Banking On New Wetlands When Old Ones Vanish

July 22, 2011 | KUOW
Ashley Ahearn


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  • This meandering stream at the University of Washington's restored wetland was artificially created to promote more natural hydrology and flooding in the wetland. credit: Ashley Ahearn
  • There are now 13 approved wetland banks, totaling almost 1300 acres, in Washington and 7 in process. credit: Washington State Department of Ecology
  • Steve Sego is a wetland mitigation banker with Habitat Bank NW. credit: Ashley Ahearn
  • In order to restore natural hydrology to the East Fork Lewis mitigation bank, drainage ditches like this will need to be removed. credit: Ashley Ahearn
  • Kern Ewing at the restored wetlands near UW Bothell. The project took 15 years and 8 million dollars to complete, and is still actively managed today in order to prevent the increase of invasive species like reed canary grass. credit: Ashley Ahearn
This meandering stream at the University of Washington's restored wetland was artificially created to promote more natural hydrology and flooding in the wetland. | credit: Ashley Ahearn | rollover image for more

Steve Sego is walking into a bank near La Center, Washington. But he’s not making a deposit or taking out cash.

“This is a bank that’s been sponsored by our company, East Fork Lewis Mitigation Partners,” Sego explains. “We just received a few weeks ago certification to begin construction and management of a very wonderful wetland and habitat restoration project.”

Sego is a wetland mitigation banker. He finds lands that were once healthy wetlands but were drained for crops or livestock and restores them to create what are called wetland mitigation banks. The Washington Department of Ecology estimates that half the state’s wetlands have been lost since European settlers first arrived and has declared mitigation banking a potential solution to this trend.

But recreating wetlands in the form of mitigation banks is tricky. On this 113 acre plot of land in southern Washington, Sego’s company will have to take out thousands of feet of drainage pipe and re-configure the straight drainage ditches into meandering streams. Then they’ve got to plant native shrubs and trees and fend off invasive species like reed canary grass.

“It’s a very costly process,” Sego says. “It’s a risky process. It’s environmental capitalism or this idea of developing a wonderful environmental asset but being part of a marketplace that creates some return on that investment.”

Here’s where the money comes in: If you’re a landowner in the watershed surrounding Sego’s bank and you want to pave over wetlands on your property to put in say - a new housing development or a shopping mall or a road, you’d come to Sego and buy credits from his bank to offset the wetlands you’re destroying.

There will be 91 credits for sale from this bank, which will be released in phases over the next ten years, after approval from the Washington Department of Ecology. The total value of the credits will be roughly $13 million, about half of which will go to paying the farmer (who still owns the land) and putting an easement on the land so it can never be developed. East Fork Lewis Mitigation Partners stands to make about $6 million on this project, which Sego says they’ll invest in more mitigation projects.

Wetland mitigation banking is a relatively young industry in the Northwest, but it’s growing fast. The state of Idaho joined with two federal agencies to form The Wetland Banks of Idaho. Oregon has approved 24 mitigation banks since 1995. In Washington, there are now 13 approved banks and seven in progress.

“We’ve really noticed it starting to pick up in the last five years as people see it as an opportunity to do something good for the environment as well as being able to make a profit at it,” says Lauren Driscoll, who manages the wetlands division at the Washington State Department of Ecology.

The Department of Ecology is in charge of approving bank proposals and making sure they stick to their commitment to make a functioning wetland over the course of a ten-year period. If the bankers don’t meet the Department of Ecology’s standards for a healthy wetland, they don’t get to sell credits.

“We have had one experience where a bank was having some trouble meeting a standard,” Driscoll says. “So we did end up needing to do a suspension of their credits and that did give them the incentive to then fix the problem that was going on.”

About 1,300 acres of wetlands have been created in Washington during the 10 years that wetland mitigation banking has been happening there. But Driscoll says it’s too early to tell if this scheme is working.

“The whole wetland restoration program is definitely something that is still, I would say, in its infancy,” she says. “We’re just slowly learning more about the natural systems and how we can try and channel work to help mimic those systems.”

Kern Ewing, an ecology professor at the University of Washington, cautions that mimicking healthy firmly-established wetlands isn’t easy.

As we walk out into the wetland the university created in the mid-90’s to offset those it destroyed to create the satellite campus in Bothell, Ewing describes what’s growing around us. “There’s red alder, there’s poplar, cottonwood and a lot of willows. The willows and poplars and red alder and cottonwoods grow pretty fast. The conifers take a long time to grow.”

It took 15 years to get this wetland functioning, and cost the university about $8 million. Ewing says this is not a process that can be rushed.

“I think that there’s some important drawbacks to mitigation banking in that it takes a long time for the mitigation bank to get up to speed,” he says.

It’s possible to create a wetland full of shrubs and reeds within the 10-year time frame set by the Washington Department of Ecology for wetland bankers. But Ewing says there are a lot of different kinds of wetlands and the older forested ones are increasingly hard to come by.

“If you want a forested wetland, forests take a long time to grow,” he says. “If the wetland bank can hang around for 40 or 50 years and that still works for their business plan, you know, if you want a coniferous forested wetland — it’s going to take a lot of years.”

Creating a wetland isn’t as easy as adding water and letting nature take hold. It’s a process that involves monitoring and management over an extended period of time. Mitigation banking provides one framework to prevent net loss of wetlands in the region, but the results aren’t in just yet.

© 2011 KUOW
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