Natural Resource Damage Assessment: Methods and Cases

Creek and the cultural importance of Panther Creek fish to certain Native American tribes.
Damages were determined using a compensatory restoration approach. The service-toservice
scaling methodology used in this case calculates the size of the compensatory restoration
project necessary to ensure that the present discounted quantity of replacement services is equal
to the present discounted quantity of services lost during the time between the beginning of the
injury and the accomplishment of primary restoration. The key to this approach is that it equates
quantities, rather than values, of services lost and restored.
In the damage assessment and in the settlement, primary and compensatory restoration
activities were assumed to be conducted concurrently, since that approach was deemed to be
cost-effective. It was also assumed that water quality would return to baseline conditions in 2005
as a result of remediation conducted under the auspices of the U. S. EPA.
The trustees established a baseline by determining that, but for the contamination, there
would have been a population of 200 adult Chinook salmon spawning in Panther Creek each
year. The trustees selected the Chinook salmon population as the baseline measure for all the
environmental services lost because of the contamination, on the assumption that salmon vitality
is a good measure of the overall health of the habitat. This assumption makes sense because the
conditions necessary for salmon vitality also support the other fish and streambed resources that
the mine damaged.
The baseline was used to identify actions that would return the salmon population to
baseline and compensate for losses due to reduced fish populations between 1980 and the date
when fish populations were restored to the baseline. Using a salmon life-cycle model, the
trustees estimated that if salmon recovery efforts began in 2005, baseline populations would be
restored in 2021. However, in order to compensate for interim losses, salmon populations need
then to be restored to levels exceeding the baseline. The trustees calculated the present value of
the total number of salmon years lost since 1980, which is 200 (baseline number) times 15 years
times 3% per year, and equated that to the present value of a certain number of salmon years
above the baseline over the life of the restoration project. The responsible parties therefore were
required to provide that extra amount of restored salmon years to compensate for the salmon
years that they destroyed.
Settlement: The PRPs agreed to:
• Clean up the mine site and restore water quality according to a cleanup program
selected by the EPA
• Implement a Biological Restoration and Compensation Plan (BRCP) to restore,
enhance, and create anadromous and resident salmonid habitat in site-impacted and outof-basin
streams
• Put $2.5 million in a fund for hatchery operation
• Pay $1-2 million for trustee oversight costs associated with the BRCP
• Pay government agencies $328,742 for past response costs associated with the site
• Pay $4.7 million for reimbursement of damage assessment costs
Restoration activities in Panther Creek are being designed to improve water quality;
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