Fact Sheet1
Wetland Banking at Former Mine Lands:

An Ecological Solution with Economic Benefits

This fact sheet is intended to educate communities, mine land owners, potentially responsible
parties, companies, and other in terested individuals about the opportunities associated with reusing
former mine lands to create wetland banks. It is one of a series ofpapers that describe a variety of
tools that can be used to reuse former mining sites. Other topics in this series include carbon
sequestration, water quality credits, and land conservation. This paper focuses on one tool, wetland
banking, that may be applicable to only a small percentage of theformer mine lands throughout the
country. However, given the number of former mine lands, that small percentage may represent
thousands of actual sites. This documen t also describes the opportunities and limitations associated
with using water quality trading credits and provides resource and contact information.

Introduction

Across the United States hundreds of thousands
of former mine lands lie idle or abandoned.
Although they were once productive sources of
raw materials for thriving industries they may
now contaminate the environment. Wetland
banking may provide a solution to the problems
caused by former mine lands—a solution that
not only returns idle land to productive use, but
also benefits the environment, the property
owner, and the local community.

Wetland banking, the restoration, creation, or
enhancement of wetlands to offset future
development impacts to other wetlands, was
designed as a compensatory mitigation
mechanism to support the wetland preservation
requirements of the 1972 Clean Water Act
(CWA). Today, wetland banking is a
commonly employed compensatory mitigation
approach and one which can produce numerous
benefits at former mine lands.

As this paper will describe in greater detail,
wetland banking at former mining sites

	

Wetland Banking Terms

On-Site Compensatory Mitigation: The restoration,
creation, or enhancement of wetlands and/or other
aquatic resources to offset unavoidable adverse impacts
which remain after all appropriate measures have been
taken to minimize damage. On-site compensatory
mitigation occurs adjacent or contiguous with the
location of the damaged wetlands.

Off-Site Compensatory Mitigation: Replacing the
functioning of damaged wetlands and/or aquatic
resources through the creation, restoration, or
enhancement of similar resources at a location other
than the area near the damaged resources.

Banking Instrument: Essentially, the instrument is a
document that outlines the scope of the wetland bank,
including the physical and legal characteristics of the
bank and how the bank will be established and
operated.

Bank Sponsor: Any public or private entity
responsible for establishing and, in most circumstances,
operating a mitigation bank.

Service Area: The designated area (e.g., watershed,
county) wherein a bank can reasonably be expected to
provide appropriate compensation for impacts to
wetlands and/or other aquatic resources.

Source: Federal Guidance for the Establishment. Use,
and Operation of Mitigation Banks. November 1995.

1 This document does not represent official US EPA policy or guidance. Rather this material presents
alternative approaches which may lead to environmental improvements at mining sites.

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represents a reuse opportunity with benefits for the community, the environment, and the mine land
owners.

What are Wetlands?

Section 404 of the Clean Water Act defines
wetlands as "areas that are inundated or
saturated by surface and groundwater at a
frequency and duration sufficient to support,
and that under normal circumstances do
support, a prevalence of vegetation typically
adapted for life in saturated soil conditions."

Wetlands include swamps, marshes, bogs, and
similar areas, which provide a variety of
ecologically important functions. These
functions vary from wetland to wetland, but in
general, wetland services include protecting
and improving water quality, assisting in
floodwater control, recharging water supplies
in dry periods, and providing fish and wildlife habitats. Additionally, wetlands provide recreational
opportunities such as fishing and hunting, aesthetic benefits to communities, and commercial fishery
benefits.

W hat is Wetland Banking?

W etland banking is the restoration, creation, or enhancement of wetlands to compensate for wetlands
that are unavoidably destroyed by development activity in other locations. This approach was
established to support CWA's mandate that unavoidable impacts to wetlands be offset through the
creation or restoration of similarly functioning wetlands, otherwise known as compensatory wetland
mitigation. When possible, this mitigation should occur on site, in areas contiguous with the
impacted wetlands. In instances where on-site mitigation is not possible, off-site compensatory
mitigation such as wetland banking is allowable. The Federal Guidance for the Establishment, Use,
and Operation of Mitigation Banks (hereafter referred to as "Banking Guidance"; available at
http://www.epa.gov/owow/wetlands/mitbankn.html) further detailed the protocol for wetland
banking.

Ecologically, wetlands creation can transform former mines into thriving habitats for plants and
animals, and the wetlands can aid in removing harmful metals from contaminated waters. Wetlands
creation can provide mine land owners with financial rewards as well, through the sale of bank
"credits" to landowners or developers who must compensate for damage to wetlands during
development. Mine owners can then use the revenue from these credit sales to help fund site cleanup.
Remediation at mining sites can sometimes take decades to complete, but wetland banking provides

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mine owners with the possibility of recouping at least some of the remediation costs.

As a compensatory mitigation approach, wetland banking is unique in that the banks are created in
advance of any damage to wetlands. According to the Banking Guidance, these banks are designed
to "replace essential aquatic functions that are
anticipated to be lost through authorized
activities within the bank's service area." Once
fully functional, the services wetland banks
provide are quantified as "credits," which
developers can buy from the bank sponsor to
offset the "debit" created when development
activities impact the functioning of a wetland.

The quantity and type of credits that a bank
provides depend on the amount of acreage and
wetland type at the bank and/or on the habitat,
physical or biological functions, or social
values the wetland furnishes.

At former mine lands, the mine land owner would serve as the bank's sponsor and would be
responsible for the operation, monitoring, and overall functioning of the bank as well as the success
of the credit exchange system. The Army Corps of Engineers oversees the exchange of credits on
a project-specific basis and determines the number and availability of credits required to compensate
for proposed impacts in accordance with the terms of the banking instrument. Once the Corps
approves the sale of credits, the bank sponsor issues a certificate or receipt to the purchaser. The
purchaser, in turn, furnishes the certificate to the regulatory authority to verify the completed
transaction and satisfaction of the developer's mitigation requirement. The bank sponsor should also
make the appropriate real estate arrangements, such as conservation easements and transfer of title
to a federal or state resource agency or non-profit organization, to ensure the wetland is preserved
in perpetuity, guaranteeing that wetland functioning will continue at the site and that incompatible
uses such as industrial development or vehicular use will be prohibited.

Mine land owners may create wetlands at former mining sites for a variety of reasons: to remediate
mining-related contamination such as acid mine drainage, to protect the property from potential acid
mine drainage and regulatory actions, and/or to establish additional wetland acreage in a formerly
non-wetlands area. Certain wetland construction activities at former mine lands, however, do not
qualify for wetland banking. Banking credits cannot be issued for wetlands that were created as a
component of a former mining site's remedy. Additionally, the Banking Guidance stipulates that
"federally-funded wetland conservation projects undertaken via separate authority and for other
purposes cannot be used for the purpose of generating credits within a mitigation bank."2

2 For instance, wetland projects associated with the Wetlands Reserve Program, Farmer's
Home Administration fee title transfers or conservation easements, or the Partners for Wildlife
Program cannot be used to generate banking credits.

Activities that can Generate Demand for
Wetland Credits:

•	Transportation development (i.e. highway or road
widenings, parking areas, new road development)

•	Utilities (i.e. pipeline or power line construction)

•	Commercial and industrial construction

•	Residential development

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Benefits of Wetland Banking

Economic Benefits

Wetland banking at former mine lands can provide direct economic benefits to site owners as well
as the surrounding community. For site owners, the financial rewards of establishing a wetland bank
on site are clear. Bank sponsors can sell credits to developers for $2,300 to upward of $100,000 per
acre depending on the wetland's location, the services it provides, and the market value of the
credits. The cost of developing large wetland tracts is significantly less per acre than creating a small
parcel, and accordingly, the return on investment is much higher. For instance, the Missouri
Department of Transportation (www.conservation.state.mo.us/conmag/2003/01/almanac.htm)
estimates that the development of small wetland parcels in the state can cost more than $20,000 per
acre while large parcel development can be completed for as little as $3,000 per acre. With credits
from the Missouri bank (http://www.mldda.org/wetlandbank.htm"> priced as high as $ 17,000 per acre,
the potential for profit is significant.

The community stands to gain economically from wetland banking as well, in the form of increased
local property values and tourism revenue. This economic benefit, however, is typically realized
only after site remediation is underway or
completed. Depending on the extent and
severity of contamination at the site, this
cleanup process can take decades to complete.

Once the environmental quality of the site is
restored, however, nearby property values
previously impaired by real and perceived
contamination may increase. Additionally,
the creation of new wetlands provides the
community and visitors to the area with new
recreational opportunities such as hunting,
fishing, birdwatching, and photographing
wildlife. These activities can produce
significant economic benefits for the
community; in fact, the National Survey of
Fishing, Hunting, and Wildlife-Associated
Recreation found that over 82 million U.S.
adults engaged in wildlife-associated recreation in 2001, spending a total of $108 billion on
equipment, guides, lodging, and food. The increase in property values and tourism revenue will, in
turn, increase tax revenue for the community and aid the community in marketing itself as an
attractive environment for businesses and families.

	

What are the Benefits of Wetland
Banking?

•	W etland credit sales generate revenue for the
property owner ($2,300-$100,000 per acre)

•	Boosts local property values

•	Creates new recreational opportunities

•	Attracts tourists

•	Supports a diversity of plants and wildlife

•	Assists in controlling flood waters

•	Filters contaminants from water, including acid
mine drainage

•	Recharges water supplies in dry periods

•	Increases the likelihood of compensatory
mitigation success

•	Eliminates the temporal losses of wetland
functioning that often occur with development

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Ecological Benefits

In recent years, studies have reaffirmed the
critical role that wetlands play in the healthy
functioning of humans, wildlife, and
watersheds. The ecological services wetlands
provide are considered so important that
researchers have attempted to quantify their
value in economic terms. A study on
wetlands in Washington state
(http://www.ecv.wa.gov/pubs/97100. pdf)
valued wetland functions at $8,000 to $51,000
an acre while a global study of wetland
services pinned their value at $7,927 per acre
per year. The functions quantified include
supporting an immense variety of plants and
animals; assisting in floodwater control (by
absorbing large volumes of water); improving
water quality through filtering; buffering
shorelines, stream banks, and agricultural soils
from erosion; recharging stream flow during
dry periods; and sequestering carbon (by
absorbing carbon in its plant communities and
soil rather than releasing it as carbon dioxide).
Wetlands' ability to filter contaminants out of
water is of particular importance to mine land
owners, because constructed wetlands have
been instrumental in remediating acid mine
drainage at many mining sites.

As a compensatory mitigation approach,
wetland banking provides certain ecological
benefits that other compensatory mitigation
methods do not. Because the wetlands at a
bank must be monitored and fully functional
in advance of development that adversely
affect wetlands, wetland banking is more
likely to successfully offset the damaged
wetland functioning than mitigation occurring
after the damage has taken place.
Additionally, the wetland bank's existence
and proven functionality prior to a developer' s
need for its credits eliminates the temporal

Powell River Project Wetland
Construction

Source: Virginia Cooperative Extension.

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losses of wetland services that typically occur when developers themselves initiate mitigation during
or after the development impacts occur.

Requirements and Limitations

The creation of wetlands requires meticulous attention to a variety of ecological and procedural
details. Careful consideration must be given to the ecological suitability of a site for wetlands.
Additionally, the site's size, location, hydrologic sources, compatibility with adjacent land uses and
watershed management plans must be considered.

Procedurally, prospective bank sponsors should first discuss their proposals with the appropriate
state or local agencies, which are typically the state or county environmental agencies. Following
this discussion, the sponsor must submit an
initial plan, referred to as a prospectus, to the
Army Corps of Engineers or the Natural
Resources Conservation Service (NRCS) to
initiate the formal agency review process. The
prospectus should discuss the objectives of the
bank and how the bank will be established and
operated. A Mitigation Bank Review Team
(MBRT) will review the prospectus. The
Mitigation Bank Review Team will include
representatives from the Army Corps of
engineers, NRCS, EPA, Fish and Wildlife
Service, and/or National Marine Fisheries
Service, as appropriate given the projected use
of the bank. This team and the bank sponsor
will eventually agree on an "instrument" that
embodies the information in the prospectus.

How do Wetland Banks Benefit
Developers?

Reduce the amount of time needed to process a
COE 404 perniit*

Decrease developers' legal exposure

•	Minimize developer contact with federal agencies

•	Eliminate the developer's risk of constructing a
wetland that fails

•	Eliminate the burden of locating an appropriate
mitigation site

•	Eliminate the long-term responsibility for
monitoring and reporting wetland performance to
government agencies

•	Ease the developer's wetland mitigation burden

•	Note: A COE 404 Permit, issued by the Army
Corps of Engineers, permits the discharge of
dredged or fill material into navigable waters at
specified locations.

The instrument defines several parameters
including the bank's service area. The service
area, which generally consists of the regional
watershed or county, is the area wherein a bank

can reasonably be expected to provide compensation for impacts to wetlands. In the interest of
integrating banks with other resource management objectives, bank service areas may encompass
larger watershed areas if the designation of such areas is supported by local or regional management
plans, state wetland conservation plans or other federally sponsored or recognized resource
management plans. Ultimately, the viability of a wetland bank depends on the amount of
development impacting wetlands in the bank's service area. Demand for wetland bank credits will
be highest in areas where there is a high level of development activity.

The bank instrument also articulates the monitoring requirements and general procedures for

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identifying and implementing remedial actions at the bank. Typically, the bank sponsor must
monitor the wetland bank for five years to ensure that the wetland is functioning as intended,
although it may be necessary to extend this period for projects requiring more time to reach a stable
condition or where remedial actions were undertaken. The bank sponsor should issue monitoring
reports annually to the authorizing agencies, which then distribute these reports to other members
of the MBRT.

Wetland Banking Resources

Although the specifics of establishing a wetland bank vary from one place to another, the basic
protocol for wetland banking is available in the Banking Guidance. Many states and counties issue
their own guidance manuals, which detail the nuances of wetland banking in their specific areas.
A number of agencies, resources, and programs can help mine land owners weave through the web
of wetlands banking regulations and create a wetland bank that is effective and profitable. The
Appendix lists some of these organizations and government agencies.

Conclusions

Across the country today, hundreds of thousands of former mining sites stand idle and underutilized,
no longer providing the local community with a job base and tax revenue. Wetland creation,
however, can help return these areas to productive parts of the community. Areas that once provided
industry with coal and minerals can now provide the community with recreational opportunities and
tourist attractions. Lands that once bustled with miners and extractive machines can now support
diverse plants and wildlife, providing the community with an aesthetically pleasing amenity and the
region with immensely valuable ecosystem services. The creation of wetland banks at former mine
lands provides mine land owners with an opportunity to benefit financially from long-underused sites
where conventional development opportunities are limited. Moreover, wetland banking offers mine
land owners a reuse approach that can have far-reaching benefits for the community and the
environment.

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Contact Information

Interested in pursuing wetland banking at a local former mine land site? For additional information, contact the
following resources.

•	EPA's Abandoned Mine Land Team can provide communities with technical support and resources as they
explore reuse opportunities available at former mine lands. EPA's AML Team works in partnership with
communities to clarify EPA's interests at former mining sites and address potential obstacles to reuse at
these sites. For information about EPA's AML Team, please see the Web site at:

http://www .epa.gov/sup erfund/pro grams/ami/

•	EPA also supports the reuse of former mine lands through the Superfund Redevelopment Initiative (SRI).
For additional information, see SRI's Web site, at www.epa.gov/superfund/programs/recvcle. It provides
tools, case studies, and resource information addressing the reuse of Superfund sites, including former mine
lands.

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Sources:

Atkins, Robert B. et al. June 1997. Constructing Wetlands During Reclamation to Improve

Wildlife Habitat. Powell River Project Reclamation Guidelines for Surface-Mined Land
in Southwest Virginia. Virginia Cooperative Extension. Available online at
http://www.ext.vt.edu/pubs/mines/460-129/460-129.pdf.

Costanza, Robert et al. May 1997. The Value of the World's Ecosystem Services and Natural
Capital. Nature. 387: 253-260.

Critical Habitats, Inc. 1997. Critical Habitats, Inc. Guide to Wetland Banking. Available online
at www .criticalhabitats.c om/ab out2.htm#What!s.

Hopey, Don. November 2002. Coalition Spreads the News About the Value and Limits of

Passive Wetlands to Treat Mine Drainage. Pittsburgh Post-Gazette. Pittsburgh, PA. PG
Publishing Co., Inc. Available online at

www.pittsburghfirst.com/healthscience/2002111 lmonastervmainp2.asp.

Kraus, Mark L. October 1996. Wetland Mitigation Banking in Florida: Issues and Concerns.
Miami, Florida. Audubon of Florida. Available online at
www.audubonofflorida.org/main/Publications/Policvdocs/Mitigation .pdf.

Lcschine, Thomas et al. 1997. October 1997. The Economic Value of Wetlands: Wetlands'Role
in Flood Protection in Western Washington. University of Washington. Available online
at www.ecv.wa.gov/pubs/97100.pdf.

Missouri Department of Conservation. January 2003. MODOT Has a Conservation Idea You
Can Take to the Bank. Missouri Conservationist Online. Jefferson City, MO. Missouri
Department of Conservation. Available online at
www, conservation, state .mo .us/conmag/2003/01/almanac .htm.

North Carolina State University. North Carolina State University's Water Quality Group Water,
Soil, and Hydro-Environmental Decision Support System (WATERSHEDS) Mitigation
Banking webpages. Available online at
http://h2osparc.wq.ncsu.edu/info/wetlands/mitbank.html.

Simon, Dan. August 2002. AMD Solutions. Environmental Reporter. Philadelphia, PA.

Green works. Available online at www.greenworks.tv/radio/todavstorv/20020814.htm.

Society of Wetland Scientists. April 2000. Society of Wetland Scientists' Wetland-Related
Educational Resources Webpage. Available online at
www.sws.org/education/#WHATIS.

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U.S. Environmental Protection Agency. 1977. Clean Water Act Section 404. Washington, D.C.:
U.S. Environmental Protection Agency. Available online at
www.epa.gov/region5/water/pdf/ecwa t4.pdf.

U.S. Environmental Protection Agency. 1995. Federal Guidance for the Establishment, Use and
Operation of Mitigation Banks. Washington, D.C.: U.S. Environmental Protection
Agency. Available online at

http://www.usace.armv.mil/inet/functions/cw/cecwo/reg/mitbankn.htm.

U.S. Environmental Protection Agency Wetlands Page. Available online at
www, epa. gov/o wow/wetlands/.

U.S. Fish & Wildlife Service. 2001. National Survey of Fishing, Hunting, and Wildlife-
Associated Recreation. U.S. Fish & Wildlife Service. Available online at
http ://fa.r9. fws. gov/surveys/surveys .html

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Appendix: Community Resources

Wetland Banking Resources

American Society for Mining and Reclamation.
Available online at http://ces.ca.ukv.edu/asmr/

A non-profit organization dedicated to reestablishing,
enhancing, and protecting natural resources on lands
disturbed by mining or other human activities, or by
disturbance through natural events..

Association of State Wetland Managers. Available
online at www.aswm.org

A nonprofit membership organization established to
promote and enhance protection and management of
wetland resources, to promote application of sound
science to wetland management efforts and to provide
training and education for members and the public.

Clean Water Act Section 404. Available online at
www.eDa.aov/reaion5/water/Ddf/ecwa t4.Ddf

Established a program for regulating the discharge of
dredged and fill material into US waters and a protocol
for compensating for unavoidable wetland or aquatic
resource impacts.

Critical Habitats, Inc. Guide to Wetland Banking.
Available online at

httD://www.criticalhabitats.com/about2.htm#WhatIs

Provides a brief overview of how wetland banking
works and the benefits it can generate for the bank
sponsor.

Federal Guidance for the Establishment, Use, and
Operation of Mitigation Banks. Available online at
httD://www.eDa.aov/owow/wetlands/mitbankn.html

The regulatory document providing guidance for the
establishment, use, and operation of mitigation banks
for the purpose of providing compensatory mitigation
for authorized adverse impacts to wetlands and other
aquatic resources.

National Mitigation Banking Association. Available
online at httD://www.mitiaationbankina.ora/index.html

An association of individuals focused on conducting
research and promoting policies that encourage
mitigation banking as a sound compensatory mitigation
approach. Members are involved with numerous
wetland banking projects across the U.S.

National Research Council Report Compensating for
Wetland Losses Under the Clean Water Act, pages 82-
93. Available online at

httD://bo oks.naD.edu/books/0309074320/htm 1/82 .html#
DaaetoD

An overview of compensatory mitigation actions
authorized under Section 404 of the Clean Water Act.

National Wetlands Mitigation Banking Study Model
Banking Instrument. Available online at
httD://www.iwr.usace.armv.mil/iwr/Ddf/wmb tDl Mav
96.pdf

Provides potential bank sponsors with an example of
how a bank instrument might look.

North Carolina State University's Water Quality Group
Water, Soil, and Hydro-Environmental Decision
Support System (WATERSHEDS) Mitigation Banking
webpages. Available online at

httD://h2osDarc.wa .ncsu.edu/info/wetlands/mitbank.htm

Provide a great overview of the history, regulatory
framework, obstacles, opportunities, and logistics of
wetland mitigation banking.

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Oregon Division of State Lands' Wetland Mitigation
Banking Guidebook for Oregon. Available online at
http://statelands.dsl.state.or.us/mitbank auidebk.pdf

A 156-page guide to wetland banking in Oregon. While
the guide is focused on the particulars of banking in
Oregon, it is a valuable resource for understanding
many of the nuances of wetland banking.



Ramsar Convention on Wetlands' Online Wetland
Restoration Resources. Available online at
http://www.ramsar.org/strp rest links tools.htm

Provides a wide variety of online links to information
and guidance on wetland restoration.

US Army Corps of Engineers' home page. Available
online at http://www.usace.armv.mil/

The U S Army Corp s serve as one of the primary
authorities on wetland bank operations. Corps
representatives review the banking prospectus, serve as
members of the MBRT, and oversee the exchange of
wetland bank credits.

US Army Corps of Engineers' Institute for Water
Resources National Wetlands Mitigation Banking
Study. Available online at

http://www.iwr.usace.armv.mil/iwr/services/pdcpnwetl

Evaluates the feasibility and appropriateness of
wetland mitigation banks. This study was an important
contributor to the development of the EPA guidance
published in 1995.

andsM.htm

US Army Corps of Engineers' Institute for Water
Resources National Wetlands Mitigation Banking
Study: Model Banking Instrument. Available online at
http://www.iwr.usace.armv.mil/iwr/pdf/wmb tpl Mav

Serves as a template for the establishment of wetland
mitigation banks.

96.pdf

US EPA Wetlands Helpline. Available online at
http://www.epa.gov/OWOW/wetlands/wetline.html

Information and referral service which handles
requests for information on wetlands regulation,
legislation and policy pursuant to Section 404 of the
Clean Water Act, wetlands values and functions, and
wetlands agricultural issues.

US EPA Wetlands Mitigation Banking Fact Sheet.
Available online at

http://www.epa.gov/OWOW/wetlands/facts/factl 6.htm
1

US EPA overview of wetland banking and its benefits.

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