16 ALASKA RESOURCE REVIEW SUMMER 2024 Carbon capture, wetlands permitting remain in spotlight BY TIM BRADNER REGULATORY CHALLENGES CONTINUE TO BE A FACT OF LIFE FOR ALASKANS. Newest of these are adverse decisions like new U.S. Interior Department land management rules in the National Petroleum Reserve–Alaska. There are occasional wins, too. Or at least delays in bad news. For example, Alaska’s coal and gas-fired power plants appear to be excluded, for now, from a new final U.S. Environmental Protection Act rule requiring carbon capture and storage that went into effect April 25. At least for now the rule does not affect coal power plants that are important to Interior Alaska or the natural gas-fired plants like those operated by Southcentral Alaska electric utilities and with the Prudhoe Bay power plant on the North Slope. That could change in future revisions to the rule, EPA has said, but for now Alaska appears to have missed a bullet. What is most concerning about the rule when it was first proposed is that it would have required coal plants — including combined heat and power plants like at the University of Alaska Fairbanks and the Usibelli-owned Aurora plant in downtown Fairbanks — to implement carbon capture, which would be very expensive. The Aurora plant provides steam that heats downtown buildings in Fairbanks. Were the plant not available the alternative, it would be required to install oil-fired heating units. Meanwhile, on another key regulatory issue, federal agencies are still wrestling with how to implement the U.S. Supreme Court’s landmark Sackett vs. EPA decision on federal wetlands regulation in May 2023. The decision narrowed the focus of the U.S. Clean Water Act. There were hopes this would ease the burden of securing wetlands permits for Alaska projects. One year later the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers are still working out how to implement the decision. This will take a while, say people familiar with the issue. Sackett limits the scope of the Clean Water Act to protect water bodies, including wetlands, that are connected to larger streams. Where there is no connection to larger waters, there is no Clean Water Act jurisdiction. Much of the North Slope, which is dotted by small lakes and streams, would appear to be unaffected by Sackett. In contrast, dry upland tundra on the North Slope would seem to be excluded. But this isn’t clear yet, as is often the case under major new court rulings. This could mean that for major industries in Alaska, such as oil and gas, the status quo with permitting will continue. It will take time for Sackett to have any real impact on Corps of Engineers wetlands permitting in Alaska. Companies will still have to do wetlands assessments on many proposed projects and negotiate impact mitigation agreements with the U.S. Environmental Protection Agency if wetlands are affected. Meanwhile, some of the more contentious issues in wetlands permitting also remain, such as the federal agencies’ rules for mitigation. In the Lower 48 states there are many places with damaged wetlands that can be restored to productive ecological use by companies under off-site mitigation programs. In those places there are well-organized mitigation banks, or organizations, that purchase damaged lands and hold them in inventory for companies to invest in restoration. But damaged wetlands are hard to find in Alaska, where most of the state is undeveloped and essentially wilderness. Companies working in Alaska have proposed mitigation plans that repair other kinds of environmental damage, such as those around historic mining sites. However, the U.S. Environmental Protection Agency and U.S. Corps of Engineers have turned down most of these, taking the position that mitigation should deal only with wetlands. The agencies have also said that the mitigation should be done in the same region where the development occurs and sometimes the same watershed. This further limits options for mitigation that are really useful. In practice it has led to companies spending money on purchases of undeveloped lands and other agreements to permanently protect wetlands from development even in remote areas where there is no development planned or even likely. REGULATORY CHALLENGES FOR INDUSTRY CONTINUE Photo Courtesy Aurora Energy
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