Legislature(2013 - 2014)BUTROVICH 205
03/31/2014 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Opportunities for Resource Development to Address Economic Challenges in Rural Alaska | |
| HJR30 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HJR 30 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 31, 2014
3:32 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Fred Dyson, Vice Chair
Senator Peter Micciche
Senator Click Bishop
Senator Hollis French
MEMBERS ABSENT
Senator Lesil McGuire
Senator Anna Fairclough
COMMITTEE CALENDAR
OPPORTUNITIES FOR RESOURCE DEVELOPMENT TO ADDRESS ECONOMIC
CHALLENGES IN RURAL ALASKA
- HEARD
HOUSE JOINT RESOLUTION NO. 30 am
Requesting that the federal government and the United States
Secretary of the Interior reconsider the Izembek Land Exchange
decision and approve the Izembek Land Exchange, allowing the
residents of King Cove to have road access to the Cold Bay
Airport for critical health and safety reasons and to improve
the quality of their lives.
- MOVED HJR 30 am OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HJR 30
SHORT TITLE: IZEMBEK LAND EXCHANGE
SPONSOR(s): REPRESENTATIVE(s) HERRON
02/26/14 (H) READ THE FIRST TIME - REFERRALS
02/26/14 (H) RES
03/10/14 (H) RES AT 1:00 PM BARNES 124
03/10/14 (H) Moved Out of Committee
03/10/14 (H) MINUTE(RES)
03/12/14 (H) RES RPT 9DP
03/12/14 (H) DP: JOHNSON, KAWASAKI, HAWKER,
P.WILSON, OLSON, SEATON, TARR, SADDLER,
FEIGE
03/18/14 (H) TRANSMITTED TO (S)
03/18/14 (H) VERSION: HJR 30 AM
03/19/14 (S) READ THE FIRST TIME - REFERRALS
03/19/14 (S) RES
03/26/14 (S) RES WAIVED PUBLIC HEARING NOTICE,RULE
23
03/29/14 (S) RES AT 10:00 AM BUTROVICH 205
03/29/14 (S) -- MEETING CANCELED --
03/31/14 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JOHN SHIVELY, Chairman of the Board
Pebble Limited Partnership
POSITION STATEMENT: Presented moved on opportunities for
resource development to address economic challenges in rural
Alaska.
ED FOGELS, Deputy Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Commented on rural economic opportunity
issues presentation.
REPRESENTATIVE BOB HERRON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HJR 39.
HENRY MACK, Mayor
City of King Cove, Alaska
POSITION STATEMENT: Supported HJR 30.
GARY HENNIGH, City Administrator since 1989
City of King Cove, Alaska
POSITION STATEMENT: Supported HJR 30.
ACTION NARRATIVE
3:32:08 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:32 p.m. Present at the call to
order were Senators Bishop, Micciche, and Chair Giessel.
^Opportunities for Resource Development to Address Economic
Challenges in Rural Alaska
Opportunities for Resource Development to Address Economic
Challenges in Rural Alaska
3:32:46 PM
CHAIR GIESSEL announced an informational presentation on the
opportunities for resource development to address economic
challenges in Rural Alaska. It started with showing a video
called: The Villages Documentary - by Director Tim Eaton. He
said when they started this project in 2012 he knew almost
nothing about Alaska. But in February last year on a frozen lake
he learned a couple of things very quickly. One: cold in Alaska
means very cold and two: there is a kind of raw beauty about it
that is rugged and austere, but it is very inspiring. It takes a
special kind of person to live in rural Alaska; you have to be
tough and you have to have strong character.
3:33:14 PM
SENATOR FRENCH joined the committee.
MR. EATON said his goal in this project was to capture life in
Southwest Alaska as it really is with no constraints. What they
will see is from almost a year of shooting and many trips back
to the villages. The film had no narrator; he decided to let the
people of the villages tell their own story. They met a lot of
wonderful people while making the film and the documentary is a
tribute to them.
3:46:44 PM
SENATOR DYSON joined the committee.
3:55:24 PM
The movie ended at 3:55 p.m.
JOHN SHIVELY, Chairman of the Board, Pebble Limited Partnership,
stated that Pebble paid for the movie they just saw, but they
told Tim to go out and find his story. They had no editorial
control over it. An internationally well-known economics
consulting firm did an economic study and estimated there would
be over 4,000 direct and indirect jobs during construction and
over 2,000 during operations. The impact on the economy would be
over $400 million a year during the four to five years of
construction and probably over $1 billion in the first 25 years.
He said it would be a significant tax payer, although not as
good as oil.
3:58:09 PM
It would contribute over $100 million/year in taxes, more than
the entire commercial fishing industry does now. The state will
have a royalty, part of which will go into the Permanent Fund
because they are on state lands. Mr. Shively had said all along
if the state wants to have a discussion about mining taxes and
royalties that they are willing to do so.
3:59:06 PM
He switched to a slide that was made up from a table in the
Department of Labor and Workforce Development (DOLWD) "Economic
Trends Magazine." It showed the change in population by census
district from 2000-2010. It was not a surprise that rural census
district populations are declining including two of the three
areas in the Bristol Bay Region, the Lake and Peninsula Borough
and the Bristol Bay Borough. Dillingham had a slight increase,
but if you look at migrating communities from a state policy
view, in 10 years the Native population increased by 11.6
percent. No rural district had a population gain that high. The
closest that came to it was Wade Hampton in the Yukon Kuskokwim
area, which increased by 8.3 percent. What was very dramatic to
him was the Native population in the Matsu Borough, which
increased 63 percent in those 10 years.
MR. SHIVELY said a lot of his work had been in the last six
years and but in the last two days he had been concentrating on
the three census districts: Bristol Bay, the Lake and Peninsula
Borough and the Dillingham census areas. Economic opportunities
are needed out there where there is only a month-long fishing
industry - even though it is a $1.5 million commercial fishing
industry. And he has no interest in damaging it. But its impacts
have changed locally. When limited entry went in, over 80
percent of the limited entry permits, both drift and set net,
were owned by people who lived in the region. Now 59 percent of
drift netters are owned by people that don't live in the state;
about one-third are owned locally and one-third are owned by
other Alaskans, and one-third of the setnet permits are owned by
people outside the state.
4:01:55 PM
He has been told that 12,000-16,000 jobs are tied to the
industry, but they are very short term and mostly in the
processing area that are minimum wage; over 80 percent are held
by non-residents of the U.S. Since 2003, six schools have
closed, four in the last three years. So the rate of school
closure is increasing and a number of others are right on the
edge.
MR. SHIVELY said they had spent a lot of time with elders and
their visions aren't much different than a lot of people's in
some ways. It's about jobs and keeping children in the villages.
There are no job opportunities. To him it's about jobs and
taxes, but it's also about what it can do for local people.
Pebble has employed 130-180 local people, and Red Dog Mine has
employed over 50 percent Alaska Natives even though rumors say
Natives don't know how to do them.
4:03:17 PM
Their biggest problem was not recruiting Alaska Natives, but
listening to people call up their local hire person and crying
on the phone because they needed work. One example, Mr. Shively
said was when he became CEO; a Nondalton boy named Jonathan
Hobson became a driller's helper. He was very shy at first and
would hide if the press came out, but two years ago Jonathan
said he wanted to talk to the press and tell them what the job
meant to him and to his family. He can now feed his family in
the winter time and it has changed his life. Mr. Shively said
stories like that is why he took the job at Pebble.
MR. SHIVELY said he didn't know if the mine would damage the
fishery when he took the job, but after six years he knows this
prospect can be built without damaging it. If they were going to
do that kind of damage they wouldn't get through the permitting
process, either state or federal. All they are asking is to be
able to design this project, which is very complicated. They
have spent $150 million on their science and believe they can
engineer a project that works. They intend to go ahead as soon
as the EPA lets them.
SENATOR DYSON said people who overstate things tend to lose
credibility. He had fished the Bay for 25 years and opponents
say a catastrophe at this mine can ruin the whole Bay fishery
that has five major rivers.
MR. SHIVELY said there are basically three drainages: Upper
Talarik, Kvijack, and the south fork of the Koktuli River, and
there are eight different watersheds.
SENATOR DYSON said so even if the worst happens it won't destroy
the whole fishery. His experience over 25 years was that even
when one run gets really weak, fish will often get into
drainages that smell like home. They are also out in the ocean
for three years and if you lose a year, it will be replenished
just because of the apparent randomness of when the fish choose
to head for home.
4:10:57 PM
MR. SHIVELY related how streams have come back on their own -
like after the Katmai Volcano erupted; it closed off a number of
streams with extremely toxic material, but the fish came back
ultimately. The same thing happened at the Mount St. Helens
eruption. Some of the streams came back naturally and others
because man stepped in and fixed them: the same thing in Prince
William Sound and the '64 Earthquake. If something went wrong
there could be a short term impact, but it wouldn't devastate
the fishery.
Another thing he said to keep in mind is this is a low grade
prospect. The ore averages less than 1 percent; over 90 percent
of what they put in the tailings impoundment facility would be
just dirt.
MR. SHIVELY said they bought into this process in good faith and
had spent over $600 million on it.
SENATOR DYSON said expending that much on something that got
sawed off would have some chilling effect on other investments,
as well.
MR. SHIVELY said the Frasier Institute does an annual survey of
mining industry executives and measures a variety of different
aspects of mining. So, the good news for Alaska is that we are
number one in the world in terms of geological prospects and
23rd in terms of development challenges; and it's more expensive
to develop here, which doesn't help.
SENATOR MICCICHE reflected that a 2008 statewide effort that was
defeated the mine, essential, and then it got narrowed down to
the "2011 Save Our Salmon Initiative," which passed by 37 votes,
and that was recently struck down. He asked what the primary
reason is for the people of Southwest to cut this project off at
the knees before the effects can really be evaluated.
MR. SHIVELY said his theory is that the opponents have done a
great job of persuading people that significant damage will be
done to the fishery, and the efforts by the EPA to do a study on
a mine that doesn't exist have added to that problem. People are
being paid to oppose it and spread fear. They need to be
concerned, but he knew a couple of elders who were absolutely
opposed to the mine five years ago that changed their minds. At
their last conference, the whole conversation was about what was
going on in the village, what they can do for their kids and how
they can keep them there. Most of Pebble's support comes from
people who live closest to the mining prospect and most of the
opposition comes from people who live in Dillingham over 100
miles away.
4:17:04 PM
SENATOR BISHOP said he was around the periphery of this project
since its inception, specifically at Iliamna, doing some work
force development training locals on an airport project. And Mr.
Shively was right; they can do the work. Enough people sitting
here at the table supported him on a project to start the first-
ever registered core driller apprenticeship training program on
the planet.
MR. SHIVELY remarked that it was a very successful program.
SENATOR BISHOP said Jonathon Hobson started out as a driller in
that program and is now very successful. He's portable; just
give him an opportunity.
MR. SHIVELY said what goes behind the tailings impoundment
facility is the waste stream that comes out of the processing
plant (tailings). A little over 90 percent of the tailings is
just dirt; other things are handled in a separate place in the
impoundment facility so they don't come in contact with air and
water, which together makes sulfuric acid.
4:20:01 PM
SENATOR BISHOP said they don't even have a project yet. They are
just trying to do the analytical science to see if they even
have a project.
MR. SHIVELY said that was correct.
SENATOR BISHOP said years ago there was some discussion about
how this could be an underground project with a slurry pipeline
to tide water with the processing being done somewhere else. Has
that idea come and gone?
MR. SHIVELY explained that there are two parts of the prospect.
Pebble West has to be an open pit; Pebble East is richer and
could be underground further down, but that is significantly
more expensive to develop. And it would still have the same
tailings impoundment issues. The problem with moving the ore to
another area to process - which they have considered on the Cook
Inlet side - is that because it is only 1 percent and less
mineralization you have to move a lot of stuff that has
absolutely no value. So, if you go underground, you still have
the water treatment and the tailings impoundment facility, but
you would probably not have the waste rock piles from the
overburden.
CHAIR GIESSEL asked Deputy Commissioner Ed Fogels for a broad-
brush explanation of how DNR approaches a large mine permitting
process.
ED FOGELS, Deputy Commissioner, Department of Natural Resources
(DNR), Anchorage, Alaska, said he continually hears two myths
and wanted to inject a little bit of truth into them. One is
that mines don't contribute to the state's economy and two that
mines can't be permitted properly. On the contrary, mines are
significant contributors to the state's economy and the
department is able to permit them effectively. Looking at
Alaska's record its clear the department has done a good job
with the mining industry from an environmental perspective. He
said Red Dog Mine successfully operated for many years now is
one of the world's largest zinc mines and the main economic
driver of the Northwest Arctic Borough; the water that the
leaves that mine is treated and has a lower metals content than
the naturally occurring waters and the fish populations are
going down stream. The Kensington and Greens Creek Mines are
both strong economic drivers for the economy of Juneau and they
are operating soundly.
Fort Knox is a significant contributor to the Fairbanks
community. They have created wetlands downstream with growing
fish populations. Usibelli Coal Mine provides over 100 jobs to
the rural community of Healy and has been successfully
reclaiming its lands for over 50 years. The Pogo Mine provides
jobs for Delta Junction and Fairbanks, and is operating in the
headwaters of one of the most pristine and beautiful rivers in
the Interior, the Good Pastor River.
MR. FOGELS said the department has a good mine team composed of
experts from all the different agencies: all with advanced
degrees. They work on permitting these mines and monitoring them
for environmental compliance; they do regular inspections and
bio monitoring to make sure the aquatic life downstream remains
healthy. They continue monitoring the mines as they close, and
post-closure they still monitor their care and maintenance.
MR. FOGELS said the state's large mine team was created over 20
years ago and is unique in the nation. It's coordinated by the
DNR Office of Project Management and Permitting; it issues the
dozens of permits necessary for large mines from the state
alone. It coordinates with federal agencies, which also issues
dozens of federal permits. It also coordinates with the federal
agencies to do the federal impact statement process, key to
permitting any large project in Alaska.
4:25:20 PM
No one department can do all the permitting, but denial of one
permit by any state or federal agency can. So, all agencies must
work together and the experts have to agree that the permits are
issuable for a particular mine.
He said, like all big industrial projects, mining projects are
complex and never without issues. None of the projects will ever
work perfectly. Their job is to evaluate those designs and make
sure they are strong. The key is now making sure that each site
is strongly monitored to find potential problems while they are
still small.
4:26:48 PM
Alaska has 17 percent of the world's coal, 3.5 percent of the
world's copper, 3 percent of the world's lead, 8 percent of the
world's gold, 3 percent of the world's zinc, 1.5 percent of the
world's silver, but Alaska is underexplored. Only 15 percent of
the state land has been mapped at an inch to mile scale in
geology and only 25 percent of it has been flown with
geophysical surveys. There is a lot of potential to have these
kinds of projects and it can be done properly. Most importantly,
they have the wisdom and experience not to approve something
when it won't work right.
He said his big messages were that their state agencies work for
the people of Alaska. They have significant jobs to do and have
to decide to issue their own individual permits that will be
part of a coordinated process that will take anywhere from three
to five years.
MR. FOGELS said they are currently looking at the permit
applications for the Donlin Creek project that could provide one
or two generations of high-paid jobs for the people of that
region.
CHAIR GIESSEL said the average wage in the mining industry in
Alaska today is $100K/year. She asked him to elaborate on the
Health Assessment Program.
MR. FOGELS said Alaska is the only state that has developed a
state-lead health impact assessment program that is housed
within the Department of Health and Social Services (DHSS). A
number of years ago there was a call that the Federal
Environmental Impact Statement (EIS) Process focused on the
environment but wasn't doing an adequate enough job of analyzing
the impacts to human health. The federal laws that drive the EIS
process actually mention human health in the law and it was
decided that more focus should be put on the impacts to human
health.
So, they actually now have a medical doctor that has been hired
by the DHSS whose job it is to sit on the large projects team to
make sure that human health is brought into the equation in
evaluating potential impacts, both positive and negative. No
other state in the nation has developed a health impact
assessment program the way this state has.
4:30:30 PM
SENATOR MICCICHE said the EPA received 850,000 comments about
this project and wondered how to keep away from that
sensationalism. Some projects aren't going to be right, but it
requires a discussion before that determination is made.
4:31:50 PM
MR. SHIVELY said he had his own theories about that. But the not
all of the 850,000 comments supported the EPA; 200,000 actually
said the study was not adequate. Most comments were generated by
pushing a button on an environmental organization's website and
at least one environmental organization brought in a whole
series of comments they'd actually collected from another issue.
And the EPA actually extended the comment time the second time
because Pebble was actually ahead for a while. It's a game.
They have evidence that this started in 2008 and was driven by
Phil North that Lisa Jackson, the administrator of EPA, who were
briefed on this in January of 2010, five months before they got
the petition. In the briefing there was talk about the use of
preemptive veto as a tool for zoning that EPA could do. When
Administrator Jackson came to Alaska in 2010 and met with them
she'd had that petition since May and didn't mention it, and
evidence exists that they wanted to try to hush it up when they
were in Alaska. He found out about it by accident through an
article in the LA Times.
MR. SHIVELY said big money is driving some of this and the way
to have a better discussion about issues like this is to go to
the villages and talk to the elders but it takes time. He
admitted that industry had created problems and that mining does
have a bad record before environmental standards were changed.
The Kennecott is at the headwaters of the Copper River, for
instance.
SENATOR FRENCH said he had questions, but realized they were
running short of time and would save them for later.
CHAIR GIESSEL mentioned that Senator Coghill had filed a four-
year request to the EPA on the documents that Mr. Shively was
referring to on Pebble.
HJR 30-IZEMBEK LAND EXCHANGE
4:37:25 PM
CHAIR GIESSEL announced HJR 30 to be up for consideration. She
said the Izembek land exchange is a public safety issue that is
getting blocked by the federal government.
REPRESENTATIVE BOB HERRON, sponsor of HJR 39, Alaska State
Legislature, described the current medical situation in King
Cove where many years several deaths have been related to
medevacs because there isn't a road. For instance, King Cove is
experiencing 60 mph winds today and there is a 270 ft. Bering
Sea trawler in port with an injured fisherman - severe eye
injury - who requires medevac to Anchorage immediately. The
Coast Guard will not go into King Cove and the trawler will not
go over to Cold Bay, because of the rough seas. If the winds die
down a bit the Coast Guard will go from Cold Bay to the end of
the Izembek King Cove Road and maybe they can medevac that
fisherman back to Cold Bay to go to Anchorage. Situations like
this have happened many times.
Everyone is talking about how the road will ruin the Eel grass
and Black Brandt, so the coordinating agencies - the feds, the
state, local and Tribes - worked for four years to develop a
corridor on which the closest the road can get to a single blade
of Eel grass is one-half mile.
Of course, in the Congressional Act the land trade is 300:1.
They are willing to trade 61,000 acres for the value of 206
acres for a "public safety only corridor." There are no other
alternatives, and this will work.
4:40:52 PM
Again, the coordinating agencies, including Fish and Wildlife,
submitted an EIS saying that a road makes most sense. Alaska
ADF&G agreed and were surprised that Secretary Salazar and
Secretary Jewell made the same decision to deny it - no action
on the proposed swap and no action on the road.
REPRESENTATIVE HERRON related that Fish and Wildlife publicly
stated that safety considerations are important but they were
not a factor in the decision, since they only evaluate
environmental impacts (not being a public safety organization).
What is so incredulous about that is that the courts have told
all federal agencies that all federal decisions must consider
the human factor. All these facts are stated over and over in
the resolution.
4:44:56 PM
SENATOR BISHOP said he concurred with his explanation of the
resolution.
4:45:08 PM
HENRY MACK, Mayor, City of King Cove, Alaska, supported HJR 30.
Audubon is concerned that this road will impact the wellbeing of
migrating birds in the Izembek Refuge; Natives claim title to
thousands of years of stewardship over this refuge and yet they
were nowhere to be found in Audubon's concerns. Twelve people
have been killed flying in and out of King Cove; countless
relatives and friends have had their lives impacted being
medevac'd out. He couldn't believe they were still dealing with
this basic quality of life issue.
He said in mid-January they had asked Secretary Jewell to
reconsider, but she hadn't responded so far. He concluded by
urging the committee to approve this resolution that clearly
expresses the needs of King Cove and that reaches far beyond.
4:51:08 PM
GARY HENNIGH, City Administrator since 1989, City of King Cove,
Alaska, supported HJR 30. He had been active for 25 years on
this road issue. He summarized key events of his 21st trip to
D.C. on the Izembek issue saying he met with Kip Knutson, the
Governor's point person in D.C., who relayed the message that
the secretary had encountered him in another meeting a week
prior and told him that he needed to tell Senator Murkowski to
"get beyond this Izembek Road thing." However, Mr. Knutson told
her that she could resolve the issue on her own by approving the
land exchange and that the Senator would never get over it.
4:56:04 PM
CHAIR GIESSEL closed public testimony.
4:59:04 PM
SENATOR DYSON moved to report HJR 30 am, version 28-LS1533\A.A,
from committee with attached fiscal notes and individual
recommendations. There were no objections and HJR 30 am passed
from the Senate Resources Standing Committee.
4:59:55 PM
Finding no further business to come before the committee, Chair
Giessel adjourned the Senate Resources Standing Committee
meeting at 4:59 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 30 vs A.A.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Sponsor Statement.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Explanation of Changes 28-LS1533.A to .A.A.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Fiscal Note 1 - LAA.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - Map.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR30 Backup - USFWS Huting Guide . Question.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - Final USFWS EIS ExecSum.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - KC Group letter to USDOI Sec. Jewell 30140115.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - KC press release 20140116.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - Sen Murkowski HRES Testimony 20140310.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| HJR 30 Backup - Sen. Murkowski letter to President Obama 20140204.pdf |
SRES 3/31/2014 3:30:00 PM |
HJR 30 |
| SRES It's About People 20140331.pdf |
SRES 3/31/2014 3:30:00 PM |
|
| Alaska as a Storehouse.pdf |
SRES 3/31/2014 3:30:00 PM |