The EPA in late March announced requirements that would encourage developers to compensate for the destruction of wetlands or streams by paying for the restoration or creation of new ones elsewhere, sometimes many miles away.

The approach, which emphasizes linking wetlands destruction and replacement efforts across expansive watersheds, has been a contentious issue since its proposal two years ago.

The EPA and the U.S. Army Corps of Engineers, in announcing the regulation's final approval, said that it will help to replace wetlands and streams that are unavoidably destroyed or severely impacted by construction or other activities.

"It will accelerate our wetlands conservation effort by establishing a more effective, consistent mitigation process," said Benjamin Grumbles, the EPA's assistant administrator for water.

The regulation encourages the expanded use of so-called "mitigation banking" where a developer can obtain a permit to destroy a wetland or stream if the developer agrees to invest in wetland creation or enhancement elsewhere. This approach has resulted in the creation of businesses that specialize in wetlands creation for a price.

While the regulation establishes standards for a number of mitigation approaches for lost wetlands, it emphasizes a preference for mitigation banking. "Sometimes you get greater ecological success...and increased watershed health by looking offsite," away from where a wetland is destroyed, Grumbles said.

Environmentalists worried the new mitigation policy could encourage wetlands destruction and overall wetlands loss.

"There's nothing in here that says we're going to improve mitigation. It's just going to be easier and cheaper," said Julie Sibbing, a wetlands expert at the National Wildlife Federation. "And the cheaper it is to mitigate, the more economic it is to buy land that has wetlands on it and destroy them."

She said mitigation banking is already being used, but the new federal rule will make it difficult to argue that a developer should be required to perform onsite mitigation instead. A wetland often is important to a local ecosystem and "it doesn't help to move it 100 miles away."

With the new regulation, the business of wetland mitigation banking is expected to prosper.

George Howard, who has such a business in North Carolina, said "the vast amount" of mitigation banking involves not creating new wetlands, but restoring wetlands that have disappeared. "There are millions of acres that have been ditched and drained for agriculture that are no longer wetlands, but can be easily be restored," he said.

The National Academy of Sciences, in a report, has encouraged the development of watershedwide mitigation programs, and the EPA said the report's recommendations were taken into account in the new regulation.

The EPA and Army Corps said the new rules will increase public participation in the process and require increased monitoring of mitigation projects.

Shortly before the new rule was proposed in 2006, the General Accountability Office, Congress' investigative arm, found that the Army Corps could not ensure that 40,000 acres of wetland restoration work, required annually, was being done.