E&E News on Milburnie and Dam Removal for Mitigation

Clean Water Act may offer ‘magic key’ for dam removal
Jeremy P. Jacobs, E&E News reporter
Published: Monday, December 11, 2017


An environmental mitigation firm, Restoration Systems, tearing down the Milburnie Dam on the Neuse River outside Raleigh, N.C. The company will turn a profit on the credits it sells from the removal, and advocates say their model could fund dam removals across the country.


When environmentalists press for the removal of river-choking old dams, George Howard can smell the money.

Howard’s company is tearing down the Milburnie Dam on the Neuse River outside Raleigh, N.C. The 15-foot impoundment stretches 625 feet across the river, blocking fish runs and creating a deadly hydraulic trap that’s drowned 15 swimmers.

Milburnie is Howard’s third North Carolina dam removal. As with the other two, he will turn a profit using a tool called mitigation banking.
“This could create a long-term mechanism that could slowly drive dam removals across the country that cannot be funded now,” he said in an interview.

Howard’s company, Restoration Systems, capitalizes on provisions in the Clean Water Act that aim for “no net loss” of wetlands and streams by requiring anyone wanting to destroy riverbed, marshes, bogs or swamps to offset the damage by creating and restoring habitat elsewhere.

Howard was among the first to recognize dam removals make good mitigation banks. He does restoration up front then sells credits to developers or highway builders who need Clean Water Act permits.

Almost 250 miles of the Neuse River will be dam-free after Milburnie is torn down in the next few months. The only remaining impoundment will be Falls Lake Dam upstream, whose reservoir holds most of Raleigh’s water supply. It’s not going anywhere.

The Milburnie removal will directly revive 6 miles of the Neuse. North Carolina will likely buy that mitigation to offset the expansion of the state capital’s outer-loop highway, Howard said.

He views his work as the future of environmentalism.

“Ultimately, we can’t pay to fix everything we screwed up, and we can’t stop everything in the future,” he said. “The best we can do is leverage what is going to occur — it’s unavoidable. Leverage the inevitability of well-regulated development to do the restoration that we need to do.”

It’s a philosophy that others — including some environmentalists — are beginning to appreciate for dam removals.

The Nature Conservancy recently concluded in a white paper that removing dams and culverts provide more successful mitigation than other efforts.

“If you remove a dam, you realize a lot of benefits for people and nature, and those benefits are usually enduring and sustainable,” said Jessica Wilkinson, an author of the report. “Dam removals — improving connectivity — can be and should be an appropriate method” for mitigation.

To some, mitigation represents a silver bullet for financing dam removals.

Public and private investments in compensatory mitigation is “conservatively” estimated at $3.8 billion annually, according to a widely cited 2015 paper on the “restoration economy” by University of North Carolina professor Todd BenDor. Some in the industry estimate that figure is now as high as $5 billion.

“Conceptually, it’s a great idea,” said Steven Stockton, former director of civil works and dam safety officer for the Army Corps of Engineers.

But Stockton pointed out the obstacles, the biggest being that someone’s got to foot the bill for mitigation that typically must take place in the same watershed as the development. Another is that mitigation banking has never had broad political support needed to make it a Clean Water Act fixture.

Nonetheless the number of for-profit dam removals is growing. Serena McClain of American Rivers counts about two dozen dam removals for mitigation and nine others under consideration.

Annapolis, Md.-based GreenVest LLC, another mitigation firm, has been behind removals in New Jersey, Pennsylvania and Maryland.

“It should be considered more often,” said Doug Lashley, GreenVest’s CEO.

Dam removal for mitigation also appears to be a rare example of environmental work that has bipartisan appeal.

Greens see rivers restored. Republicans see a market-driven solution, sort of akin to the acid rain cap-and-trade Clean Air Act program.

“In a way, this is a Rosetta stone,” said Mike Wicker of the U.S. Fish and Wildlife Service in North Carolina. “Biologists like me see the strong environmental uplift. And it’s a mechanism for guys in the private sector to make some money.”

Howard encapsulates that dynamic.

The 51-year-old has worked for two North Carolina Republican senators, Jesse Helms and Lauch Faircloth. In the mid 1990s, Howard spearheaded unsuccessful legislation from Faircloth, who sat on the Environment and Public Works Committee, to deregulate wetlands.

But Howard’s no fan of the Trump administration’s efforts to rescind the Obama administration’s Clean Water Rule — also known as Waters of the U.S., or WOTUS — which defines what marshes, streams and wetlands qualify for federal protections.

He calls the current administration “regulatory barbarians.”

“Our business depends on well-regulated environments,” he said.

Howard sensed an opportunity in the then-fledgling mitigation banking industry while working on the wetlands bill. He returned to North Carolina and launched Restoration Systems.

“It was a dramatic departure from my career,” he said. “I went from wearing Brooks Brothers suits to Carhartt pants in 90 days.”

So far, all dam removals for mitigation have occurred in the East. But many, like Howard, see potential across the country.

“The East is more obvious because the rivers are smaller, the dams are smaller and they are all really obsolete,” said former Interior Secretary and Arizona Gov. Bruce Babbitt (D). “But there is plenty of work out here, too.”

If it’s successful, Fish and Wildlife’s Wicker believes the removal of the century-old Milburnie Dam will become a model.

“Milburnie is right on the edge of Raleigh,” he said. “That’s what the system is waiting for — to see if this will work for one of these contentious dams.”


Neuse River dams. The Neuse River, North Carolina’s longest, has seen a series of dam removals since the late 1990s. After the Milburnie Dam is removed, nearly 250 miles of the river will flow unimpeded. Claudine Hellmuth/E&E News

The Neuse River rises in central North Carolina’s rocky Piedmont region, winds about 275 miles east, past Raleigh, before becoming the nation’s widest river — 6 miles across — as it drains into Pamlico Sound.

It is the state’s longest river and home to several dams that generated power for paper and corn mills, Raleigh’s street cars and various other purposes. Some of the dams stretch back two centuries, and almost all of them are useless now, leading to a spree of removal projects.

In 1998, Interior Secretary Babbitt visited the area to celebrate the removal of Quaker Neck Dam near Goldsboro. Though only 17-feet tall, the impoundment effectively cut the Neuse in half for fish when it was built in 1952. Obliterating it restored about 78 miles of the Neuse main stem to migratory fish like shad and striped bass, as well as some 900 miles of its tributaries.

The same year, the nearby Cherry Hospital Dam was also taken out. Rains Mill Dam, upstream on a tributary, came out the following year.

Mike Wicker. Photo credit: Wicker/Special to E&E News

Around that time, North Carolina launched a Dam Removal Task Force comprising state and federal agencies.

Each agency examined the state’s more than 5,600 dams and evaluated them based on various priorities — ecology, public safety, transportation and others.

Dams were given numerical values. In 2002, the state released a top 10 list of dams that should be taken out.

During that process, Wicker, the veteran FWS biologist, had an idea. What if dam removal could be used for compensatory mitigation? North Carolina, and particularly the Raleigh area, were growing rapidly, spawning development that was heavily affecting streams and wetlands.

Wicker thought dam removals would have a more lasting impact than traditional mitigation measures, which he characterized as “hard engineering” that generate an artificial landscape requiring perpetual maintenance.

“Generally with mitigation, the environment sort of gets the short end of the stick,” Wicker said.

Wicker thought using dam removals for compensatory mitigation could be a “magic key.”

“I thought this technique would be a way of really getting some uplift, not only adequate mitigation, but some bonuses,” he said.

The concept grabbed Howard’s attention. Seven of the top 10 dams on the state list have since been removed. In total, 30 dams in North Carolina have been torn down, including eight in 2016 alone, according to data from American Rivers.

Howard’s Restoration System tore down two of the Top 10: Lowell Dam in a tributary of the Neuse and Carbonton Dam on the Deep River in 2005.

Construction crews work to dismantle Milburnie dam. Photo credit: Restoration Systems

The state and cities bought the mitigation credits generated by both removals, paying Howard’s company $4.8 million for the credits from Lowell’s removal, and $12 million for those from Carbonton.

Howard said it appeared that the idea would catch on then. He has been working to remove the privately owned Milburnie Dam, the last small dam on the Neuse River and another on the state’s Top 10 list, since 2001. His company will ultimately spend more than $2 million tearing it down.

“We had great hopes for it in the mid-2000s when we took out the first two,” he said. “The agencies have been slow to catch up.”

‘This should be a win-win’

That doesn’t mean U.S. EPA and the Army Corps haven’t tried.

The Army Corps’ Wilmington District and EPA Region 4 have sought to be leaders on the issue. Beginning in 2003, the agencies have twice issued guidance “to provide a consistent method to determine mitigation credit derived from appropriate dam removal projects across North Carolina.”

“We all got together back in the early 2000s because the development pressure was so great here,” said Jean Gibby, chief of the Army Corps’ Raleigh regulatory office.

Then, in April 2008, the Obama administration issued a regulation that stated a clear preference for mitigation banking over other types of compensatory mitigation under the Clean Water Act.

A prime motivation for the rule was the main form of mitigation previously — in which the permit seeker does some sort of project on their own — wasn’t working, said Royal Gardner, a law professor at Stetson University who has written extensively on the Clean Water Act.

“It was clear that permittee responsible mitigation was not successful,” Gardner said.

Proponents of mitigation banking contend there are advantages both for the permit seeker and the regulator. For the developer, it is easier to buy credits from a bank than undertake an entire mitigation project. The credits also release them from the liability of making sure the project is successful over the long term. For the Milburnie Dam bank, for example, Howard’s company will monitor the site for seven years.

At the same time, the regulator knows the credits are bought from a bank that it has evaluated and deemed worthy.

It’s the type of regulation that pro-business conservatives support.

“This is an area with the proper amount of policy and guidance from the federal government pushed down districts” could lead to “a lot of dams being removed and providing compensatory mitigation,” said Murray Starkel of Ecological Service Partners, another mitigation banker who sees potential for dam removal banks in the Pacific Northwest.

“This should be a win-win.”

The Obama administration rule boosted the mitigation bank market for stream restoration, according to the Nature Conservancy white paper. The number of mitigation banks across the country providing stream mitigation credits jumped from 141 in 2008 to more than 300 in 2014.

Both 2008 efforts have since encountered challenges.

The North Carolina guidance has been repeatedly withdrawn, most recently in 2011, in part due to resistance from traditional stream mitigation companies.

“It scared people because it was precedent-setting and different,” Wicker saidThe Army Corps’ Gibby said the document was rescinded largely due to technical issues, including difficulty reconciling it with the national mitigation rule.

“Like anything, when you first do something you are going to find that it’s not perfect the first time,” she said.

That Obama-era rule is also now in jeopardy; the Trump administration has listed it as one it will re-evaluate and possibly repeal.

Mitigation bankers also say regulators approve projects much more quickly than banks.

‘Neither side agrees with it’

The 15-foot high, 625-foot wide Milburnie Dam before it was removed. More than 100 years old, the dam creates dangerous hydraulic suction and has drowned 15 swimmers.

Overall, mitigation banking has never had a large contingent of political backers in either party, Howard said.

Many conservatives don’t like it because they don’t agree with federal regulations, while many greens are suspicious of it as a potential spur for development.

“Mitigation banking is good policy, but it has never had a lover,” Howard said. “That’s a hell of a policy if neither side agrees with it. But that means it’s a good policy.”

Matthew Starr of the Upper Neuse Riverkeeper acknowledged that mitigation banking is “a little bit of a Catch-22.”

“In a perfect world, you wouldn’t need mitigation. It would be removed because that’s what’s best for the environment and the public,” he said.

But, he added, “in any political climate this is necessary because it’s the only way it’s going to be done.”

Wicker, the folksy FWS biologist, turned metaphoric when asked the significance of the Milburnie Dam removal.

“A blind hog finds an acorn every now and then,” he said. “I think we are about to eat a great big acorn.”

Jesuit Bend: All over Facebook and new RS website

If you are interested in following developments at Jesuit Bend, we recommend you immediately follow RS at our company Facebook page — or, if FB ain’t your thang — visit the Jesuit Bend feature page on our brand new company website.

We are populating Facebook with current and recent photos of the dredge-and-fill work from the Mississippi River:

Screenshot 2015-11-16 20.28.46


And the new website is increasingly filled with material of more long-term interest, like news articles, or particularly instructive photos and video:


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Restoration Systems featured in Triangle Business Journal

Surprisingly perhaps, over seventeen years in business RS has never had a “business” article written about our firm. We have had specific projects covered as ecological interest stories, and even some controversy, but never a word in the business pages or the local biz journal.

But last year we decided finally to show some leg and entered the Triangle Business Journal’s ‘Fast Fifty’ growing companies competition. We were surprised (to say the least if you saw us jumping up and down) to place….drum roll please….#2!!

One thing led to another and RS was the featured company in TBJ this week. As per a business associate who is filing for a new DBA in Texas “It is not easy to come among such a list, let alone be among the top 10”. Considering how dynamic and prosperous our region is, it is a genuine thrill to be covered so well in these pages. Amanda Hoyle did a great job and we look forward to providing her — and you — more frequent updates regarding our progress as a business.

A business that banks on regulations by Restoration Systems, LLC

A business that banks on regulations

Friends since high school and college, George Howard and John Preyer are used to the confused looks they often get when they explain the business model of Restoration Systems LLC, the company they started together in 1998.

The company specializes in environmental mitigation banking, a field of business that didn’t exist before 1995. That was the year that the federal guidelines for mitigation banks were established as a compromise option under the Clean Water Act of 1973, the federal government’s primary law governing water pollution.

Former U.S. Sen. Lauch Faircloth, R-NC, then a member of the Committee on Environment and Public Works, helped craft the federal guidance for mitigation banking. And John Preyer, at the time, was serving as his legislative director.

And to that, a niche industry – and a business plan for Restoration Systems – was born.

Mitigation banks offer a third alternative that didn’t exist before for developers of roads, utilities and buildings that might be doing damage to a nearby water resource, such as a stream or wetland.

If trying to qualify for an environmental permit, a property owner or developer must:

1) Avoid the protected property altogether if possible;
2) Minimize the potential damage or impact to the property; and
3) When all else fails, mitigate.

“And in that order,” Preyer says.

“We come in at the end of the day, after they have already worked to avoid and minimize,” he says. “If you are looking for a positive environmental outcome, we are doing it.”

Restoration Systems proactively finds and buys conservation easements from property owners for the purpose of restoring streams and wetlands or protecting threatened species from the future encroachment of development and growth. Once a project has been signed off on by both federal and state agencies, the company sets up a mitigation bank, or a system in which to sell “credits” or pieces of a restored stream or wetland to help make up for any damage that might be done to a nearby water resource from another construction project. Credits can cost $14,000 each, or it might be cheaper if it’s a large transaction. The company also manages restoration projects on behalf of government partners or companies that don’t have to be sold through a mitigation bank.

Preferably, Howard says, the impacted projects “share the raindrop” with the stream or wetland property so that the damaged and the improved property impact the same body of water.

Mitigation banking is usually a last-ditch option for builders, but it’s a a growing industry that Restoration Systems is helping take nationwide.

It’s also one of the most-regulated industries in the environmental market, Howard says.

“Developers don’t want to have to pay for credits. Conservation interests don’t want development there in the first place. We have to answer to everybody,” he says. “It’s the good guys and the bad guys these days, and we like being the good guys.”

Restoration Systems is currently overseeing 50 mitigation banks and restoration sites in nine states, with a majority of them in North Carolina. It has restoration sites within the Falls Lake watershed in Raleigh and along the Cape Fear River watershed in southeastern counties.

In Texas, the company has partnered with Morehead Capital Management, a Raleigh-based hedge fund, and a Texas land trust to restore more than 20 miles of streams on the Katy Prairie near Houston. The project is the largest permitted stream mitigation bank in the U.S.

Restoration Systems is also a lead partner in the sale of off-set credits to companies in the wind, oil and energy industries across the Southern Great Plains.

Howard shows from a aerial map the desolate lands in northern Texas, Oklahoma and Kansas that Restoration Systems has invested in to preserve sufficient grassland habitats for the lesser prairie chicken, a threatened species whose population has dwindled to around 17,000 birds in recent years.

This breed of bird is particularly sensitive to things that are taller than its grassy habitat – like the oil rigs that dot the landscape of the Southern Great Plains.

“They don’t like anything over three feet tall, or they’ll stop mating,” Howard explains,

Since the company was founded, the partners estimate the company has sold about $110 million in credit inventory in fits and starts over the years. It brought in about $20 million in revenue in 2014, mostly from the sale of mitigation bank credits, which was up from $6 million in revenue in 2012, according to Chief Financial Officer Buzz Floyd.

“With these bigger projects, we’ve caught the eye of national investment firms, and the deals are getting more sophisticated,” Floyd says.

Their goal moving forward is to smooth out that revenue stream and keep a more stable inventory of credits to sell in the parts of the country where demand is expected to grow.

“We are all about regulation in our business,” Howard says. “It creates our business.”

Amanda Hoyle covers commercial and residential real estate. Follow her on Twitter @TBJrealestate

North Carolina, Neuse River Basin Dam Removal Paying Dividends for Anadromous Fish

Anadromous fish are those, such as shad, that return to freshwater to spawn after spending part of their lives in the ocean. Bennett Wynne, the North Carollina Wildlife Resources Commission’s Anadromous Fisheries Coordinator is quoted as saying “In the Neuse River, hickory shad have been more abundant. Last week, we picked up a few around Goldsboro, along with some American shad. I am cautiously optimistic about shad numbers. Removing dams is important to both species but more so for American shad because they prefer spawning on the rockier substrate above the fall line. Most of the hickory shad population is found from Kinston downstream, where Pitchkettle Creek is the historical place where fishermen catch them. Last year we had strong flows in the river and we saw a good turnout of anglers at Milburnie Dam near Raleigh in Wake County. It is great that we can have a fishery for shad that far inland.”
READ MORE AT  http://www.newsobserver.com/2014/04/09/3771485/neuse-shad-run-nears-peak-numbers.html?sp=/99/103/126/

We plant trees, thousands of them!

Photos of recent tree planting in the buffer zone at Bass Mountain Stream and Nutrient Bank, North Carolina

Sage Grouse Rebellion: Will listing of two small birds limit oil drilling in the West?

Almost half the land west of the Mississippi belongs to the federal government, including 48% of California, 62% of Idaho and 81% of Nevada. No surprise that the Obama Administration wants to control more. But the result could be to suppress the country’s booming oil and gas developmentIn partnership with green activists, the Department of Interior may attempt one of the largest federal land grabs in modern times, using a familiar vehicle—the Endangered Species Act (ESA). A record 757 new species could be added to the protected list by 2018. The two species with the greatest impact on private development are range birds—the greater sage grouse and the lesser prairie chicken, both about the size of a barnyard chicken. The economic stakes are high because of the birds’ vast habitat.Interior is expected to decide sometime this month whether to list the lesser prairie chicken, which inhabits five western prairie states, as “threatened” under the Endangered Species Act. Meantime, the Bureau of Land Management and U.S. Forest Service are considering land-use amendments to protect the greater sage grouse, and to use proper Inflatable Packers for mining, which’d mitigate the landslides in the area. The sage grouse is found in 11 western states—California, Colorado, Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. Most of the areas affected are federal lands routinely used for farming, ranching, mining, road building, water projects and oil and gas drilling.
MORE AT:  http://tinyurl.com/lo6y4hj

New Home prepared for endangered American Burying Beetles

Oklahoma energy and construction companies now have another potential option for dealing with an endangered insect that has bugged operations in the state for years. For now, however, the companies still have no way to take advantage of the offering. The U.S. Fish and Wildlife Service this week approved the American Burying Beetle Conservation Bank. Operated by Edmond-based Common Ground Capital on 1,600 acres of Pittsburgh County, the conservation bank will provide a safe home for the beetle that has been listed as an endangered species since 1989.  “Conservation banking provides for a free market regulatory compliance solution,” Common Ground Capital owner Wayne Walker said. “They provide customers a lot of certainty that they are getting a competitive price on a regulatory system that’s proven.”
New rules still awaiting implementation are expected to require companies to obtain an “incidental take” permit for the beetle by purchasing conservation credits. But the rules have been delayed more than a year. The permit would remove the liability from killing or harming the beetles. “It’s not a perfect situation for us, but the American Burying Beetles situation has been pretty complex,” Walker said. “We now have part of the equation to enable a market here with our approved habitat. We’re a few months away from the ability to sell credits. We’re pretty close to having a much more improved situation than we’ve had for the last couple of years. It requires patience.”
READ MORE AT http://tinyurl.com/pauso7g

Lesser Prairie Chicken (LPC) Resource Center

We love the LPC everyday, especially on Valentine’s Day! Lesser prairie chickens (LPC) once ranged all across the Southern Great Plains. Historically this area of the United States boasted both lesser and greater prairie chickens along with teeming herds of bison and pronghorn antelope, huge black-tailed prairie dog towns and mule deer in the wooded draws and canyons.

Lesser prairie chickens could be found in much of western Texas, western Oklahoma and Kansas, eastern New Mexico and southeast Colorado. This regional landscape, however, has seen many changes over the last 150 years, leading to an estimated 92% decline in this little grouse’s population. These losses are a direct result of the declining quality of habitat due to human activities such as conversion of native prairie to tilled agriculture, oil and gas exploration, urban development and suppression of naturally occurring fire.

READ MORE at http://lesserprairiechicken.com/

17,000 feet of stream restoration in Texas

Reach 5 of Warren Creek: 17,000 feet of stream restoration completed ahead of schedule by Restoration Systems for TxDOT  – 52,000 feet still to be done – compensation for impacts of under-construction segments of the Grand Parkway, Houston, Texas.

E&E: Future of Conservation?: RS Katy Prairie Bank Nation’s Leading Commercial Mitigation Project

From more pics of the project visit our public Facebook page.

To learn more about the project visit our Katy Prairie project page:

I’ve read a lot articles about mitigation banking. But this one got it just right.

We made the largest sale in the history of the mitigation industry to the Grand Parkway, for segments F1, F2 and G,” Howard explained. “As Houston grows west, it’s going to demand mitigation, and then that will drive the restoration of the Katy Prairie and the Warren Ranch. — George Howard, E&E, October 5, 2012

Texas launches eco-credit trading to mitigate development impacts
Published:Friday, October 5, 2012 | Source: http://www.eenews.net/gw/

Nathanial Gronewold, E&E reporter

HOUSTON — One of the largest highway construction projects in the country promises to deliver more urban sprawl to already-diffuse Houston when it is completed in 2019, threatening vast swaths of untouched natural areas.

State Highway 99, or the Grand Parkway, will become the third freeway loop to circle the greater metropolitan area here, alleviating congestion in some places but inevitably encouraging this fast-growing city to further expand its footprint.

But a new Army Corps of Engineers-administered ecological credit trading system being introduced in the state is viewed by developers as a potential game changer in the struggle to balance conservation and city growth.

Adjacent to the highway project, work crews began construction this week on the nation’s largest “stream mitigation bank” project, a market-based approach to mitigating losses of creeks, streams and smaller waterways affected by development.

The project, undertaken in conjunction with a local conservation group called the Katy Prairie Conservancy, seeks to restore more than 110,000 feet of streams lost to earlier development at a site managed by the conservancy on the Warren Ranch, the largest operating cattle ranch in Harris County. Officials involved in the project say it will serve as a template for this city’s future growth, ensuring that development in one part of the watershed will be met first with protections and ecological mitigation in another part of it.

The project, paid for by the sale of environmental mitigation credits to the highway project, will also potentially create revenues the conservancy can use to purchase and protect other parts of what is left of the historic Gulf Coast prairie that used to dominate Harris County, now almost completely swallowed by the city’s relentless growth.

Mary Anne Piacentini, director of the Katy Prairie Conservancy, said the arrangement will earn her organization enough funds to pay off the debt it took to acquire the ranch and create that portion of the preserve. The conservancy owns 72 percent of Warren Ranch, while family members control the rest.

“Clearly the money is important, and it will … allow us to ensure the permanent protection of the ranch,” Piacentini said. “But it also is important because it is really improving habitat on the ranch, not just the streams themselves, but the banks of the streams and the flood way and floodplain and the improved grasslands that are going to be on either side lining the creeks.”

Under the new Army Corps system, which the agency began crafting in 2008, construction projects that would cross or otherwise affect waterways in Houston’s watershed would have to receive a special permit to be allowed to continue. Developers have the option to avoid the impact entirely, minimize it as much as possible or mitigate the damage by restoring an equal amount of waterway in a different part of that watershed.

The stream mitigation bank project on the Katy Prairie will offset damage to other waterways at points where the massive Grand Parkway will be built. Click the map for a larger version. Map courtesy of Restoration Systems LLC.
The system allows third-party developers to manage their own restoration projects and bank credits for doing so. Later projects can then purchase those credits from these mitigation banks to meet regulations and proceed with construction.

Mitigation banking has been up and running in North Carolina for a few years but had yet to be introduced to Texas. George Howard, president of Restoration Systems LLC, said this initial project will serve as a template for future development mitigation banking throughout Houston and eventually across all of expanding Texas. Restoration Systems is the firm leading the Katy Prairie stream mitigation bank project.

“We made the largest sale in the history of the mitigation industry to the Grand Parkway, for segments F1, F2 and G,” Howard explained. “As Houston grows west, it’s going to demand mitigation, and then that will drive the restoration of the Katy Prairie and the Warren Ranch.”

The Texas Parks and Wildlife Department estimates that the Katy Prairie — a popular birding spot and home to a variety of species — once covered an area of 500,000 to 750,000 acres before development began, first in the form of rice farms and later as subdivisions. Little remains; Piacentini estimates that less than 20 percent is in “OK” condition, while perhaps 1 percent is considered “pristine.”

And a booming Houston economy is still putting pressure on the land. Plans for thousands of new homes and businesses are in the works for both sides of the route along the future Highway 99 toll road.

Segment E of the parkway, scheduled to open to traffic in late 2013, was permitted under the old system and is not contributing to the current stream construction. But the other three segments of the highway that will link Houston’s north suburbs will cross more waterways, and the state highway department is required to purchase conservation credits to get the permits it needs.

The city is eager to open segments F1, F2 and G in time for the opening of a massive new corporate campus that Exxon Mobil Corp. is building in the northern suburb of the Woodlands. To offset the damage caused by those three segments to north and northwest Harris County waterways, the Grand Parkway project will purchase banked mitigation credits from Restoration Systems, covering the cost of the Katy Prairie project and possibly more conservation initiatives.

Howard said it took the group four years to secure the permit for its stream mitigation project, but he said the delay was expected. Having never administered such a system in its area of jurisdiction before, the Army Corps of Engineers’ office in Galveston essentially had to develop standard operating procedures. Future projects will experience fewer bureaucratic hurdles, officials predict.



During a recent tour of the stream restoration project site, Lee Forbes, a fluvial geomorphologist and president of Forbes Consultancy PLLC, explained the team’s plan for building — sometimes almost from scratch — more than 100,000 feet of streams that will be nearly identical to natural streams that once were found on the ranch.

Before the banking method was introduced, construction projects could offset their ecological impact by funding wetland restoration elsewhere in the region. The new rules specifying mitigation of streams bring greater technological challenges, Forbes said.

“Stream impacts, which prior to this were able to be mitigated with wetlands, now have to be mitigated with streams,” Forbes said. “And streams are a lot more complex to design, build and maintain, and they have different function, ecological function, than a wetland.”

Earlier settlers to the site worked to straighten out some streams and create a direct path to their tributaries, believing that was better for moving water efficiently and for flood control. But natural streams engineer themselves to move both water and sediment in the most economic manner that nature allows, creating the winding paths that creeks and rivers take in near-flat terrain.

Blueprints of the first phase of the project show what Forbes and others involved have planned. The course is deliberately windy and crosses much of the existing straight channel several times. Crews will also build the stream to have different depths at different places, and trees and branches will be carefully inserted in places to brace the walls of the stream, just as naturally fallen trees do for wild streams.

“A stream functions best when it has easy access to the floodplain. That’s how it builds itself, how it manages its energy,” Forbes said. “We’re putting back in ripples, runs, pools and glides. … It’s a very complex science.”

Stream construction is so complex that advanced computer models and the latest satellite-driven surveying equipment have to be laid out to plot the best meandering path to take. Local construction crews are also unschooled in the idea, requiring extra training, Forbes said.

“The contractors that do it have been from other states where they have been doing it a lot longer,” he said. “We have a mission here in Houston to start training the local contractors on how to do this.”


Technical challenges aside, both Forbes and Howard are convinced that the market-driven approach behind the mitigation banking concept is the future of environmental conservation across the United States.

Restoration Systems estimates it will generate about 250,000 credits from just this project, each credit selling to construction projects for about $250. As the first project, the Katy Prairie stream mitigation bank is being priced in the absence of competition, but Howard expects more actors to enter the fray and force credit prices lower as Houston continues to grow. City leaders believe Houston will overtake Chicago as the nation’s third most populous city by 2030.

Conservation through market-based credit trading systems has detractors. A similar project proposed by U.S. EPA for Chesapeake Bay is facing a court challenge by environmentalists who allege that credit trading will invite fraud and abuse (Greenwire, Oct. 3).

But the Army Corps of Engineers and the forces behind the pilot in Texas seem convinced that the concept is proved to work and may be one of the best methods for balancing development and environmental protection.

“There could be additional banks, and then it would be a competitive market that sells to the impactor at the best rate, so it’s a market-driven ecosystem management,” Forbes said. “Meanwhile, economic development and growth are restoring some of the last vestiges of native prairie and streams in the country.”

Piacentini says she’s equally enthusiastic about the concept and the millions of dollars her organization will receive from it. She is looking for other market-based conservation models that the Katy Prairie could tap into, to grab hold of more tracts of land to preserve ahead of the expanding zone of concrete.

The stream mitigation bank going up now is a prime example of the obvious benefit, she said.

“It will give us water. It will give us a place to put trails. It will allow us to improve the water quality in that stretch of the various tributaries to Cypress Creek,” Piacentini said. “And it will also just ensure that there are places that continue to be available for wildlife.”

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