Legislature(2019 - 2020)BARNES 124

03/25/2019 01:00 PM RESOURCES

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Audio Topic
01:02:14 PM Start
01:02:42 PM Alaska Oil and Gas Conservation Commission
01:21:04 PM Presentation(s): Pebble Mine Status and Update
03:02:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: Alaska TELECONFERENCED
Oil & Gas Conservation Commission
-- Public Testimony <Time Limit May Be Set> --
+ Presentation: Pebble Project Status & Update on TELECONFERENCED
Permitting & Environmental Impact Statement by
- Tom Collier, CEO
- John Shively, Chairman
- James Fueg, VP of Permitting
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 25, 2019                                                                                         
                           1:02 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Lincoln, Co-Chair                                                                                           
Representative Geran Tarr, Co-Chair                                                                                             
Representative Grier Hopkins, Vice Chair                                                                                        
Representative Sara Hannan                                                                                                      
Representative Ivy Spohnholz                                                                                                    
Representative Chris Tuck                                                                                                       
Representative Dave Talerico                                                                                                    
Representative Sara Rasmussen                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative George Rauscher                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING(S):                                                                                                        
                                                                                                                                
Alaska Oil and Gas Conservation Commission                                                                                    
                                                                                                                                
     Jessie Chmielowski - Anchorage, Alaska                                                                                     
                                                                                                                                
     CONFIRMATION (S) ADVANCED                                                                                                  
                                                                                                                                
PRESENTATION(S):  PEBBLE PROJECT STATUS AND UPDATE                                                                              
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JESSIE CHMIELOWSKI, Appointee                                                                                                   
Alaska Oil and Gas Conservation Commission                                                                                      
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified as appointee to the Alaska Oil                                                                 
and Gas Conservation Commission, Department of Administration.                                                                  
                                                                                                                                
TOM COLLIER, Chief Executive Officer                                                                                            
Pebble Limited Partnership                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "A Clear Path Forward."                                                                                               
                                                                                                                                
JOHN SHIVELY, Chairman                                                                                                          
Board of Directors                                                                                                              
Pebble Limited Partnership                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "A Clear Path Forward."                                                                                               
                                                                                                                                
JAMES FUEG, Vice President of Permitting                                                                                        
Pebble Limited Partnership                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Co-Provided  a  PowerPoint  presentation                                                             
entitled, "A Clear Path Forward."                                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:02:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHN  LINCOLN  called   the  House  Resources  Standing                                                             
Committee meeting to order at  1:02 p.m.  Representatives Hannan,                                                               
Talerico, Spohnholz, Rasmussen, Hopkins,  Tarr, Tuck, and Lincoln                                                               
were present at the call to order.                                                                                              
                                                                                                                                
^CONFIRMATION HEARING(S):                                                                                                       
                                                                                                                              
                    CONFIRMATION HEARING(S):                                                                                  
                                                                                                                                
^Alaska Oil and Gas Conservation Commission                                                                                   
                                                                                                                                
           Alaska Oil and Gas Conservation Commission                                                                       
                                                                                                                                
1:02:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN announced  the first order of  business would be                                                               
a confirmation  hearing for the  appointee to the Alaska  Oil and                                                               
Gas Conservation Commission.                                                                                                    
                                                                                                                                
1:03:24 PM                                                                                                                    
                                                                                                                                
JESSIE CHMIELOWSKI,  Appointee, Alaska  Oil and  Gas Conservation                                                               
Commission (AOGCC),  informed the  committee she wished  to serve                                                               
as the petroleum  engineering commissioner for AOGCC  in order to                                                               
use her experience  and skills to protect the  public interest in                                                               
Alaska's  oil and  gas  resources.   She said  she  has lived  in                                                               
Alaska  for almost  20 years  and has  worked with  AOGCC in  her                                                               
profession.     Ms.  Chmielowski   gave  a  brief   personal  and                                                               
educational history,  noting the  following qualifications:   her                                                               
experience; she  is a registered professional  petroleum engineer                                                               
with the state;  she has nineteen years of  work experience, with                                                               
three years  of work  as an  engineer on the  North Slope  in all                                                               
facets  of oil  field operations;  she has  government regulatory                                                               
experience as  senior petroleum engineer  with the  Alaska office                                                               
of  the  Bureau  of  Land Management  (BLM),  Department  of  the                                                               
Interior,  performing  regulatory  oversight functions;  she  has                                                               
reviewed  drilling permits  and  metering,  unit agreements,  and                                                               
development obligations;  she was  the main  point of  contact at                                                               
BLM pertaining to the ConocoPhillips  Alaska, Inc. development in                                                               
the National Petroleum Reserve-Alaska (NPR-A).                                                                                  
                                                                                                                                
1:06:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RASMUSSEN asked  if Ms.  Chmielowski is  aware of                                                               
areas  in  the  regulatory  process   that  could  be  made  more                                                               
efficient for the oil and gas industry.                                                                                         
                                                                                                                                
MS. CHMIELOWSKI  was unsure;  however, she  suggested cooperative                                                               
joint  federal   and  state   oversight  may   be  one   area  of                                                               
improvement.                                                                                                                    
                                                                                                                                
CO-CHAIR TARR asked Ms. Chmielowski  to discuss subsidence issues                                                               
related to BP wells, her work at Milne Point, and bonding.                                                                      
                                                                                                                                
MS. CHMIELOWSKI recalled  in the matter of BP  well integrity, on                                                               
2/28/19, AOGCC  released an order  that required BP  to undertake                                                               
specific   actions;  the   order  remains   under  investigation,                                                               
although  she  said  she  is  well  prepared  to  handle  surface                                                               
subsidence issues.  Related to bonding  on idle wells that are on                                                               
state land,  she advised if  an operator is  unable to shut  in a                                                               
well that  has been closed for  over one year, the  state ends up                                                               
with  the obligation  to  plug the  abandoned  well.   Therefore,                                                               
AOGCC seeks to  update its regulations to create  a tiered system                                                               
of  bonding for  operators across  the North  Slope, which  would                                                               
mitigate  the  state's  potential liability  should  an  operator                                                               
claim bankruptcy.                                                                                                               
                                                                                                                                
CO-CHAIR  TARR   asked  Ms.  Chmielowski  to   elaborate  on  the                                                               
"California proposal."                                                                                                          
                                                                                                                                
MS.  CHMIELOWSKI  explained  another   method  to  address  state                                                               
liability for  shut-in wells entails AOGCC  meeting annually with                                                               
each  operator  to identify  idle  wells  that  are ready  to  be                                                               
plugged and abandoned; a third  option is enacting legislation to                                                               
establish "predecessor  liability," in which the  state holds the                                                               
prior  operator   liable  should   the  current   operator  claim                                                               
bankruptcy.                                                                                                                     
                                                                                                                                
1:10:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN inquired as to  other issues coming before AOGCC                                                               
and the legislature.                                                                                                            
                                                                                                                                
MS. CHMIELOWSKI  restated the top  issues before AOGCC are:   the                                                               
idle  and  long-term  shut-in wells;  ensuring  new  and  smaller                                                               
operators  -  that  are unfamiliar  with  state  regulations  and                                                               
standards   -  follow   regulations;  new   exploration  activity                                                               
workload for staff; unknown issues that arise.                                                                                  
                                                                                                                                
CO-CHAIR   LINCOLN   asked   whether  permafrost   problems   are                                                               
widespread on the North Slope.                                                                                                  
                                                                                                                                
MS.  CHMIELOWSKI  acknowledged  the subsurface  subsidence  issue                                                               
occurs across the  North Slope including Prudhoe  Bay, Milne, and                                                               
Kuparuk;  however, how  the operators  respond will  vary due  to                                                               
differences  in well  construction.   For example,  the BP  wells                                                               
were completed with the outer  surface casing anchored within the                                                               
permafrost zone.   She opined  subsidence is an issue  that would                                                               
benefit from  study by  all of  the industry  on the  North Slope                                                               
because it is a regional problem.                                                                                               
                                                                                                                                
CO-CHAIR  LINCOLN surmised  a taskforce  on this  issue would  be                                                               
organized by AOGCC.                                                                                                             
                                                                                                                                
MS. CHMIELOWSKI  said AOGCC has suggested  organizing a taskforce                                                               
to hold a knowledge-sharing session.                                                                                            
                                                                                                                                
CO-CHAIR  LINCOLN  questioned  whether  the  aforementioned  well                                                               
designs were approved and permitted by AOGCC.                                                                                   
                                                                                                                                
MS.  CHMIELOWSKI  advised  the   aforementioned  wells  were  the                                                               
earliest  wells  drilled  at  Prudhoe   Bay  and  are  no  longer                                                               
permitted under current regulations; in  fact, there are 14 wells                                                               
of a  similar design and  all have  [shut-in] plans.   In further                                                               
response  to  Co-Chair Lincoln,  she  said  she would  provide  a                                                               
timeline  for the  completion of  the identified  wells; it  will                                                               
take at least through 2019.                                                                                                     
                                                                                                                                
1:14:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR asked  Ms. Chmielowski  to disclose  any potential                                                               
conflict of interest.                                                                                                           
                                                                                                                                
MS.  CHMIELOWSKI  responded  AOGCC   is  an  independent,  quasi-                                                               
judicial body and  thus she disclosed she formally  held BP stock                                                               
and her husband works at Oil Search Limited.                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  stated her  support for  Ms. Chmielowski's                                                               
appointment.   She noted  AOGCC has a  vacant position  and asked                                                               
whether AOGCC is functioning without  a chair, or if the governor                                                               
will appoint a chair.                                                                                                           
                                                                                                                                
MS. CHMIELOWSKI was unsure of the  process or the timing [for the                                                               
appointment of a chair].                                                                                                        
                                                                                                                                
1:16:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN will inquire.                                                                                                  
                                                                                                                                
1:16:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN observed  two  commissioner positions  are                                                               
filled by  petroleum engineering and geologist  professionals and                                                               
the third  commissioner fills  a public member  seat.   She asked                                                               
whether AOGCC  would face limitations  in fulfilling  its mission                                                               
were the third position not filled.                                                                                             
                                                                                                                                
1:17:43 PM                                                                                                                    
                                                                                                                                
MS.  CHMIELOWSKI expressed  her  understanding a  quorum for  the                                                               
commission is two, thus AOGCC can function.                                                                                     
                                                                                                                                
1:18:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN  opened public testimony; after  ascertaining no                                                               
one wished to testify, public testimony was closed.                                                                             
                                                                                                                                
CO-CHAIR TARR paraphrased from the following statement:                                                                         
                                                                                                                                
     The  House Resources  Standing  Committee has  reviewed                                                                    
     the qualifications of  the governor's appointee, Jessie                                                                    
     Chmielowski,  to the  Alaska Oil  and Gas  Conservation                                                                    
     Commission,   [Department    of   Administration]   and                                                                    
     recommends  that  the  name be  forwarded  to  a  joint                                                                    
     session for  consideration.  This does  not reflect the                                                                    
     intent by  any of  the members to  vote for  or against                                                                    
     this  individual during  any  future  sessions for  the                                                                    
     purpose of confirmation.                                                                                                   
                                                                                                                                
1:18:58 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:18 p.m. to 1:21 p.m.                                                                       
                                                                                                                                
^PRESENTATION(S):  PEBBLE MINE STATUS AND UPDATE                                                                                
        PRESENTATION(S):  PEBBLE MINE STATUS AND UPDATE                                                                     
                                                                                                                                
1:21:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN announced  the final order of  business would be                                                               
an update on the Pebble  Project related to its permitting status                                                               
and the draft environmental impact statement (EIS) process.                                                                     
                                                                                                                                
1:21:19 PM                                                                                                                    
                                                                                                                                
TOM   COLLIER,   Chief    Executive   Officer,   Pebble   Limited                                                               
Partnership, gave brief professional  background information.  He                                                               
said  his career  in permitting  brings a  perspective -  broader                                                               
than simply  a mining perspective  - of  environmental protection                                                               
and   how   natural   resource  development   and   environmental                                                               
protection  can go  hand-in-hand.    Further, principles  learned                                                               
from his  earlier experience in  government are:   it is  a false                                                               
choice   between   development  and   environmental   protection;                                                               
development and  environmental protection  can coexist;  hard and                                                               
intense  scientific analysis  through the  National Environmental                                                               
Policy  Act  of  1969  (NEPA), EIS  will  determine  how  natural                                                               
resource development  and environmental protection coexist.   Mr.                                                               
Collier   directed  attention   to   a  PowerPoint   presentation                                                               
entitled, "A Clear Path Forward,"  and informed the committee the                                                               
importance  of mining  begins with  a [positive]  economic impact                                                               
for the state,  but mining is also essential for  modern life and                                                               
particularly for green technology:   wind turbines, solar panels,                                                               
and  electric  vehicles require  enormous  amount  of copper;  in                                                               
fact, green  transportation requires much more  copper than other                                                               
transportation  options.   Beginning  in 2021,  there  will be  a                                                               
significant gap  in the  supply of copper;  the base  supply from                                                               
existing mines will begin to  decrease, demand will increase, and                                                               
"Pebble  fits right  into that  ...  gap."   Mr. Collier  advised                                                               
copper will be needed for green  energy, and it can be sourced in                                                               
the third world, where there  are poor environmental protections,                                                               
or it can  be mined in Alaska, under  the strictest environmental                                                               
regimen found in the world (slides 1-8).                                                                                        
                                                                                                                                
1:26:12 PM                                                                                                                    
                                                                                                                                
MR.  COLLIER said  Pebble is  a copper  mine with  other minerals                                                               
including silver,  gold, molybdenum, and rhenium,  and is located                                                               
on state  land that  was acquired  by the  state for  its mineral                                                               
potential (slides 9-13).   Slide 14 was a picture  of the site of                                                               
the Pebble deposit.                                                                                                             
                                                                                                                                
REPRESENTATIVE  TUCK  asked  for  more information  on  the  land                                                               
acquisition.                                                                                                                    
                                                                                                                                
MR. COLLIER explained  there was a three-way land  trade with the                                                               
state, Cook  Inlet Region, Incorporated  (CIRI), and  the federal                                                               
government to  expand the  boundary of  Lake Clark  National Park                                                               
and Preserve.   The state  relinquished timberland to  CIRI, CIRI                                                               
relinquished  land  needed  for  Lake  Clark  National  Park  and                                                               
Preserve,  and the  federal government  relinquished land  to the                                                               
state  that  had  mineral  potential.   He  said  the  trade  was                                                               
recognized in federal  statute; if the land is  not developed the                                                               
state will not benefit from the trade.                                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN asked when the trade occurred.                                                                            
                                                                                                                                
1:28:11 PM                                                                                                                    
                                                                                                                                
JOHN  SHIVELY,  Chairman,  Board  of  Directors,  Pebble  Limited                                                               
Partnership,  recalled the  trade occurred  in 1977,  as part  of                                                               
agreements  related   to  the  Alaska  National   Interest  Lands                                                               
Conservation Act (ANILCA);  CIRI traded land that  became part of                                                               
Lake Clark National Park and Preserve.                                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN  surmised all of  the land was part  of the                                                               
original Lake Clark National Park and Preserve proposal.                                                                        
                                                                                                                                
MR. SHIVELY clarified [the land]  was part of ANILCA negotiations                                                               
that  went on  for  four  years, "and  this  took  place I  think                                                               
relatively early  on during those  negotiations as a way  to sort                                                               
of make Lake Clark National Park more complete."                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK questioned  whether  the land  trade was  an                                                               
amendment to ANILCA.                                                                                                            
                                                                                                                                
MR. SHIVELY said, "It was approved as part of ANILCA."                                                                          
                                                                                                                                
MR. COLLIER further explained the  Pebble Partnership worked from                                                               
2013-2014 to  reassess and  redesign the  project in  response to                                                               
concerns about the project.   The plan has the following changes:                                                               
the  project has  a smaller  footprint; a  proposed 20-year  mine                                                               
plan; the  footprint has been  moved away from the  Upper Talarik                                                               
and Kvichak  River systems;  no cyanide will  be used  to recover                                                               
gold; there  will be no  waste rock  piles at closure;  there are                                                               
enhanced environmental  safeguards regarding water  treatment and                                                               
the tailings facilities (slide 15).                                                                                             
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ asked  whether the  smaller project  is                                                               
economic.                                                                                                                       
                                                                                                                                
MR. COLLIER said yes.                                                                                                           
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ expressed  her understanding the present                                                               
design  of the  project would  leave  a majority  of the  mineral                                                               
resource in the ground.                                                                                                         
                                                                                                                                
1:31:41 PM                                                                                                                    
                                                                                                                                
MR.  COLLIER  agreed.   In  further  response  to  Representative                                                               
Spohnholz, he said  a decision to reduce the size  of the project                                                               
was in  response to  concerns by opponents  that the  project was                                                               
too large.  He remarked:                                                                                                        
                                                                                                                                
     We  tried to  find the  exact sweet  spot where  a mine                                                                    
     could  be  built,  including the  infrastructure,  that                                                                    
     would  be economically  profitable,  and  yet one  that                                                                    
     would have  the smallest  footprint out in  Bristol Bay                                                                    
     as we could find, and we think we found that.                                                                              
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  inquired as  to how  long it  will take                                                               
the proposed project to recover its capital investment.                                                                         
                                                                                                                                
MR.  COLLIER  explained  the  project  moves  into  profitability                                                               
within the 20-year course of the project.                                                                                       
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ   asked,  "What's  the   percentage  of                                                               
capital outlay  versus the total  ... gross revenue  you'd expect                                                               
to earn?"                                                                                                                       
                                                                                                                                
MR.  COLLIER was  unable  to comment  on  the specific  financial                                                               
aspects of  the project because  of the [National  Instrument 43-                                                               
101 for the Standards of  Disclosure for Mineral Projects], which                                                               
prevents  Canadian  mining  companies from  disclosing  financial                                                               
information about a project except  under certain conditions; the                                                               
project   has  completed   internal  analyses   that  cannot   be                                                               
disclosed.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  HANNAN  questioned  how,  after  20  years,  with                                                               
mineral  resource   still  in  the  ground,   "you're  done  with                                                               
business, [and]  Pebble shuts  up and goes  away, and  that's the                                                               
end."                                                                                                                           
                                                                                                                                
MR. COLLIER acknowledged  - with the amount  of mineral resources                                                               
that are known  - a permit may  be filed for an  expansion of the                                                               
project and  more mining.   However,  Pebble Partnership  seeks a                                                               
permit for the  project as proposed, and to build  the project as                                                               
proposed; later,  if an expansion  is proposed, permits  would be                                                               
required for the existing project and for the expansion.                                                                        
                                                                                                                                
1:35:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN said  it is  odd that  a project  that was                                                               
described as  a large 100-year  gold mine  is now described  as a                                                               
small 20-year copper mine.                                                                                                      
                                                                                                                                
MR.  SHIVELY pointed  out Pebble  Partnership  never intended  to                                                               
obtain  a  permit to  mine  the  entire  resources.   When  Anglo                                                               
American  was  a  partner  in  the project,  the  mine  life  was                                                               
projected to  be 20-25 years;  although it was a  bigger project,                                                               
is not  reasonable to permit  for [100 years] because  of changes                                                               
in technology  and regulations.   Regarding leaving  resources in                                                               
the ground, he said that has always been an aspect of Pebble.                                                                   
                                                                                                                                
MR.  COLLIER   added  in   his  experience,   the  aforementioned                                                               
permitting  plan is  exactly the  way  the oil  and gas  industry                                                               
"opens up"  a new field,  and he  provided details.   Further, he                                                               
noted many  mines in Alaska  have been expanded by  this process.                                                               
He  directed  attention  to  slide   16,  which  illustrated  the                                                               
footprint that was analyzed by  the U.S. Environmental Protection                                                               
Agency (EPA)  in its Bristol  Bay watershed assessment.   He said                                                               
the footprint  shows the current  project is about  one-fifth the                                                               
size of the original project.                                                                                                   
                                                                                                                                
REPRESENTATIVE TUCK remarked:                                                                                                   
                                                                                                                                
     ...  when you  said that  the Canadian  statutes limits                                                                    
     your  ability to  disclose  information,  how ...  does                                                                    
     that  affect the  operations on  U.S.  soil, on  Alaska                                                                    
     state  land,  ...  that carries  over  -  international                                                                    
     orders?                                                                                                                    
                                                                                                                                
MR.  COLLIER   clarified  the  aforementioned  is   a  disclosure                                                               
obligation:   [Pebble  Partnership]  is not  allowed to  disclose                                                               
certain  information,  and  it   does  not  affect  the  proposed                                                               
operation of  the project  in the U.S.;  operations on  U.S. land                                                               
are controlled by federal and state  law.  In further response to                                                               
Representative Tuck, he remarked:                                                                                               
                                                                                                                                
     It's a disclosure  obligation, and so we're  out in the                                                                    
     stock   market,   we're    listed   on   the   Canadian                                                                    
     [Securities] Exchange and the  New York Stock Exchange,                                                                    
     we are  controlled by  both laws of  both of  those two                                                                    
     federal  entities in  terms  of disclosure,  disclosing                                                                    
     financial information only.                                                                                                
                                                                                                                                
REPRESENTATIVE   TUCK  opined   without  knowing   the  project's                                                               
expected  return on  investment,  one cannot  determine what  the                                                               
state's  revenue will  be from  the project.   He  asked for  the                                                               
timeline for getting minerals to market.                                                                                        
                                                                                                                                
MR. COLLIER  related the  current plan is  that the  project will                                                               
take five years to build and  an additional two years to obtain a                                                               
permit, thus it will be six  to seven years before minerals would                                                               
be available to market.                                                                                                         
                                                                                                                                
1:40:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LINCOLN acknowledged there  are standards for the public                                                               
disclosure  of "financials"  and  observed, typically,  operators                                                               
and  developers  provide  financials  at  a  certain  point,  for                                                               
example,  as  a  prefeasibility  study.   He  asked  whether  the                                                               
project is currently working on a prefeasibility study.                                                                         
                                                                                                                                
MR.  COLLIER  said  the  Pebble   Partnership  plans  to  publish                                                               
financial data in a manner consistent with statutes.                                                                            
                                                                                                                                
CO-CHAIR LINCOLN remarked:                                                                                                      
                                                                                                                                
     But  in  terms of  the  timeline  of a  typical  mining                                                                    
     project  like   this,  would  you  normally   have  ...                                                                    
     permitting before  you did a  pre-FEAS, or does  a pre-                                                                    
     FEAS normally come first ...?                                                                                              
                                                                                                                                
MR.   COLLIER   agreed   normally   a  project   would   have   a                                                               
prefeasibility study prior  to permitting, but it  is not unusual                                                               
to  not do  so.   In  further response  to  Co-Chair Lincoln,  he                                                               
pointed  out a  prefeasibility study  is not  required to  obtain                                                               
permits.                                                                                                                        
                                                                                                                                
CO-CHAIR  TARR  observed  other projects  have  departed  from  a                                                               
typical  schedule  and  expressed   concern  that  as  a  result,                                                               
investors  have been  misled, because  the  project looks  better                                                               
economically, which may also influence those issuing permits.                                                                   
                                                                                                                                
MR.  COLLIER  disagreed, noting  that  the  pertinent statute  is                                                               
designed to  protect investors and  has no impact  on permitting;                                                               
furthermore, it is not unusual for  a mine to obtain a permit and                                                               
subsequently make a final decision to advance the project.                                                                      
                                                                                                                                
CO-CHAIR  TARR opined  permitting could  be influenced  by public                                                               
comment  in  support  of  a  project  because  of  its  potential                                                               
positive  impact to  economics and  jobs, even  though financial,                                                               
cost-benefit  analysis, and  environmental  information would  be                                                               
incomplete.                                                                                                                     
                                                                                                                                
MR.  COLLIER stated  economic  impact data  is  available on  the                                                               
project;  however,  certain  financial  data  is  constrained  by                                                               
reasons previously discussed.                                                                                                   
                                                                                                                                
1:45:52 PM                                                                                                                    
                                                                                                                                
MR. SHIVELY  pointed out  almost $800 million  has been  spent on                                                               
the project;  this investment  would not  have been  made without                                                               
some  conviction of  a positive  economic outlook.   Furthermore,                                                               
the investment  that has been  made has garnered  the information                                                               
needed to advance the project to permitting.                                                                                    
                                                                                                                                
CO-CHAIR TARR  posited parties are  looking at the  investment in                                                               
the  project and  questioning how  a 20-year  project will  allow                                                               
sufficient  return on  the investment  that has  been made.   She                                                               
suggested multiple  phases of  the project  would be  required to                                                               
recover $800 million.                                                                                                           
                                                                                                                                
MR. SHIVELY said the permitting  process does not reflect whether                                                               
a project  is economic.  He  cautioned there is no  guarantee the                                                               
project will advance to [multiple  phases].  Furthermore, some of                                                               
the money spent  by Anglo American does not need  to be recovered                                                               
as part of the economics of the project.                                                                                        
                                                                                                                                
REPRESENTATIVE  HOPKINS asked  for elaboration  of the  footprint                                                               
illustrated on slide 16.                                                                                                        
                                                                                                                                
MR. COLLIER explained the footprint  is one of three alternatives                                                               
considered  by  EPA within  the  Bristol  Bay watershed  analysis                                                               
published in 2014.  He remarked:                                                                                                
                                                                                                                                
     And at  the time  that they  did that  analysis, Pebble                                                                    
     had not  put a specific plan  on the table, and  so EPA                                                                    
     looked at some of our  earlier financial data and tried                                                                    
     to determine  what were the three  alternatives that we                                                                    
     might be  considering taking forward, and  this was one                                                                    
     of those alternatives.   The one that  I've shown here,                                                                    
     the  smaller  one,  is  the   one  that  we  took  into                                                                    
     permitting.                                                                                                                
                                                                                                                                
REPRESENTATIVE HOPKINS  said, "So,  theoretically, the  next four                                                               
phases  would  look  similar  to   the  previous  iteration,  the                                                               
previous slide."                                                                                                                
                                                                                                                                
MR. COLLIER  said, "Perhaps.   There are  lots of  different ways                                                               
you can come  at this project in terms of  an underground mine, a                                                               
larger  pit  mine, all  kinds  of  things  that could  be  future                                                               
alternatives.  This is something  that ... we never proposed, but                                                               
that EPA thought we might consider ...."                                                                                        
                                                                                                                                
MR. COLLIER, in further response  to Representative Hopkins, said                                                               
the exact location of the ore is  known [shown as a red circle on                                                               
slide 16].                                                                                                                      
                                                                                                                                
1:50:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HOPKINS  asked   for   the   location  of   mine                                                               
infrastructure such  as the  mill, roads,  and the  [natural] gas                                                               
pipeline.                                                                                                                       
                                                                                                                                
MR. COLLIER  said he  would provide a  map of  the transportation                                                               
corridor that  includes a direct transportation  corridor to Lake                                                               
Iliamna, a  ferry across  the lake, another  road to  Cook Inlet,                                                               
and a natural gas pipeline to the [ferry] port.                                                                                 
                                                                                                                                
REPRESENTATIVE RASMUSSEN  opined hypotheticals are  irrelevant at                                                               
this  point in  time  and  urged the  committee  to consider  the                                                               
information as it is currently presented.                                                                                       
                                                                                                                                
MR. COLLIER continued,  noting Pebble is an asset  to Alaska that                                                               
will  bring  thousands  of  jobs and  hundreds  of  millions  [of                                                               
dollars] in tax revenue, and the  debate is how to safely develop                                                               
a mine in Bristol Bay  without significate damage to fish (slides                                                               
17 and  18).  For  12 years, developers  have sought to  ensure a                                                               
safe  process, and  developers  now have  answers  from the  NEPA                                                               
process, which must be followed  to advance a project (slides 19-                                                               
21).    He   explained  the  NEPA  process   is  an  independent,                                                               
scientific analysis that requires  approximately 60 categories of                                                               
permits and  is the right  way to evaluate the  project; further,                                                               
the NEPA  process is supported  by an  environmental organization                                                               
(slides 22-24).   As part  of the NEPA  process, a draft  EIS was                                                               
prepared  by the  U.S. Army  Corps of  Engineers (USACE)  a major                                                               
independent  agency of  the  federal  government (slides  25-27).                                                               
Slide 28  illustrated other agencies involved  in the preparation                                                               
of the draft EIS, including federal and state agencies.                                                                         
                                                                                                                                
CO-CHAIR  TARR expressed  her concern  that  the current  federal                                                               
administration  has   directed  that  all   environmental  impact                                                               
statements  must  be  completed  in less  than  one  year,  which                                                               
"sidesteps the  scientific process."   She opined the  process is                                                               
no longer independent and scientifically sound.                                                                                 
                                                                                                                                
1:55:26 PM                                                                                                                    
                                                                                                                                
MR. COLLIER said environmental impact  statements issued by USACE                                                               
are unaffected by  the one-year timeline directed  by the federal                                                               
administration.    He  related in  his  professional  experience,                                                               
USACE  is not  an agency  easily subject  to political  whims; he                                                               
described  in detail  the  rank and  education  of various  USACE                                                               
personnel.  Mr.  Collier stressed USACE approaches  its work with                                                               
rigor, and its work is subject  to judicial review.  In fact, the                                                               
Pebble Partnership expects  the record of decision  and permit to                                                               
be  challenged in  court as  related to  whether the  process was                                                               
thorough, scientific, and independent.                                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN asked whether  the USACE EIS process allows                                                               
for dissenting opinions to be included in its final report.                                                                     
                                                                                                                                
MR.  COLLIER  said  all  comments  filed  by  federal  and  state                                                               
agencies are part of the record.                                                                                                
                                                                                                                                
REPRESENTATIVE HANNAN  directed attention  to slide 29  and asked                                                               
whether  the Tribal  governments and  councils listed  have local                                                               
government authority over lands that  are affected by the current                                                               
proposal.                                                                                                                       
                                                                                                                                
1:58:37 PM                                                                                                                    
                                                                                                                                
JAMES  FUEG,   Vice  President  of  Permitting,   Pebble  Limited                                                               
Partnership, said  the land falls  within the Lake  and Peninsula                                                               
Borough.  In  further response to Representative  Hannan, he said                                                               
Lake  and  Peninsula Borough  is  a  cooperating agency  that  is                                                               
participating  in the  development  of the  EIS,  and which  will                                                               
issue a development permit before the project can proceed.                                                                      
                                                                                                                                
REPRESENTATIVE HANNAN  advised in  state permits,  the permitting                                                               
agency  usually   references  dissenting  views;  she   asked  if                                                               
dissenting views are attached or excluded in the EIS process.                                                                   
                                                                                                                                
MR.  COLLIER  said comments  from  agencies  or governments  with                                                               
dissenting views are  "made very clear in the  comments they file                                                               
in response to this draft EIS."                                                                                                 
                                                                                                                                
CO-CHAIR TARR characterized  the Section 404 [of  the Clean Water                                                               
Act] issue as a political hot  potato; she said there are reasons                                                               
to believe politics can influence a permitting process.                                                                         
                                                                                                                                
2:01:02 PM                                                                                                                    
                                                                                                                                
MR.  COLLIER disagreed  adding, in  his experience  as a  federal                                                               
regulator "at  a pretty high  level," he  never knew USACE  to be                                                               
subjected  to   political  influence.     Mr.   Collier  returned                                                               
attention to  slide 29  which listed  35 Tribal  governments that                                                               
were contacted by  USACE during the draft EIS process.   Slide 30                                                               
illustrated  the  Pebble  EIS schedule:    application  filed  in                                                               
December 2017; the scoping period  began in April [2018] with the                                                               
final draft  EIS released in  February [2019]; the  public review                                                               
process extends to  [5/30/19]; the target date for  the final EIS                                                               
is early in 2020; a record  of decision is expected mid-2020.  To                                                               
address questions  about whether the  [draft EIS] was  rushed, he                                                               
provided  several  examples  of   permitting  periods  for  other                                                               
projects  such as  the  Point Thomson  oil  facility (slide  31).                                                               
Slide 32 listed comment periods  for several projects; he pointed                                                               
out a  45-day public comment  period is required by  statute, and                                                               
this project has a "quite  a reasonable" public comment period of                                                               
90 days.                                                                                                                        
                                                                                                                                
REPRESENTATIVE HANNAN  returned attention  to slide 32  and asked                                                               
whether  the  Bristol Bay  watershed  assessment  was related  to                                                               
Pebble project permitting.                                                                                                      
                                                                                                                                
MR. COLLIER said yes.                                                                                                           
                                                                                                                                
2:04:11 PM                                                                                                                    
                                                                                                                                
MR. SHIVELY disagreed;  he clarified at that time  Pebble had not                                                               
submitted an  application for  a project  to any  federal agency.                                                               
He said the assessment was a process  by EPA that was not part of                                                               
a  permitting  process, but  was  a  biased  effort to  stop  the                                                               
project and led to legal action.                                                                                                
                                                                                                                                
MR.  COLLIER  agreed.   In  further  response  to  Representative                                                               
Hannan,  he   said  EPA  initiated  the   Bristol  Bay  watershed                                                               
assessment.                                                                                                                     
                                                                                                                                
REPRESENTATIVE HANNAN remarked:                                                                                                 
                                                                                                                                
     So, the  EPA can ... ask  for an assessment to  be done                                                                    
     and  they did,  with the  Bristol Bay,  in response  to                                                                    
     probably 13  years of  inquiries and  discussions about                                                                    
     Pebble.                                                                                                                    
                                                                                                                                
MR. COLLIER opined  EPA does not have the  statutory authority to                                                               
do so; in  fact, a preliminary injunction to stop  the report was                                                               
issued.  However,  the case was settled thus the  issue was never                                                               
finally resolved  by the  court system.   In further  response to                                                               
Representative Hannan,  the injunction stopped EPA  from making a                                                               
decision  to  await  litigation, which  was  ultimately  settled,                                                               
allowing Pebble to advance to the USACE permitting process.                                                                     
                                                                                                                                
REPRESENTATIVE  HANNAN   questioned  whether  the   document  was                                                               
released.                                                                                                                       
                                                                                                                                
MR. COLLIER said the document  was published, followed by several                                                               
public comment periods;  this is the fifth  public comment period                                                               
held  on the  project,  two  of which  were  related  to the  EPA                                                               
process.                                                                                                                        
                                                                                                                                
REPRESENTATIVE HOPKINS asked for the length of the draft EIS.                                                                   
                                                                                                                                
MR. COLLIER said the draft EIS is approximately 1,600 pages.                                                                    
                                                                                                                                
There followed brief  discussion related to the  Donlin Gold mine                                                               
project permitting process.                                                                                                     
                                                                                                                                
2:07:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOPKINS  observed the  applicants and  projects at                                                               
Point  Thomson are  not  similar  to Donlin  Gold  or the  Pebble                                                               
Partnership  project,  based  on   their  long-term  impacts  and                                                               
reclamation projects.                                                                                                           
                                                                                                                                
MR. COLLIER  pointed out the  public comment period for  the very                                                               
controversial Arctic  National Wildlife Refuge Coastal  Plain Oil                                                               
and Gas Leasing project is 45 days.                                                                                             
                                                                                                                                
REPRESENTATIVE  HOPKINS stated  [the difference  is] oil  and gas                                                               
projects are "pipes and rigs."                                                                                                  
                                                                                                                                
MR.  COLLIER  said  the  public  comment  period  for  Pebble  is                                                               
appropriate because most  of the controversial issues  are out of                                                               
the  project as  follows:   one-fifth  the size  of the  original                                                               
announcement;  no  cyanide;  redesigned tailings  facilities;  no                                                               
waste rock.   The major issue with a mine  project is the quality                                                               
and quantity  of water  affected by  the project,  therefore, the                                                               
redesign removes all  of the facilities from  "the Upper Talarik"                                                               
(slides  34-36).    Slide  37  illustrated  the  current  design;                                                               
cyanide will  not be used  for gold recovery; all  water affected                                                               
by  the  mine  will  be   captured,  treated,  and  strategically                                                               
released  to   optimize  fish  habitat,  for   example,  at  time                                                               
necessary  for  salmon  to  spawn   (slides  37-39).    Slide  40                                                               
illustrated two water treatment  plants, water storage, and water                                                               
release points.                                                                                                                 
                                                                                                                                
2:12:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK returned attention to  slide 37 and asked for                                                               
the diameter of the open [ore pit shown in orange].                                                                             
                                                                                                                                
MR. FUEG said approximately one mile by one mile.                                                                               
                                                                                                                                
REPRESENTATIVE TUCK  observed the redesign eliminated  waste rock                                                               
piles and questioned what concerns are raised by waste rock.                                                                    
                                                                                                                                
MR. COLLIER  explained waste  rock piles  increase the  impact of                                                               
the mine site to wetlands; the  intent is to reduce the footprint                                                               
on the site by eliminating waste rock piles.                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK asked  how the project will  dispose of waste                                                               
rock.                                                                                                                           
                                                                                                                                
MR. COLLIER said the mine is  designed for the lowest strip ratio                                                               
possible for  20 years,  thus there  is not  much waste,  and the                                                               
waste will  be treated as potentially  acid-generating rock (PAG)                                                               
tailings instead of stored separately as waste rock.                                                                            
                                                                                                                                
[Mr.  Collier pointed  out  the main  water  management pond  and                                                               
other aspects  of the mine  shown on slide  37 are also  shown on                                                               
slide 40 larger and in grey with blue arrows.]                                                                                  
                                                                                                                                
2:16:39 PM                                                                                                                    
                                                                                                                                
MR. FUEG,  in response to  Representative Hopkins,  explained the                                                               
project mines  little waste rock  thus waste rock cannot  be used                                                               
to build the infrastructure.   So, during construction, rock will                                                               
be quarried  for building materials,  and the quarries  are shown                                                               
in brown on slide 37.                                                                                                           
                                                                                                                                
REPRESENTATIVE HOPKINS  asked whether the quarried  rock would be                                                               
used for the tailings pond.                                                                                                     
                                                                                                                                
MR. FUEG said the tailings dams  would be built from the quarried                                                               
rock.                                                                                                                           
                                                                                                                                
MR. COLLIER stated  one conclusion of the draft EIS  is to have a                                                               
management plan to  discharge water into three  nearby streams to                                                               
benefit fish  habitat; there will  be no downstream  impacts from                                                               
the pit in post closure at reclamation (slides 41 and 42).                                                                      
                                                                                                                                
REPRESENTATIVE  TUCK  surmised  the main  water  management  pond                                                               
would be created to collect  water that normally courses in three                                                               
streams, and then the water would have to be discharged.                                                                        
                                                                                                                                
MR. COLLIER  said the facility  would be built to  handle extreme                                                               
precipitation thus  normally [water storage] would  not be needed                                                               
except in a year with too much rain.   He added that all water in                                                               
contact with the site must be treated.                                                                                          
                                                                                                                                
REPRESENTATIVE TALERICO  returned to  slide 40  which illustrated                                                               
settlement  ponds and  treatment  plants, and  asked whether  the                                                               
blue   arrows  indicated   the  project   has  the   capacity  to                                                               
recirculate water prior to discharge.                                                                                           
                                                                                                                                
MR.  FUEG  explained  the  primary purpose  of  the  [main  water                                                               
management pond  shown on slides  37 and  40] is to  store excess                                                               
water, although water  can be recirculated.   Recent tailings dam                                                               
failures are  associated with too  much water building up  in the                                                               
tailings facility;  the pond is  there to store excess  water, so                                                               
it does  not have to be  stored in the tailings  facility.  After                                                               
storage,  the water  is treated  to  meet all  the water  quality                                                               
standards  prior to  discharge.   He pointed  out the  applicants                                                               
have  75 years  of precipitation  data from  the region  and have                                                               
included allowances for multiple years of wet or dry weather.                                                                   
                                                                                                                                
2:22:33 PM                                                                                                                    
                                                                                                                                
MR.  COLLIER,  in response  to  Representative  Hannan, said  the                                                               
streams  affected are  Upper Talarik  Creek,  North Fork  Koktuli                                                               
River, and South Fork Koktuli River.                                                                                            
                                                                                                                                
REPRESENTATIVE HANNAN  asked how discharging water  would benefit                                                               
fish habitat.                                                                                                                   
                                                                                                                                
MR.  COLLIER explained  many streams  near the  mine site  do not                                                               
have an  annual flow, and  "what we can  do is bring  back annual                                                               
flow to the streams."                                                                                                           
                                                                                                                                
REPRESENTATIVE HANNAN remarked:                                                                                                 
                                                                                                                                
     ... if they don't have  flow, then they are unlikely to                                                                    
     have  salmon that  spawn  in  them because,  naturally,                                                                    
     salmon don't  go to streams  that don't have  flow that                                                                    
     could  hold  their  spawn,  at least  in  the  case  of                                                                    
     sockeye.                                                                                                                   
                                                                                                                                
MR.  COLLIER  suggested creating  annual  flow  is a  benefit  to                                                               
habitat.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  HANNAN advised  the  only  method of  introducing                                                               
salmon  stock  is salmon  enhancement  via  hatcheries and  asked                                                               
whether there is a plan to do so.                                                                                               
                                                                                                                                
MR.  COLLIER restated  the habitat  would be  enhanced to  create                                                               
more options for  salmon to spawn.  Mr.  Collier turned attention                                                               
to tailings  and said  the tailings  facilities are  designed for                                                               
maximum  safety (slides  45-47).   Slide  48  illustrated a  bulk                                                               
tailings facility  with a minimum  amount of water,  which drains                                                               
into a  containment pond  and an embankment  [with a  slide ratio                                                               
of]  2:1,  with  buttresses.     The  design,  construction,  and                                                               
operation of  the facility would  be certified by the  Alaska Dam                                                               
Safety Program,  Division of Mining,  Land and Water,  DNR (slide                                                               
49).                                                                                                                            
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ inquired  as to  the importance  of the                                                               
embankment 2:1 ratio.                                                                                                           
                                                                                                                                
MR. COLLIER  explained the ratio is  a height to width  ratio and                                                               
"the better that  ratio is the ... less likely  it is that you'll                                                               
have  a  failure  of  the  facility."   In  further  response  to                                                               
Representative Spohnholz,  he gestured  to indicate the  slope of                                                               
the embankment.                                                                                                                 
                                                                                                                                
REPRESENTATIVE HANNAN  returned attention  to slide 37  and asked                                                               
how  deep the  bedrock  is  beneath the  mine  site  and for  the                                                               
relative location of the tailings dam.                                                                                          
                                                                                                                                
2:29:40 PM                                                                                                                    
                                                                                                                                
MR. FUEG  described the dam as  a valley with the  dam across the                                                               
end.  The rendering [on slide  48] shows the component of the dam                                                               
wall.  The  depth of the bedrock is not  constant and varies from                                                               
zero to over 50 feet.   Overburden will be thickest at the center                                                               
of the valley;  all of the overburden will be  excavated prior to                                                               
placement of rock on "competent" bedrock.                                                                                       
                                                                                                                                
REPRESENTATIVE HANNAN  restated her  question as to  the location                                                               
of the tailings dam.                                                                                                            
                                                                                                                                
MR. FUEG said one  embankment is on the north side  and one is on                                                               
the  south, shown  [in  purple] "in  a  relatively straight  area                                                               
right at the bottom that is  the south embankment, and then there                                                               
is a straight  area .... and that would be  the north embankment,                                                               
the  bigger one  we showed  the rendering  of."   In response  to                                                               
Representative Tuck,  he said the  tallest point would be  on the                                                               
north end.                                                                                                                      
                                                                                                                                
MR. FUEG, in response to  Representative Spohnholz, said the blue                                                               
lines  are  the boundaries  of  the  watersheds and  the  primary                                                               
rivers  in the  watersheds are  lighter blue  and labeled  (slide                                                               
37).                                                                                                                            
                                                                                                                                
CO-CHAIR  TARR  asked  for  the  expected  life  of  the  storage                                                               
facility.                                                                                                                       
                                                                                                                                
MR. FUEG responded  both of the tailings  facilities are designed                                                               
for a 20-year life.                                                                                                             
                                                                                                                                
2:32:55 PM                                                                                                                    
                                                                                                                                
MR. COLLIER continued to pyritic  tailings storage that holds PAG                                                               
tailings.    By  separating  the   facilities,  the  PAG  storage                                                               
facility  is smaller  and fully  lined; at  closure, the  pyritic                                                               
tailings will be returned to the  mine pit and covered with water                                                               
to prevent contact with oxygen.   He opined the closure plan is a                                                               
significant  environmental  enhancement  over the  previous  plan                                                               
(slides 50-54).                                                                                                                 
                                                                                                                                
CO-CHAIR TARR  asked whether the  design of the  pyritic tailings                                                               
dam is  specific to conditions in  Alaska, such as at  the [Hecla                                                               
Mining Company Greens Creek mine located in Southeast Alaska].                                                                  
                                                                                                                                
MR. FUEG  advised Greens  Creek mine uses  a dry  stack facility.                                                               
Separating  bulk and  pyritic  tailings is  planned  in order  to                                                               
address  Alaska  conditions,  such  as  a  lot  of  water  during                                                               
operations and mine closure.   The design will keep bulk tailings                                                               
in  a  desired  dry  state; however,  the  pyritic  tailings  are                                                               
covered  with water  and  lined to  prevent  contact with  ground                                                               
water.   At closure, the  pyritic tailings  will be put  into the                                                               
mine pit 2,000 feet down in  a gravity well that cannot fail, and                                                               
covered with a pit lake.                                                                                                        
                                                                                                                                
REPRESENTATIVE  HANNAN asked  for the  depth of  water needed  to                                                               
prevent oxidization.                                                                                                            
                                                                                                                                
2:36:29 PM                                                                                                                    
                                                                                                                                
MR. FUEG said as little as a few feet.                                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN  inquired as  to the  effect of  the oxygen                                                               
that is found  in water, and the problem caused  should the water                                                               
drain away.                                                                                                                     
                                                                                                                                
MR. FUEG  said the [atmospheric]  condition everywhere  in Alaska                                                               
and at the mine site is a net positive rainfall.                                                                                
                                                                                                                                
REPRESENTATIVE HANNAN questioned the  effect of climate change to                                                               
the  amount  of  rainfall  in  Alaska and  whether  the  risk  of                                                               
acidification remains in perpetuity.                                                                                            
                                                                                                                                
MR. FUEG  said "models" for  the project indicate an  increase in                                                               
rainfall;  importantly, the  [location of  the tailings]  will be                                                               
below the ground water level.                                                                                                   
                                                                                                                                
REPRESENTATIVE HANNAN restated her  question as to the perpetuity                                                               
of acidification.                                                                                                               
                                                                                                                                
MR.  COLLIER said  the tailings  must  be covered  with water  in                                                               
perpetuity.                                                                                                                     
                                                                                                                                
CO-CHAIR TARR  observed Greens  Creek mine  uses a  liner beneath                                                               
its bulk tailings facility but the Pebble project does not.                                                                     
                                                                                                                                
MR. FUEG stated  using a liner prevents drainage  and the project                                                               
seeks a free-draining facility to  prevent the risk of a tailings                                                               
dam failure.                                                                                                                    
                                                                                                                                
2:39:53 PM                                                                                                                    
                                                                                                                                
MR. COLLIER directed attention to  slide 54 which illustrated the                                                               
pit  lake.   He said  according  to the  draft EIS,  catastrophic                                                               
failure  of the  tailings  facilities is  extremely unlikely  and                                                               
there  are  no population  impacts  to  fish from  the  evaluated                                                               
tailings release scenarios (slide  53-56).  Turning to supporting                                                               
salmon, Mr. Collier said Pebble  has completed more than a decade                                                               
of  environmental studies,  at a  cost of  over $150  million, on                                                               
wetlands,  groundwater,  surface hydrology,  migration  patterns,                                                               
fish habitat and more (slides  57-60).  The sockeye escapement in                                                               
the mine area  is small:  0.08 percent of  the South Fork Koktuli                                                               
River  and  North  Fork Koktuli  River  drainages  escapement  to                                                               
Bristol Bay.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOPKINS  returned  attention   to  slide  60  and                                                               
expressed his understanding the  affected groundwater table is at                                                               
the  surface of  the ground;  therefore, water  would need  to be                                                               
constantly pumped out of the pit.                                                                                               
                                                                                                                                
MR.  FUEG  acknowledged  there   are  isolated  areas  where  the                                                               
groundwater  comes to  the  surface, and  other  areas where  the                                                               
groundwater is deeper.   Like other mines, the  project will have                                                               
to dewater  by drilling  wells around  and in  the pit,  which is                                                               
then treated to  water quality standards and  discharged into the                                                               
rivers.                                                                                                                         
                                                                                                                                
REPRESENTATIVE HOPKINS  surmised the  project will need  to empty                                                               
the water table surrounding the mine.                                                                                           
                                                                                                                                
MR.  FUEG assured  the  committee the  project  has drilling  and                                                               
modeling to assess changing water levels.                                                                                       
                                                                                                                                
MR.  COLLIER read  from slides  64-72.   He stated  a significant                                                               
finding of the  draft EIS is that - following  12 years of debate                                                               
- Pebble  will not harm  the Bristol Bay  fishery.  He  read from                                                               
slides 72-75.                                                                                                                   
                                                                                                                                
2:45:18 PM                                                                                                                    
                                                                                                                                
MR. SHIVELY  gave a history  of his professional  experience with                                                               
the Red  Dog mine project.   He  said [the Pebble  project] would                                                               
benefit  the  economy   and  the  culture  of   the  region  when                                                               
opportunities  come to  local  residents; in  fact,  he has  seen                                                               
lives changed and benefits will  be statewide (slides 76-78).  In                                                               
the  region, the  project will  increase the  Lake and  Peninsula                                                               
Borough budget  by two or  three times  for the benefit  of local                                                               
education.    State revenue  will  depend  on  the value  of  the                                                               
minerals extracted  and the  mining industry  more than  pays for                                                               
itself; further, mining industry tax  revenue is third behind oil                                                               
and  gas tax  revenue and  insurance tax  revenue (slides  79 and                                                               
80).   There is also the  benefit of 750-1,000 direct  jobs, with                                                               
an average mining  wage of $100,000 or more (slides  82-83).  Mr.                                                               
Shively noted  the draft EIS  indicated the project  will benefit                                                               
small communities by providing a  transportation system and lower                                                               
cost power  with minimal impact  to subsistence resources  and no                                                               
impact to the  abundance of resources (slides 84-85).   The draft                                                               
EIS also noted there will  be substantial benefits to the overall                                                               
health of  the region  and the  state due to  funds spent  by the                                                               
project  on support  services, including  benefits to  nonprofits                                                               
(slide 86).                                                                                                                     
                                                                                                                                
2:50:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RASMUSSEN has  heard from  her constituents  that                                                               
there  is "a  declining quality  of life  in the  village."   She                                                               
asked for Pebble Partnership Ltd.'s view on local hiring.                                                                       
                                                                                                                                
MR.  SHIVELY related  Cominco and  Teck,  owners of  the Red  Dog                                                               
mine,  are Canadian  companies  and have  made  a commitment  for                                                               
local hire.                                                                                                                     
                                                                                                                                
CO-CHAIR  TARR pointed  out the  state does  not have  credits or                                                               
incentives  [against]  mining taxes;  however,  the  state has  a                                                               
three-year  tax   holiday  for  mines,   thus  once  a   mine  is                                                               
operational,  it has  three years  for cost  recovery before  any                                                               
revenue is due to the  state, although Lake and Peninsula Borough                                                               
may collect local revenue at the outset.                                                                                        
                                                                                                                                
MR.  SHIVELY  stressed  the  project has  helped  the  [Lake  and                                                               
Peninsula Borough]  deal with current  impacts; in  addition, the                                                               
project may  negotiate a  payment in  lieu of  taxes (PILT)  in a                                                               
manner similar to the  Red Dog mine.  He pointed  out there is no                                                               
tax holiday for corporate income tax or royalties.                                                                              
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  asked for detailed  information related                                                               
to the local hire provision.                                                                                                    
                                                                                                                                
MR. SHIVELY  advised the project  has an outline for  a workforce                                                               
development plan; at the Red  Dog mine, job training began during                                                               
the  construction phase.    He recalled  former  partners in  the                                                               
project    supported    educational   programs    and    provided                                                               
scholarships.                                                                                                                   
                                                                                                                                
REPRESENTATIVE TUCK  asked whether  the projected revenue  to the                                                               
Lake and Peninsula Borough is based upon the redesigned project.                                                                
                                                                                                                                
MR. SHIVELY indicated yes.                                                                                                      
                                                                                                                                
REPRESENTATIVE HOPKINS  asked whether  there has been  support or                                                               
opposition from local governments and villages.                                                                                 
                                                                                                                                
2:54:36 PM                                                                                                                    
                                                                                                                                
MR.  SHIVELY  said  support  and   opposition  is  varied.    The                                                               
strongest support comes from those  closest to the project due to                                                               
the economic  benefits garnered during the  exploration programs.                                                               
He acknowledged there is a  majority of opposition in the region;                                                               
however, he recalled  last year 150 elders  attended a conference                                                               
and no  one expressed a  negative comment.   The elders  have two                                                               
top  priorities:    protect   subsistence  resources  and  ensure                                                               
villages survive.                                                                                                               
                                                                                                                                
REPRESENTATIVE  HOPKINS  asked  whether any  of  the  governments                                                               
closest  to the  project  have taken  an  official or  unofficial                                                               
stance in support of the project.                                                                                               
                                                                                                                                
MR. SHIVELY opined  the applicants have not  sought support prior                                                               
to this time.                                                                                                                   
                                                                                                                                
MR. COLLIER stated  the draft EIS indicates a  clear path forward                                                               
and revealed:   Alaska's resource projects  coexist with fishing;                                                               
Pebble  will  use  industry's best  practices;  benefits  include                                                               
increased revenue,  employment, and  education; there will  be no                                                               
downstream impacts  from the pit  post closure; there will  be no                                                               
long-term change to the health of  the Bristol Bay and Cook Inlet                                                               
fisheries;   Alaska   knows   how  to   develop   its   resources                                                               
responsibly.  He concluded the project  is the right mine for the                                                               
right time (slides 87-96).                                                                                                      
                                                                                                                                
REPRESENTATIVE HANNAN  expressed her  support for a  state income                                                               
tax and asked if Mr. Collier is  a resident who would pay a state                                                               
income tax.                                                                                                                     
                                                                                                                                
MR. COLLIER said he has been an Alaska resident for six years.                                                                  
                                                                                                                                
MR. SHIVELY spoke in support of a personal income tax.                                                                          
                                                                                                                                
REPRESENTATIVE  HANNAN asked  whether  Pebble corporate  officers                                                               
are residents of Alaska.                                                                                                        
                                                                                                                                
MR.  COLLIER said  of  seven  or eight  officers,  one  is not  a                                                               
resident.                                                                                                                       
                                                                                                                                
REPRESENTATIVE TUCK inquired  as to whether the  project would be                                                               
expanded.                                                                                                                       
                                                                                                                                
MR. COLLIER said there are no plans for expansion of the 20-year                                                                
project.                                                                                                                        
                                                                                                                                
3:02:11 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The House Resources Standing Committee meeting was recessed at                                                                  
[3:02] p.m. to be reconvened on 3/25/19 at 6:30 p.m.  The                                                                       
meeting was reconvened and adjourned on 3/25/19 at 6:30 p.m.                                                                    

Document Name Date/Time Subjects
Jessie Chmielowski_Redacted.pdf HRES 3/25/2019 1:00:00 PM
Alaska Oil and Gas Conservation Commission
HRES Pebble Partnership Presentation 3.25.19.pdf HRES 3/25/2019 1:00:00 PM
Pebble Mine
Alaska Oil and Gas Conservation Commission Fact Sheet and Roster 3.25.19.pdf HRES 3/25/2019 1:00:00 PM
Alaska Oil and Gas Conservation Commission