State regulators say that taking over what are known as Clean Water Act Section 404 permits will allow more flexibility to benefit businesses and the environment in “Alaska’s unique conditions.” Most construction, resource and community development projects require such permits, and regulators hope the state could take over up to 75% of them beginning in 2024.
But since almost every other state is opting against such control, the question is if Gov. Mike Dunleavy’s administration is pitching only the positive aspects while ignoring the drawbacks — such as $5 million in annual costs and murky rules that allow the federal government to retain the ability to overrule the state’s decisions.
A detailed overview of Alaska’s possible takeover has been presented to legislators this session, based on a feasibility study prepared by the state Department of Environmental Conservation. The permits involve projects where dredged or fill material is discharged into what are officially classified as “waters of the United States,” which includes wetlands — one of the more contentious aspects of the regulatory process.
The permits are currently issued by the U.S. Army Corps of Engineers, which considers about 775 cases annually in Alaska.
In Wrangell, the borough is waiting on its Army Corps permit to fill in a small area of wetlands for development of the former Wrangell Institute property into a residential subdivision.
Shannon Miller, a DEC program manager, told the Senate Resources Committee last month that Alaska has two-thirds of the country’s wetlands, with 174 million acres representing 43% of Alaska’s surface area. Such terrain includes tundra, permafrost, marshes and bogs. Less than 0.1% have been developed to date.
“We need to be able to focus in on a program that is written and built for Alaska,” Miller said.
The federal government would retain authority for permits affecting oceans, tidally influenced wetlands, and navigable rivers and lakes.
Such a takeover was approved by the Legislature in 2013, but abandoned after oil prices plummeted and the state opted not to spend the money.
Dunleavy is requesting nearly $5 million in next year’s budget to begin implementing the takeover, and expects it will cost about that much for 32 employees to administer the program annually. The Army Corps in Alaska has about 50 staff and an $8.5 million annual budget for wetlands permitting.
DEC officials said they plan to submit an application for the takeover to the U.S. Environmental Protection Agency at the beginning of 2025 in the hope of getting approval later that year.
While a primary intent of state control is streamlining the permitting process, DEC Commissioner Jason Brune said state regulations would need to be at least as strong as the federal rules, but could be adapted so they are more suited to Alaska’s geography.
“Permittees are required to compensate for unavoidable impacts to wetlands,” he wrote in an introduction in the feasibility study. “We will have the opportunity to provide compensatory mitigation options that are presently not utilized and veer from the federal focus of restoring damaged wetlands, creating new wetlands, or putting lands into perpetual conservation easements as their primary mitigation options.”
Nearly 90% of Alaska’s wetlands already have protected status and there are few in need of restoration, Brune noted.
More flexible state regulation, for instance, “could allow project developers to remediate contaminated sites that affect water quality in the watersheds of their activities.”
But the credibility of the analysis was questioned by some senators who noted the feasibility study authors declared their purpose was to show legislators the advantage of a state takeover rather than an objective analysis.
“I think as a Legislature we want to know the whole picture,” Anchorage Sen. Bill Wielechowski, told administration officials at a Feb. 27 Senate Resources Committee hearing. “The pros, the cons, whether this is something good to go forward with, whether or not this is a financial black hole, which I think is probably a big reason why 47 other states haven’t assumed this is because it just takes an enormous bureaucracy to administer this program.”
Miller said staff preparing the study were directed to assume a takeover would happen and assess how to do so. She also noted challenges the state will need to address are specified in the report, along with how other states have assessed such permitting authority.
Wielechowski, during an initial hearing on the same issue a few weeks ago, also noted Alaska has far more wetlands and far fewer staff to provide oversight than the three states — Florida, New Jersey and Michigan — that have taken over control of some permitting. Brune said DEC’s hope is that user fees from developers would cover some funding needs and efforts to have the federal government provide some money are being made by multiple states.
But even if Alaska’s takeover occurs, the EPA still has oversight, said Julie Pack, an assistant attorney general for the Alaska Department of Law. She said the EPA gets a copy of every permit and regulatory activity, and state must submit an annual audit, and the EPA and other federal agencies have up to 90 days to object.
Pack said there are only a handful of legal cases involving such situations so far, so the effect of the waiting period isn’t clear.
That legal uncertainty extends to other issues that in some cases are largely unique to Alaska, such as whether permafrost is classified as wetlands. Currently, such frozen terrain is not considered wetlands.
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