Fourth-generation Middle Tennessee cattle farmer Cole Liggett lined up with scientists and environmental advocates in March to urge Tennessee lawmakers not to gut the state’s historically strong protections for wetlands.
Wetlands protection has been good business for Liggett. In addition to raising cattle, he’s a manager at Headwaters Reserve, a firm that developers pay to preserve and restore wetlands and streams so they can destroy them elsewhere, called mitigation banking. If lawmakers follow through on a plan to deregulate an estimated 80% of the state’s isolated wetlands, that will upend the industry in Tennessee and drive up prices for developers still required to pay for mitigation, Liggett testified.
Liggett works in a growing industry that operates more than 2,500 mitigation banks nationwide, earning an estimated $3.5 billion in revenue in 2019, according to a 2023 study funded by the Ecological Restoration Business Association.
The industry is built on demand spurred by the 1972 U.S. Clean Water Act, which requires developers to offset their damage to wetlands by building or restoring wetlands nearby.
But recent federal actions to reduce the scope of that law are pushing states to choose how strictly they will regulate wetlands. The consequences of those decisions not only threaten further degradation of land, water and wildlife, but also the fortunes of an industry that has made a big business out of conservation.
The 2023 U.S. Supreme Court ruling in Sackett v. EPA stripped federal protection from wetlands that don’t have a surface connection to navigable waters, which means bigger rivers and lakes. The Trump administration has vowed to ease regulation, allowing developers to ditch and drain all but the wettest wetlands without permits or mitigation. Environmentalists fear that a recent order to speed up around 600 energy projects nationwide could limit requirements to compensate for the destruction of wetlands.
Some states, such as North Carolina and Indiana, have loosened regulations since the Sackett decision. In March, Kentucky lawmakers passed legislation to do the same, overriding Gov. Andy Beshear’s veto.
Tennessee’s wetlands regulations predate the federal Clean Water Act, but pending legislation could roll back much of that protection, according to the Southern Environmental Law Center.