02/16/2018 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB267 | |
| Presentation(s): Pebble Mine Status Update | |
| HB217 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 267 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 217 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 16, 2018
1:06 p.m.
MEMBERS PRESENT
Representative Andy Josephson, Co-Chair
Representative Geran Tarr, Co-Chair
Representative John Lincoln, Vice Chair
Representative Harriet Drummond
Representative Justin Parish
Representative DeLena Johnson
Representative David Talerico
Representative Mike Chenault (alternate)
MEMBERS ABSENT
Representative Chris Birch
Representative George Rauscher
Representative Chris Tuck (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 267
"An Act requiring the release of certain records relating to big
game hunters, guided hunts, and guided sport fishing activities
to municipalities for verification of taxes payable; and
providing for an effective date."
- HEARD & HELD
PRESENTATION(S): PEBBLE MINE STATUS UPDATE
- HEARD
HOUSE BILL NO. 217
"An Act relating to the Alaska Food, Drug, and Cosmetic Act;
relating to the sale of milk, milk products, raw milk, and raw
milk products; and providing for an effective date."
- MOVED CSHB 217(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 267
SHORT TITLE: RELEASE HUNTING/FISHING RECORDS TO MUNI
SPONSOR(s): REPRESENTATIVE(s) EDGMON
01/12/18 (H) PREFILE RELEASED 1/12/18
01/16/18 (H) READ THE FIRST TIME - REFERRALS
01/16/18 (H) CRA, RES
01/25/18 (H) CRA AT 8:00 AM BARNES 124
01/25/18 (H) Heard & Held
01/25/18 (H) MINUTE(CRA)
02/08/18 (H) CRA AT 8:00 AM BARNES 124
02/08/18 (H) Moved CSHB 267(CRA) Out of Committee
02/08/18 (H) MINUTE(CRA)
02/14/18 (H) CRA RPT CS(CRA) 4DP 2NR
02/14/18 (H) DP: DRUMMOND, LINCOLN, KREISS-TOMKINS,
PARISH
02/14/18 (H) NR: TALERICO, SADDLER
02/16/18 (H) RES AT 1:00 PM BARNES 124
BILL: HB 217
SHORT TITLE: RAW MILK SALES; FOOD EXEMPT FROM REGS
SPONSOR(s): REPRESENTATIVE(s) TARR
04/07/17 (H) READ THE FIRST TIME - REFERRALS
04/07/17 (H) RES, FIN
04/12/17 (H) RES AT 1:00 PM BARNES 124
04/12/17 (H) Scheduled but Not Heard
04/13/17 (H) RES AT 5:00 PM BARNES 124
04/13/17 (H) -- Continued from 4/12/17 --
04/14/17 (H) RES AT 1:00 PM BARNES 124
04/14/17 (H) <Bill Hearing Postponed>
04/17/17 (H) RES AT 1:00 PM BARNES 124
04/17/17 (H) Heard & Held
04/17/17 (H) MINUTE(RES)
01/31/18 (H) RES AT 1:00 PM BARNES 124
01/31/18 (H) Heard & Held
01/31/18 (H) MINUTE(RES)
02/07/18 (H) RES AT 1:00 PM BARNES 124
02/07/18 (H) Heard & Held
02/07/18 (H) MINUTE(RES)
02/14/18 (H) RES AT 1:00 PM BARNES 124
02/14/18 (H) Heard & Held
02/14/18 (H) MINUTE(RES)
02/16/18 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
TIM CLARK, Staff
Representative Bryce Edgmon
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 267 on behalf of
Representative Bryce Edgmon, sponsor.
MARK HAMILTON, Executive Vice President for External Affairs
Pebble Partnership
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "A New Path Forward," and answered questions.
MARIT CARLSON-VAN DORT, Director of Regional Affairs
Pebble Partnership
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the Pebble Mine
status update.
ABE WILLIAMS, Commercial Fisherman
Anchorage, Alaska
POSITION STATEMENT: Spoke of the value of the Pebble Mine
project to the communities of Southwest Alaska.
WAYNE FLOYD, Co-owner
Cool Cache Farms
Nikiski, Alaska
POSITION STATEMENT: During the hearing of HB 217, testified in
support of Amendment 2.
CHRIS FLICKINGER, Spokesperson
Kodiak Chapter
Alaska Farm Bureau, Inc.
Kodiak, Alaska
POSITION STATEMENT: During the hearing of HB 217, testified in
support of Amendment 2.
ACTION NARRATIVE
1:06:57 PM
CO-CHAIR ANDY JOSEPHSON called the House Resources Standing
Committee meeting to order at [1:06] p.m. Representatives
Josephson, Chenault (alternate), Parish, Talerico, Drummond,
Johnson, Lincoln, and Tarr were present at the call to order.
HB 267-RELEASE HUNTING/FISHING RECORDS TO MUNI
1:08:01 PM
CO-CHAIR JOSEPHSON announced that the first order of business
would be HOUSE BILL NO. 267, "An Act requiring the release of
certain records relating to big game hunters, guided hunts, and
guided sport fishing activities to municipalities for
verification of taxes payable; and providing for an effective
date."
[Before the committee was the committee substitute (CS) for HB
267(CRA), labeled 30-LS0808\J.]
1:08:12 PM
TIM CLARK, Staff, Representative Bryce Edgmon, Alaska State
Legislature, on behalf of Representative Edgmon, sponsor of HB
267, paraphrased from the following sponsor statement [original
punctuation provided]:
For boroughs and other municipalities that bring in
revenues through levies on fish and game guiding,
CSHB267(CRA) will provide a tool to help confirm that
activities within their jurisdictions subject to
taxation are being accurately reported to them. The
bill would allow municipalities access to certain
records collected by the state that relate to big game
hunters, guided hunts, and guided sport fishing for
the purpose of verifying taxes payable. All such
information would remain confidential.
The access that CSHB267(CRA) permits municipalities is
modeled after long-existing provisions in AS
16.05.815(a)(4) and AS 43.75.133, both of which allow
local governments to review certain records, reports,
and returns to verify payment of local commercial
fishing taxes.
With state-government cutbacks resulting in greater
responsibilities and costs being borne by local
governments, all necessary resources should be made
available to our municipalities to ensure they are
receiving the revenues due to them according to their
local ordinances.
MR. CLARK pointed out at the time the information is made
available to municipalities, the strict confidentiality required
of state agencies would apply to the municipalities as well.
REPRESENTATIVE PARISH directed attention to [an email dated
2/15/18, provided in the committee packet] in opposition from
the Big Game Commercial Services Board (BGCSB), Division of
Corporations, Business and Professional Licensing, Department of
Commerce, Community & Economic Development, which stated its
concern about confidentiality.
MR. CLARK opined BGCSB would be less concerned about
confidentiality when apprised of [CSHB 267(CRA), Version J].
The bill was amended by the House Community and Regional Affairs
Standing Committee to clarify the confidentiality requirements;
furthermore, the consequences to an official for a breach in
confidentiality would constitute a class A misdemeanor.
CO-CHAIR JOSEPHSON asked whether municipalities feel they are
not getting revenue to which they are entitled.
MR. CLARK explained affected municipalities have very large
jurisdictions and may be unaware of all hunting and fishing
guiding activities. In addition, some guides may be unaware of
municipal or borough ordinances, and some may forget to pay
taxes or fees; however, most businesses will remit delinquent
taxes when notified.
CO-CHAIR JOSEPHSON observed some guides or transporters may work
outside the seat of government.
1:13:08 PM
MR. CLARK agreed and gave the example of regions that are
accessed by floatplane and not through an airport managed by a
borough.
REPRESENTATIVE JOHNSON asked whether there are other state tax
records to which municipalities have access.
MR. CLARK said certain Alaska Statutes allow municipalities
access to records regarding commercial fishing from the Tax
Division, Department of Revenue.
REPRESENTATIVE TALERICO observed from his experience most
municipal codes require a municipality to keep accurate records,
and also include confidentiality clauses; furthermore, general
accounting rules and standards are explicitly followed to
maintain accuracy for auditing purposes. He said the issue was
discussed thoroughly at the time the bill was heard by the House
Community and Regional Affairs Standing Committee, and expressed
his confidence in the conduct of municipalities.
1:17:21 PM
HB 267 was held over.
^PRESENTATION(S): Pebble Mine Status Update
PRESENTATION(S): Pebble Mine Status Update
1:17:55 PM
CO-CHAIR JOSEPHSON announced that the next order of business
would be a presentation by the Pebble Limited Partnership on the
status of the Pebble Mine.
1:19:55 PM
MARK HAMILTON, Executive Vice President of External Affairs,
Pebble Mine, provided a PowerPoint presentation entitled, "A New
Path Forward." He first presented the following observations:
• 1. The project is located on state land within the Lake
and Peninsula Borough, 200 miles southwest of Anchorage and
17 miles northwest of Iliamna; the project is located on
land that is open for mineral entry and the prospect should
be given full vetting; the deposit was discovered in the
late 1980s and work began by Northern Dynasty Minerals in
2004; the work has discovered a world class deposit of
copper, gold, and molybdenum
• 2. The partnership recognizes the cultural and commercial
importance of salmon to residents of Southwest Alaska, and
has undertaken environmental, engineering, and technical
work with a focus on understanding fish and water resources
affected by the project, work that has gone ignored
• 3. The partnership seeks the opportunity to submit plans
for permitting and reviewing processes in a manner similar
to other projects; on 12/22/17, the U.S. Army Corps of
Engineers (USACE) announced the beginning of the
environmental impact statement (EIS) process as set out by
the National Environmental Policy Act of 1969 (NEPA), and
in which the project will participate fully
• 4. All Alaskans should know the U.S. Environmental
Protection Agency's (EPA's) attempt to block the project
from filing its permits created an unscientific study to
justify its goal; the action to preemptively block the
project was a troubling precedent for all future
development in Alaska; a regulatory agency should not have
the ability to preemptively stop or approve a project; the
action has garnered much opposition from Alaska entities
and lawmakers
• 5. Many opinions about the project have been formed from
skewed stories and advertising, and without complete and
accurate information
1:23:40 PM
MR. HAMILTON presented three slides which were photos of Twin
Lakes that have been used in opposition advertising; however, he
said the photos are of property 85 miles from the project. Two
slides illustrated the actual project site in Bristol Bay -
which encompasses nearly 45,000 square miles - and an
illustration of the Bristol Bay watershed of 40,000 square
miles. An illustration of the Pebble Mine study area indicated
three sub-basins: North Fork Koktuli River, South Fork Koktuli
River, and Upper Talarik Creek, which encompasses 400 square
miles or 1 percent of Bristol Bay. Continuing to the project
permitting process, Mr. Hamilton presented a slide entitled,
"Project Development Timeline," and pointed out the project is
presently in the permitting process, including opportunities for
public involvement. He said USACE and the third-party
independent engineering and consulting firms selected by USACE
would establish the rules for the EIS. He characterized the
project as a much smaller mine, and presented a slide entitled,
"Pebble Project Description" that illustrated components of the
project, including the transportation corridor and gas pipeline.
Slides 15 and 16 depicted hypothetical mine sites by EPA that
were 4.2 square miles and 13.5 square miles. Slide 17 depicted
the current project plan of 5.9 square miles; the study area is
1 percent of Bristol Bay, and the mine is approximately 1.5
percent of 1.0 percent. A slide entitled, "Mine Operations"
illustrated the process of mining from excavating, hauling,
crushing ore to 6-inch pieces, grinding ore to powder, froth
flotation with the addition of chemicals, scraping from the
tailings pond, concentrate dewatering to final tailings,
gold/copper concentrate storage in sealed containers, and
shipping to the smelter. The next [untitled slide] was an
artist's rendition of the pit and overburden pile. A slide
illustrated water treatment plants which are a significant part
of a mine, and he explained the project would have two water
treatment facilities that would intercept any water reintroduced
to the environment; also pictured was the tailings pile and
seepage pond of the Gibraltar mine [British Columbia, Canada].
1:30:35 PM
Mr. Hamilton continued to a slide entitled, "Tailings Storage
Facility" and said the project would get its dam permit from the
Alaska Dam Safety Program, Division of Mining, Land and Water,
Water Resources Section, Department of Natural Resources,
although the dam looks more like one-half of a mountain. The
dam would be located at the tip of the tailings facility and is
the means to ensure the tailings pond does not overflow or give
way. Another rendition pictured the tailings facility and the
seepage pond designed with a French drain that is a flow-through
system to prevent a large build-up of water behind the dam. In
addition, about 12 percent of the tailings may be acid-
generating and thus would be in another pond covered with water.
Further, there would be inner and outer walls to contain
overflow in the pit. Mr. Hamilton referred to [the Mount Polley
mine disaster in British Columbia, Canada], noting the Pebble
Partnership learned a great deal about the mine disaster in
order "to explore the failure scenario" because of the risk to
the mine (slides 24 and 25). He pointed out the Mount Polley
mine tailings dam did not have a flow-through design - but had a
1:1.5 slope instead of 1:3 - and was used to hold water.
Continuing to slides 27-35, he restated the Pebble Mine study
area consists of about 1 percent of the Bristol Bay watershed;
in terms of fish production, the affected watershed is less than
0.5 of 1 percent, and of that 82 percent exists in Upper Talarik
Creek; however, mine facilities have been moved from Upper
Talarik Creek - except for a road - leaving a small number of
fish at risk. Therefore, all of the tailings storage and risk
involves the North Fork of the Koktuli River. Although the
project is not fully designed, EPA reported in the case of a
breach, over the course of one decade, physical habitat would
travel 9 to 30 [kilometers] down the North Fork of the Koktuli
River before it enters the Mulchatna River. He remarked:
But, remember that the EPA specifically said a couple
of things that apply. One is, specifically, [EPA]
said they would not use the best engineering, and
number two, they would not allow remediation. Well,
Mount Polley began very, very quickly with
remediation, so we're looking at a tailing[s] facility
that could possibly threaten .02 percent of all the
sockeye in Bristol Bay. Remember they said no
mitigation - you're legally and morally obligated to
do remediation and that's what Mount Polley did.
1:35:38 PM
MR. HAMILTON further explained Mount Polley immediately began
revegetation and quickly restored the water, and the plants and
fish returned one year later (slides 37-39). For the Pebble
project, environmental management continues, including updating
permits and favorable regulatory inspections. He said the
project transportation system is designed to minimize any
ecological impact by utilizing an ice-breaking ferry instead of
a road. He presented a slide entitled, "Transportation System"
and a slide entitled "Ice-Breaking Ferry" that pictured various
ferries and gave an example of their use. Mr. Hamilton
concluded the use of a ferry would result in fewer bridge
crossings of streams, fewer roads, and less impact on wetlands
[slide entitled, "Ferry Reduces Wetland Impact"]. Returning to
the concentrate in the mine, a slide entitled, "Mineral
Concentrate in Covered Containers" pictured concentrate loaded
in a truck and placed in sealed containers for transfer into the
hold of a ship; the ships would travel to a smelter in the Far
East every two weeks. An illustration of port operations in
Turnagain Arm was presented. He continued to energy
infrastructure, noting the project needs about 230 megawatts to
power the mine; natural gas would be supplied by a 188-mile-long
pipeline from existing natural gas infrastructure on the Kenai
Peninsula to the mine, further energizing Southwest Alaska. For
example, the project would provide electric power to villages at
cost via state-funded infrastructure. Expansion of electric
power and natural gas would present a business opportunity for a
Native corporation to form a utility. Moreover, Mr. Hamilton
suggested additional power would enhance the economic value of
the Bristol Bay fishery. Because of the permitting time and
construction period, the project has three years to prepare
workers for construction jobs, and sufficient time to educate
the mining engineers needed for mine production.
1:41:15 PM
Mr. Hamilton said the Pebble Mine is not the biggest in Alaska
(slide 52). Although the price of ore seven years in the future
is unknown, the mine would be a boon to the Lake and Peninsula
Borough, adding approximately $20 million into the borough's
economy. He estimated the project's budget at $400 million per
year, providing over 750 direct jobs, and 1,500-2,000 seasonal
and construction phase jobs, at an average mining wage of
$100,000. He stressed mining jobs are highly desired in the
region and workers are exceptional. A slide entitled, "Mining &
Fish Co-Exist" illustrated mine locations in the state, and he
said mining and fish co-exist in every mine in the state. He
turned to environmental issues and said copper is increasing in
value because of electric cars and cell phones; mining cannot
continue only in countries without environmental protections.
Speaking not as a representative of Pebble Mine, but as an
Alaskan, he urged the committee to review the methodology of
opponents to development, and their tactics such as those used
against the development of the Pebble Mine and the Arctic
National Wildlife Refuge.
1:44:45 PM
REPRESENTATIVE CHENAULT spoke of Mr. Hamilton's previous careers
and expressed his interest in why Mr. Hamilton "has taken on
this project."
MR. HAMILTON responded he was happy in retirement; however, he
spent one month reviewing the circumstances of the project and
then decided "this is a wrong that needs to be righted."
REPRESENTATIVE PARISH asked how the tailings storage would be
adapted to cold weather.
MR. HAMILTON said the ice-breaking ferry would cross the lake
once per day during production carrying sealed containers of
concentrate. For the tailings facility there is less concern
about dust in winter, but snowpack and snowmelt must be closely
monitored. He concluded cold presents no effect.
REPRESENTATIVE PARISH asked about the tailings operations at the
Red Dog mine, the Fort Knox mine, and the Pogo mine.
1:48:23 PM
MR. HAMILTON stated all have tailings facilities and Fort Knox
also has a leach pile; all monitor water usage and storage due
to their importance to mine operations.
CO-CHAIR JOSEPHSON recalled testimony [presented before the
committee on 2/27/17] by United Tribes of Bristol Bay (UTBB)
informing the committee that 150 borehole sites were visited and
107 were documented, [71] with environmental issues. Co-Chair
Josephson surmised from looking at slides of the sites - and
from testimony from a UTBB consultant - the boreholes did not
look not fully restored, which is why the Department of Natural
Resources (DNR) required "a special bond for Pebble that it
previously hadn't required." He asked whether Pebble asserts
the borehole sites were fully restored, and for information
related to the exploration bonds that were required.
1:50:46 PM
MR. HAMILTON said the Pebble boreholes have all been inspected
and closed; in fact, boreholes were shown in some of the slides
he presented, but cannot be seen. Like a closed oil well,
everything around a closed borehole is restored. He advised
remediation is planned at the start of a project and a bond is
posted to ensure a mine is closed and environmentally evaluated.
CO-CHAIR JOSEPHSON expressed his understanding DNR required
Pebble to post an atypical cash bond.
MR. HAMILTON opined DNR increased the level of environmental
protection.
CO-CHAIR JOSEPHSON read a portion of a letter dated 11/30/16 to
Andy Mack, commissioner, DNR, from Robert Heyano, president,
UTTB, as follows:
In short, our scientists found acidic soils with high
metal concentrations, leaking wells, dead vegetation,
and improper drill casing closures at inspected drill
sites; all causes of concern for safety and water
quality in Bristol Bay.
CO-CHAIR JOSEPHSON questioned whether Mr. Hamilton's position is
all of Pebble's 1,700 drill sites have been sealed and fully
inspected.
MR. HAMILTON said that is absolutely true; the project has been
inspected 57 times by DNR and the Alaska Department of Fish &
Game.
CO-CHAIR JOSEPHSON asked whether Pebble needs to reserve water
rights to Upper Talarik Creek, even though the current project
does not include using that part of the basin for tailings or
development.
MR. HAMILTON acknowledged there is the possibility as the mine
is dug, some water flowing into Upper Talarik Creek may be
diverted into the mine; therefore, the project must "claim
impact," although no facilities would be built at that location.
However, there would be the impact of the road across Upper
Talarik Creek, and he stressed the importance of impact to this
area because 82 percent of the sockeye are in the creek. In
addition, the area is very important for subsistence and
recreational fishing, thus permits are required. However, he
said the water would have to flow uphill to reach Upper Talarik
Creek.
1:55:42 PM
CO-CHAIR JOSEPHSON recalled the new project plan proposes the
operational phase of the mine would be 20 years; he asked
whether Pebble would be willing to covenant and contract to a
system "that would hold Pebble to this 20-year mine plan."
MR. HAMILTON restated the only mine plan submitted to permit is
to dig for sixteen years, and then to use low grade ore for the
last four years; any other plans would require new permitting.
He said "... I really can't speak for the leadership of Northern
Dynasty, but I would suspect that they would not choose to do
that."
CO-CHAIR JOSEPHSON, for clarification, restated Northern Dynasty
would not choose to reach an agreement with the state to "fix
the footprint" in a development phase.
MR. HAMILTON said, "No, they would fix the footprint ..." In
further response to Co-Chair Josephson, he opined Northern
Dynasty would not ask for an extension of the new operational
plan - or expand the footprint of the mine - for several
reasons: the mine is designed for 20 years; the [Pebble] mine
may operate extremely well for years, but there may be other
[mining operations] in Bristol Bay; the future is unknown. He
said, "... I can't imagine it. We could ask that to the
leadership of Northern Dynasty, but that's my opinion, I can't
imagine why you'd do such a thing."
CO-CHAIR JOSEPHSON turned attention to the application fees
Pebble has paid for miscellaneous land use permit (MLUP)
applications that were submitted to the Office of Project
Management and Permitting (OPMP), DNR.
MR. HAMILTON explained the standard procedure is that a project
can "pay to, in essence, move up ... the chain" in order to
supplement [for the cost of] the department's extra workload.
He spoke in support of the state's procedure, although the
project would "get nothing from it." Further, the NEPA process,
and oversight by USACE, depoliticizes the process and selects a
third-party engineering firm that is paid by Pebble. He
concluded Pebble cannot - and does not expect to - gain any
value from the policy.
2:00:30 PM
REPRESENTATIVE TALERICO returned attention to the design of the
tailings dam.
MR. HAMILTON said the design is a 3:1 slope, which is a Class I
(high) dam; although there are no faults beneath the mine
footprint, the dam is designed as if there were. He advised the
project anticipates the Alaska Dam Safety Program will require
Class I dam engineering standards for all tailings facilities in
the future.
REPRESENTATIVE TALERICO advised a 3:1 slope is the angle of
repose required for pulverized sandstone and thus is a
substantial stability factor.
MR. HAMILTON restated the dam design is a lesson from Mount
Polley, and reviewed its features.
CO-CHAIR JOSEPHSON expressed his understanding there are many
other risks feared by the residents of Southwest Alaska, such as
dewatering.
MR. HAMILTON said correct. However, his presentation is focused
on the risk of a dam failure because a dam failure that destroys
the fishery of Bristol Bay frightens the most people.
REPRESENTATIVE LINCOLN posed a scenario following an extension
of the 20-year mine life plan, and asked for amounts of the
known or estimated mining reserves located in the areas adjacent
to the existing site, at the initial production rate.
MR. HAMILTON said there are enormous reserves in the region.
Initially, the proponents of the mine focused on mining $400
billion of ore; in fact, the ore body is the largest undeveloped
copper and gold find in the world. However, about four years
ago, a mining consultant suggested designing a smaller mine with
the fewest environmentally damaging aspects of any mine ever
built; for example, no use of cyanide to mine the last 15
percent of gold.
2:06:22 PM
REPRESENTATIVE LINCOLN related others' concern about a smaller,
responsible mine that expands production once in place. He
asked what opportunities are available to the local population
and the borough to address future expansion.
MR. HAMILTON said the NEPA process includes extensive periods of
public comment; in addition, expansion would require a new
permitting process with the additional burden of the cumulative
effects of the first mine. He restated the future is unknown.
REPRESENTATIVE LINCOLN asked what opportunities there would be
for local residents or boroughs located closest to the mine to
comment on a proposed expansion.
2:08:25 PM
MR. HAMILTON stated at the time [of a proposed expansion], the
mine's record will have determined its future.
CO-CHAIR JOSEPHSON observed the issuance of a permit is not a
democratic process and therefore, strong local and statewide
opposition would not necessarily preclude the mine from moving
to a different phase of development.
MR. HAMILTON agreed; however, true environmental concerns
brought forward through the EIS process must be successfully
addressed.
REPRESENTATIVE DRUMMOND returned attention to a slide entitled,
"Tailings Storage Facility" and asked for a definition of PAG
tails.
MR. HAMILTON explained PAG is an acronym for potentially acid
generating rock; he restated about 12 percent of the tailings
come from PAG ore, so to prevent PAG tailings from forming acid,
they are covered with water.
REPRESENTATIVE DRUMMOND surmised 12 percent of the tailings will
remain permanently covered with water after the project is
closed.
MR. HAMILTON suggested PAG tailings may be processed by a
heretofore unknown methodology; otherwise, when the mine is
closed, PAG tailings will remain in the bottom of the pit,
covered with water, in perpetuity.
REPRESENTATIVE DRUMMOND questioned whether the main embankment
illustrated would be 600 feet above the original ground level.
2:12:20 PM
MR. HAMILTON explained the embankment would start at about 250
feet and would increase in height by about 25 feet every two
years to contain tailings and water. In further response to
Representative Drummond, he said the initial construction of the
embankment would be 250 feet above the original ground.
REPRESENTATIVE DRUMMOND asked how the concentrate would be
loaded onto the ferry.
MR. HAMILTON said the ferry that crosses Lake Iliamna would
carry the trucks loaded with concentrate; the trucks would then
drive 35 miles to the port for storage. In further response to
Representative Drummond, he confirmed the project would need to
dredge in Lower Cook Inlet for the loading operation.
REPRESENTATIVE PARISH asked for the location of the smelter.
MR. HAMILTON restated the smelter would be in the Far East.
REPRESENTATIVE PARISH asked how the project would accommodate
intermittent permafrost and changes due to warming Arctic
temperatures.
MR. HAMILTON said he would provide a specific answer from an
engineer.
2:17:16 PM
REPRESENTATIVE PARISH asked whether Pebble would work with
Donlin [Gold] on a [natural] gas pipeline to the Donlin
prospect.
MR. HAMILTON said he would provide information in this regard.
REPRESENTATIVE PARISH inquired as to the status of support from
local Tribes.
MR. HAMILTON advised Pebble is working closely with two Tribal
governments in the Lake and Peninsula Borough; support is strong
as residents are looking forward to jobs that would stop the
outflow of residents from villages to cities.
CO-CHAIR JOSEPHSON recommended members refer to page 70 of
[Attachment] D of the December 2017, USACE application, [4.1.4
Closure/Post-Closure Phase, 4.1.4.1 Water Management Plan],
which read as follows [in part]:
The pit will continue to fill until the pit lake is
formed. Surface runoff from the walls may result in
metal leaching. Water quality is expected to be
acidic with elevated metals due to overall oxidation
of the open pit walls. The pit lake water quality
will be monitored, and appropriate precautions will be
taken to manage wildlife activity on the lake. ... The
water level should never rise above 50 feet below the
elevation in which ground water flows ...
CO-CHAIR JOSEPHSON said the foregoing causes concern, along with
a reference to a possible need "to change altogether the water
treatment plan as required."
2:21:11 PM
MR. HAMILTON explained the project seeks to fill the pit
completely and store all the ore underwater; however, the water
level must be 50 feet down, to prevent the water pressure in the
pit from reversing the flow of ground water that has come in
contact with the exposed rocks. He said the abovementioned
permit application to USACE will be investigated and will reveal
less environmentally damaging practical alternatives for
consideration. and will become part of the EIS.
CO-CHAIR JOSEPHSON advised the Berkley Mine in Montana used a
similar model and is a source of concern due to leaching.
MR. HAMILTON restated Pebble will be required to address this
issue as part of the EIS permitting process.
REPRESENTATIVE JOHNSON asked whether the tailings [embankment]
would be vegetated.
MR. HAMILTON said vegetation would grow on the slope, but not on
the tailings; ultimately, the embankments would be covered with
overburden which would support vegetation.
REPRESENTATIVE JOHNSON asked whether the containers on the ferry
would be sealed, and who has oversight on the plan to cross Lake
Iliamna.
MR. HAMILTON responded the containers are sealed; he was unsure
about oversight, or how an accident on the ferry would be
handled, but said that issue would be addressed in the EIS.
REPRESENTATIVE LINCOLN returned attention to the tailings
facility and observed the east embankment is 60 feet in
elevation; he surmised the east embankment is an extension of
the natural rise in elevation.
MR. HAMILTON indicated yes.
REPRESENTATIVE LINCOLN asked whether it is legally possible to
enact a local hire preference for a project on state land.
2:27:10 PM
MR. HAMILTON stated the issue is preparing workers so that local
organizations have the capacity to fill jobs that become
available. He favored employing locals by any organization in
order to lower transportation costs. He said there is time to
train workers for all of the needed skills, provided there is
support for the project. In fact, Pebble and the Arctic Slope
Regional Corporation (ASRC) have begun to investigate the
existing and potential capacities of the village corporations
within the Lake and Peninsula Borough that could compete for
mine jobs.
REPRESENTATIVE LINCOLN cautioned local hire may not be cost
effective because transportation costs are high between
villages, and restated his question about local hire provisions
for projects not on private land.
CO-CHAIR JOSEPHSON observed the mining plan requires access to
land owned by regional Native corporations and the state; he
questioned how Pebble would gain access to all of the land
needed to move its product to the west side of Cook Inlet.
MR. HAMILITON acknowledged about 65 percent of the land belongs
to the state and about 35 percent belongs to one of two regional
corporations, and said negotiations are ongoing in this regard.
CO-CHAIR JOSEPHSON turned to the issue of financing $5 billion
to $6 billion in construction costs, and asked whether Pebble
intends for the state to invest in the mine.
MR. HAMILTON said no. The project has recently partnered with
First Quantum Minerals, which is a company experienced in the
construction of copper mines and that has a policy of involving
local residents in its work. Proposed are investments of $150
million per year for three years, followed by a payment of $1.3
billion, in order for First Quantum to own half of the project.
CO-CHAIR JOSEPHSON noted Pebble has asked the state to help
build a powerline.
2:34:00 PM
MR. HAMILTON said, "quite likely." He suggested the source of
the capital to build powerlines to transmit power to a village
utility could come from the Power Cost Equalization (PCE)
program because this would be a one-time expense that would
eliminate the need for PCE.
REPRESENTATIVE CHENAULT cautioned the committee against
restricting a project from future expansion because the state
has greatly benefitted from expansion [by the oil and gas
industry] at Prudhoe Bay.
2:36:00 PM
CO-CHAIR JOSEPHSON pointed out the difference in tax structure
between the oil and gas industries and the mining industry.
REPRESENTATIVE PARISH requested a future response regarding
Pebble's plan to address acid generating dust disposal during
the winter months.
2:36:18 PM
MARIT CARLSON-VAN DORT, Director of Regional Affairs, Pebble
Partnership, in response to Representative Parish, said the
positions of local Tribes adjacent to the project site differ in
response to the mine from opposition to neutrality; some of the
Tribes and village corporations located nearer the project are
neutral and support a full NEPA permitting process that
evaluates the project on its merits. In response to
Representative Lincoln, she confirmed there is no statutory
requirement for local hire preference because the project is not
located on Alaska Native Claims Settlement Act (ANCSA) land;
however, Pebble intends to maximize local hire during
negotiations with landowners related to right-of-way access. In
response to Co-Chair Josephson, regarding access to land to
complete the route of the project, she said Pebble has entered
into negotiations with some of the landowners and surface rights
owners. Ms. Carlson Van-Dort noted one of her primary roles is
to explore ways the Pebble Partnership can maximize the economic
benefit of the project for those living in the region, and near
the project site, through public discussion about contracting
opportunities for village corporations and all local businesses.
2:39:16 PM
ABE WILLIAMS informed the committee he is a fourth-generation
commercial fisherman born and raised in Bristol Bay. He has
served fifteen years as president of a village corporation, six
years on the Bristol Bay School District school board, and three
years on the Bristol Bay Borough assembly. In 2010, Mr.
Williams became affiliated with the Pebble project and he noted
its value to the region and to the residents located closest to
the site of the project. He acknowledged there are many
concerns from fisherman who participate in the Bristol Bay
fishery; however, he confirmed there is local interest in the
project by the communities of Southwest Alaska. Rural
communities are losing population and some local schools are
closing due to the serious economic issues affecting the state
and specific areas of the state. For any project located in a
region such as Southwest Alaska, it is important that the state
and the federal government review the project for its impact on
local residents. He said there is support for the project from
those whose voices have not been heard, and expressed hope their
testimony would be brought forward during the NEPA permitting
process.
CO-CHAIR JOSEPHSON asked whether the Bristol Bay Native
Corporation (BBNC) will allow access to the subsurface lands.
MR. WILLIAMS said he could not speak on behalf of the management
of BBNC, although he is a shareholder. He noted [profit-sharing
provisions of ANCSA], and said, "... Bristol Bay Native
Corporation is an owner of subsurface right and I, I think that
could quite possibly create some angst if they weren't, in fact,
utilizing those resources for sale or for the benefit of not
only their own shareholders, but at the same time, other
regional corporations and village corporations within the State
of Alaska.
HB 217-RAW MILK SALES; FOOD EXEMPT FROM REGS
2:43:35 PM
CO-CHAIR JOSEPHSON announced that the final order of business
would be HOUSE BILL NO. 217, "An Act relating to the Alaska
Food, Drug, and Cosmetic Act; relating to the sale of milk, milk
products, raw milk, and raw milk products; and providing for an
effective date."
CO-CHAIR JOSEPHSON handed the gavel to Co-Chair Tarr.
CO-CHAIR TARR informed the committee an amendment provided in
the committee packet [related to labeling Alaska food products
(raw milk), and discussed at the hearing of 2/14/18] would not
be moved for adoption.
2:45:22 PM
CO-CHAIR TARR moved to adopt Amendment 2, labeled 30-LS0593\J.3,
Wayne, 2/15/18.
CO-CHAIR JOSEPHSON objected for discussion purposes.
CO-CHAIR TARR said due to the growing interest in farm tours and
visits, there is a need to protect farmers who seek to host
tours on their farms. Currently, AS 09.65.290(e)(3), limits
liability related to sports or recreational activities, and the
bill seeks to add farm touring to the list of activities in this
statute. Further, Amendment 2 adds the definition of farm
touring on page 2, lines 1-3, which read:
(4) "farm touring" means briefly visiting a farm
to observe or experience aspects of raising, growing,
producing, cultivating, harvesting, or processing an
agricultural product as a tourist, without receiving
pay.
CO-CHAIR TARR explained the amendment would also allow a tourist
to pick fruit or flowers on a farm.
REPRESENTATIVE DRUMMOND asked whether dinners served on a farm
would be considered farm touring as defined by the amendment.
CO-CHAIR TARR said yes.
2:47:50 PM
WAYNE FLOYD, Co-owner, Cool Cache Farms, said his farm in
Nikiski specializes in peonies and food products. He expressed
his support for the amendment because the agricultural industry
is now expanding into [farm touring] which is a new industry;
agriculture in Alaska is becoming known and is attracting
visitors. Farms carry liability insurance, but insurers raise
rates on policies for tourism activities such as selling U-pick
products. Thus, the amendment would help farmers keep their
expenses down, so they can compete with products from the Lower
48. Mr. Floyd pointed out because the tourism industry already
has protection, adding farm tourism is logical and would help
small farms grow.
REPRESENTATIVE PARISH asked how often injuries are associated
with U-pick activities.
MR. FLOYD explained farms with beehives may have bees on flowers
that can lead to stung noses, but farmers want to have insurance
against reasonable and valid claims.
2:52:08 PM
CHRIS FLICKINGER, Spokesperson, Kodiak Chapter, Alaska Farm
Bureau, Inc., said people stop by at his ranch and want to help
brand the animals, which could lead to injuries.
2:52:51 PM
CO-CHAIR JOSEPHSON withdrew his objection. There being no other
objection, Amendment 2 was adopted.
CO-CHAIR TARR reviewed HB 217, as amended, which includes
provisions to allow the Department of Natural Resources to
market the Alaska Grown trademark; provides product procurement
preference permissive from 7 percent to 15 percent; creates
consistent statewide policy for the cottage food industry with
informed consumer consent; included a provision for farm
touring.
2:54:16 PM
CO-CHAIR JOSEPHSON moved to report the committee substitute for
HB 217, labeled 30-LS0593\J, Wayne, 2/6/18, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE TALERICO objected for discussion purposes. He
stated his interest in an amendment previously discussed [but
not moved for adoption related to labeling food products (raw
milk)] which addresses an issue critical to local producers. He
urged for continued work on this issue.
CO-CHAIR TARR suggested a subcommittee representing all areas of
the state could continue hearing testimony from farmers on the
[labeling of food products and] raw milk issue.
REPRESENTATIVE PARISH directed attention to the bill on page 2,
lines 26-28, which read [in part]:
"THIS PRODUCT WAS MADE IN A PRIVATE FACILITY THAT IS
NOT SUBJECT TO STATE OR MUNICIPAL REGULATION";
REPRESENTATIVE PARISH stated his preference for the language in
the original version of the bill, which read:
This product was made in a private kitchen that is not
inspected by a state or local agency.
CO-CHAIR TARR said the change in language was suggested by
Legislative Legal Services, Legislative Affairs Agency.
2:57:35 PM
REPRESENTATIVE TALERICO removed his objection. There being no
further objection, CSHB 217(RES) was reported out of the House
Resources Standing Committee.
2:58:49 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:58 p.m.