Legislature(2019 - 2020)BUTROVICH 205
03/25/2019 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Consideration of Governor's Appointees: Jessie Chmielowski, Alaska Oil and Gas Conservation Commission | |
| Presentation: the Pebble Partnership: Project Update, Draft Eis and Next Steps | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 25, 2019
3:30 p.m.
MEMBERS PRESENT
Senator Chris Birch, Chair
Senator John Coghill, Vice Chair
Senator Cathy Giessel
Senator Lora Reinbold
Senator Scott Kawasaki
Senator Jesse Kiehl
MEMBERS ABSENT
Senator Click Bishop
COMMITTEE CALENDAR
Alaska Oil and Gas Conservation Commission
Jessie Chmielowski - Anchorage
- CONFIRMATION ADVANCED
PRESENTATION: "The Pebble Partnership: Project Update, Draft EIS
and Next Steps"
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JESSIE CHMIELOWSKI, Appointee
Alaska Oil and Gas Conservation Commission
Anchorage, Alaska
POSITION STATEMENT: Addressed questions regarding her
appointment to AOGCC.
TOM COLLIER, CEO
Pebble Limited Partnership
Anchorage, Alaska
POSITION STATEMENT: Participated in the overview of the Pebble
Project.
JOHN SHIVELY, Chairman of the Board of Directors
Pebble Project
Anchorage, Alaska
POSITION STATEMENT: Participated in the overview of the Pebble
Project.
JAMES FUEG, Vice President of Permitting
Pebble Limited Partnership
Anchorage, Alaska
POSITION STATEMENT: Participated in the overview of the Pebble
Project.
ACTION NARRATIVE
3:30:21 PM
CHAIR CHRIS BIRCH called the Senate Resources Standing Committee
meeting to order at 3:30 p.m. Present at the call to order were
Senators Coghill, Giessel, Reinbold, Kawasaki, Kiehl, and Chair
Birch.
^Consideration of Governor's Appointees: Jessie Chmielowski,
Alaska Oil and Gas Conservation Commission
CONFIRMATION HEARING:
Alaska Oil and Gas Conservation Commission
3:31:07 PM
CHAIR BIRCH announced the consideration of an appointment to the
Alaska Oil and Gas Conservation Commission (AOGCC). AOGCC is a
three-member commission that oversees oil and gas drilling,
development and production, reservoir depletion and metering
operations. AOGCC acts on behalf of the state to prevent waste,
protect correlative rights, improve ultimate recovery, and
protect underground fresh water.
He said Ms. Chmielowski was appointed to the petroleum
engineer's seat on March 7, 2019. Her term with AOGCC will
expire in 2025.
3:31:56 PM
JESSIE CHMIELOWSKI, Appointee, Alaska Oil and Gas Conservation
Commission, Anchorage, Alaska, said she wants to be the
Petroleum Engineering Commissioner for AOGCC because the
position is a very important role that she thinks she can do
very well. She said using her skills and experience to protect
the public interest in Alaska's oil and gas resources is
something that she will be honored and proud to do. She
disclosed that Alaska has been her home for nearly two decades
and the state is where she plans to stay. She said she has
enjoyed working on projects cooperatively with AOGCC and said
she will be happy to join the commission's smart and capable
team.
3:32:46 PM
MS. CHMIELOWSKI provided her personal background information as
follows:
• Grew up in the San Francisco area.
• Attended Rice University:
o Received a Bachelor of Science Degree in Chemical
Engineering.
o Received a Bachelor of Arts Degree in Environmental
Sciences.
• Moved to Alaska in 2000.
• Her husband and children were born in Alaska.
She provided her professional background information and
qualifications for her AOGCC appointment as follows:
• Registered as a professional petroleum engineer in the
State of Alaska.
• Nineteen years of experience, all in Alaska.
• Spent three years as an engineer on the North Slope and
understands oil field operations from "sand face to sales
meter."
• Engineering knowledge includes seismic in geology, drilling
incompletions, well work artificial lift, operations and
facilities, metering, and oil integrity issues.
• Deep and broad understanding of oil and gas developments in
Alaska having worked as an engineer on a variety of
reservoirs and fluid types: light oil, viscous oil, and
heavy oil.
• Direct government regulatory experience from her position
as the Senior Petroleum Engineer for the Bureau of Land
Management (BLM) in Alaska.
o Covered the regulatory oversite functions of both the
AOGCC and the Division of Oil and Gas.
o Worked on projects cooperatively with the State of
Alaska.
o Reviewed drilling permits and fiscal meter
applications like the AOGCC.
o Worked on unit agreements and development obligations.
o Main point of contact at BLM for decision pertaining
to ConocoPhillips' new developments in the National
Petroleum Reserve-Alaska (NPRA).
MS. CHMIELOWSKI summarized that she has a holistic view of the
entire oil and gas process and her experience will be a benefit
to the State of Alaska.
3:34:50 PM
SENATOR REINBOLD asked Ms. Chmielowski to detail her engineering
degrees.
MS. CHMIELOWSKI specified that she has degrees in chemical
engineering and environmental sciences, and she is a registered
professional petroleum engineer.
SENATOR REINBOLD commented that she is impressed with Ms.
Chmielowski's background.
SENATOR KAWASAKI noted that something was redacted in Ms.
Chmielowski's resume regarding her education.
MS. CHMIELOWSKI replied that there is nothing in her resume
regarding education that she thinks is confidential and she does
not know why there is a redaction.
CHAIR BIRCH remarked that the year noted on Ms. Chmielowski's
resume may have been redacted.
MS. CHMIELOWSKI concurred with Chair Birch.
SENATOR KAWASAKI asked if during her time at BLM-Alaska she
confidentially held proprietary information regarding oil and
gas leasing in NPRA.
MS. CHMIELOWSKI answered yes. She said the information is like
the confidential information AOGCC currently holds.
SENATOR KAWASAKI asked if there will be a conflict of interest
based on her BLM experience.
3:37:15 PM
MS. CHMIELOWSKI answered that there is no conflict of interest.
The confidential information is available to both BLM and AOGCC.
SENATOR GIESSEL noted that she was the lead on the legacy wells
issue, also known as the Travesty Wells. She asked if someone
has taken over her position at BLM.
MS. CHMIELOWSKI explained that she spent two winter seasons on
the legacy wells and then went on to NPRA oversite. She said BLM
did not replace and noted her concern that BLM is running out of
funds to continue plugging wells.
SENATOR GIESSEL noted that she has been on the job at AOGCC for
several weeks and asked her impression of how the commission is
functioning, its staffing levels, and if she believes there is
enough funding to do her job well.
MS. CHMIELOWSKI answered that through her work at BLM and
working on projects with AOGCC, she is impressed with the
commission's high level of expertise. She said her understanding
is that AOGCC is staffed appropriately. AOGCC has nine
inspectors and that is one of the critical pieces for having
"eyes on the ground" to keep an eye on the operations.
SENATOR GIESSEL asked if she has the resources she needs at the
commission.
MS. CHMIELOWSKI answered yes.
SENATOR GIESSEL noted that Ms. Chmielowski's husband is employed
by Oil Search (Alaska) LLC. She asked how her husband's
employment will be addressed should an issue come forward from
Oil Search.
MS. CHMIELOWSKI answered that AOGCC is an independent, quasi-
judicial commission that must be unbiased. She said she is fully
open and transparent with all her personal relationships and
will fully recuse herself if appropriate. She noted that she
sold her BP stock and does not have any interest in any other
company.
SENATOR GIESSEL asked what her husband's role is at Oil Search.
MS. CHMIELOWSKI answered that her husband is Vice President of
Exploration at Oil Search.
3:40:24 PM
SENATOR KIEHL asked if she has a background for the quasi-
judicial hearing part at AOGCC.
MS. CHMIELOWSKI opined that AOGCC is unique regarding their
independent, quasi-judicial, and unbiased role. She explained
that through her role at BLM she did enter the sphere of viewing
operations and decisions from a government point of view. She
said keeping her actions clear, open, and transparent along with
consulting fellow AOGCC commissioners will be of value to her.
SENATOR KIEHL said she made a good point that while AOGCC is
quasi-judicial, the commission does not tend to have a lot of
hearings. He asked if she is receiving or seeking any training
or help in learning the quasi-judicial functions at AOGCC.
MS. CHMIELOWSKI answered yes. She said she wants to do the best
that she can by seeking mentorship or advice where appropriate
on the correct way to handle meetings or hearings at AOGCC.
3:41:58 PM
CHAIR BIRCH opened and closed public testimony.
SENATOR GIESSEL reviewed the qualifications fact sheet for an
appointee serving at AOGCC and noted that adjudication
experience is not a requirement for the regulatory position that
deals with fact and science behind the extraction of the state's
resources to maximize extraction for the maximum benefit for
Alaskans. She detailed the qualifications for the engineer seat
as follows:
Qualified petroleum engineer who has earned a degree
from a university in the field of engineering and has
at least 10 years of professional subsurface
experience in the oil and gas industry in drilling,
well operations, production process operations,
reservoir engineering, or a combination there of.
She said Ms. Chmielowski's resume certainly and robustly
represents the previously noted qualifications for AOGCC's
highly technical position.
3:43:50 PM
CHAIR BIRCH stated that in accordance with AS 39.05.080, the
Senate Resources Committee reviewed the following and recommends
the appointment be forwarded to a joint session for
consideration:
Alaska Oil and Gas Conservation Commission
Jessie Chmielowski - Anchorage.
CHAIR BIRCH reminded members that this does not reflect an
intent by any of the members to vote for or against the
confirmation of the individual during any further sessions.
3:44:28 PM
At ease.
^PRESENTATION: The Pebble Partnership: Project Update, Draft EIS
and Next Steps
PRESENTATION: The Pebble Partnership: Project Update, Draft EIS
and Next Steps
3:47:14 PM
CHAIR BIRCH called the committee back to order. He said the
Pebble Limited Partnership (PLP) will provide an update on the
Pebble Project. He said the Senate Resources Committee requested
an update on the project considering the recently released U.S.
Army Corps of Engineers' (USACE) Draft Environmental Impact
Statement (EIS) that details the potential impacts of developing
a large copper and gold mine in the Bristol Bay region. The
Draft EIS is open for public comment until May 30, 2019.
3:48:11 PM
TOM COLLIER, CEO, Pebble Limited Partnership, Anchorage, Alaska,
explained that during his career he has dealt with environmental
issues and permitting large controversial projects. He said he
worked during the Clinton Administration as the Chief of Staff
for Bruce Babbitt, Secretary of the U.S. Department of the
Interior, and addressed some of the nation's biggest and most
difficult environmental challenges at the time.
He said one of the reasons he was chosen for the job at PLP was
his perspective that natural resource opportunities should only
be done responsibly. Choosing between natural resources
development and environmental protection is a false dilemma and
the two can coexist. Determining coexistence is done by looking
intensively and comprehensively at the available science and the
way to do that is through an EIS. PLP has gotten the Pebble
Project to the point where an independent assessment by USACE
addresses the project's controversial issues.
3:50:33 PM
MR. COLLIER addressed "Copper is Essential for Green Technology"
from his presentation and opined that modern life probably
traces back to mining of some type, especially for copper. He
said for technology in America, when people tell him they do not
want copper mines built, he said he asks if they will hand him
their cellphone. He emphasized that copper mining is not just
about the use of copper in technology, but especially for its
use in green technology where enormous amounts of copper is used
for wind turbines, solar panels, and electric vehicles.
He said there is a "dirty little secret" where forecasts predict
there will be a massive gap in worldwide copper availability
starting in 2021 when copper resources start to fall off and
demand increases. The Pebble Project will fit right into the
copper availability gap as a necessary source to solve the
supply dilemma.
He explained that needing to develop copper raises the question
about where to develop copper. Copper can be developed in third
world countries where there is no environmental protection and
disasters occur, or copper can be developed in the U.S. where
the country has the most rigorous environmental regime that will
protect the environment while allowing PLP to develop copper at
the same time. Alaska has the highest standards for resource
development and PLP thinks the state is the place to do a copper
mine.
3:52:26 PM
He addressed "Facts about Pebble" in his overview. He said the
project will mine copper, gold, silver, molybdenum, and rhenium.
He explained that rhenium is a critical mineral that is used for
propeller blades in jet fighters' engines. He noted that the
Pebble Project has a large source of rhenium.
He detailed that the Pebble Project's deposit is located on land
that is owned by the state. He pointed out that the land is not
accidentally owned by the state, the state went after the
location for possible mineral development in exchange for
valuable timber land.
3:55:40 PM
He addressed the Pebble Project's redesigned mining footprint.
He noted that mine opponents show pictures of the project's site
teaming with rivers, but the location is not teaming with
rivers. He explained that when he and Mr. Shively came onboard,
the project was at a crossroads and a decision was made to take
a step back and assess the opposition's concerns and redesign
the project in a way that is directly responsive to those
concerns.
MR. COLLIER opined that PLP's response to the concerns is
dramatic. The mine has been reduced to a 20-year project with a
smaller footprint. The project's smaller footprint is no longer
within the Upper Talarik and Kvichak watershed. Cyanide will not
be brought in to recover approximately 12 percent of the gold
from the mine. The project is now designed to not have any waste
rock piles. A significant amount of work was done on
environmental safeguards, particularly with water treatment and
the tailing's facilities. The mining project that PLP has taken
into permitting is not the project that was being talked about
over the last 12 years. He noted that the project's footprint is
one-fifth the size of what was initially proposed.
He opined that the Pebble Project is a real asset for Alaska.
The project is going to create thousands of jobs and hundreds of
millions in tax revenue. PLP believes that the Pebble Project
can be developed safely without damaging the Bristol Bay fishery
via the EIS process. PLP has invested a lot of time, money, and
effort in the EIS process and now an independent federal agency
has agreed that the Pebble Project will not damage the Bristol
Bay fishery.
3:57:36 PM
He explained that the National Environmental Policy Act (NEPA)
process involves 60 separate permit categories with federal,
state, and local authorities. The NEPA process is a substantial
one that is rigorous, demanding, transparent, and accountable;
however, the NEPA process is the right process.
He said one of the Pebble Project's major opponents is the
Natural Resources Defense Council (NRDC). He disclosed that NRDC
says NEPA is the "democratic process" to make environmental
decisions. The NRDC also says the EIS, done under NEPA, is the
"Magna Carte" of environmental protection and that is where the
Pebble Project is today via the Draft EIS.
MR. COLLIER explained that the Draft EIS is produced by the
USACE, but most importantly the Draft EIS is independent. He
emphasized that no one could have worked on the project's EIS if
they had previously worked on either side of the Pebble Project
or had publicly expressed an opinion about the project. He
detailed that independent scientists were brought to the EIS
effort, but they did not work alone. Agencies involved in the
Draft EIS process includes the U.S. Fish and Wildlife Service,
the U.S. Environmental Protection Agency (EPA), state agencies,
the Lake and Peninsula Borough, and 35 separate tribal
governments.
3:59:16 PM
SENATOR KIEHL asked him to explain the involvement of state
agencies with the Pebble Project. He inquired if the Alaska
Department of Environmental Conservation (DEC) and the Alaska
Department of Fish and Game (ADF&G) have been fully involved or
are now involved with the project.
MR. COLLIER replied that the departments have been involved in a
little bit of both. He explained that there was involvement
during the Draft EIS process, but more involvement will occur
during the public comment period for both the Draft EIS and the
Final EIS.
SENATOR KIEHL pointed to the government-to-government section in
the overview where the Pebble Project has 35 Bristol Bay and
Cook Inlet tribal governments involved. He asked if all the
tribal governments are supportive or have taken positions on the
project.
MR. COLLIER replied that there are tribes that are supportive
and tribes that are not supportive. He conceded that most of the
Bristol Bay and Cook Inlet tribal governments are not
supportive. The EPA invited all the tribal governments to
participate in the government-to-government negotiations with
respect to the EIS. The 35 tribal governments noted in the Draft
EIS overview are the ones that chose to participate.
He addressed the EIS schedule as follows:
• EIS application filed in December 2017.
• Draft EIS has just been issued and the public review
process has started.
• The public comment period and public hearings will last
through May 30.
• The projection for the draft of the Final EIS will be early
2020 with a Record of Decision (ROD) in mid-2020.
4:01:28 PM
MR. COLLIER said there have been a lot of conversation about the
Pebble Project process being rushed, but the project is moving
through the permit process in two-and-a-half to three years. PLP
has looked at other development projects in Alaska and how long
they have taken is detailed as follows:
• Pogo Mine:
o In August 2000, Teck-Pogo Inc. applied for a Section
404 permit for a proposed underground cut-and-fill
gold mine on State of Alaska-owned land in the
Goodpaster River Valley.
o EPA, in close consultation with the USACE, published a
Draft EIS in March 2003, then a Final EIS in Sept.
2003 three years and a month after the application.
• Kensington Mine:
o In 2001, Coeur Mining redefined the scope for its
development of an underground gold mine within the
Tongass National Forest outside of Juneau.
o This necessitated a new NEPA review, which was
completed three years later in December 2004.
• Red Dog Mine:
o EPA prepared the EIS for the expansion of the Red Dog
Mine into the Aqqaluk deposit in northwest Alaska.
o The permitting process started in mid-2007 and the EIS
was finished during Fall 2009, taking just over two
years.
o USACE was a cooperating agency.
• Point Thomson:
o USACE was the lead agency for the EIS for the
development of ExxonMobil's Point Thomson oil facility
on the North Slope of Alaska.
o The EIS process began in late 2009 and the Final EIS
was issued mid=2012, taking approximately two and a
half years.
• ConocoPhillips GMT-1 Project:
o In 2013, ConocoPhillips moved forward with permitting
of its proposed Greater Moose's Tooth-1 oil and gas
project in the National Petroleum Reserve-Alaska.
o The Bureau of Land Management (BLM) was the lead
agency and USACE was a cooperating agency.
o The EIS process began in August 2013 and concluded by
November 2014, taking just over a year.
• ConocoPhillips GMT-2 Project:
o ConocoPhillips began permitting the Greater Mooses-2
project in 2016.
o Like GMT-1, the GMT-2 project is in the National
Petroleum Reserve-Alaska.
o The EIS was overseen by BLM with USACE as a
cooperating agency.
o The EIS process began during July 2016 and concluded
just over two years later in September 2018.
• Hilcorp Liberty Project:
o Hilcorp is the operator of the Liberty oil and gas
leases in the federal OCS off the North Slope of
Alaska.
o The leases are overseen by the Bureau of Ocean Energy
Management (BOEM).
o Hilcorp began permitting the Liberty Project in 2015.
o BOEM started the EIS process in September 2015 and
completed it three years later in August 2018.
MR. COLLIER opined that the Point Thomson Project is most
comparable to the Pebble Project. The project at Point Thomson
was a new project going into a new area in the state. The
project had a lot of issues associated with it, but the project
was able to move through the entire permitting process in two
and a half years. He said PLP believes that the Point Thomson
Project is the analog to Pebble Project and acts as proof that
PLP is on the right timeline.
He said one of the other issues that has been raised is whether
the public comment period for the Pebble Project has been long
enough. The statute requires 45 days, the Corps announced that
the Pebble Project will have a 90-day public comment period. He
disclosed that there has been some concern that the Pebble
Project's 90-day public comment period is not long enough, a
time period that is somehow shorter than what has usually been
the case for projects in Alaska. He cited the public comment
periods for the following projects:
• ANWR Coastal Plain Oil and Gas Leasing:
o Comment period: 45 days.
o Comment period extended: 30 days.
• Tongass Timber Sale on Prince of Wales (POW) Island:
o Comment period: 45 days.
• ConocoPhillips GMT 2:
o Comment period: 45 days.
o Comment period extended: 10 days.
• Oil Search Nanushuk Project:
o Comment period: 45 days.
o Comment period extended: 30 days.
• Hilcorp Liberty Project:
o Comment period: 90 days.
o Comment period extended: 22 days.
• Alaska Stand Alone Pipeline Project:
o Comment period: 45 days.
o Comment period extended: 15 days.
• Donlin Gold:
o Comment period: 155 days.
o Comment period extended: 31 days.
• Chukchi Sea OCS Oil and Gas Lease Sale 193:
o Comment period: 45 days.
• Bristol Bay Watershed Assessment:
o Comment period: 32 days.
o Comment period extended: 6 days.
• ConocoPhillips GMT1:
o Comment period: 60 days.
• Exxon Mobile Corporation - Point Thomson:
o Comment period: 45 days.
o Comment period extended: 15 days.
• Point Mackenzie Railroad Expansion:
o Comment period: 56 days.
• Red Dog Aqqaluk Expansion:
o Comment period: 60 days.
MR. COLLIER opined that the Pebble Project is "right in the
sweet spot" and maybe on the "high end" of what is usual for a
public comment period.
He summarized that the Draft EIS addresses three issues that are
most important: water quality and quantity are not diminished,
cyanide is not coming into the region, and all water the project
comes in contact with will be treated to Clean Water Act
standards and released with a sophisticated computerized program
to optimize conditions for salmon in the region.
4:04:31 PM
MR. COLLIER detailed the project's water treatment operation
that involves a bulk tailings facility and a water containment
pond for treatment prior to release, even during high
precipitation years. The Draft EIS carefully looks at the
project's water resource issue and concludes, "A sophisticated
management plan will discharge water into all three nearby
streams to benefit fish habitat." He added that the Draft EIS
also states, "There will be no downstream impacts from the pit
in post closure."
He said PLP looked hard at the project's tailings facilities to
address concerns with respect to what has happened with tailings
in other countries. The Pebble Project has combined the
location's natural resources and features to engineer features
that are designed according to very conservative criteria for
maximum safety. The bulk tailings facility will allow water to
flow through and get captured in a containment pond on the other
side of the facility's dam. The reason for the water flow-
through is to avoid failures like what occurred at Mount Polley
in Canada due to the capture and containment of too much water.
4:07:25 PM
He explained that prior to the tailings facilities'
construction, the Alaska Dam Safety Program must first certify
the project. He opined that certification is a "big deal"
because the Alaska Dam Safety Program is probably the most
rigorous program in the country and its day-to-day management is
certainly the most rigorous in the country.
SENATOR KIEHL noted that the legislature just passed a
supplemental appropriation bill for recent earthquake damage. He
asked what the project's seismic standards are designed to
withstand.
MR. COLLIER answered that the seismic standards the project is
designed to withstand are "huge". He opined that Alaska thinks
of itself as an earthquake zone, but not many earthquakes occur
in the Bristol Bay area. He noted that the "big earthquake" that
occurred in Anchorage was not felt at the mine site because the
fault lines are not in the area; however, the project is
designed for a very significant earthquake. He pointed out that
the recent earthquakes in Chile impacted tailings facilities
that were essentially "pilings of sand". The Pebble Project's
tailings facilities are designed to a much higher than the
necessary standard.
SENATOR KIEHL asked what page in the Draft EIS specifically
provides the seismic number that the tailings facilities are
designed to withstand.
MR. COLLIER replied that he will provide the information to the
committee.
4:09:54 PM
He explained that the pyritic tailings facility is fully lined
because pyritic tailings present the risk of potentially
generating acid. He provided details on the tailings facilities
as follows:
• Pyritic tailings:
o Water must cover the tailings.
o Facility is fully lined.
o Account for 12 percent of the total tailings.
o Separating the tailings results in a smaller facility.
• Bulk tailings:
o Facility will not be lined.
o Tailings stored below the water table.
o A lake will cover the tailings.
He noted that the Draft EIS addressed the tailings facilities as
follows:
• Catastrophic failure is extremely unlikely.
• USACE did multiple failure scenario evaluations and
concluded that there are no population level impacts for
fish from the tailings' releases.
He reiterated that the Pebble Partners will not build the Pebble
mine if salmon in the region are going to be at risk. Over the
past decade the Pebble Project spent $150 million just studying
the area's: wetlands, groundwater, surface water, migration
patterns, and fish habitat.
4:12:07 PM
He explained that the starting point for the analysis is that
escapement is very low in the mine area because there are not
many fish. The Upper Talarik drainage had about four-tenth of
one percent of all the salmon in Bristol Bay that come up to the
mine area. The South Fork Koktuli and the North Fork Koktuli
account for eight-one-hundredths of one percent of all the
salmon in Bristol Bay that would be at risk in the mine area.
SENATOR COGHILL asked if the escapement is for all of Bristol
Bay or just the fish that flow up the river.
MR. COLLIER specified that it is the escapement up the river
from Bristol Bay.
He opined that mining and fish do coexist. The Pebble Project's
plan applies the best science and Alaska's highest standards. He
pointed out that in Alaska there is a long history of
responsible development that coexists with fish and wildlife at
Fort Knox, Greens Creek, Kensington, Pogo, and Red Dog mines.
He said over 12 years has been spent talking about whether a
mine will risk Bristol Bay's fishery. He emphasized that the
Draft EIS provides an independent and scientific analysis that
there is no long-term change to the health effect from the
Pebble Project on Bristol Bay and Cook Inlet fisheries. He
detailed that the study shows the Pebble Project will not reduce
the returning of adult salmon in Bristol Bay's river systems and
the impact from the project will not decrease the abundance of
the fish and wildlife resource.
4:14:34 PM
JOHN SHIVELY, Chairman of the Board of Directors, Pebble
Project, Anchorage, Alaska, provided his background information
to committee members. He emphasized that he took the position at
Pebble Project because he is convinced by science that the
project can be built safely while bringing major economic and
cultural benefits to the region's rural communities. He noted
that he had worked on getting the Red Dog mine started with NANA
and Cominco American. He highlighted the project's significance
for the region: it allowed a borough government to be set up, it
allowed money to flow into the borough government to improve the
education system, and it created jobs. He opined that the Pebble
Project will provide both economic and cultural benefits to the
region. He said rural communities are losing people and the
project will allow people to stay and work. Working at the
Pebble mine will allow for participation in the region's
subsistence economy which is so important to local's economic
and cultural wellbeing.
4:17:18 PM
He pointed out that the Pebble Project will provide statewide
benefits. The Pebble Project will spend over $400 million a year
in operations that will go towards wages, equipment companies,
airlines, and food service companies.
MR. SHIVELY opined that the Pebble Project will have a tax
impact. The Lake and Peninsula Borough will receive
approximately three times its current budget. He noted that the
borough is facing very serious difficulties, particularly with
their education system. Last year the borough reduced the school
year by 20 days due to the economic problems the borough is
facing.
He emphasized that the Pebble Project will have an impact on the
state. The project will pay three kinds of payments to the
state: mining license tax, corporate income tax, and state
royalties which go into the permanent fund because the project
is on state land.
He detailed that the Pebble Project will provide 750 to 850
jobs. PLP believes that a number of the project's jobs, as with
the Red Dog mine, will be held by local people who will be
trained to take those jobs. The average mining wage is over
$100,000 a year. The project's jobs are primarily "rotational"
and that will allow employees to both make money to feed their
families and to participate in subsistence activities.
He said the Draft EIS points out that the project's benefits
will be most apparent in the region's small rural communities.
He noted that the project's strongest support is from people
that are closest to the mine because they have already seen some
of the project's benefits that were provided during exploration.
The Draft EIS says the project will have minimal impact on
access to subsistence resources with no change in resource
abundance.
4:19:49 PM
He opined that jobs and tax revenues are important, but the most
effective social program the project will provide is giving
somebody a job. He emphasized that providing jobs will change
people's lives. People with jobs tend to have more hope and
behave better because they have a reason to behave better.
He noted that during the Pebble Project's exploration program,
PLP supported the Alaska Native Science and Engineering Program
at $75,000 a year as well as supported geology and mining
programs in Fairbanks and Anchorage. PLP also supported a
variety of social programs throughout the region and state. He
summarized that when the state gets a project like the Pebble
Project, the state gets a company that is dedicated to not only
jobs, tax revenues and economic impact, but the state will see a
very important underlying social impact as well.
MR. COLLIER summarized that PLP thinks the Draft EIS provides a
clear path forward. It clearly says that Alaska's resource
projects already coexist with fishing. The Pebble Project will
use industry best practices. The project's benefits include
increasing revenue, employment, and education. There will be no
downstream impacts from the pit in post closure, and there will
be no long-term change in the health of Bristol Bay and Cook
Inlet fisheries. Alaska knows how to develop resource projects
and PLP is eager for the Pebble Project to be the next one that
is developed. PLP believes that the Pebble Project is the right
mine at the right time and the partnership is moving forward
with the project.
SENATOR REINBOLD asked Mr. Fueg if there are competing mines or
competing opportunities in the area.
4:22:36 PM
JAMES FUEG, Vice President of Permitting, Pebble Limited
Partnership, Anchorage, Alaska, answered that there is nothing
in the immediate area that PLP is aware of. He said there are
other exploration projects out there, but to the best of his
knowledge none of the projects have a defined resource
associated with them.
SENATOR REINBOLD asked Mr. Shively if he will "drink the
tailings" as he previously has done.
MR. SHIVELY answered that he will drink the water from the bulk
tailings because they are not toxic, but not the water from the
pyritic tailings.
SENATOR KIEHL asked Mr. Collier whether the mineral he referred
to earlier in the overview was "rhenium" or "radium".
MR. COLLIER replied that he said rhenium.
SENATOR KIEHL asked him to provide greater detail on the
project's waste rock storage.
MR. COLLIER answered that the project has no waste rock storage.
He explained that when the Pebble Project redesigned a smaller
mine, it allows for the lowest strip ration, so there will be
almost no waste rock to rip off to get to the ore. The waste
rock that the project finds will be put into the tailings
facility so there will not be separate waste-rock piles. The
smaller mine is a significant development that is much more
environmentally sensitive.
4:24:24 PM
SENATOR KIEHL asked how much of the project's probable ore body
can be mined based on the tailings facility's capacity.
MR. COLLIER answered approximately 10 percent.
SENATOR KIEHL asked what the likelihood is for future expansion,
especially when the project will only mine 10 percent of the ore
body, the infrastructure is in place, and workers are trained.
MR. COLLIER answered that he would not be surprised if an
expansion plan comes along. He emphasized that the Pebble
Project currently does not have plans for expansion. He pointed
out that any expansion will require another permitting process.
4:26:28 PM
SENATOR KIEHL asked if a new EIS will be required for expansion.
MR. COLLIER answered that a new EIS depends on the proposed
expansion. He said a sliver around an edge might not require a
new EIS, but any kind of significant expansion will require the
entire EIS process to be done again.
SENATOR KIEHL noted that there are several hard rock mines in
his district that have worked hard to recruit and train locally;
however, their percentage of Alaskans hired has dropped
precipitously. He asked Mr. Collier how much thought has been
put into avoiding dislocation in the region by hiring locally.
MR. COLLIER answered that the Pebble Project has put a lot of
time and effort into planning its workforce development
strategy. PLP wants to recruit people that live in the region
and want to stay in the region. The Pebble Project has already
gone out soliciting those that might be interested in the
necessary training, but the project must be careful not to train
workers too much in advance.
4:29:07 PM
MR. SHIVELY opined that one of the other differences between the
Pebble mine and the mines that Senator Kiehl referenced is that
the mines in Senator Kiehl's district are underground and
underground mining is much more difficult to recruit people who
end up "living in the dark". He added that another factor in
trying to keep people in Juneau is the fact that the flight is
short between Juneau and Seattle.
SENATOR KAWASAKI asked Mr. Collier if the current EIS will cover
expansion, the use of cyanide to enhance gold recovery, or the
creation of waste rock piles.
MR. COLLIER answered that the changes Senator Kawasaki described
probably will require different permit types.
SENATOR KAWASAKI asked whether the changes he noted will require
the Pebble Project to redo its EIS process.
MR. COLLIER replied that the requirement to redo the process
depends on the changes. If the change is to double the mine's
size, that will probably require the entire EIS process to be
redone.
SENATOR KAWASAKI asked who ultimately makes the decision to redo
an EIS.
MR. COLLIER replied that regulatory agencies make the decision,
not the Pebble Project.
4:31:27 PM
SENATOR KAWASAKI asked if the smaller footprint has impacted the
project's economic feasibility.
MR. COLLIER admitted that a smaller mine is not as good
economically as the bigger design. He said the Pebble
Partnership found the "sweet spot" in making enough profit and
being confident the mine will get developed.
SENATOR KAWASAKI asked if there is an economic feasibility
proposal on the Pebble Project.
MR. COLLIER answered that PLP has a lot of internal economics on
the project, but PLP is not presently able to release economic
information due to regulatory requirements.
CHAIR BIRCH thanked PLP for providing the update on the Pebble
Project's Draft EIS.
4:33:19 PM
There being no further business to come before the committee,
Chair Birch adjourned the Senate Resources Standing Committee
meeting at 4:33 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Pebble Partnership SRES Presentation 3.25.19.pdf |
SRES 3/25/2019 3:30:00 PM |
|
| Governor's Appointee AOGCC Chmielowski Resume 3.22.19.pdf |
SRES 3/25/2019 3:30:00 PM |
|
| Pebble Project DEIS Sec 4.15.1-2 Geohazards.pdf |
SRES 3/25/2019 3:30:00 PM |
|
| Pebble Project DEIS Sec 3.15.1 Geohazards.pdf |
SRES 3/25/2019 3:30:00 PM |