On November 3, 2015, President Obama released an important Memorandum regarding Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment (Memorandum).  The Memorandum establishes a multi-agency approach for achieving environmental conservation, while promoting an emerging industry – namely, mitigation.  While presumably in the works for several years, this Memorandum was largely drafted behind closed doors, and comes as a surprise to many stakeholders.  In an era of continued growth and development, the Administration has made it a priority to find the means and measures to make informed and responsible decisions on where to allow impacts to public lands resources and how to mitigate losses associated with those impacts.  The Memorandum attempts to articulate those means and measures, and effectively encourage public-private partnerships to achieve restoration and conservation goals.  As the memorandum articulates:

Federal agencies can . . . face barriers that hinder their ability to use Federal resources for restoration in advance of regulatory approval of development and other activities (e.g., it may not be possible to fund restoration before the exact location and scope of a project have been approved; or there may be limitations in designing large-scale management plans when future development is uncertain). This memorandum will encourage private investment in restoration and public-private partnerships, and help foster opportunities for businesses or non-profit organizations with relevant expertise to successfully achieve restoration and conservation objectives.

Thus, this memorandum serves as a policy to guide the Departments of Defense, Interior, and Agriculture, along with the Environmental Protection Agency and the National Oceanic and Atmospheric Administration (collectively, the Agencies), to work together to attain two broad goals: first, to achieve “no net loss” of ecological resources, and second, to promote profitable markets for conservation activities.
 
The Memorandum purports to achieve the Administration’s stated goals by directing the Agencies to “each adopt a clear and consistent approach for avoidance and minimization of, and compensatory mitigation for, the impacts of their activities and the projects they approve.”  Agency policies would be developed on a landscape level, with large-scale plans, and a comprehensive evaluation of the best locations for both project development as well as resource conservation, with a focus on avoidance, minimization, and mitigation (including compensatory mitigation), sequentially.  Ideally, if the policies in the Memorandum are implemented as intended, development on public lands would involve lower long-term environmental risks by encouraging resource mitigation from the private sector in advance of project development, and would not only reduce timelines of development by streamlining the permitting and approval process but also reduce the possibility of a dual standard for practitioners and industry alike.
 
Although not a product of the Memorandum, the Desert Renewable Energy Conservation Plan (DRECP)—released November 10, 2015—offers a glimpse of the potential efforts that could result from implementation of the policies declared in the Memorandum.  Derived from a collaborative effort between local, state, federal agencies, and other stakeholders, the DRCEP is intended to provide effective protection and conservation of California’s desert ecosystems while allowing for the appropriate development of renewable energy projects.  We expect that the cooperative efforts behind the DRECP may well inform the Agencies’ development of individual policies, shifting from project-by-project management to consistent landscape-scale, science-based management of the lands and resources for which the Agencies are responsible.
 
This new platform concept will undoubtedly open doors for private investment in the conservation and compensatory mitigation arena.  The Administration anticipates that the Memorandum will increase the emerging mitigation industry’s presence significantly by promoting public-private partnerships and the incorporation of conservation activities into existing business models.  The goal would be to bring private investment to the table at the forefront, to evaluate and achieve positive environmental outcomes concurrent with evaluation of project development.  The success of private investment in this arena will almost certainly depend on uniformly high standards of mitigation to ensure transparency as well as certainty of return on investment. 
 
The Memorandum indicates it will be promptly implemented: the Forest Service is required to incorporate mitigation policies into handbook and manual guidance documents within 180 days, finalizing their regulations within two years.  The Bureau of Land Management, the Fish and Wildlife Service, the Department of the Interior, and all Federal natural resource trustee agencies have one year to develop mitigation guidance for their respective programs.  Stakeholders will be able to comment and provide input on the individual policies that agencies prepare in support of this Memorandum.  Under this umbrella Memorandum, and once individual agency policies are adopted, we understand the U.S. government is interested in pilot projects that would involve multiple state and federal agencies and large landscapes to refine and improve upon the concepts laid out in the Memorandum.  The availability of a pilot project program is quite timely, as private and public partners continue to work together to improve and expand our nation’s energy portfolio and transmission infrastructure.

While the full impacts of the Memorandum are yet to be realized, this comprehensive Memorandum is poised to change the way federal Agencies approach major project developments, potentially resulting in a paradigm shift to mitigation as an industry in support of environmental conservation while continuing to support responsible development.