In a major policy shift by federal authorities, waterfront maintenance and reconstruction projects are undergoing increased scrutiny — not only for their environmental impacts during and after construction but for effects that ripple through time.

The change, imposed by NOAA Fisheries to protect threatened and endangered species, requires compensation for environmental damage calculated over the life of a shoreline structure. So compensation comes into play even where a structure is merely replacing an old one. Previously, in most cases, the agency did not require environmental compensation for repair and replacement projects permitted by the Army Corps of Engineers — unless the projects were some type of expansion.

This change in policy is welcomed by environmental and tribal leaders, who say ongoing reconstruction of bulkheads, docks and other shoreline structures perpetuates the well-documented habitat damage that starts when a structure is first built. Requiring compensation for maintenance and reconstruction is a way to hold the line in the face of ongoing development, they say.

“This is NOAA really standing up for the resource,” declared Fran Wilshusen, habitat services director for the Northwest Indian Fisheries Commission. “It has been a long time coming, but it is a very positive change.”

The environmental compensation, known as “offsets” by NOAA Fisheries, requires project proponents to fund habitat improvements nearby but separate from their projects, or else purchasing “credits” offered by Puget Sound Partnership or other organizations involved in habitat restoration.

Shoreline property owners, marina managers and contractors say the cost of paying for such compensation will discourage needed upgrades, many of which actually improve the environment — such as replacing creosote pilings and bulkheads with nontoxic materials.

“I’m afraid it is counterproductive if you really want people to do the right thing,” said Bob Wise, who has been waiting three years to obtain a permit to upgrade Port Hadlock Marina, near Port Townsend, with environmentally sound materials.

Adding a time element

A growing body of scientific research confirms the importance of the nearshore habitat to the survival of endangered species, including salmon and southern resident killer whales, said Jennifer Quan, branch chief for South Puget Sound in NOAA Fisheries’ West Coast Region.

Consequently, starting in 2017, regional experts at NOAA Fisheries determined that Corps permits for maintenance and reconstruction projects should no longer be allowed to bypass extensive review by way of “informal consultation” under the Endangered Species Act. Such a review requires a finding of “not likely to adversely affect” listed species — something that can no longer be justified, Quan said.

The move to “formal consultation” between the agencies requires a more rigorous investigation into the impacts of each project.

Time became a key element in the new analysis by NOAA Fisheries, which reasoned that structures all have a usable lifespan. If not rebuilt, then a structure eventually will be removed, one way or another. Work that extends the life of a structure thus creates an add-on environmental impact.

To quantify environmental impacts into a common “currency,” NOAA Fisheries relied on studies such as the Habitat Equivalency Analysis, long used to estimate natural resource damages caused by oil spills and other destructive events. Subsequently, the agency developed a “debit/credit conservation calculator” to add up all the effects on shoreline habitat, good and bad, resulting from a specific project.

While rebuilding a dock would result in an environmental debit, the number would be less if built with a grated deck to allow light to penetrate to the water below, thus improving conditions for eelgrass and migrating salmon. The debit can be offset with credits for reducing the size of the structure or improving shoreline habitat elsewhere, either on-site or off-site. Credit also is given for removing the old structure before its useful life is over.

Alternatively, a project could purchase credits to erase the deficit under new programs being developed through cooperative agreements. One is with the Puget Sound Partnership, which is now selling credits and will use the money for environmental restoration. Other programs involve Hood Canal Coordinating Council for projects in Hood Canal along with Blue Heron Slough Conservation Bank for projects in an area that extends from the Snohomish River estuary.

Environmental advancement

As part of its review, NOAA Fisheries found that the overall impact of ongoing shoreline projects puts Chinook salmon in jeopardy of extinction — a so-called jeopardy finding. The result also reflects an increased risk to the survival of the endangered southern resident orcas, which rely largely on Chinook for food.

“This is huge,” said Wilshusen of the Northwest Indian Fisheries Commission. “This is the first time that we have had a jeopardy finding without a dead fish. We all know that degraded habitat is having a major effect on salmon. Now we have the science to back it up. We can’t have any more habitat loss. We really have to have some gain.

“The tribes were not involved in developing this new approach,” she added, “but we are very optimistic.”

The extinction of Chinook salmon and killer whales is a real risk, Wilshusn said, not to mention the decline of a host of other species, all dependent on each other and the habitat where they live. Changing the present course is essential.

“Hopefully, we are coming to realize that we have run out of space to continue our lives as usual,” she continued. “We are moving into an awkward period of transition, as we go from a pollution-based economy to a life-giving economy.”

Tim Trohimovich, director of planning and law for Futurewise, an environmental organization, said he would not be surprised if the concept of adding a time element in measuring environmental impact is picked up in permitting by Washington state and by other federal offices across the country.

“One reason for doing this is the dire straits that the southern residents are in,” he said. “Other species are in deep trouble throughout the United States, and I think we are going to see more of this approach at the federal, state and local levels.”

Programmatic approach and new review

After NOAA Fisheries decided that it was legally obligated to conduct more thorough reviews of shoreline projects — including maintenance and reconstruction — the agency was confronted with a much heavier workload with limited staff.

To smooth the approval process for new applications, officials began working on a “programmatic consultation” to be used in quantifying the impacts from all sorts of projects. Debits and credits would be based on project location and design parameters, such as length of bulkhead, number of pilings and so on. A written document spelling out “reasonable and prudent” methods of avoiding the critical jeopardy finding would require buy-in from the Army Corps of Engineers, which issues the permits under Section 404 of the Clean Water Act.

So far, officials with NOAA Fisheries and the Corps of Engineers have not come to agreement on the so-called Salish Sea Nearshore Programmatic. Letters between NOAA and the Corps reflect numerous concerns about technical issues as well as questions about measuring environmental impacts — such as how one determines the useful life of an existing structure. Negotiations continue between the two agencies.

As permit applications piled up, NOAA Fisheries grouped together 39 nearshore projects in Puget Sound for which the Army Corps of Engineers had requested consultation since May of 2018. The variety of projects ranged from commercial marinas to dredging projects, with about a third being repair or replacement of shoreline bulkheads. The resulting biological opinion (PDF 7 mb), released in November, includes an overall environmental analysis along with design details for each of the 39 projects.

After working with project proponents to reduce environmental impacts, the document shows final debits and credits, with a net “offset” needed to ensure no net loss of habitat function. It turns out that 12 of the projects provided enough environmental benefits so that no further action is needed. The other 27 projects have debits ranging from -2.1 for a small moorage project to -2,043 for an extensive bulkhead/breakwater replacement. The 27 projects have a combined deficit of -8,158.

To eliminate the deficit for an individual project, proponents may revise their plans to reduce the deficit or propose on-site or off-site habitat-restoration projects to gain the needed credits. Another option is to purchase credits outright from an approved organization that would use the money to conduct environmental restoration equivalent to the damage quantified by the debit/credit calculator.

Purchasing credits

Puget Sound Partnership, the state agency responsible for coordinating ecosystem recovery in Puget Sound, has launched a pilot project for selling conservation credits. Approved by NOAA Fisheries, the “Partnership Nearshore Credits Program” will initially conduct its restoration work by removing creosote pilings, which emit toxic chemicals that degrade water quality and damage nearby habitat. The work will be conducted in cooperation with an existing creosote-removal program being run by the Washington Department of Natural Resources.

The cost of each credit currently stands at $800, according to Ahren Stroming, special projects assistant at the Puget Sound Partnership. The cost of the credits will be re-evaluated each year, he noted.

As the program moves forward, moneys received could be directed to other restoration projects, possibly even large projects currently funded through state and federal grant programs. The state’s Recreation and Conservation Office will manage the fiscal aspects of the new credits program for Puget Sound Partnership.

Other organizations also are working to set up programs to sell credits that align with the NOAA’s debit/credit calculator. One is Hood Canal Coordinating Council, which already sells mitigation credits under a multi-agency in-lieu-fee mitigation program, which has been used by the Navy to offset environmental damage from construction work at the Bangor submarine base. Another is Blue Heron Slough Conservation Bank, which conducts restoration work in the vicinity of the Snohomish River Estuary near Everett.

Project delays and increased cost

In 2017, Bob Wise was faced with an aging Eagle Harbor Marina on Bainbridge Island. It was time for an upgrade, he said, and he went to work on a total rebuild to improve conditions for tenants while better protecting the marine habitat. Steel pilings replaced creosote, grated decks replaced solid wood, and new floats replaced Styrofoam that was chipping away.

Wise says he had no trouble obtaining an Army Corps of Engineers permit for the project, and the environmental upgrade has been widely heralded. The work complements the certification of Eagle Harbor Marina as a “clean marina” under the Clean Marina Washington program.

A year later, Wise applied for another permit to do the same thing at Port Hadlock Marina, which he also owns with his wife Lisa. “We’re going to put literally the best marina in the Puget Sound in Port Hadlock,” Wise proudly told The Leader newspaper in Port Townsend.

This time, he confronted a federal roadblock, as NOAA Fisheries had shifted from informal to formal consultations for maintenance and replacement projects in the face of growing concerns about the recovery of salmon, orcas and other marine species in Puget Sound.

According to Wise, NOAA officials told him they would soon have a new programmatic consultation process that would calculate how much environmental compensation he would need to provide to get his project underway.

“That was three years ago,” he said. “I have been sitting here, saying there are things at this marina that are harming the environment, and I want to take them out.”

The delay has been infuriating for dozens of project proponents waiting to obtain permits for all sorts of projects.

Logan Brown, president of the company Marine Floats in Tacoma, says he is contracting with eight or nine of the 39 project proponents in the group of applications now being batch-processed. Waiting for the projects to get reviewed is one thing, he said. Now it is a matter of trying to make sense of the result.

“The fault is in the logic that if they do not permit a replacement, then (the structure) will just disappear at some point,” he said. “In fact, the impact is increased. As these structures get older, they deteriorate faster, and the materials break down and spread, causing greater environmental impact.”

Brown said the science behind the change has never been adequately explained to those affected by the outcome, and none of the findings have been subject to public review, despite potentially millions of dollars on the line.

“They are trying to roll this out on the fly with practically no oversight or meaningful input from the industry,” he said. “Nobody wants to come down on the wrong side of environmental protection, but our position is that this regulation is not only stopping upkeep but it may be creating safety concerns at some marinas. Because of this approach, some environmental improvements are not taking place.”

The increased cost and complication of permitting may cause less responsible owners to keep patching up their facilities without doing the environmentally responsible upgrades, observers say. Some worry that the program will lead to work being done without required permits.

Assuming that he can obtain the needed credits at $800 apiece, Wise says the new permit will cost him $120,000 more than he expected while planning his upgrade.

“That’s not a trivial amount of money,” he said. “We’re just a family-owned business. I don’t know how this will fit into my model.”

Financing the project is a major issue, he said, and banks loan money on tangible assets, not on credits derived from a conservation calculator.

“I thought we were all ready to go,” he said, “but now we will have to think about it.”

With concerns running high for salmon and orcas, nobody disputes the need for environmental restoration. Yet to be seen, however, is whether the new permitting approach to maintenance and repair can overcome potential legal hurdles and become a smoothly running operation.
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Public information

NOAA Fisheries will hold online public workshops on Jan. 26 and Jan. 28 to explain the conservation calculator that the agency developed to assess the value of nearshore habitat. Both workshops will run from 9 to 11 a.m. Details will be posted on the webpage Puget Sound Nearshore Habitat Conservation Calculator.