Future of full-scale energy development in Wyoming may rely on ‘ecological currency’

— April 3, 2013

The private Sweetwater River Conservancy northeast of Rawlins has been spending about $1 million annually for the past several years gathering an inventory of existing natural resources for what might one day become “ecological currency” — credits that can be bought and sold, allowing both industrial developers and conservationists to advance their work in Wyoming.

“That baseline serves … for what we measure our successes and failures against,” said Michael Fraley, co-founder of the conservancy and Pathfinder LLC.

There are a handful of these conservancies in the works in Wyoming right now, with backers hoping to transition the rhetoric of “balanced development” into something that can be quantified and banked on.

Fraley was a speaker at the Forum on Conservation Finance this week in Casper. It was hosted by the University of Wyoming’s Ruckelshaus Institute of Environment and Natural Resources, Wyoming Stroock Forum on Wyoming Lands and People, and the Wyoming Chapter of The Nature Conservancy.

“In other states, the majority of credits sold typically go to the state for highway projects. Wyoming is very different. Not only do you have that market, but you have oil and gas and minerals,” said Fraley.

The 100,000 acres that make up the Sweetwater River Conservancy might one day serve as a “mitigation bank,” generating credits that can be sold to parties that have a responsibility to make up for habitat losses from activities such as drilling and mining.

It seems there’s momentum building in Wyoming for this type of banking; leveraging trammelled habitat in one area into bigger environmental improvements for the same region’s broader ecosystem.

Attendees of the forum seemed to agree that mitigation banking can’t come too soon. The environmental health of the American West is under stress from multiple pressures. Several “mega-field” oil and gas proposals are in queue, opening the door for some 24,000 new wells across Wyoming’s landscape. The job of avoiding habitat losses, rehabilitating industrialized zones and making up for fractured habitats is made more difficult by drought and wildfire.

Smart folks from both the industrial and conservation sides of the equation find themselves agreeing that there’s no more ground to give on degradation of the environment. Backers of the mitigation banking idea say industrial activity must be leveraged into active and quantifiable conservation and habitat improvement, or the hammer of the Endangered Species Act and other federal laws will indiscriminately put the pinch on all parties.

The prime example was offered by Bob Budd, executive director of the Wyoming Wildlife and Natural Resource Trust, who spoke about the potential of a full listing of the sage grouse under the Endangered Species Act. “If we don’t put investment in sage grouse, we can kiss our oil and gas industry goodbye … we can kiss agriculture and ranching goodbye.”

There are cynics, of course, and many demands for certainty in the process. Mitigation banking isn’t regulated the same way as the New York Stock Exchange, for example. It requires buy-in from state and federal regulators, as well as conservation and industry partners.

Others worry that such an exchange program can be used to justify creating industrial sacrifice zones, such as the Jonah natural gas field.

But that’s not the intent of mitigation banking — at least not among many who attended the UW forum.

“We are not going to stand for trading quality habitat for marginal habitat,” said Budd. Rather, the stream and wetland improvements, the sage grouse conservation efforts will not only be measured and quantified, the value of those efforts (both in time and space) should exceed the development footprint that helped fund it.

Budd said the state of Wyoming has invested some $40 million in conservation financing, turning it into $343 million in total leverage, attracting buy-in from others.

WyoFile published a feature on the efforts at Pathfinder in August 2011, describing how Fraley and his business partner Jeff Meyer amassed private ranches in the area with a working conservancy in mind.

— Dustin Bleizeffer is WyoFile editor-in-chief. You can reach him at (307) 577-6069 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer

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