Biodiversity offsets provide a mechanism for maintaining or enhancing environmental values in situations where development is sought despite detrimental environmental impacts. They seek to ensure that unavoidable negative environmental impacts of development are balanced by environmental gains, with the overall aim of achieving a net neutral or positive outcome. Once the decision has been made to offset, multiple issues arise regarding how to do so in practice. A key concern is site selection. In light of the general aim to locate offsets close to the affected sites to ensure that benefits accrue in the same area, what is the appropriate spatial scale for identifying potential offset sites (e.g., local, ecoregional)? We use the Marxan site-selection algorithm to address conceptual and methodological challenges associated with identifying a set of potential offset sites and determining an appropriate spatial scale for them. To demonstrate this process, we examined the design of offsets for impacts from development on the Jonah natural gas field in Wyoming.