of acres, half acres or an acre. So the impacts are much larger 
on the North Slope, typically speaking, therefore, it would 
drive more compensatory mitigation while other areas may not.
    The Chairman. I look forward to that break down.
    Mr. Hobbie. Will do.
    The Chairman. I want to bring up with you an issue that was 
just presented to me this morning. I had an opportunity to meet 
with the Mayor of the Mat-Su Borough, the Palmer Mayor and the 
Mayor here in Wasilla. They alerted me to what they are 
entitling here the ``Wetland Mitigation Bank Concern.''
    They apparently received some information that was 
disclosed just as a result of a FOIA request regarding some 
changes in policies that relate to compensatory mitigation. The 
fact that the guidance letter was developed and implemented 
without public input which is something that I think we are 
going to have a little bit longer conversation about here and 
the concern that we have that so much of what we're seeing 
coming out is not with full public comment.
    The concern they have raised, and I will read from their 
document here they provided, ``The Corps new policy requires 
ownership of wetland banks, requires ownership of the surface, 
subsurface rights or an agreement with subsurface right owners 
to not impact the surface even in those cases where the 
possibility of mineral exploration or extraction is remote. 
Municipal entitlements for boroughs and municipalities from the 
state only convey the surface estate to municipalities.''
    This is an issue here in the Mat-Su. It is also an issue 
out in the Ketchikan Gateway Borough. I was asked to bring this 
to your attention.
    I am going to not only provide this to you, Mr. Hobbie, but 
it will become part of the record.
    [The information referred to follows:]
    
    

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    The Chairman. The Borough is essentially laying out that 
they could potentially lose millions of dollars in wetland 
mitigation credit. This is something that was new to me this 
morning, and I am still learning more about it. But I would 
like you to be able to respond to not only the people here in 
the Mat-Su Borough but Ketchikan Borough because I understand 
that they have a similar concern, an issue, as it relates to 
the mitigation bank.
    Mr. Hobbie. Okay, Senator.
    I'm not familiar with that particular letter; however, we 
are struggling right now. And when I say we, Alaska District, 
and it's nationwide typically when a mitigation bank is 
established the land is reserved into perpetuity or any other 
sort of mitigation. Typically that requires some surface 
rights.
    The rationale behind that is locking up the surface may be 
fine, but that doesn't exclude people coming in individually 
and mining the area because in most states, the subsurface 
rights are not bound by any restrictions. So therefore the 
easement really doesn't mean much.
    The Chairman. Understood, but if you do not have the 
subsurface rights?
    Mr. Hobbie. Totally understand.
    The Chairman. Yes.
    Mr. Hobbie. What we're trying to do is make sure the policy 
has some kind of consistency across the nation. Alaska is sure 
where it's not the only state that has some sort of issues, so 
we want to make sure we're trying to be as consistent as 
possible across the nation.
    I'm not saying that that means that will never happen; 
however, it's something we're investigating to try to ensure 
that we are applying the rules as fairly as we can.
    The Chairman. I am going to turn to Senator Sullivan, but 
one thing that I think is important to keep in mind here in 
this state is we are unique. We have some laws here, Federal 
laws, that apply to our lands that do not apply in other 
states. ANILCA is applicable only in Alaska, and I want to talk 
about ANILCA when we do our next round.
    Senator Sullivan?
    Senator Sullivan. Thank you, Madam Chair.
    I want to thank the witnesses here. I really appreciate 
some of you flying in from out of town.
    But also what Ms. Crockett mentioned in her earlier 
testimony is it has been my experience, as Attorney General in 
Alaska, and as the DNR Commissioner, is closer to the Federal 
officials are to Alaska, when they live here, when they work 
here, they see our issues. I think the working relationship is 
oftentimes a lot stronger because you get it.
    The problem is when Washington, DC dictates certain 
policies with, kind of, a one-size-fits-all mentality, and then 
they try to apply it here. So I just appreciate you being here. 
I know that you guys are working hard on these issues.
    But as you did see and as Senator Murkowski mentioned, we 
also appreciate you letting the Alaskan panel go first, because 
I think it was good for all of us to see what the issues are. 
Clearly there is a lot of frustration. That is a sampling of 
what is going on in the state, but that was not some kind of 
handpicked group. That is very representative of the sense in 
Alaska whether you are a small, private landowner or a big 
company in terms of what is going on with mitigation.
    A lot of it is the sense of, you talked about transparency 
and predictability, it almost seems like it is the opposite 
where it is random. So I want to get into some of those kind of 
questions.
    I also, if you can and if you cannot do it here, one of the 
things I mentioned in my opening statement, authority, 
authority, authority, authority. If you are a Federal agency 
and you are taking action or issuing a regulation, do you agree 
that you have to have a basis either in Federal statute or the 
U.S. Constitution? Do you agree with that? Do you?
    The answer is yes, if you are wondering. [Laughter.]
    It is not even a close question.
    Just for the record, it should be yes. If you take an 
action as a Federal agency, your action or your reg has to be 
based in statute or the U.S. Constitution. Just for the record, 
do you agree with that?
    Mr. Hobbie. Yes, sir.
    Senator Sullivan. Okay.
    Mr. Murphy. Yes.
    Dr. Thiesing. Of course, of course it does.
    Senator Sullivan. Okay.
    Dr. Thiesing. We take the same oath that you do, sir.
    Senator Sullivan. Oh, I know. I am just checking because, 
as I mentioned, now this is a really important issue because 
there are a lot of things where, on the actions you are taking, 
I know you have some discretion and the Corps allow some 
discretion.
    But as I mentioned in my opening statement, in the last two 
terms of the U.S. Supreme Court, they have found that the EPA 
has not done that. And one of those cases actually started 
here, the Utility Air Regulator Case verses EPA. It wound its 
way to the U.S. Supreme Court. Two years in a row the U.S. 
Supreme Court has stated that you have not abided by the 
statute or the Constitution. So your record on this is not 
terribly good. I think it is an area that, in terms of 
Congressional oversight, that is important.
    The Deputy Commissioner, Mr. Fogels, raised a really good 
issue. As you guys know, when you look at the structure of the 
Clean Water Act, just like the Clean Air Act, it is supposed to 
be a co-regulator relationship between the states and the feds. 
It is in the, actually, preamble of the law.
    So why is it that in terms of mitigation which has such a 
big impact here which we have so many concerns about, that you 
guys do not invite the State of Alaska in with regard to your 
mitigation decisions? We asked Commissioner Fogels whether you 
do that. His answer was no. So why don't you do that?
    Mr. Hobbie. Well, sir, I would say two things.
    One, through our permitting process, you know, we do invite 
responses, information, from all agencies, State and Federal, 
you know. The state does have an opportunity. When it comes to 
the Interagency Review Team for mitigation, the Department of 
the Environmental Conservation which is a state agency, does 
sit on that Interagency Review Team with regards to mitigation 
banks and such.
    Senator Sullivan. So you think that Deputy Commissioner 
Fogels' response was incorrect that the state does actually 
have a co-regulator role with regard to the mitigation 
decisions?
    Mr. Hobbie. Senator, what I'm stating is the DEC does sit 
on the Interagency Review Team, and I'm stating that it's a 
practice they do come into our projects, a good majority of 
them with regards to mitigation.
    Senator Sullivan. Okay.
    Dr. Thiesing. Senator, if I might add to that?
    I believe that the commissioners of all the state agencies 
were signators to the State Interagency Review Team document. 
They're not?
    Senator Sullivan. Okay. But I think, for example, I was 
very involved with regard to the Corps and the permitting on 
Point Thompson, right? At the end of that permitting process, 
wham, there was a huge dollar figure that you put with regard 
to the permittees in terms of compensation that we had no idea, 
right?
    So I know from personal experience that we are not that 
involved because we were the lead agency doing that project but 
we did not have a clue.
    I think if you say you are doing it, you need to do a much, 
much better job of doing it because you have a Deputy 
Commissioner who just talked about it and also my experience. 
We are getting blindsided by this. I think it is important to 
go back and look at the statute. We are the co-regulator. We 
are the co-sovereign here. I think that is a really important 
issue, and it is a part of the frustration.
    Let me ask another question that came up. Do you see this 
tension that became very apparent in the previous panel between 
ANCSA and what is required in terms of the Clean Water Act 
mitigation? And if so, how do you address it? Again, I will 
just summarize it.
    If our Alaska Native Corporations, regional corporations, 
village corporations want to develop the land that they were 
given by the Federal Government and the State to develop to 
take care of their shareholders, their people they are 
responsible for, to do that they have to give up land. They 
actually have to give up land in a way that is more than one 
for one. The EPA wanted six for one which I have a question for 
on that too. But do you see the tension there? How do we solve 
that? What is your recommendation to solve that? To develop 
land you have got to lose land.
    Mr. Hobbie. Senator, there are a couple ways to respond to 
that.
    First of all with regards to compensatory mitigation, 
again, I do believe there's a low percentage of times where we 
do require it. When we do though----
    Senator Sullivan. Not on the North Slope, though. We will 
be very curious about your numbers on the North Slope. I think 
we see it on almost everything, roads, developments and that is 
a lot, in many ways the heart and soul of our economy. So I 
would like to see those numbers.
    Mr. Hobbie. We'll provide those, sir, to the Committees.
    [The information referred to was not provided as of the 
date of printing.]

    Mr. Hobbie. The other thing is the mitigation banks or in-
lieu fee programs have become a way to allow applicants an 
easier access to mitigation. There's nothing that precludes 
them from not tying up land.
    Mr. Fogels talked about legacy wells and stuff. When I met 
with the different agencies those were some of the things we 
were trying to do, trying to be flexible.
    Are there other areas in the state that can actually be 
cleaned up or rehabbed versus just setting aside land?
    Senator Sullivan. What if you are a corporation like 
Kuukpik that said they do not have $1.4 million for just an 
eight mile road? One million four hundred thousand dollars. 
They did not have that money. You heard it, their only option 
was to give up their land. You heard the testimony. They are in 
a conundrum. Develop the land. Give up the land. It seems to me 
it is squarely undermining the intent of ANCSA. How do you 
respond to that?
    Mr. Hobbie. Again, sir, they may have chosen that route, 
but again, I'm not for sure----
    Senator Sullivan. But I do not think they are choosing.
    Mr. Hobbie. Um, well----
    Senator Sullivan. If you do not have the money, what is the 
opposite?
    Mr. Hobbie. If the determination was the impacts were more 
than minimal, mitigation is required by statute. That's a 
requirement. You know, I can't change that.
    The cost of that, the Corps of Engineers nor EPA, that I'm 
aware of, apologize if I speak for you, regulates the amount of 
fees that the in-lieu banks with mitigation banks charge and 
in-lieu programs charge.
    Senator Sullivan. Let me ask a question where you have more 
flexibility than you think you might have.
    On May 13th, 1994, the Army Corps and the EPA jointly 
issued a memorandum entitled, ``Statements on the Mitigation 
Sequence and No Net Loss of Wetlands in Alaska.'' What this 
states, and it is still a memo that is good to go according to 
your guy's website, it states there are areas of the State of 
Alaska because of a high proportion of wetlands in a watershed 
or region opportunities for compensatory action may not be 
available. I think they are clearly referring to places like 
the North Slope.
    In addition, there are situations in this state where the 
technology for restoration enhancement or creation of wetlands 
is not available or are otherwise impracticable where 
compensatory mitigation is not practicable it is not required 
of Section 404 permit applicants.
    So isn't the North Slope a perfect example of what this 
memorandum is talking about? Have there been situations where 
the Corps and the EPA under this authority that you guys have, 
that you stated, have said, look, it's not going to work. You 
pick, we get it. You don't have $1.4 million and you should not 
be required to give up land to develop lands so we are not 
going to require anything. Have you ever used the authority 
given to you by this memorandum between the EPA and the Corps?
    Ms. Thiesing. Sir, the memorandum was dated 1994. We have 
since come out with a rulemaking which applies something over 
or a different set of standards which are clearer intended to 
try and make, put everything on an even playing field.
    Kuukpik was the one that offered an area of preservation as 
compensation for the impacts that they had. And when a 
conservation easement was written or identified in the Corps' 
permit and the permit that was ultimately granted to Kuukpik 
there are a number of uses of that land that remain theirs.
    They are, they can use it for subsistence purposes. There 
are a whole bunch of other things that are listed as part of 
the conservation easement which is not ordinarily something 
that is done. But----
    Senator Sullivan. Alright Ms. Thiesing, for the record, in 
the preamble to your 2008 compensatory mitigation rule it 
references the 1994 memorandum. And it says, therefore it does 
not, the new rule, change the May 13th, 1994 statements on 
mitigation sequencing no net loss of wetlands in Alaska. So to 
say that the 2008 rule overrode the 1994 memo, giving you way 
more flexibility than you are utilizing is not correct.
    Ms. Thiesing. But I believe what the preamble is addressing 
itself to is the no net loss. We understand that there will be 
loss of wetlands in Alaska.
    Senator Sullivan. Again, to say Kuukpik had an option. I 
think that is stretching the situation that you just heard from 
them. They didn't really have an option to build a road because 
they did not have the $1.4 million. You see, I think that what 
you need to do is look at a lot more flexibility for the state, 
and I think you have that. You are just not using it.
    Madam Chair, I am sorry I kind of went a lot over.
    The Chairman. No, this is the line of inquiry that I think 
most of us here in Alaska are interested in, because I do not 
think that we have received satisfactory responses from the 
agencies.
    Pretty tough words are used when we hear whether it is from 
Wainwright or Nuiqsut or Craig or the folks at Great Northwest. 
But the word is extortion. Now that is pretty tough.
    I think we can understand why it is important to allow for 
mitigation, why those regulations are in place, but I think 
there also is an expectation, and this goes back to your words, 
that there be a level of predictability, that it be fair and 
reliable. This is where the concern is because it is almost as 
if there is a bargaining that goes on and we will figure out 
what it is that we can settle on. Instead of a six-to-one ratio 
you settle on a two-to-one because that was what people finally 
agreed to.
    It is not really an option when you have no other 
alternative, and yet you want to be able to provide for the 
health and safety of the people in your village. You want to be 
able to get to work which is effectively what they are looking 
for there at Kuukpik and you want a road open for subsistence.
    So I do not mean to be not asking a question, but I think 
you need to put yourself into the shoes of those that are 
working really very, very hard to try to provide for a level of 
access, a limited level of development and a willingness to do 
so and work within the laws. But we want to know that you are 
working within the laws and not sometimes making it up as you 
go, and sometimes that's how it feels. Again, these are pretty 
harsh words for you, but that's how it feels.
    Mr. Murphy, I don't want you to get off the hook. 
[Laughter.]
    The Chairman. The compensatory mitigation is certainly one 
thing within our Corps, but we do have other issues within our 
BLM lands. The Federal Land Policy Management Act, FLPMA as it 
is lovingly called. Throughout FLPMA we have the principles of 
multiple use defined, pretty consistently, pretty clearly. I 
think you, in your comments, referred to the fundamental 
authorities that come from FLPMA to BLM.
    Secretary Jewell in her Secretarial Order stated that, 
``Through the development of comprehensive mitigation strategy 
we can ensure that our national wildlife refuges, national 
parks, other Federal lands and waters are managed for 
conservation purposes with sound stewardship and a commitment 
to conserve habitat and fish in wildlife mitigation 
corridors.''
    She goes on to lay out the following mitigation priorities, 
and this is what she says in her Secretarial Order. She says, 
``To avoid potential environmental impacts where impacts cannot 
be avoided require projects to minimize impacts to the extent 
practicable and where impacts cannot be avoided, DOI should 
seek offset or compensation.'' She is effectively taking this 
language, borrowing this language, if you will, from the Clean 
Water Act. And regarding the avoiding, the minimizing and the 
compensating, do we really have authority within FLPMA that 
gives to BLM the authority to borrow this language, if you will 
or these priorities, that the Secretary has included within 
this order? How do we get to this level of authority? It goes 
to Senator Sullivan's earlier question. Do we have that 
authority within FLPMA because that is your fundamental 
authority? It seems to me that what you are doing is you are 
taking language from another authority and utilizing it to 
expand yours. That is my question.
    Mr. Murphy. Well, as I pointed out in my comments looking 
through our handbook and manual--it's, well mitigation in 
general. And we do have a long history of arguing with 
proponents at development all over the United States and that's 
built upon the challenges and we realized in the lower 48 over 
time development that have impacts we couldn't sustain there. 
And as we moved into Alaska and we started to see opportunities 
for development, particularly in the National Petroleum 
Reserve, we didn't want to think of going down that same road, 
fragmenting habitat and precluding multiple use--resource 
economically and sustaining the resources, the natural 
resources that are on land.
    So, yes, we feel that our authority emanates from FLPMA. 
But within the National Petroleum Reserve we also have the 
National Petroleum Reserve Protection Act which also reinforces 
that level of mitigation necessary to sustain ourselves and the 
public land.
    The Chairman. So let me ask you about this draft guidance, 
this manual. It is my understanding that it was Secretary Hayes 
that began the process for this draft Regional Mitigation 
Manual, and that was when Secretary Salazar was in office so it 
was about five years ago, and that draft manual has not even 
been something issued. It has not been rescinded. So we are 
sitting here with a situation where BLM is effectively drafting 
guidance and then before it has been finally issued, before it 
has been vetted, you are implementing it. It goes to the 
comment that I made earlier about the lack of public comment 
afforded through BLM.
    You heard the concerns. We have had conversations about it 
in the past, and yet it still seems to me we are in the same 
situation where you are moving forward with draft provisions 
that have not been vetted, have not received the public 
comment, and yet you're moving forward to implement them.
    Even though they are not yet fully in place, you heard Ms. 
Crockett's comments about the impact that this proposed 
guidance and these designations have on the ability to invest, 
the ability to permit, the ability to really do anything in any 
area. So at the end of the day, you may get your desired effect 
if the desired effect is to limit further development in the 
area because everybody is put on hold. How are we at that place 
where we are allowing these draft, unvetted guidance documents 
to be controlling without public comment?
    Mr. Murphy. The--of that draft, I believe is 2013, and that 
draft mitigation policy was vetted with the public. And yes, we 
are implementing portions of that as we move forward.
    The Chairman. Even though it is still in draft?
    Mr. Murphy. Even though it's still in draft, in close 
coordination, we're developing with FOIA, with the states and 
to be sure that we're not overlapping each other, if you will, 
as well as making sure that we're on program as we move 
forward.
    And again, it all emanates from, you've heard it time and 
time again, the transparency aspect that we're trying to 
achieve that we can provide some assurances to those developers 
as we move forward and as they move forward to develop other 
lands in Alaska.
    The Chairman. One of the things that we did hear from Mr. 
Fogels though is a concern that you have overlapping, 
duplicative mitigation requirements. So if, in fact, you are 
working with the state to ensure that that is not the case, it 
seems to me we need to be doing a little bit better 
coordination.
    Let me go to Senator Sullivan.
    Senator Sullivan. Madam Chair, I am going to spend my 
comments or a couple more questions on authority because I 
think it goes to the fact, again, to this critical question so 
many of us are concerned about. It is clearly an oversight role 
of the Energy and Natural Resource Committee and the EPW 
Committee on pinning down where you have authority to take the 
actions that you do.
    Mr. Murphy, I know you are not driving this policy and this 
is actually driven by Secretary Jewell, but I still think your 
answers to this with regard to mitigation are not sufficient. I 
would request that, for the record, you get the Department of 
the Interior General Counsel's Office to give detailed answers, 
citing specific statutes on where you get the authority to 
require $8 million in mitigation on GMT1. It is not sufficient 
to say the Secretary has a draft letter that provides us that 
authority. That is worthless. The authority has to derive from 
the Congress. You have to be able to point to a statute.
    We have heard rumors that there was at one point officials 
from DOI saying hey, they can afford it, so we are going to 
require mitigation.
    Last time I checked that was not a proper authority to 
require that kind of level of mitigation. We heard, once again, 
it started at a real high number, again, not sure why, and then 
started to come down throughout this negotiation, and then what 
are you are actually going to do with the funds? Who made that 
decision? What are you going to do with those funds? You are 
just randomly coming up with the idea that now we have $8 
million and we are going to use it for whatever purpose we want 
without any direction from the Congress of the United States?
    I don't think you are answering these questions. I would 
respectfully request that the headquarters back at the 
Department of the Interior come back with detailed, detailed, 
legal authority on what gives you the authority for the GMT1 
mitigation and the spending of that money on whatever you feel 
like? I don't think that is a proper answer.

    [The information referred to was not provided as of the 
date of printing.]

    Senator Sullivan. I would like to ask a question that came 
up, and this could be for all three of you. In terms of 
mitigation required by the state, so the State of Alaska wants 
to build a road. We were required, I guess, last year to pay 
almost $3.5 million in mitigation. Do you have a statutory 
provision that you can provide us that allows Federal agencies 
to require compensatory mitigation of a co-equal sovereign to 
pay mitigation? I was very surprised by that. I actually did 
not know the answer until this morning.
    Mr. Hobbie. I'll take the first stab at it, Senator.
    As far, I mean, under the Clean Water Act of course, 
there's regulations that have been promulgated. Part of that 
is, of course, the 2002 rule.
    Senator Sullivan. But remember, we are a co-equal regulator 
under the Clean Water Act, so you are charging us compensatory 
mitigation.
    Mr. Hobbie. We didn't charge the state a dime. The state 
chose to pay that in a third party, in-lieu fee holder. Again, 
like replacing the fish culvert.
    Senator Sullivan. So we could have just not done anything?
    Mr. Hobbie. You would not have got a permit, sir. 
[Laughter.]
    Sir, if the state was exempt----
    Senator Sullivan. Come on there, Mr. Hobbie.
    Mr. Hobbie. If the state was exempt----
    Senator Sullivan. You are playing with the words. So we had 
to do it. No equal regulator under the Clean Water Act became 
the subservient sovereign.
    Mr. Hobbie. Yes, sir, just like the Federal agencies have 
to mitigate also.
    Senator Sullivan. Okay, can you do the same thing? Provide 
the statutory authority detail on where that authority rests?
    Mr. Hobbie. Yes, sir.

    [The information referred to was not provided as of the 
date of printing.]

    Senator Sullivan. Okay, thank you.
    Ms. Thiesing, I wanted to ask you a question. This is a 
little more detailed, but again it goes to authority issues. It 
is my understanding that the lands that are set aside in 
compensatory mitigation are supposed to be under an imminent 
threat of development.
    Dr. Thiesing. That's correct.
    Senator Sullivan. Why is this a requirement? Where do you 
derive your authority for that? For example, the EPA initially 
dismissed, when Kuukpik was working with you, the location of 
their initial easement that they wanted to provide as 
inadequate because that land was not under the imminent threat 
of development. I just do not even understand that. That is not 
just taking acreage, the six-to-one or two-to-one or whatever, 
but you are actually making sure it is acreage that is really, 
really valuable for them. Again, where do you get the authority 
in the statute to say that the acreage that you want has to be 
extra valuable to them? Do you see how it is extra valuable?
    Dr. Thiesing. Senator, I think you're not correctly 
characterizing what the rule says. The authority for requiring 
measures to evaluate a permit comes from Section 404B of the 
statute, the 1972 Federal Water Pollution Control Act also 
known as the Clean Water Act. Section 404B, Section 404A 
authorizes the Corps to, the Secretary of the Army acting 
through the Chief of Engineers or his designee, to authorize 
discharges to fill, dredged of full material to waters of the 
West. Section 404B authorizes the Administrator to develop 
guidelines, the substantive criteria, by which the Corps will 
evaluate its authorizations for against the criteria that the 
Administrator develops. Okay? So, in other words, EPA has 
responsibility to develop the guidelines while the Corps 
evaluates all of its permits applications because----
    Senator Sullivan. You are not really answering my question.
    Dr. Thiesing. No, sir.
    Senator Sullivan. Why is this a requirement? Why is the 
compensatory land that you are seeking----
    Dr. Thiesing. I'm getting to that.
    Senator Sullivan. Have to be under the imminent threat of 
development?
    Dr. Thiesing. Okay, that's where the authority comes from.
    Now the rule which is part, the 2008 final mitigation rule, 
is part of the, has become part of the 404B guidelines, and in 
laying out criteria for using preservation as a means of 
offsetting unavoidable losses, okay?
    If you preserve an area you're still incurring a loss of 
function and services that that area provides to the 
environment and to the human population. However, if an area is 
particularly valuable ecologically or provides important 
services and it is under threat of destruction or degradation 
then preserving that area provides an important--it provides, 
it preserves those important functions and services to the 
environment and to the human population using it.
    Senator Sullivan. Actually I think you can make the 
opposite argument. If you talked to the Kuukpik members who 
were here earlier that is very important to that population 
because of the fact that you are putting up, you are focusing 
on it in a way that actually is going after even more high 
value land for them. Again, I just do not understand why this 
is a requirement and where you have the authority to make it a 
requirement.
    Dr. Thiesing. It is a criteria by which, it's a criteria 
laid out in a rule by which the Corps can consider a net loss 
of wetlands if an important area, an area that's ecologically 
important and performs important functions, is preserved.
    Senator Sullivan. Okay, if you can, again if you can take 
the opportunity to provide more detailed comments with the 
general counsel from the EPA on the statutory basis for this 
requirement, if there is any. I'm doubtful there is. It would 
be very useful, I think, to be respectful here, as a follow-up 
to this hearing.
    Dr. Thiesing. I can, sir.

    [The information referred to was not provided as of the 
date of printing.]

    Dr. Thiesing. But the important thing is that valuable is, 
you know, in terms of when we look at preservation, our 
analysis of its value is how important is this to the area in 
terms of providing ecologically important services.
    Senator Sullivan. How about how important it is to the 
people of the area?
    Dr. Thiesing. Well, but that's the thing. One of the 
reasons the Kuukpik proposed this area for preservation was 
that it was very important to them for subsistence and for 
other uses for hunting, for fishing----
    Senator Sullivan. But you initially dismissed Kuukpik's----
    Dr. Thiesing. No, what we said in our comment letter was 
that we did not see the basis for them preserving. There was no 
information provided in the public notice that identified what 
the values of this parcel were. I mean, it did not have 
information available either from the public notice or from our 
discussions with the Corps as to what the basis for this 
parcel's ecological value was.
    Senator Sullivan. Okay.
    Well Madam Chair, I am sorry, but just to wrap up. I do 
think, again, even on that it would be very useful. This is 
something I have asked the Administrator a number of times in 
hearings, in Washington, about getting back to the Committees 
of oversight with detailed statutory reasoning on how you have 
the ability to take these kind of actions. If you don't you can 
admit that as well, but she has not been very good about 
getting back to us. I think it is something that we need to 
start instilling as part of the agency oversight.
    Where are you getting your authority? And you need to show 
us, you need to show the American people, the people of Alaska 
and the Congress. I think that if you can do that, provide that 
for additional follow-up to some of these questions, I think it 
would be very useful and we would really appreciate that.
    Thank you, Madam Chair.
    The Chairman. Thank you, Senator Sullivan.
    I think the whole discussion about where the authority 
stems from and some of the comments that have been made by this 
panel are important, again, in the context of where we are 
because we are not in Iowa. We are in Alaska.
    We have some provisions, some Federal laws, ANILCA most 
specifically, ANCSA certainly, but certainly ANILCA that 
recognizes that our Federal land managers who work all over the 
country and manage all kinds of Federal land all over the 
country that we all have existing Federal statutes but within 
Alaska ANILCA provides that there is a difference that in order 
to accommodate a viable social and economic future that 
respects Alaskan needs, Alaskan traditions, participation 
within the state. This is laid out in Federal statute that is 
unique to Alaska.
    Yet it seems that that is just yet one more Federal law 
that we can overlook in an effort to say, well where we are 
working on all of these other land management policies for BLM 
across the country, and so we will just lump Alaska in but for 
ANILCA.
    I have questioned you, Mr. Murphy, on where the authority 
rests to allow for an ACEC in the Fortymile area that would 
encompass over 700,000 acres when within ANILCA it specifically 
limits, specifically limits, to 5,000 acres any withdrawal or 
deferral without Congressional authority. We can talk about 
whether it is EPA compensatory mitigation or BLM, the issues 
that you are dealing with in terms of some of these proposals 
and land designations and within the Corps, but I think it is 
imperative to understand where you are operating.
    I would assume that Mr. Murphy and Mr. Hobbie, you have had 
ANILCA training and that you require ANILCA training of all of 
your staffs here in Alaska. I would hope that that is the case. 
If it is not, we need to make sure that that is the case.
    Mr. Murphy. It's the case.
    The Chairman. But further to that that anybody who is 
sitting back in Washington, DC working out these regulations 
and reading through the records and the comments, that they too 
have an understanding and an appreciation of ANILCA because 
there is something that is clearly missing. I think part of it 
is bypassing some of the fundamental Federal statutes that 
relate specifically to the State of Alaska.
    We are well over our time, and I apologize to those of you 
that have been very patient with us as we have tried to gain 
more information. I appreciate not only the testimony provided 
today, but what you will be able to provide us with follow-up.
    As we have additional comments that may be presented by the 
public for the record, know that we will keep this Committee 
hearing record open for an additional two weeks.
    I think this has been very important for Alaskans to be 
able to understand some of what we are dealing with and perhaps 
some of the more constructive paths forward.
    It is probably the bigger part of our jobs representing 
Alaska back in Washington, DC to try to lend some air of 
predictability or certainty within the Federal regulations. 
This is one area where, I think, you can see we are not able to 
give that certainty because we do not have that at this point 
in time. So the request for greater cooperation, greater 
collaboration is an imperative and hopefully we will be making 
some progress moving forward.
    Senator Sullivan, thank you for----
    Senator Sullivan. Thank you, Madam Chair.
    The Chairman. Your leadership on these issues within EPW. 
It is really important that we are working together as a team.
    For those of you who gathered here today, thank you for 
your interest and your concerns as well.
    With that, the Committees stand adjourned.
    [Whereupon, at 5:30 p.m. the hearing was adjourned.]

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