Aitkin County gets swamped by state wetlands rules

Aitkin County soil scientist Becky Sovde understands that Minnesota's wetlands are vital for absorbing pollutants, recharging aquifers, storing floodwater, harboring wildlife and filtering drinking water.

But these days, her county is getting fed up.

"We now have 700,000 acres of wetlands in our county, and another 33,000 acres proposed," Sovde said. "Do we need more?"

In an unintended consequence of a state law designed to save wetlands, Aitkin County — about two hours north of the Twin Cities and an hour and a half west of Duluth — has been overrun by them.

An influx of relatively cheap wetland replacement projects, largely to accommodate Iron Range mine expansions farther north, has left 65 percent of the spacious, low-lying county covered in wetlands, including thousands of acres of shrubby, scrubby swamps.

"These aren't open-water ponds with cattails and a few mallards," said Brian Napstad, a county commissioner who also chairs the Minnesota Board of Water and Soil Resources (BWSR). "You buy an old farm, you plug up a ditch or two and bingo," the state has "mitigated" the loss of a natural wetland in some other place.

Now, as the Iron Range contemplates a wave of new mining projects, state regulators and advocates are asking whether it's time to change the wetland replacement section of the landmark Minnesota Wetland Conservation Act of 1991.

"It's time to do a better job of prioritizing and targeting where replacement wetlands are located," said David Weirens, who heads the Land and Water Section for the BWSR, a state agency that improves and protects water and soil resources. "We'd like to help guide the policy direction."

The leaders of two mining trade groups said last week that they're not asking for any changes and declined to comment on the new concepts.

"We've got strong regulatory standards in Minnesota … let the system work," said Frank Ongaro, executive director of Mining Minnesota, a voice for emerging copper-nickel interests. "If proposals come in, we will weigh in on them."

Efforts to modify the law last year went nowhere, but legislators asked for a stakeholders' group to study the statutes and look for consensus. After a series of meetings this fall, nothing gelled.

"I would not say that everyone was happy at the end," said Doug Norris, wetlands program coordinator for the Minnesota Department of Natural Resources.

Weirens called the idea of a high-priority site list "particularly appealing," though it will be important to identify which parts of the state would benefit most from wetland restoration and to draft objective, valid criteria for the sites.

But environmentalists have objected to the concept. Wetlands should be replaced within the same watersheds where they are destroyed, they say; otherwise degradation goes unchecked in the region hosting the development. In northeastern Minnesota, for example, wetlands protect waters draining into Lake Superior and the Rainy River — and some waterways already are impaired by industrial pollution.

"It's just not a solution to destroy wetlands and replace them somewhere else," said Kathryn Hoffman, staff attorney for the Minnesota Center for Environmental Advocacy.

Norris said he agrees to some extent, but he pointed out that mining companies and other industries in northeastern Minnesota — including ambitious proposals for copper-nickel mining — have their backs against the wall. They operate in water-rich territories that are critically short on sites to host large replacement projects on the traditional 1-to-1 acreage ratio.

Hoffman said that the land squeeze in northeastern Minnesota is real, but that it shouldn't be an excuse for erasing thousands of acres of high-quality wetlands in such an ecologically sensitive place.

"We think it's worth exploring," Hoffman said. "You replace the functions, if not the wetlands."

The idea for alternative projects within the affected watershed is a departure from the core principle under current law of "no net loss of wetlands." It also would demand a new series of calculations to equate the value of lost wetlands. For instance, how much credit should be awarded for repairing a mile of a polluted stream?

At an August meeting in Cloquet, industry representatives voiced concerns that new rules would only drag out the process of getting permits for their projects, according to minutes kept by the BWSR. Mining, timber and construction executives were in attendance. Audience members were anxious for the agency to explain how companies would get wetland credits under the various new options.

At least a couple of those commenting said an industry shouldn't be penalized financially if it is forced to take replacement projects to faraway sites of "high priority," according to the report.

Another concept floated by the BWSR in meetings this fall is an "in-lieu fee," in which companies write a check to a designated third party to pay for a wetland replacement project.

For environmentalists, an advantage of an in-lieu fee is that project sites can be selected to meet local needs and long-term watershed planning.

Hoffman said the idea is worth considering. Minnesota already allows for wetland "banking," in which private investors build wetlands, then sell state-authorized restoration credits to companies that don't want to construct their own.

That is exactly how Aitkin County came to attract so many new wetlands. Partly located in northeastern Minnesota, and dotted with parcels of marginal farmland that previously were drained, it attracted investors who bought land on the cheap and spent relatively little to restore land to legal wetland status.

In total, 6,800 acres of wetlands have been created in Aitkin County under the wetland replacement program, with 31,000 acres of projects proposed or conceived, county officials said. The transformation has stifled the county's property tax base and driven away some of the families who sold their low-lying farmland, said Napstad, the county commissioner and BWSR chair. If the trend continues, the county could wind up with more wetlands than it had before statehood.

"We have a clear loss in public value," Napstad said. "It was never the intention to place 10,000, 20,000 or 30,000 acres of wetlands in Aitkin County."

U.S. Steel owns a 4,000-acre tract near Palisade that it has just started to convert to wetlands for recent and future mining expansions. In addition, PolyMet Mining has expressed interest in a 1,000-acre site near the city of Aitkin for the possible replacement of wetlands that would be destroyed in St. Louis County if Polymet's proposed copper-nickel mine near Babbitt is approved.

Weirens said the BWSR is refining the new ideas and may present them to interest groups next month. He said that the agency is responding to guidance from last year's Legislature and that Gov. Mark Dayton will play a key role.

"People tend to like the new concepts," Weirens said, "but they are hungry for details."