(1) It is the policy of the department to avoid or mitigate adverse environmental impacts which may result from its decisions.

(2) If an action is subject to SEPA, including an activity or activities requiring a permit from the department, and is reasonably likely to have an adverse environmental impact as identified in an environmental document, the department will:

(a) Require reasonable alternatives to the action and/or proven measures which will mitigate or eliminate the identified potential adverse impact, and make such alternatives and/or proven mitigation measures conditions of the department's approval; or

(b) Deny the proposal if significant adverse impacts as identified in a final or supplemental environmental impact statement prepared under chapter 197-11 WAC are not satisfactorily avoided or mitigated by proven techniques.