Legislature(2017 - 2018)BARNES 124

02/21/2018 01:00 PM RESOURCES

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Audio Topic
01:15:12 PM Start
01:15:42 PM Presentation(s): Proposed Pebble Mine
03:13:17 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 1:10 PM --
+ Presentation: Proposed Pebble Mine by: TELECONFERENCED
- AK Dept. of Fish & Game
- AK Dept. of Natural Resources
- AK Dept. of Environment Conservation
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                       February 21, 2018                                                                                        
                           1:15 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 Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative George Rauscher                                                                                                  
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S):  PROPOSED PEBBLE MINE                                                                                          
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ANDY MACK, Commissioner                                                                                                         
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a PowerPoint presentation                                                                       
entitled, "Permitting Processes for the Pebble Project," dated                                                                  
2/21/18.                                                                                                                        
                                                                                                                                
LARRY HARTIG, Commissioner                                                                                                      
Department of Environmental Conservation (DEC)                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided an overview of the major permits                                                                
that may be required from DEC for the proposed Pebble Mine.                                                                     
                                                                                                                                
SAM COTTEN, Commissioner                                                                                                        
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Provided   a  PowerPoint   presentation                                                             
entitled,  "House  Resources  Committee Pebble  Project  Update,"                                                               
dated 2/21/18.                                                                                                                  
                                                                                                                                
RON BENKERT, Regional Supervisor                                                                                                
Anchorage Area Office                                                                                                           
Division of Habitat                                                                                                             
Alaska Department of Fish & Game (ADF&G)                                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Answered  questions  during   the  ADF&G                                                             
presentation on the proposed Pebble Mine.                                                                                       
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:15:12 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ANDY  JOSEPHSON  called the  House  Resources  Standing                                                             
Committee  meeting  to  order  at   1:15  p.m.    Representatives                                                               
Josephson  and  Talerico  were  present at  the  call  to  order.                                                               
Representatives  Johnson, Lincoln,  Drummond,  Parish, Tarr,  and                                                               
Birch arrived as the meeting was in progress.                                                                                   
                                                                                                                                
^PRESENTATION(S):  PROPOSED PEBBLE MINE                                                                                         
             PRESENTATION(S):  PROPOSED PEBBLE MINE                                                                         
                                                                                                                              
1:15:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON announced the only  order of business would be                                                               
presentations by  the commissioners of the  Department of Natural                                                               
Resources  (DNR), the  Department  of Environmental  Conservation                                                               
(DEC), and  the Alaska Department of  Fish & Game (ADF&G)  on the                                                               
proposed Pebble Mine.                                                                                                           
                                                                                                                              
1:16:34 PM                                                                                                                    
                                                                                                                                
ANDY MACK,  Commissioner, Department of Natural  Resources (DNR),                                                               
provided   a   PowerPoint  presentation   entitled,   "Permitting                                                               
Processes for the  Pebble Project," dated 2/21/18.   He explained                                                               
the  presentation  would  cover  a broad  context  on  mining  in                                                               
Alaska,  the present  permitting  status of  the proposed  Pebble                                                               
Mine project,  and DNR's  expectations going  forward.   He noted                                                               
the three photographs on slide 1  are of operations at the Pebble                                                               
Mine  and  were  taken  9/17/17   during  one  of  two  DNR  site                                                               
inspections.   Turning  to slide  2 he  said the  map illustrates                                                               
mining activities  in the state,  including producing  mines, and                                                               
pointed  out   that  DNR  works   on  lots  of   mine  prospects,                                                               
opportunities, and operating mines located throughout Alaska.                                                                   
                                                                                                                                
COMMISSIONER  MACK stated  DNR aggressively  seeks to  ensure the                                                               
state is  in control of its  future on issues related  to oil and                                                               
gas resources  as well  as to  the growing  mining industry.   He                                                               
acknowledged there is tension between  federal and state agencies                                                               
and expressed his  belief Alaska is developing  its resources and                                                               
caring for  its environment.   For example, the state  is engaged                                                               
in the national  discussion on definitions of the  [Waters of the                                                               
United States (WOTUS),  pursuant to the Clean Water  Act], and in                                                               
review  of the  U. S.  Environmental Protection  Agency's (EPA's)                                                               
requirements   of  the   Comprehensive  Environmental   Response,                                                               
Compensation, and  Liability Act (CERCLA), Section  108(b), which                                                               
is   the  financial   responsibility   requirements  for   mining                                                               
operations.                                                                                                                     
                                                                                                                                
COMMISSIONER MACK  related that Alaska state  government has long                                                               
been  confident  in  its  bonding   requirements  system  for  an                                                               
operational mine  in Alaska and  is encouraging  federal agencies                                                               
to stand down  so that [the state]  can take a greater  role.  He                                                               
said  DNR  is  advancing  the state's  interest  in  the  Eastern                                                               
Interior Resource Management  Plan (RMP) issued by  the Bureau of                                                               
Land Management (BLM), which is  another example of DNR's efforts                                                               
to take control of the state's future.                                                                                          
                                                                                                                                
1:21:18 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  MACK displayed  slide 3  and reviewed  the proposed                                                               
project's status.  He said the  Pebble Project is a large deposit                                                               
in the advanced  exploration stage of development;  it is located                                                               
in  the Bristol  Bay region  17 miles  northwest of  Iliamna; and                                                               
consists of  two contiguous deposits  - Pebble West on  which the                                                               
application  is  now and  Pebble  East  [with combined  estimated                                                               
mineral resources of  80.6 billion pounds of  copper, 5.6 billion                                                               
pounds of molybdenum, and 107.4 million ounces of gold].                                                                        
                                                                                                                                
COMMISSIONER MACK moved  to slide 4 and explained  DNR has issued                                                               
a miscellaneous land  use permit (MLUP), number  6118, for Pebble                                                               
which - with two small exceptions  - is the interface between the                                                               
state, as landowner, and the project.   On December 31, 2017, the                                                               
multiyear  MLUP  permit  [issued to  Pebble  Limited  Partnership                                                               
(PLP)]  was due  to expire.    The application  on the  multiyear                                                               
application  was   for  the  continued  care,   maintenance,  and                                                               
reclamation  of  existing boreholes  and  facilities.   The  last                                                               
borehole at the  site was drilled in 2013, and  since then Pebble                                                               
has been responsible for care  and maintenance.  An extension was                                                               
granted so  DNR could take public  comment from 11/1/17-11/30/17,                                                               
during   which   time  1,500   comments   were   received.     He                                                               
characterized many of the comments  as substantive, detailed, and                                                               
sometimes critical, in contrast to  the thousands of MLUPs issued                                                               
by DNR for which there are typically zero comments.                                                                             
                                                                                                                                
1:25:41 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  MACK stressed  that an  MLUP  is issued  by DNR  if                                                               
there are impacts to less than  five acres on a continuous basis.                                                               
Because  Pebble  is using  helicopter  support  for most  of  its                                                               
activities,  the project's  impact  footprint is  less than  five                                                               
acres, thus the MLUP is a  legitimate permit.  He referred to the                                                               
[Nunamta  Aulukestai, et  al.,  vs. State  of  Alaska and  Pebble                                                               
Limited  Partnership] litigation  which DNR  interpreted to  mean                                                               
that DNR must follow a  thorough public comment and public notice                                                               
process.   He expressed  his belief DNR  is also  responsible for                                                               
evaluating  comments  and considering  them  prior  to issuing  a                                                               
future MLUP.  He described  DNR's thorough review of the comments                                                               
and its  decision to  incorporate some of  the comments  into the                                                               
current MLUP; for  example, the length of the  permit was limited                                                               
to  one  year  because  new  activities at  the  mine  site  were                                                               
anticipated.  Commissioner Mack opined  that limiting the MLUP to                                                               
one year was a wise decision,  given that the previous permit was                                                               
a  care and  maintenance  permit; there  were  no wells  planned.                                                               
Now, there are  applications to the U.S. Army  Corps of Engineers                                                               
(USACE)  and plans  are being  developed,  and there  is time  to                                                               
review plans  to consider them  in developing terms for  the next                                                               
permit.    Therefore,  in  2018,   Pebble  has  submitted  a  new                                                               
application and terms can be reconsidered by DNR.                                                                               
                                                                                                                                
1:29:50 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MACK said  another effect of the  litigation is that                                                               
DNR strives to ensure all  information about the project that can                                                               
be  released  is published  online  in  a  timely manner.    Also                                                               
addressed by  comments on  the project was  that within  the MLUP                                                               
there should  be financial assurance  provided to the  state thus                                                               
the permit requires  a $2 million performance  guarantee to allow                                                               
the state  to perform  cleanup if necessary.   Other  elements of                                                               
the  MLUP  include a  requirement  for  coordination between  the                                                               
Alaska  Department of  Fish &  Game (ADF&G)  and DNR  on wildlife                                                               
issues, and a  well closure plan for existing  boreholes.  During                                                               
the exploration  phase of a mine,  boreholes may be left  open to                                                               
monitor water; however,  in the permit DNR clarified  that of 612                                                               
open  boreholes, 600  would  be  inspected, 300  in  each of  two                                                               
years,  and  138  boreholes  would  be  closed  as  part  of  the                                                               
reclamation project in 2017.   He stressed DNR's intent to ensure                                                               
the integrity  of this unique  area and  to make sure  the burden                                                               
and obligation are on the operator.                                                                                             
                                                                                                                                
1:35:44 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  MACK  addressed slide  5  and  noted DNR  conducted                                                               
aerial and field  inspections in 2017 which covered  278 sites in                                                               
detail.  Since 2003 there  have been 58 state agency inspections,                                                               
he said,  and DNR's intent  is to continue active  inspections in                                                               
the future.   He moved to slide 6 and  said Pebble's MLUP renewal                                                               
application  is different  from  last year  and proposes  various                                                               
activities  for 2018,  including  61  geotechnical boreholes,  19                                                               
diamond  drill core  boreholes, minor  repairs to  Borehole 3127,                                                               
and  routine inspections.    He  pointed out  DNR  held a  public                                                               
comment  period from  1/19/18-2/20/18,  and  1,800 comments  were                                                               
received; he restated the value of public comments.                                                                             
                                                                                                                                
COMMISSIONER MACK  displayed slide  7 and  provided a  history of                                                               
the  project.   He  said  Northern  Dynasty acquired  a  purchase                                                               
option in 2001  and consolidated its ownership  interest in 2007,                                                               
which was  the year  the Pebble  Limited Partnership  was formed.                                                               
Exploration  since  then  has  been  mostly  helicopter-supported                                                               
exploration.   The  first borehole  was drilled  in 1988  and the                                                               
last  in  2013,  with  a  total  of  1,355  boreholes,  of  which                                                               
approximately 600 remain  active.  The 2017  MLUP document stated                                                               
that  field inspections  revealed Pebble  complied with  DNR, and                                                               
closed the  boreholes as requested,  albeit some  have "lingering                                                               
issues."   The site has 2,402  claims over 416 square  miles.  He                                                               
acknowledged this is a significant area  of land but said many of                                                               
the 1,355 boreholes are consolidated in a more central location.                                                                
                                                                                                                                
1:41:06 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MACK moved  to slide 8 and continued  to outline the                                                               
history of the  Pebble Project.  He stated  that baseline studies                                                               
were conducted from  2004 to 2008, and  aquatic biomonitoring was                                                               
conducted by  ADF&G in 2010,  all of  which are available  to the                                                               
public.  He explained slide 9  depicts a general description of a                                                               
timeline for  mining projects  in Alaska and  is not  specific to                                                               
the  Pebble  Project.    Although the  timeline  for  the  Pebble                                                               
Project is  unknown, DNR  estimates the  project has  entered the                                                               
advanced exploration,  environmental studies,  and prefeasibility                                                               
study phases.                                                                                                                   
                                                                                                                                
COMMISSIONER  MACK turned  to  slide 10  to  discuss the  federal                                                               
review  process.    He  pointed out  that  the  Pebble  Project's                                                               
Section  404  Clean Water  Act  application  is a  major  federal                                                               
action  that  triggered  the National  Environmental  Policy  Act                                                               
(NEPA), and the U.S. Army Corps  of Engineers (USACE) is the lead                                                               
agency for the  project.  He explained that USACE,  the U.S. Fish                                                               
and  Wildlife Service  (USFWS),  the Department  of the  Interior                                                               
(DOI), and EPA  have understandings based on the  Clean Water Act                                                               
(CWA)  and work  together to  an  extent but  are also  competing                                                               
agencies in some  cases as they develop CWA  permits, under which                                                               
the Pebble  Project falls.  He  noted that Pebble requires  a CWA                                                               
permit, and  that typically this process  goes smoothly, although                                                               
there  are some  exceptions.    He recalled  a  failed permit  by                                                               
ConocoPhillips  around a  decade  ago.   He  stressed that  every                                                               
permit  is unique.   Regarding  federal review,  he noted  public                                                               
scoping will start  in March 2018, and the next  step will be the                                                               
environmental  impact statement  (EIS)  process,  a process  with                                                               
which DNR is familiar.                                                                                                          
                                                                                                                                
1:45:39 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  MACK  displayed  slide  11  and  advised  that  the                                                               
anticipated  state permits  include  various  permits [from  DNR,                                                               
Department   of   Environmental    Conservation   (DEC),   Alaska                                                               
Department  of  Fish  &  Game  (ADF&G),  and  the  Department  of                                                               
Transportation  &  Public  Facilities (DOT&PF).    Currently,  he                                                               
said, DNR  has [issued] a  temporary water use  authorization for                                                               
water used  for exploration at  the mine site,  and an MLUP.   At                                                               
the time of the plan of  operations, public comment is taken, and                                                               
decisions will  be made.   He briefly described the  purposes and                                                               
circumstances of several other permits.                                                                                         
                                                                                                                                
1:48:21 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MACK  moved to  slide 12 and  discussed the  role of                                                               
state permit  coordination facilitated by DNR  through the Office                                                               
of  Project  Management and  Permitting  (OPMP).   He  said  OPMP                                                               
coordinates  permits -  but  has no  permitting  authority -  and                                                               
ensures questions are answered,  particularly on a "critical path                                                               
item,"  such as  major  projects  on the  North  Slope or  mining                                                               
expansions.    The  expenses  of   OPMP  are  paid  by  industry.                                                               
Displaying slide  13 he said  DNR expects applications  for state                                                               
authorizations will  be submitted  during the  NEPA process.   He                                                               
characterized the  USACE preliminary schedule of  a scoping phase                                                               
in  March  2018  and  possibly  a Record  of  Decision  (ROD)  by                                                               
September  2020 [a  correction  to  slide 13]  as  a "very  quick                                                               
schedule."  He  stressed the state will participate  fully in the                                                               
federal  process,  regulate  exploration  activities,  coordinate                                                               
with  DEC and  ADF&G, and  engage  with USACE  and other  federal                                                               
agencies, tribes, industry, and stakeholders.                                                                                   
                                                                                                                                
1:52:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  inquired about the status  of the casings                                                               
that have been left above ground.                                                                                               
                                                                                                                                
COMMISSIONER  MACK replied  that last  year DNR  was notified  of                                                               
serious physical  hazards on  public land.   He advised  that, in                                                               
the MLUP  last year, DNR  asked Pebble  to cut the  metal casings                                                               
down to  grade level so the  metal casings would no  longer stick                                                               
up above ground.  He offered  his belief that Pebble had complied                                                               
to a great extent.                                                                                                              
                                                                                                                                
REPRESENTATIVE  JOHNSON directed  attention to  slide 9,  General                                                               
Project Timeline,  and asked  how long  the entire  process might                                                               
take from beginning to end.                                                                                                     
                                                                                                                                
COMMISSIONER MACK clarified  that slide 9 is for  a typical large                                                               
mine  process without  an actual  number of  years involved.   He                                                               
noted Pebble's  first well  was drilled  in 1988  and one  of the                                                               
concerns from  stakeholders is that  the state wasn't  provided a                                                               
project  plan until  after 10  years  of activity.   However,  he                                                               
continued,  the process  is underway,  and the  state now  has an                                                               
application for review.                                                                                                         
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  for  a  timeline  for  state  and                                                               
federal permitting.                                                                                                             
                                                                                                                                
COMMISSIONER MACK  directed attention to  the list of  permits on                                                               
slide 11  and said there  is not  a typical timeline  involved in                                                               
developing  a  plan of  operation  or  for  the leases  that  are                                                               
necessary.   Speaking  from  his experience,  he  said he  really                                                               
doesn't know.                                                                                                                   
                                                                                                                                
1:59:02 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON  drew  attention  to  slide  4  and  inquired                                                               
whether the $2 million performance guarantee is a cash bond.                                                                    
                                                                                                                                
COMMISSIONER  MACK  said  yes,   Pebble  provided  a  $2  million                                                               
performance guarantee from the bonding market.                                                                                  
                                                                                                                                
CO-CHAIR   JOSEPHSON  inquired   as   to   DNR's  total   bonding                                                               
requirements for the entire project.                                                                                            
                                                                                                                                
COMMISSIONER MACK responded that  the performance guarantee is to                                                               
do the  work in the exploration  phase.  He explained  that after                                                               
the plan of  operation proposal, DNR uses  a computerized formula                                                               
to determine  the amount of  the bond  for the next  phase, which                                                               
can be very significant.  For  example, the bond required for the                                                               
Red Dog Mine is approximately $500 million.                                                                                     
                                                                                                                                
CO-CHAIR JOSEPHSON  surmised the [newly  proposed transportation]                                                               
corridor to the  west of Cook Inlet has not  been approved by the                                                               
state.   He asked  whether USACE  could evaluate  the application                                                               
prior to the state's decision.                                                                                                  
                                                                                                                                
COMMISSIONER MACK  confirmed a [transportation] corridor  has not                                                               
been approved and opined that USACE  does not have the ability to                                                               
evaluate this issue without the state's participation.                                                                          
                                                                                                                                
2:02:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH, regarding the  1,500 comments for the MLUP                                                               
application and  the 1,800 comments for  the renewal application,                                                               
inquired as to  the number of individuals  submitting comments as                                                               
opposed  to one  person sending  multiple comments.   He  further                                                               
inquired as to the percentages  of favorable and opposed comments                                                               
that were received from individual senders for the renewal.                                                                     
                                                                                                                                
COMMISSIONER  MACK   answered  that  1,500  was   the  number  of                                                               
individuals, and  that a significant majority  expressed concerns                                                               
or opposed the renewal.                                                                                                         
                                                                                                                                
2:04:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND questioned  how an  MLUP, limited  to an                                                               
area less  than five-acre impact  area, could apply to  a project                                                               
that is exploring 2,402 claims spread over 416 square miles.                                                                    
                                                                                                                                
COMMISSIONER MACK replied:                                                                                                      
                                                                                                                                
     I've been given  a phrase, which is  the very technical                                                                    
     phrase,   which   is   "five  acres   of   un-reclaimed                                                                    
     disturbance,"  okay?   I view  it as  a more  practical                                                                    
     matter,  as  the five  acres,  or  less than  five-acre                                                                    
     standard  or threshold,  is really  represent[ing] what                                                                    
     you would  place on  the tundra  on a  day-to-day basis                                                                    
       and what has been out in the field for a number of                                                                       
     years.                                                                                                                     
                                                                                                                                
COMMISSIONER MACK  directed attention  to the  photos on  slide 1                                                               
and  pointed out  that a  camp would  count as  part of  the five                                                               
acres.   However,  he continued,  disturbance from  a helicopter-                                                               
supported operation can be distinctly  less, as seen by the photo                                                               
of a wellbore which is the extent of the disturbance.                                                                           
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked whether  a camp is  established at                                                               
every borehole.                                                                                                                 
                                                                                                                                
COMMISSIONER MACK  responded no, there  is only one  central main                                                               
supply camp within the area of the deposit.                                                                                     
                                                                                                                                
2:07:12 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   TARR  offered   her  understanding   that  information                                                               
provided to DNR in the MLUP  application differs from that of the                                                               
USACE Clean  Water Act application,  and that of the  new smaller                                                               
mine plan.   She asked whether the state  will request additional                                                               
information.                                                                                                                    
                                                                                                                                
COMMISSIONER  MACK   confirmed  the  state  would   request  more                                                               
information from the federal agency.                                                                                            
                                                                                                                                
CO-CHAIR TARR asked  whether the MLUP would be [renewed  or a new                                                               
MLUP issued] prior to receipt  of any additional information; for                                                               
example, additional information on the economics of the project.                                                                
                                                                                                                                
COMMISSIONER  MACK anticipated  that  in  the federal  permitting                                                               
process, information would  be provided in various  stages of the                                                               
process.   He stressed DNR  seeks to ensure that,  regarding care                                                               
and maintenance, an  MLUP is in place.  He  said DNR cannot delay                                                               
with the approach  of a field season; however, in  some cases DNR                                                               
has become a  cooperating agency with a federal  agency, with the                                                               
big picture in mind.                                                                                                            
                                                                                                                                
CO-CHAIR  TARR  inquired whether  an  MLUP  related to  care  and                                                               
maintenance would be  issued for one year.   She further inquired                                                               
whether, as a  cooperating agency, DNR would  have influence over                                                               
the approval of the [Section 404, Clean Water Act] permit.                                                                      
                                                                                                                                
COMMISSIONER  MACK  answered that  the  term  would be  evaluated                                                               
during the processing of the  MLUP application.  Although DNR can                                                               
cooperate with  federal agencies in  many ways, he said,  it does                                                               
not have authority over USACE or vice versa.                                                                                    
                                                                                                                                
2:12:12 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  recalled testimony and  photographic evidence                                                               
were provided  about a year  ago by  Dr. Chambers and  members of                                                               
United  Tribes  [of Bristol  Bay]  regarding  petroleum and  acid                                                               
pollution at  some of the  [1,355] borehole sites, and  that they                                                               
were not  handled properly.   Co-Chair Josephson noted  that none                                                               
of  the drill  sites have  been tested  since 2013.   He  further                                                               
recalled  that [in  testimony on  2/19/18] Dr.  Chambers said  in                                                               
essence   that  the   state  was   largely  satisfied   with  the                                                               
abandonment  of  those sites,  and  General  Hamilton said  DNR's                                                               
requirement of  a $2 million  cash bond  was a typical  course of                                                               
events.   He  asked Commissioner  Mack to  comment on  the United                                                               
Tribes'  perspective that  the wellbore  sites  were not  handled                                                               
properly  and whether  that  was  the event  that  caused DNR  to                                                               
require  a cash  bond.    He further  asked  the commissioner  to                                                               
address whether  the department is  relatively satisfied  at this                                                               
point.                                                                                                                          
                                                                                                                                
COMMISSIONER MACK  responded that once mine  operation is reached                                                               
there is  a significant bond in  play, but the Pebble  Project is                                                               
currently in  the exploration phase.   The  performance guarantee                                                               
and  the  bond  that  is  part   of  that  is  dedicated  to  the                                                               
proposition that it  will cover the cost of going  into the field                                                               
and removing  the equipment that  is out there and  ensuring that                                                               
the worksites  are in reasonably  good shape when they  are left,                                                               
should  the  operator fail  to  do  so.    He said  DNR  received                                                               
recommendations  in letter  form from  consultants and  groups in                                                               
the region  about what a  performance guarantee would  look like.                                                               
Two numbers  were presented - $1.7  million and $2 million  - and                                                               
DNR chose the higher of the two.   To its credit, [PLP] agreed to                                                               
place  a performance  guarantee with  the state.   Regarding  the                                                               
difference of opinion between Dr.  Chambers and General Hamilton,                                                               
Commissioner Mack stated  DNR will continue to look  at this area                                                               
to ensure that whatever is going on  is done very well.  From the                                                               
two inspections of  sites conducted last year,  he continued, the                                                               
department  feels comfortable,  otherwise there  would have  been                                                               
notices of violation.  The  same standards are being applied here                                                               
as would  be applied to an  oil project on state  lands.  Nothing                                                               
is swept  under the  rug, everything is  public.   The inspection                                                               
reports, which are online, are solid and thorough documents.                                                                    
                                                                                                                                
2:18:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON   referred  to   slide  7  and   offered  his                                                               
understanding  that unless  there  is a  mining  closure or  land                                                               
designation such  as a  refuge, mining  is presumptively  open on                                                               
all state land for a claim.   Regarding the 2,402 claims on slide                                                               
7, he said he wonders whether  the state, industry, and people of                                                               
the state could  spend a thousand years looking  at whether there                                                               
will be  mining in an area.   He asked whether  Commissioner Mack                                                               
thinks  there  should  be  a  policy in  place  that  talks  more                                                               
globally  about  places  where mining  is  less  contentious  and                                                               
places  where  it  is  inarguably very  contentious.    He  asked                                                               
whether the Pebble  mine, which has been an issue  since at least                                                               
2006, could span the century.                                                                                                   
                                                                                                                                
COMMISSIONER MACK replied  he does not know the  answer, but that                                                               
as an agency  DNR is paying close attention and  working hard and                                                               
following the  law, and part of  that is listening to  people who                                                               
live in Alaska.                                                                                                                 
                                                                                                                                
CO-CHAIR  JOSEPHSON,  relative  to  the  timeline  of  the  USACE                                                               
application, recalled  testimony from the prior  week that things                                                               
are  moving on  a  typical  timeline but  that  there is  program                                                               
called the  "fast program."   He  offered his  understanding that                                                               
while two  other mines did  not ask for that  expedited approach,                                                               
Pebble has.                                                                                                                     
                                                                                                                                
COMMISSIONER MACK answered he has been  told that is the case but                                                               
has not actually read that request himself.                                                                                     
                                                                                                                                
CO-CHAIR JOSEPHSON asked whether DNR has an opinion about that.                                                                 
                                                                                                                                
COMMISSIONER MACK replied it is up  to the applicant given one of                                                               
their options  is to decide when  to apply and how  fast to push.                                                               
He opined  that DNR has  done a very  thorough job on  the permit                                                               
that it has now  and will continue to do so.  What  it will do on                                                               
its application is a question for Pebble.                                                                                       
                                                                                                                                
CO-CHAIR JOSEPHSON,  regarding the  61 additional  boreholes that                                                               
are being  requested, inquired  whether such  a request  is usual                                                               
after having made a Section 404 permit application to the USACE.                                                                
                                                                                                                                
COMMISSIONER  MACK responded  it is  not unusual  and added  that                                                               
understanding what  is in the  different applications is  a focal                                                               
point of DNR.                                                                                                                   
                                                                                                                                
2:22:58 PM                                                                                                                    
                                                                                                                                
LARRY   HARTIG,   Commissioner,   Department   of   Environmental                                                               
Conservation  (DEC), provided  an overview  of the  major permits                                                               
the Pebble Project may require from  his department.  He said DEC                                                               
has  not received  any permit  applications from  Pebble at  this                                                               
point  and therefore  his overview  is speculative  and based  on                                                               
similar projects  in Alaska.   He stated the three  major permits                                                               
would include:  The Clean  Water Act (CWA) Section 402 wastewater                                                               
discharge permit for  processed and storm water  collected at the                                                               
mine site; a group of  authorizations requested by DEC's Division                                                               
of  Oil Spill  Prevention  and Response  (SPAR)  relating to  oil                                                               
spill prevention and  response, such as for liquid  fuels used by                                                               
the project; and  air quality permits for emissions  from a power                                                               
plant at  the mine site,  for fugitive  dust, and for  an unknown                                                               
power  plant at  the  port  site.   He  advised  that many  other                                                               
permits would also be necessary, and  DEC would have a major role                                                               
in the NEPA  process along with DNR and ADF&G.   He further noted                                                               
that  DEC  serves as  the  responsible  state agency  that  would                                                               
ultimately certify  or not certify  the Section 404  permit under                                                               
Section 401 of the CWA.                                                                                                         
                                                                                                                                
2:26:32 PM                                                                                                                    
                                                                                                                                
COMMISSIONER HARTIG, regarding the  permits from DEC, pointed out                                                               
that air  quality permits  require the longest  lead time  on any                                                               
major project because it involves  collecting lots of information                                                               
to  evaluate the  impact of  the location  and concentrations  of                                                               
emissions.   Air quality  information includes  weather, physical                                                               
obstructions,  topography,  the  location  of  monitoring  sites,                                                               
seasonal variations,  and other meteorological  information which                                                               
can take  years to collect  for a  project to apply  for permits.                                                               
He noted  that Pebble  began collecting  information in  2006 for                                                               
its larger  project, but while  the quality  of the data  is good                                                               
the collection locations may not be relevant to the new project.                                                                
                                                                                                                                
COMMISSIONER HARTIG  advised that  DEC's Division of  Air Quality                                                               
hasn't had  discussions with  Pebble since 2013  and thus  has no                                                               
recent information  on the  project except  what was  provided to                                                               
USACE, which  proposes a power plant  at the mine site  fueled by                                                               
natural gas.   Due to  the power  plant's proposed large  size of                                                               
230 megawatts,  it may  be subject  to Prevention  of Significant                                                               
Deterioration  (PSD) requirements,  which are  requirements under                                                               
the federal  Clean Air  Act (CAA).   This means  higher standards                                                               
must be met  for the priority air pollutants  that are discharged                                                               
and  these cannot  exceed  what  is called  an  "increment."   He                                                               
explained that  the reason emissions  are measured  in increments                                                               
is because if one big facility  moved into an area and discharged                                                               
right up to  the limit of ambient air quality  standards, then no                                                               
room would  be left for  another facility to  move in as  the air                                                               
quality standards would then be exceeded.                                                                                       
                                                                                                                                
2:29:35 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  HARTIG  noted that  a  key  consideration when  DEC                                                               
looks at this  facility is whether it  will or will not  be a PSD                                                               
facility  and  whether  it  will   be  triggering  federal  [CAA]                                                               
requirements  or will  be  strictly under  state  standards.   He                                                               
stated  that given  the size  of the  plant, DEC  thinks it  will                                                               
likely  be under  the federal  standards.   Because DEC  has been                                                               
delegated  the CAA  permitting  program in  Alaska,  it would  be                                                               
following those  federal rules  and would  issue the  permit with                                                               
EPA oversight.  Permitting a  PSD facility includes review of the                                                               
emissions sources and  that equipment would have to  meet what is                                                               
called  "best available  control technology."  At the  mine site,                                                               
DEC would  also be looking at  fugitive dust caused by  the large                                                               
surface mine  with disturbance, pit laydown  areas, low-grade ore                                                               
stockpiles,  wind, erosion,  and  dust  in the  air,  as well  as                                                               
exhaust  and dust  from the  trucks.   Furthermore, DEC  presumes                                                               
that both the  mine and the port will need  a backup power system                                                               
which  would  likely be  diesel-run  generators  that would  also                                                               
require review of the emissions.   Further, DEC will need to look                                                               
at where  the public will be  accessing areas at the  active mine                                                               
site and the port and examine  whether the air emissions in those                                                               
areas will meet  ambient air quality standards.   These standards                                                               
are  set by  the state  but follow  national EPA  requirements to                                                               
protect  human  and  environmental  health  within  the  facility                                                               
boundary.  Facility boundaries are  further complicated by access                                                               
to subsistence  lands and public  use, and this would  be another                                                               
aspect of DEC's  permitting activity.  Although DEC  is unsure of                                                               
the  source of  power generation  at the  port, power  generation                                                               
requires state air permits.                                                                                                     
                                                                                                                                
2:33:47 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  HARTIG discussed  what  the Division  of Oil  Spill                                                               
Prevention and  Response (SPAR)  may be  called upon  to do.   He                                                               
said  [PLP] has  talked about  a natural  gas line  across [Cook]                                                               
Inlet.  He pointed  out that a year ago a  gas line that delivers                                                               
commercial  gas for  energy to  the platforms  in Cook  Inlet was                                                               
leaking.   The leak was  complicated by  ice cover, so  boats and                                                               
divers  couldn't safely  be brought  to  the area  to repair  the                                                               
subsea  line.   Additionally, the  icecap prevented  dispersal of                                                               
the  methane gas  that was  coming up,  causing concern  that the                                                               
methane would  displace the oxygen  in the water column  and make                                                               
it  hypoxic to  fish and  marine mammals.   Therefore,  DEC would                                                               
need to look at where the  proposed gas line would be located and                                                               
whether there could be ice conditions.                                                                                          
                                                                                                                                
COMMISSIONER HARTIG related that over  the past year DEC has been                                                               
having discussions  with the Pipeline Hazardous  Materials Safety                                                               
Administration  (PHMSA), a  federal agency  that is  part of  the                                                               
federal  Department  of  Transportation   that  has  the  primary                                                               
oversight  of gas  lines.   He advised  that PHMSA  would be  the                                                               
agency primarily responsible for looking  at how this subsea line                                                               
would be built,  maintained, and tested, but that  SPAR would get                                                               
interested if a release occurred from  this subsea line.  He said                                                               
DEC and PHMSA  are presently discussing entering  a memorandum of                                                               
understanding  (MOU)  that would  help  define  what DEC's  roles                                                               
would be on Cook Inlet lines.                                                                                                   
                                                                                                                                
COMMISSIONER HARTIG  noted that natural gas  would presumably not                                                               
be the  project's only fuel, and  that diesel fuel would  also be                                                               
coming  into port  by  tank vessel  or barge.    That vessel,  he                                                               
continued, would likely  require a contingency plan  (c-plan).  A                                                               
c-plan is a  pollution prevention and counter  measures plan that                                                               
talks in  broad terms about how  spills would be prevented.   The                                                               
department then  has guidelines and  [the project] must  show how                                                               
it could respond within a defined  period of time if a spill were                                                               
to  occur of  the magnitude  that  might be  anticipated from  an                                                               
operation like this.   [The project] would also have  to show DEC                                                               
that it has the resources to do that.                                                                                           
                                                                                                                                
2:37:07 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  HARTIG said  he assumes  Pebble would  have storage                                                               
tanks  at the  delivery port.   How  storage tanks  are regulated                                                               
depends  on  the  volume,  so  DEC  could  require  a  c-plan  or                                                               
something less for the tanks.   He offered his understanding that                                                               
the  project's proposal  is  to  move the  fuel  up  the road  in                                                               
trucks.     This  would  fall  under   PHMSA's  jurisdiction,  he                                                               
continued, and  DEC would  coordinate with PHMSA  if there  was a                                                               
spill.   At the lake  the trucks would  be rolled onto  the ferry                                                               
and be taken  north across the lake  about 16 miles.   He said he                                                               
recently talked  with the U.S.  Coast Guard (USCG)  about whether                                                               
it would oversee this because,  as he understands it, there would                                                               
be  ice breaking  part  of  the year  on  the  lake, which  isn't                                                               
something DEC  is familiar with.   If the USCG determines  it's a                                                               
navigable water,  he continued, then  the USCG would  be involved                                                               
and would be  looking at the capability and design  of the vessel                                                               
and  the competency  of the  crew.   In this  case, USCG  and DEC                                                               
would work together on what plans  should be in place in the case                                                               
of a  spill.  He  further noted that there  would also be  a tank                                                               
farm up  at the  [mine] site  which, depending  on its  size, may                                                               
need  a c-plan.   Or,  if  it is  smaller, there  would be  other                                                               
requirements that come into play from SPAR.                                                                                     
                                                                                                                                
COMMISSIONER  HARTIG added  that  he thinks  the concentrate  and                                                               
reagents  that would  be moved  up to  the [mine]  site would  be                                                               
under  federal  jurisdiction.    But,   he  said,  DEC  would  be                                                               
coordinating  with the  federal  agencies so  that  DEC would  be                                                               
prepared in the event of a spill.                                                                                               
                                                                                                                                
2:39:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    PARISH   offered    his   understanding    that                                                               
Commissioner Hartig said it is  unclear whether Lake Iliamna is a                                                               
navigable waterway.                                                                                                             
                                                                                                                                
COMMISSIONER HARTIG  replied it  isn't to him  but that  the USCG                                                               
thinks it  might be  and it  needs to be  assessed by  the USCG's                                                               
legal team.                                                                                                                     
                                                                                                                                
REPRESENTATIVE PARISH asked what  the biological importance is of                                                               
Lake Iliamna.                                                                                                                   
                                                                                                                                
COMMISSIONER HARTIG  responded he  understands it is  the biggest                                                               
producer of red salmon in the world.                                                                                            
                                                                                                                                
2:41:08 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  HARTIG resumed  his  overview and  related that  no                                                               
permit  applications  have been  received  by  DEC's Division  of                                                               
Water,  although baseline  work has  been done  looking at  water                                                               
quality  and mapping  streams and  background  conditions in  the                                                               
area.   He said DEC  is assuming the project  is going to  need a                                                               
Clean  Water Act  402  permit, which  is  a wastewater  discharge                                                               
permit,  at  the  mine  because  it is  going  to  be  generating                                                               
processed  water and  putting tailings  into an  impoundment that                                                               
could  be potentially  acid generating.   The  tailings would  be                                                               
covered with water  to try to minimize oxidation.   There will be                                                               
other water needing  treatment at the site, he stated,  and to be                                                               
discharged it will  have to meet water quality  standards.  Under                                                               
the Clean Water Act a permit will be needed from DEC to do that.                                                                
                                                                                                                                
COMMISSIONER HARTIG explained DEC, as  well as EPA, would also be                                                               
looking at stormwater  because in a big site like  this there are                                                               
EPA requirements  to minimize  the contact  of the  natural water                                                               
with the disturbed areas where it  might pick up metals and other                                                               
contaminants,  thereby minimizing  the  amount  of water  needing                                                               
treatment.    A wastewater  treatment  plant  will be  needed  to                                                               
collect and treat this water, and  a permit will be needed so the                                                               
discharge meets water quality standards.   In issuing the permit,                                                               
DEC  would be  looking at  protecting  the receiving  water.   He                                                               
offered his  understanding that the  discharge would be  into the                                                               
northern  part  of  the  Koktuli River  drainage,  so  the  water                                                               
quality in  that stream  would have to  meet state  water quality                                                               
standards.    He   noted  there  is  nothing   in  the  project's                                                               
application to the USACE that indicates  it is going to be asking                                                               
for  any  kind  of  variations   from  the  state  water  quality                                                               
standard, such  as a mixing zone  which would be an  initial area                                                               
of dilution  that would  allow some mixing  in the  Koktuli River                                                               
before   it  would   have  to   meet  water   quality  standards.                                                               
Therefore, he  continued, his presumption  at this point  is that                                                               
there  wouldn't be  a mixing  zone.   He further  noted there  is                                                               
nothing to indicate  that the project would be  looking at trying                                                               
to find some  variance to state water quality  standards, such as                                                               
site-specific  criterium.   So,  under  that  scenario the  water                                                               
quality standards would have to be met.                                                                                         
                                                                                                                                
COMMISSIONER HARTIG  said water  quality standards  start getting                                                               
into  Tier  3  and  these standards  include  the  state's  anti-                                                               
degradation  policy.   Initially  all waters  of  the state  were                                                               
designated for all uses, with  these uses including protection of                                                               
the growth  and propagation of freshwater  aquatic life, drinking                                                               
water,  contact  recreation  including  eating the  fish  that  a                                                               
person would catch, non-contact  recreation, and agriculture use.                                                               
He  explained  that DEC  sets  criteria  for different  types  of                                                               
pollutants, such  as copper, zinc,  lead, so that the  amounts of                                                               
those pollutants in  the water would not exceed  a threshold that                                                               
would  impair that  designated use.   When  looking at  a project                                                               
like this  that would introduce  into the stream a  new pollutant                                                               
or  more of  a  pollutant that  may already  be  there, DEC  must                                                               
figure out how much of that pollutant  is going to end up in that                                                               
water, what the designated uses  are, and whether it would exceed                                                               
the criteria  that provide that  threshold for how much  could be                                                               
in that water to protect that use.                                                                                              
                                                                                                                                
2:46:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  noted that  an application  has been  made by                                                               
members  of the  Bristol Bay  community to  classify the  Koktuli                                                               
River as a Tier 3.                                                                                                              
                                                                                                                                
COMMISSIONER HARTIG confirmed such an application has been made.                                                                
                                                                                                                                
CO-CHAIR JOSEPHSON  asked whether  Alaska has  a Tier  3 criteria                                                               
that has been  codified and adopted, and if not,  how it would be                                                               
known whether the Pebble Project can meet the standards.                                                                        
                                                                                                                                
COMMISSIONER HARTIG  answered that under the  federal Clean Water                                                               
Act  (CWA),  each  state  is   required  to  have  water  quality                                                               
standards for  antidegradation.  It describes  the [framework and                                                               
methodology]  that will  be used  before  a decision  is made  to                                                               
allow any  pollution to go into  a water, he explained.   This is                                                               
done by  first classifying the  water into Tier  1, 2, or  3, the                                                               
three that are  generally presumed to be required  under the CWA.                                                               
A  Tier  1  stream  doesn't  currently  meet  all  water  quality                                                               
standards; a Tier 2 stream  meets all the water quality standards                                                               
for the  designated uses,  so it would  be protective  of aquatic                                                               
life,  drinking water,  and  so forth;  a Tier  3  stream is  the                                                               
highest  level  of protection  and  is  described as  outstanding                                                               
natural resource  waters.  The  state has the option  of choosing                                                               
whether to designate  any of them; for  example, Washington state                                                               
and Alaska  have not designated  any Tier 3  waters.  If  a state                                                               
does  designate a  Tier 3  water,  then CWA  and EPA  regulations                                                               
provide  that the  water  quality  existing at  the  time of  the                                                               
designation must be maintained.   It has been interpreted to mean                                                               
that, other  than very  temporary things  such as  siltation from                                                               
nearby  construction activity,  no  additional  pollution can  be                                                               
allowed  in that  water, regardless  of  whether that  additional                                                               
pollution  would  exceed  a criterium  protective  of  designated                                                               
uses.   For  example,  he  explained further,  if  a facility  is                                                               
already discharging  into a  Tier 3 water,  it could  continue to                                                               
discharge  as  it   has  been,  but  would   be  prohibited  from                                                               
undertaking  any  activities   that  would  discharge  additional                                                               
amounts of  an existing pollutant or  a new pollutant.   A Tier 3                                                               
water isn't necessarily a pristine water,  it can also be a water                                                               
that  is  very  important  for  recreational  use  or  ecological                                                               
significance, so  a Tier 3  water could  be something like  a hot                                                               
spring that people want to bathe in.                                                                                            
                                                                                                                                
2:50:17 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  HARTIG continued  his  answer  and reiterated  that                                                               
there are no Tier 3 waters in  Alaska and said most of the waters                                                               
in the state are Tier 2 waters.   It would take a legislative act                                                               
to get a Tier  3 water designation in the state,  he advised.  If                                                               
the legislature did that, then  federal law and DEC's regulations                                                               
would  kick in  and the  water would  be protected.   The  Tier 3                                                               
protection process  is there,  it's just there  is not  a process                                                               
outside  of the  legislative process  for designating  a Tier  3.                                                               
For the  past 10  years, he  noted, DEC has  been working  to put                                                               
together  implementation   guidance  that  talks  about   how  to                                                               
implement  the state's  antidegradation  policy,  which has  been                                                               
around since  about 1996.   He said  he will probably  be signing                                                               
another set  of regulations on that  in the next day  or two that                                                               
further clarify how  [DEC] treats a Tier 3 water  in a permitting                                                               
scenario.       [The  department]  has  tried  for some  time  to                                                               
establish  a public  process where  members of  the public  could                                                               
nominate a water for Tier 3 -  there is no requirement in the CWA                                                               
to have  such a process  - but  the governor feels  strongly that                                                               
there  should be  one in  Alaska.   The main  sticking point,  he                                                               
related, has  been the question  of who would make  this decision                                                               
on a nomination.  There is  division in the public comment - some                                                               
people believe  it should  be a  legislative decision  because of                                                               
the  long-term implications  of  a Tier  3  designation and  what                                                               
impact  it might  have  on future  development,  and some  people                                                               
believe  it should  be an  administrative action  that should  be                                                               
based on  objective criteria  and leave the  politics out  of it.                                                               
Therefore,  if a  process is  wanted for  the public  to nominate                                                               
then these things need to be filled in.                                                                                         
                                                                                                                                
CO-CHAIR  JOSEPHSON recalled  that  the  administration did  have                                                               
legislation on that and said more discussion is needed on it.                                                                   
                                                                                                                                
2:54:26 PM                                                                                                                    
                                                                                                                                
SAM  COTTEN,  Commissioner,  Alaska  Department of  Fish  &  Game                                                               
(ADF&G), said he will discuss  ADF&G's role in habitat permitting                                                               
generally  as well  as  specifically  for the  Pebble  Mine.   He                                                               
introduced the department's  staff who are doing this  work:  Ron                                                               
Benkert, Kate Harper, and John Brenkin.                                                                                         
                                                                                                                                
COMMISSIONER COTTEN  related that  in addition to  its permitting                                                               
responsibilities, ADF&G  is involved with  at least  five habitat                                                               
partnerships  around  the state,  as  well  as partnerships  with                                                               
communities, tribal  groups, local governments,  U.S. government,                                                               
oil  companies,  and  sport and  commercial  fishing  groups,  to                                                               
contribute to  healthy salmon habitat  projects.   The department                                                               
has lots of  hands-on experience with standards that  are used to                                                               
design structures,  such as culverts  and bridges that  help fish                                                               
passage and  help improve  salmon habitat.   He noted  that these                                                               
are the same  kind of standards that ADF&G applies  to the people                                                               
coming in for permits.                                                                                                          
                                                                                                                                
COMMISSIONER COTTEN  began his PowerPoint  presentation entitled,                                                               
"House   Resources  Committee   Pebble  Project   Update,"  dated                                                               
2/21/18.    He  displayed  slide  2  and  reviewed  ADF&G's  four                                                               
statutory  authorities:   the Fishway  Act,  Alaska Statute  (AS)                                                               
16.05.841  regarding fish  passage; the  Anadromous Fish  Act (AS                                                               
16.05.871),   which  is   the  department's   primary  permitting                                                               
authority  for  anadromous  fish  streams and  bodies  of  water;                                                               
[Special Area Permitting (5 AAC  95.700)], the general provisions                                                               
in the  department's regulations that  deal with how  permits are                                                               
applied for  and handled;  and a fish  resource permit  [from the                                                               
Divisions  of   Sport  Fish  and   the  Division   of  Commercial                                                               
Fisheries], which  is in  Title 16 for  the purposes  of handling                                                               
and transporting live fish.                                                                                                     
                                                                                                                                
COMMISSIONER COTTEN turned to slide  3 and explained that ADF&G's                                                               
general role  in mining  project evaluation is  to work  with the                                                               
applicant through  the department's various divisions  as well as                                                               
other state agencies.   The department is part of  the Large Mine                                                               
Permitting  Team (LMPT),  so in  addition to  receiving a  permit                                                               
ADF&G works with the people who  are applying the permit and help                                                               
them understand what  is going to be required in  terms of study,                                                               
design, data collection, and so forth.                                                                                          
                                                                                                                                
COMMISSIONER COTTEN  moved to slide  4 and noted  ADF&G evaluates                                                               
mine projects.   In  addition to the  site development,  he said,                                                               
ADF&G is also  involved in the infrastructure  that supports site                                                               
development, such as  roads and pipelines.   No large development                                                               
is the  same as another  one, so  ADF&G must evaluate  the unique                                                               
characteristics  of   each  large  project  and   internally  and                                                               
otherwise  determine  which  specific  permits are  going  to  be                                                               
required for which projects.                                                                                                    
                                                                                                                                
COMMISSIONER  COTTEN displayed  slide 5  which listed  activities                                                               
that would typically  require fish habitat permits.   [The listed                                                               
activities were:  construction of  fish barriers; flow reduction;                                                               
bridges, culverts, buried pipelines;  water withdrawal and intake                                                               
structures;  stream  re-alignment  and  diversion  channels;  and                                                               
instream mitigation projects.]                                                                                                  
                                                                                                                                
COMMISSIONER COTTEN turned  to slide 6 and explained  that once a                                                               
permit is  issued ADF&G remains  involved with  site inspections,                                                               
ongoing  monitoring to  ensure compliance  with the  permits, and                                                               
amending habitat permits if necessary.                                                                                          
                                                                                                                                
3:01:03 PM                                                                                                                    
                                                                                                                                
COMMISSIONER COTTEN moved  to slide 7 and pointed  out that ADF&G                                                               
is currently  reviewing the Pebble  Project's Section  404 permit                                                               
application with  the U.S. Army  Corps of Engineers  (USACE), and                                                               
that ADF&G  will be participating  in the USACE Notice  of Intent                                                               
(NOI) and the  scoping opportunities.  He noted that  a change in                                                               
the project is  a transportation corridor and said  ADF&G will be                                                               
involved in  evaluating what  permits are going  to be  needed in                                                               
that area.   The transportation  corridor and gas line  would get                                                               
close to  the McNeil River  bear viewing area, he  continued, and                                                               
people have expressed interest in considering that.                                                                             
                                                                                                                                
COMMISSIONER  COTTEN  reviewed  slide  8 and  noted  the  project                                                               
activities  for  which  fish  habitat   permits  will  likely  be                                                               
required from ADF&G.    He said ADF&G will  likely receive permit                                                               
applications for  such things as  culverts, pipelines,  and barge                                                               
landings.  He  displayed an aerial view (slide 9)  of the overall                                                               
project area,  which extends from  the mine  site to where  a new                                                               
port  would have  to  be  developed.   He  also  displayed a  map                                                               
depicting the sites  where ADF&G has already  done work regarding                                                               
subsistence uses in the project area (slide 10).                                                                                
                                                                                                                                
3:02:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LINCOLN,  regarding  the permit  requirement  for                                                               
crossings over  fish bearing water, recalled  that a presentation                                                               
last week  talked about how the  area is covered with  gravel and                                                               
there is a  lot of exchange of  water across the area.   He asked                                                               
whether a  stream that  has no  fish, but  which is  connected to                                                               
streams that do, would have any  relevance to whether it needs to                                                               
be permitted.                                                                                                                   
                                                                                                                                
RON   BENKERT,  Regional   Supervisor,  Anchorage   Area  Office,                                                               
Division of  Habitat, Alaska Department  of Fish &  Game (ADF&G),                                                               
replied  that  some  previous  hydrology  studies  have  revealed                                                               
ground connections.   Specifically, there appears to  be a strong                                                               
groundwater connection between upper  Talarik Creek and the south                                                               
fork  of  the  Koktuli  River,   and  there  are  probably  other                                                               
instances  of that.   He  said ADF&G  has not  yet evaluated  the                                                               
areas along  the new corridor.   Some previous studies  by Pebble                                                               
Project  consultants looked  at  instream flows  and exchange  of                                                               
water near  the mine site, but  ADF&G has not had  an opportunity                                                               
to initiate any studies or  recommend studies for looking at that                                                               
specific kind  of information  on the new  corridor.   He advised                                                               
ADF&G anticipates  that additional  studies will be  conducted to                                                               
clarify  whether  the  old  studies   are  still  valid  or  what                                                               
additional  information  needs  to  be  obtained  to  inform  the                                                               
department's permitting decision.   A lot of work  still needs to                                                               
be done,  he continued, as  to what type of  physical information                                                               
is going to be needed to evaluate the project.                                                                                  
                                                                                                                                
COMMISSIONER COTTEN said the Section  404 permit application that                                                               
has  been submitted  suggests a  certain number  of culverts  and                                                               
bridges.    He stated  that  ADF&G  will evaluate  and  determine                                                               
whether   additional  requirements   are  needed   for  culverts,                                                               
bridges, or  any other  crossings.  So,  even if  something might                                                               
not be  in the permit  application, ADF&G would  have potentially                                                               
an additional evaluation as to what else might be needed.                                                                       
                                                                                                                                
3:04:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  inquired whether  ADF&G can make  those sorts                                                               
of requests of the applicant before it rules on permits.                                                                        
                                                                                                                                
COMMISSIONER COTTEN replied, "Absolutely yes."                                                                                  
                                                                                                                                
COMMISSIONER COTTEN  returned to his presentation  and reiterated                                                               
that  slide 10  displays  the  work ADF&G  has  done to  identify                                                               
subsistence use.   He explained that  slides 11 and 12  provide a                                                               
general description of  some of the studies  that have previously                                                               
been conducted.  He said copies  of these studies can be provided                                                               
to the  committee upon  request.  He  noted ADF&G  has identified                                                               
areas  where additional  studies are  needed, such  as evaluating                                                               
what  permits  will  be  required   for  the  new  transportation                                                               
corridor.   Additionally,  the new  mine footprint  will probably                                                               
need some reevaluation as to which  permits ADF&G will have to be                                                               
involved with.                                                                                                                  
                                                                                                                                
3:06:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked where things  are at as far as federal                                                               
intervention  on  state land.    He  further asked  whether  [the                                                               
state] has taken  a position in opposition  to federal preempting                                                               
of state authority on state lands.                                                                                              
                                                                                                                                
COMMISSIONER COTTEN responded there is a  lot of case law on that                                                               
subject.   He said he  thinks it's  clear that the  United States                                                               
has an ability to require a  Section 404 permit, for example, and                                                               
he doesn't think  the state can tell the  federal government that                                                               
it  cannot  do  that.    The state  is  not  limited  by  federal                                                               
regulations  or  standards,  he  added, the  state  can  be  more                                                               
stringent than the federal government.                                                                                          
                                                                                                                                
3:07:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON noted  the Pebble  permit application  to the                                                               
USACE proposes  an 83-mile [transportation]  corridor.   He asked                                                               
how ADF&G  would analyze  the potential  impacts to  fish habitat                                                               
and  mitigation  for  those  impacts  to  those  streams  on  the                                                               
transportation corridor.                                                                                                        
                                                                                                                                
COMMISSIONER COTTEN  answered that  ADF&G would do  an evaluation                                                               
of each  of the  potential stream  crossings that  the department                                                               
identifies.  He deferred to Mr. Benkert to answer further.                                                                      
                                                                                                                                
MR. BENKERT explained  that once the state  process is initiated,                                                               
teams  called  technical  working  groups  are  put  together  to                                                               
evaluate  any  kind  of  study  plan  proposals  by  the  project                                                               
proponents  and  to  provide  suggestions to  get  a  study  plan                                                               
together  that is  going to  get at  the correct  information for                                                               
ADF&G.  One of those study  plans would be to evaluate the stream                                                               
crossings along the road corridor,  he continued.  The department                                                               
would also physically  visit each one of the sites  and do a site                                                               
characterization  to  provide  recommendations  as  to  what  the                                                               
design standards should  be on each specific crossing.   A lot of                                                               
work still needs to be done; ADF&G  will get out on the ground as                                                               
well  as  initiate  studies  to  look  at  fish,  hydrology,  and                                                               
geomorphology of  those crossings  so that  the crossings  can be                                                               
designed appropriately.                                                                                                         
                                                                                                                                
3:09:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON inquired  whether the  department can  charge                                                               
the applicant for those costs under the law.                                                                                    
                                                                                                                                
MR. BENKERT replied that a project  of this size goes through the                                                               
Office  of Project  Management &  Permitting (OPMP).   Typically,                                                               
the applicant enters into a  Reimbursable Services Agreement with                                                               
the State of  Alaska.  Those funds provided by  the applicant can                                                               
be utilized by ADF&G for its work specifically on this project.                                                                 
                                                                                                                                
3:10:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH   asked  whether   the  Stand   for  Salmon                                                               
Initiative is  an impediment to  project construction  in Alaska.                                                               
He further  asked for  ADF&G's opinion  on the  initiative.    He                                                               
opined that the  state has a rigorous mechanism  already in place                                                               
to protect the  state's fisheries and expressed  his concern that                                                               
the initiative will curtail development statewide.                                                                              
                                                                                                                                
COMMISSIONER COTTEN  responded that litigation is  ongoing on the                                                               
initiative and  meanwhile ADF&G will  continue to do its  job and                                                               
follow the  law and permitting  requirements.  At this  point, he                                                               
said, the department cannot give an opinion on the initiative.                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH  inquired whether Commissioner  Cotten could                                                               
provide an assessment to the  committee as to what the initiative                                                               
would do to the state's permitting environment if passed.                                                                       
                                                                                                                                
COMMISSIONER COTTEN said the  department is currently cooperating                                                               
with the legislature on legislation  that is similar, although he                                                               
doesn't know  whether it would  replace the initiative.   He said                                                               
ADF&G is happy  to work with the legislature  to evaluate impacts                                                               
of different proposals that would include changes to Title 16.                                                                  
                                                                                                                                
3:13:17 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 3:18 p.m.                                                                 

Document Name Date/Time Subjects
1 DNR-House_Resources-Pebble-2-21-18 PPT.pdf HRES 2/21/2018 1:00:00 PM
2 ADFG HRES PPT re Pebble Project 2.21.18.pdf HRES 2/21/2018 1:00:00 PM