Legislature(2015 - 2016)BARNES 124
03/18/2015 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SJR13 | |
| Presentation(s): Middle Earth by Calista Corporation and Donlin Gold | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SJR 13 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 139 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 18, 2015
1:02 p.m.
MEMBERS PRESENT
Representative Benjamin Nageak, Co-Chair
Representative David Talerico, Co-Chair
Representative Mike Hawker, Vice Chair
Representative Bob Herron
Representative Craig Johnson
Representative Kurt Olson
Representative Paul Seaton
Representative Andy Josephson
Representative Geran Tarr
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE JOINT RESOLUTION NO. 13(RES)
Supporting oil and gas exploration and development on the outer
continental shelf offshore of the state; opposing attempts to
prohibit future oil and gas development in the Beaufort and the
Chukchi Seas, including the Hanna Shoal area; and requesting
that the federal Administration cease and desist from
restrictions that adversely affect active or future leases in
high petroleum potential areas in the Beaufort and Chukchi Seas,
including the Hanna Shoal area.
- MOVED CSSJR 13(RES) OUT OF COMMITTEE
PRESENTATION(S): MIDDLE EARTH BY CALISTA CORPORATION AND DONLIN
GOLD
- HEARD
HOUSE BILL NO. 139
"An Act allowing the Alaska Gasline Development Corporation, or
a subsidiary of the corporation, to build, operate, and maintain
a gas pipeline within the boundaries of the Susitna Flats State
Game Refuge, the Minto Flats State Game Refuge, the Captain Cook
State Recreation Area, the Nancy Lake State Recreation Area, the
Willow Creek State Recreation Area, and the Denali State Park."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: SJR 13
SHORT TITLE: OCS OIL & GAS EXPLORATION/DEVELOPMENT
SPONSOR(s): SENATOR(s) COGHILL
02/09/15 (S) READ THE FIRST TIME - REFERRALS
02/09/15 (S) RES
02/20/15 (S) RES AT 3:30 PM BUTROVICH 205
02/20/15 (S) -- MEETING CANCELED --
02/23/15 (S) RES WAIVED PUBLIC HEARING NOTICE,RULE
23
02/23/15 (S) RES AT 3:30 PM BUTROVICH 205
02/23/15 (S) Moved CSSJR 13(RES) Out of Committee
02/23/15 (S) MINUTE(RES)
02/25/15 (S) RES RPT CS 6DP NEW TITLE
02/25/15 (S) DP: GIESSEL, COSTELLO, COGHILL,
MICCICHE, STEDMAN, STOLTZE
03/02/15 (S) TRANSMITTED TO (H)
03/02/15 (S) VERSION: CSSJR 13(RES)
03/04/15 (H) READ THE FIRST TIME - REFERRALS
03/04/15 (H) RES
03/18/15 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
CHAD HUTCHISON, Staff
Senator John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced CSSJR 13(RES) on behalf of the
sponsor, Senator Coghill.
KARA MORIARITY, President and CEO
Alaska Oil and Gas Association (AOGA), Anchorage, Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SJR 13.
MONICA JAMES, Executive Vice President/Chief Operating Officer
Calista Corporation
Anchorage Alaska
POSITION STATEMENT: Assisted in providing a PowerPoint
presentation entitled "Transportation & Energy Infrastructure
Village Cluster Consolidated Services Plan."
GEORGE OWLETUCK, MA, Government Relations Liaison
Calista Corporation
Anchorage, Alaska
POSITION STATEMENT: Assisted in providing a PowerPoint
presentation entitled "Transportation & Energy Infrastructure
Village Cluster Consolidated Services Plan."
JAMES FUEG, Project Study Manager
Donlin Gold Project
Barrick Gold Corporation
No address provided
POSITION STATEMENT: Provided a PowerPoint presentation entitled
"Donlin Gold Project Update".
CHARLIE COBB, Technical Engineer, Architect
Dam Safety and Construction Unit
Division of Mining, Land and Water
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Answered a question related to the Donlin
Gold Project update.
ACTION NARRATIVE
1:02:08 PM
CO-CHAIR BENJAMIN NAGEAK called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives Seaton,
Olson, Hawker, Tarr, Josephson, Talerico, and Nageak were
present at the call to order. Representatives Herron and
Johnson arrived as the meeting was in progress.
SJR 13-OCS OIL & GAS EXPLORATION/DEVELOPMENT
1:02:54 PM
CO-CHAIR NAGEAK announced that the first order of business is CS
FOR SENATE JOINT RESOLUTION NO. 13(RES), Supporting oil and gas
exploration and development on the outer continental shelf
offshore of the state; opposing attempts to prohibit future oil
and gas development in the Beaufort and the Chukchi Seas,
including the Hanna Shoal area; and requesting that the federal
Administration cease and desist from restrictions that adversely
affect active or future leases in high petroleum potential areas
in the Beaufort and Chukchi Seas, including the Hanna Shoal
area.
1:03:25 PM
CHAD HUTCHISON, Staff, Senator John Coghill, Alaska State
Legislature, introduced CSSJR 13(RES) on behalf of the sponsor,
Senator Coghill. He explained the resolution is in opposition
to recent efforts by the federal executive branch to further
restrict areas in the Chukchi and Beaufort seas as it relates to
oil and gas development. The specific concern is the Hanna
Shoal area in the Chukchi Sea. There are some active and
adjacent leases where it is felt there will be a negative
effect. There is concern about the ability to renew those
active leases that are currently in the area and there is a
concern that some of the mitigation costs associated with
designating the Hanna Shoal as an environmentally sensitive area
will further prohibit oil and gas development in that area.
MR. HUTCHISON began a PowerPoint presentation consisting of maps
of the area being talked about. Drawing attention to slide 2, a
map of the Beaufort Sea provided by the Bureau of Ocean Energy
Management (BOEM), he said the different colored boxes denote
the activity. Green indicates the historic leases that the oil
companies have had in the past and blue indicates areas of high
petroleum potential. Red indicates federally restricted areas,
of which one is a subsistence area by Barrow and another a
subsistence area by Kaktovik. These were previously restricted
by the Bush Administration and every five years the restriction
goes forward; the Obama Administration has continued the same
restriction from 2012 to 2017. Yellow indicates active leases,
none of which are in the restricted areas. Moving to slide 3,
he noted that the leases shown in green around Barrow and
Kaktovik are the historic leases and said the oil companies
generally don't have an ongoing interest in those. The active
leases shown in yellow are the ones about which the sponsor is
most concerned. He said slides 4 and 5 provide a less cluttered
view of what the proposed area looks like that the Obama
Administration is moving forward with.
1:06:16 PM
MR. HUTCHISON brought attention to slide 6, stating the real
concern is in the Chukchi Sea, which has a lot more activity.
He said the blue color indicates the areas with high petroleum
potential. There are more active leases as can be seen by there
being a lot more areas depicted in yellow. The red line near
the coast on slide 6 is the 25-mile buffer zone. The only thing
existing in that 25-mile area are historic leases that are no
longer of interest to the producers. The pink and red areas
near Barrow indicate the subsistence area for Barrow in which
there are no active leases, so there is not really any
resistance to that portion of it. The key area in the middle,
the Hanna Shoal area, is indicated by the yellow circle. It has
been studied the previous five years. Within that yellow circle
are historic and active leases as well as a large area with high
petroleum potential. Turning to slide 8 he explained that this
area is important because Shell has three active leases that are
adjacent to the Hanna Shoal area. Repsol has seven leases
actually in the Hanna Shoal area itself and another five leases
in the adjacent area that deal with similar petroleum prospects.
The concern is that designating an area as [environmentally
sensitive] will decrease the ability to renew those leases
beyond 2022 and will increase the mitigation costs to the oil
producers. Mr. Hutchison said slide 9 shows further
clarification as to what some of the proposed area looks like.
Slide 10 indicates the withdrawn areas [located within the draft
proposed program area]: the 25-mile buffer area, the
subsistence area around Barrow, and the Hanna Shoal area, which
is the new component to all this.
1:09:30 PM
CO-CHAIR NAGEAK said his statement is, "Here we go again." He
continued:
It really upsets me that people who live there, most
of them ... have been working on this issue for years
and years and years. All along the coast working with
the whalers, working with the industry, working with
everybody and going through the issue of reliance on
our resources offshore and onshore. And here we go
again. We have all this potential, but it really
comes to us as Native people and all people who live
along the coast where we rely on renewable resources.
We also rely on nonrenewable resources for our tax
base and for our livelihoods. A lot of people work in
that area.... Without the oil industry we wouldn't be
who we are today.
CO-CHAIR NAGEAK noted that just a few weeks ago the President
began considering placing the 1002 Area [in the Arctic National
Wildlife Refuge] near where he was born into a Wilderness. When
oil was discovered it was found out that the United States of
America had to do land claims. While doing the land claims the
federal government also created [Native] corporations. He
continued:
What are corporations? Well, they're an instrument to
make money. And why did the government give us
corporations when we wanted tribes? Well, they gave
us corporations and they ... locked up the areas where
our resources are or our resources have been. Since
time immemorial our people used those resources....
So, here we go again. What are we to do when the
government of the United States in infinite wisdom
gave us an instrument to say ... "go enrich yourself
but in the meantime we'll lock up every piece of land,
every piece of water ... and you're not going to have
anything." That is exactly what it is right now. We
didn't ask for corporations. But then for the past
several years this has been happening after working
diligently for years and years and years working with
the industry, with the government, with everybody.
And so what are we to do? There is one federal agency
who's locking up everything ... for those of us who
depend on the resource and ... another agency who's
willing to work with us and finding ways to make sure
that everything is protected in that area where they
are going to open up or they have opened up areas for
oil and gas exploration. So we have two agencies ...
that have given us heartache and hope at the same
time. So what are we to do? What [are] a whole lot
of my families going to do in Kaktovik when they have
a resource right underneath their feet but they can't
use it?
1:14:39 PM
REPRESENTATIVE JOSEPHSON understood that in the announcement
referred to by the resolution, the President also authorized
some exploratory development in a very preliminary stage from
Virginia down to the South Carolina coast. He said as far as he
knows President Obama is the first to allow that. He asked
whether the sponsor thinks that these restrictions in the Arctic
are due to Shell's performance in 2012.
MR. HUTCHISON replied that his personal opinion is that from
[the President's] perspective it might be related to that, as
well as related to an overreaching philosophical decision as it
relates to climate change and environmentally sensitive areas.
1:16:04 PM
CO-CHAIR NAGEAK opened public testimony.
1:16:23 PM
KARA MORIARITY, President and CEO, Alaska Oil and Gas
Association (AOGA), Anchorage, Alaska, spoke in support of SJR
13. She said the Alaska Oil and Gas Association (AOGA) is the
professional trade association for the oil and gas industry in
Alaska and its members represent the majority of the producers,
explorers, refiners, marketing, and transportation activities in
the state. The association's members have been operating in the
Arctic for more than 40 years. Oil and gas development is the
backbone of Alaska's economy, and as the largest undeveloped
energy basin in the U.S. the Arctic Outer Continental Shelf
(OCS) is the next generation of energy security for the U.S.
The Arctic OCS holds enormous oil and gas resources, estimated
by the Department of Interior at approximately 27 billion
barrels of oil and 132 trillion cubic feet of natural gas. In
comparison, the Trans-Alaska Pipeline System (TAPS) has carried
more than 17 billion barrels in just over 30 years. So, TAPS
has played a critical link in the nation's energy security,
transporting crude oil from Alaska's North Slope to West Coast
markets. The OCS development in the Beaufort and Chukchi seas
could feed into TAPS and maintain its viability for many more
years to come. Oil and gas development in the Arctic OCS means
more jobs for Alaskans. Development of the Chukchi and Beaufort
seas is predicted to produce an annual average of 35,000 direct
and indirect jobs representing a total payroll of over $70
billion.
MS. MORIARITY noted that since 1971, 84 wells have been drilled
in the Arctic OCS, all without incident. Industry has worked
with communities to incorporate traditional knowledge in
decision making, establish Conflict Avoidance Agreements, and
impose seasonal drilling limitations. New regulations and
further research has further ensured that development and
environmental protection can co-exist. Three AOGA member
companies hold leases within the withdrawn areas or directly
adjacent to it. While the federal withdrawal language states
that "nothing in this withdrawal affects the rights under
existing leases in the withdrawn areas," there are still many
unknowns for the operators, such as the ability to renew active
leases or how the transport or building of infrastructure into a
pipeline would be affected. The prior four lease sales
scheduled in the Beaufort and Chukchi seas were included in the
Bureau of Ocean Energy Management's previous five-year leasing
plan, but were withdrawn and subsequently not held. It is
AOGA's fear that additional restrictions or delays will limit
the opportunities for development in the Arctic OCS.
MS. MORIARITY said that as the sea ice stays open longer and
other countries move forward with exploration and development in
their waters and transportation through the ice-free Northwest
Passage, Alaska's arctic seas could be left largely unattended.
With little infrastructure in place communities along Alaska's
north coast will be at the greatest risk with no ability to
respond. Development of the Arctic OCS for exploration and
development would bring that infrastructure to a very rural
onshore area and the industry's continued presence would provide
security and response capabilities should they be needed. She
said AOGA supports SJR 13 to maintain all of the proposed
leasing areas in the Beaufort and Chukchi seas and to resist
additional restrictions on leasing in the final program.
1:20:46 PM
CO-CHAIR NAGEAK closed public testimony after ascertaining no
one else wished to testify.
1:21:18 PM
REPRESENTATIVE TARR stated she has concerns about the
resolution. Four of the five areas withdrawn were previously
withdrawn so there has been a history under both Democratic and
Republican administrations to exclude those areas from leasing.
She understood from what she has read that the new area was
picked for its biological importance, the subsistence needs of
the people living nearby, and to ensure that the marine animals
and endangered whales swimming through those areas are protected
and will be there for future generations. She said she is
cautious because the revenue issue has not yet been resolved so
the state doesn't stand to gain much from this OCS development
and she would like to see this matter resolved before moving
forward.
1:22:44 PM
CO-CHAIR NAGEAK reiterated that this issue has been worked on
for a very long time and studies have been done. The North
Slope Borough has a diploma wildlife management and he was a
drafter for many years of that diploma. He has been in offshore
and onshore issues for more than half his life. He has watched
all of this happening. His first job right after high school in
1969 was in Prudhoe Bay, so he has been involved in oil issues
for a very long time and in working with the industry and
others. So it is upsetting when things like this happen. In
the late 1980s and early 1990s a look was taken at how the
offshore rigs would work and there was a rig right outside of
Barrow. This rig was put in the area where the Chukchi and
Beaufort seas meet, which is a very volatile area. In the
summer he has been near it many times while hunting. He shared
his experience of being right in front of Barrow while hunting
and seeing all kinds of animals when suddenly the ice began
coming in very fast. The community knows how that area is and
how dangerous it is and this has been told to everybody who
comes up to do work in that area. Discussions about what the
administration wants to do will be continued in his community as
well as in this committee
1:26:34 PM
REPRESENTATIVE JOSEPHSON stated he will not be objecting to the
resolution.
CO-CHAIR TALERICO offered his appreciation of Co-Chair Nageak's
input on this issue because it is rare for the committee to get
actual firsthand knowledge and experience from someone who
thoroughly knows the area.
1:27:17 PM
CO-CHAIR TALERICO moved to report CSSJR 13(RES) out of committee
with individual recommendations and the accompanying [zero]
fiscal note. There being no objection, CSSJR 13(RES) was
reported from the House Resources Standing Committee.
The committee took an at-ease from 1:28 p.m. to 1:31 p.m.
^PRESENTATION(S): Middle Earth by Calista Corporation and
Donlin Gold
PRESENTATION(S):
Middle Earth by Calista Corporation and Donlin Gold
1:31:38 PM
CO-CHAIR NAGEAK announced that the next order of business are
presentations by the Calista Corporation and the Donlin Gold
Project.
1:32:16 PM
MONICA JAMES, Executive Vice President/Chief Operating Officer,
Calista Corporation, introduced herself and her co-presenter,
noting that she and Mr. Owletuck are Yup'ik Eskimo and are
original Calista shareholders. She said she is originally from
Alakanuk but grew up in Bethel and Mr. Owletuck is from the
village of Marshall.
The committee took a brief at-ease.
MS. JAMES stated that the remote Calista region is accessible
only by plane or boat and the region has the highest population
of remote Alaskans. It is Alaska's most economically challenged
region with 27 percent of all residents living below the federal
poverty level. Many of the region's residents pay upwards of 58
percent of their annual income on energy-related costs. Despite
these statistics, the people are resilient and culturally rich,
having thrived in a challenging environment with little
infrastructure and incorporating their traditional subsistence
lifestyle. She said today's presentation will demonstrate that
even in the face of these contemporary realities of lack of
infrastructure and crippling energy costs, achievements have
been made as a region with what the region has. That said,
there are opportunities to continue increasing these triumphs
through development of public facility infrastructure which will
empower the ability to sustain the region's villages. Natural
resources have been developed in the fishing industry with
little to no infrastructure to support it. The region has
natural resources for potential development and by partnering
with the State of Alaska and the federal government, sound
investments to address the energy crisis in the region will
support the sustainability of people and will foster economic
development for all Alaskans living in the Calista region who
want employment opportunities to create industry to change
socio-economic disadvantages.
1:35:34 PM
GEORGE OWLETUCK, MA, Government Relations Liaison, Calista
Corporation, turned to slide 2 to explain that people rely on
transportation and energy to achieve economic growth and
sustainability. For example, history shows America's towns had
many booms and busts. Towns can come and go if unsustainable
and 2,700 disappeared over the last 100 years, mostly in the
southwest U.S. Alaska has this history too. From the 1800s to
the mid-1900s, Alaska packers ruled the salmon industry,
providing 80 percent of territory tax revenue, but 37 cannery
towns are now gone. The baby state of Alaska has had 22 towns
and villages disappear since the 1900s. Which towns in Alaska
survived the best? Ketchikan has repeatedly survived many
difficult times by using available resources and adapting. From
salmon processing in the 1880s, mining until the 1950s, salmon
and halibut cold storage in the 1930s, the forestry industry
from the 1950s to the late 1990s, tourism in the 1980s, and
seafood and mining recently, the stabilizing factors have been
transportation and affordable energy. Hydropower in 1903 made
Ketchikan affordable and competitive. Today Ketchikan has one
of the highest state resident per capita incomes from
transportation accessibility, stable and affordable energy, and
natural resource extraction for jobs and economy. These are
what people rely on in Southwest Alaska and the region's
projects are related to transportation. There is a request for
$1.4 million for road design, engineering, and permits for the
Pilcher Mountain Project at Marshall and a request for $7.5
million for the Emmonak Dock Project that would contribute to
expanded economic opportunity. Both are part of a 50 percent
federal and state matched funding request as seed capital.
1:38:05 PM
MS. JAMES addressed slide 3, pointing out that as federal and
state budgets tighten, communities with little infrastructure
struggle. The Calista region lacks infrastructure, yet it is
still being developed. At 57,000 square miles the Calista
region is relative in size to the state of Oregon, but has
little infrastructure and the highest cost of living. The
region has 27,735 residents with 56 communities ranging in size
from 200 to 6,100 and a growing young population. There are no
interconnecting roads and no transmission grids, which prevents
cost sharing of assets. Drawing attention to the map depicting
all of the communities in the Calista region, she noted that
nearly all of the communities have a school for kindergarten
through twelfth grade, but there is only one true high school
which is in Bethel. This tends to lead to low graduation rates,
low scores, many dropouts. Often there is poor quality of
education and high teacher turnover. Teachers don't have the
ability to build home equity when they are teaching in the
villages. The state graduation rate is 65 percent, but the
Lower Yukon School District and the Lower Kuskokwim School
District have graduation rates of 43.81 percent and 42.75
percent, respectively. The teacher turnover rate is high at 30
percent. Many of the 56 villages have an independent aging
diesel generation system for village power. Most villages have
a runway; for example, Marshall's runway is 100 feet wide and
3,200 feet long and can support small aircraft. The region has
a couple of hub airports with runways in Aniak and Saint Mary's.
Most of the 56 villages have health clinics, but there is
limited access to state troopers and village public safety
officers even though there is a high need for public safety.
MR. OWLETUCK continued addressing slide 3, noting the average
cost of heating fuel in the Yukon-Kuskokwim Delta (Y-K Delta) is
$6.38 as compared to the on-road system average cost of $3.41.
Gasoline in the Y-K Delta is $6.90 compared to $3.42 in the on-
road system. According to statistics from the Alaska Department
of Fish & Game (ADF&G), 85 percent of households harvest
subsistence resources and 70 percent of those households are
sharing their catch, with a total estimate of over 954,000
pounds a year that is harvested to feed families and friends.
1:41:35 PM
MS. JAMES moved to slide 4, stating that a port is needed in the
Lower [Yukon] Region. There is no regional port in the 700
miles between Bethel and Nome. There is an inter-portal linkage
that connects economically with the Nenana and Fairbanks rail
and highway with the port in Anchorage. For example, the
village of Marshall shipped housing material from Seattle via
Fairbanks using Nenana barges.
MR. OWLETUCK said the Native village of Marshall, which is a
tribe, used money from the U.S. Bureau of Indian Affairs (BIA)
housing improvement program to build 25 homes that were given to
the elders. The most cost-efficient means to transport material
from Tacoma WA is to go from Washington to Anchorage, use
competitive trucking to go up the highway to Fairbanks, and hire
local Nenana barges to ship the material down the Yukon River.
So, there is an inter-modal linkage from Anchorage, Fairbanks,
and the Lower Yukon River that can be capitalized upon for
future projects.
MS. JAMES continued addressing slide 4, noting that,
geographically, the Calista region is divided between the Yukon
River, the Kuskokwim River, and coastal areas. Politically, the
region is divided into the House of Representatives districts of
Dillingham, Nome, and Bethel. Administratively, the Department
of Transportation & Public Facilities divides the area into a
northern region and a central region. The Fourth Judicial Court
in Fairbanks oversees the region.
MR. OWLETUCK stated it is important to note that the Emmonak
Lower Yukon port will provide infrastructure for potential
offshore oil and gas development from Middle Earth and shipping.
MS. JAMES drew attention to Emmonak's location on the map as it
relates to the future development of Arctic shipping, saying
that the Emmonak dock can serve as an emergency response plan
because the region must be prepared to address potential hazards
with future shipping through the Arctic.
MR. OWLETUCK added that in regard to using the Emmonak port for
potential offshore oil and gas development, a U.S. Coast Guard
approved company in Argentina has been identified that could
provide modular liquefied natural gas (LNG) plants at a fraction
of the cost of an LNG plant. So, potentially, if there is oil
and gas development off the Lower Yukon, the Emmonak port will
have an infrastructure than can be capitalized upon to export
gas to the region and up river to the Nenana/Fairbanks area.
1:44:37 PM
MS. JAMES brought attention to slide 5, explaining that the
bright green on the map denotes the area and communities
serviced by the port of Emmonak. The proposed dock in Emmonak
would help make freight shipping more economical for these
communities. The port in Emmonak would facilitate the safe and
efficient offloading of cargo from barges. Currently, there are
challenges of overcrowding, erosion, and flooding. If nothing
is done, riverbank erosion and flooding will persist and pose a
significant threat to the existing physical infrastructure of
local maritime industry businesses. Supporting economic
diversity and stability in the Emmonak dock results in maritime
industry growth and expansion, which develops a more diverse
economic base.
MR. OWLETUCK stated the total cost for the Emmonak Project is
$17.2 million and it is permitted and shovel ready. The City of
Emmonak received $500,000 in 2009 from a state grant for port
design. In 2011 the U.S. Army Corps of Engineers approved the
port design. In 2012 the City of Emmonak received a $3 million
fiscal year 2013 general obligation bond, which will deliver
rock by October 2015 from Nome, Saint Mary's, and Stevens. The
request for Phase 1 for the Emmonak Project is $7.5 million of
the remaining balance of $14 million, which goes back to a 50/50
state match. Calista is going to Washington DC next week to
propose the same message of having federal assistance to match
state assistance, which will also be part of the private
investment in the region.
1:46:44 PM
MS. JAMES discussed slide 6, stating that an example of
community sustainability is the Yukon Delta Fisheries
Development Association. Despite the lack of a port facility in
Emmonak the Yukon Delta Fisheries Development Association's
maritime industry businesses have demonstrated sufficient
growth. These businesses establish Emmonak as an economic
center for the region, providing employment, income, and
services to residents throughout the Lower Yukon.
MR. OWLETUCK said Yukon Delta Fisheries Development Association
has several subsidiaries that are part of the Community
Development Quota (CDQ) Program. Kwik'pak Fisheries from 2002
to 2013 bought 21 million pounds of salmon, infusing $21 million
in cash directly to 451 fishermen. In 2014 Kwik'pak Fisheries
paid over $50 million in aggregate wages to region works.
Kwik'pak's youth employment program provides summer employment
to youth aged 14-17 and has paid over $1 million to youth in the
last four years. Since 1999 Yukon Marine Manufacturing has
manufactured, built, and sold 243 20-24 foot skiffs. Yukon
Marine Manufacturing employs local welders to build and repair
boats for area residents. Yukon River Towing built a bunkhouse
in Emmonak that sleeps 30 people using siding from logs
delivered by local residents and milled at a local sawmill. At
its local sawmill Yukon River Towing manufactures lumber out of
the logs brought down the Yukon River to build bunkhouses,
homes, and has developed a log and stick-frame home kit for
Lower Yukon residents. Yukon River Towing is using a program
offered by the U.S. Department of Housing and Urban Development
that offers low interest mortgage loans for home buyers.
1:48:55 PM
MS. JAMES moved to slide 7 and stated that the Marshall dock and
quarry road would complement community sustainability.
Currently, the Lower Yukon Region must purchase material from
Nome at exorbitant cost. Constructing a quarry in Marshall
would result in reducing public cost by $20-$24 million for
airport projects identified by the Department of Transportation
& Public Facilities (DOT&PF). Savings are also anticipated for
future regional infrastructure with local high-grade gravel and
armour rock at a significantly lower cost. This quarry at
Pilcher Mountain has a 25-year life for producing material. The
Native village of Marshall identifies Indian Reservation Road
Funds as a 10 percent federal match. The location of the quarry
also reduces hazards of offloading freight and heavy vehicle
materials on the unimproved, eroding shoreline landing. For
public safety, this plan separates heavy equipment from the
local foot traffic.
MR. OWLETUCK related that in a letter to Calista the Northern
Region of DOT&PF identified several projects for which it wants
to use Pilcher Mountain rock. Those projects are rehabilitation
of 15 miles of the Saint Mary's and Mountain Village road at an
estimated cost of $13 million, relocation of the Pilot Station
airport and construction of a new airport and new 3-mile road at
an estimated cost of $10-$20 million, improvements to the Saint
Mary's runway at an estimated cost of $10-$20 million, and an
extension of the runway at Nunam Iqua (Sheldon's Point) at an
estimated cost of $2.5-$5 million. The high cost of barging
rock between Nome and the Lower Yukon projects makes the rock at
Pilcher Mountain of high interest to DOT&PF. He drew attention
to the topographic map on slide 7 depicting the proposed 3-mile
road between the proposed dock site and Pilcher Mountain. He
pointed out that the white spot in the picture of Pilcher
Mountain is an existing quarry. He further noted that the
topographical map depicts an existing road from Marshall to the
top of Pilcher Mountain where there is cell tower.
MS. JAMES said another important point about the location of
this dock is its location inside a natural river eddy. Over
time and annual breakup, this location would protect the dock.
MS. JAMES turned to slide 8, saying there is a consensus for
village cluster consolidated services to develop a more robust
energy transportation infrastructure for Western Alaska that
consolidates public services and infrastructure support for
community sustainability. The Calista region is a good model:
it has many small villages that lack basic infrastructure, so
doing a cluster approach would work in this region.
1:52:36 PM
MR. OWLETUCK shared an anecdote, explaining that many of the
region's people are graduates of boarding schools. He is the
graduate of a Jesuit boarding school at Saint Mary's Mission and
his older sister is a graduate of four years of boarding school.
Last summer his 80-year-old father said something was lost when
boarding schools were lost. When a high school was put in every
village the quality of education was lost that boarding schools
used to provide. He related that his nephew and nieces are in
high school in a boarding school at a Galena. The young people
are voting with their feet by going to boarding school because
they recognize the quality of education that a boarding school
potentially can provide. Part of the solution to the high cost
of living in the Calista region is to build infrastructure that
would serve those communities located in a cluster. For
example, a 15-mile road has connected Saint Mary's and Mountain
Village since the early 1980s, and a 6,000-foot runway at Saint
Mary's used to land Mark Air jets in the early 1980s. Rather
than building a high school in every little village at a cost of
$30 million each, a regional high school could be built to serve
the cluster communities. Roads could be built to connect those
cluster villages and to bus kids to the high schools; for
example, the Anchorage School District buses kids from Girdwood,
which is 30 miles away. Regional high schools, middle schools,
or elementary schools would allow focus on a higher quality of
education with specialists. Statistics show that 6 out of 10 of
the region's high school students do not graduate and a regional
school is a potential solution. This is also part of the
proposal to address high energy costs. There could be sub-
regional, gas-powered power plants that serve the surrounding
communities with high voltage/high wattage interties.
MS. JAMES highlighted the successful program of the Chininik
Wind Group, which established four wind turbines in the village
cluster comprised of Tuntutuliak, Kongiganak, Kwigilingok, and
Kipnuk. Each of the four communities has wind turbines that are
connected and for each community there has been a 30 percent
displacement of the fuel costs of the power plants and a 30
percent displacement of fuel costs in the homes that are
participating in this project.
1:56:23 PM
MR. OWLETUCK brought attention to slide 9 to discuss the state
and local benefits of village cluster consolidated services.
State benefits would include reducing duplication, achieving
economies of scale to lower costs, coordinating state agency
master plans, sharing of resources, centralizing and bettering
of schools, and leveraging limited state capital and operating
funds. Local benefits would include linked communities, more
reliable power, cheaper energy and transportation costs, higher
quality services, improved education for rural students, and
improved emergency services and resources.
MS. JAMES addressed the map on page 9, pointing out a well-
traveled trail to Toksook Bay, as well as a trail to Tununak.
She noted that these trails are used in winter and could become
a road system for this cluster of communities.
1:57:38 PM
MS. JAMES moved to slide 10, stating that the Donlin Creek Mine
affords access to energy. A 315-mile-long pipeline, privately
financed at $1 billion, is being proposed to transport natural
gas from the Beluga natural gas pipeline system 30 miles west of
Anchorage to the Donlin Creek Mine. Completing the gas pipeline
project provides a future opportunity for a federal, state,
public, and private partnership to expand a natural gas powered
electric intertie network into the region. This has potential
to expand the natural gas pipeline into the region, thus
reducing reliance on subsidized electricity from the power cost
equalization. She said Calista is optimistic to have the Donlin
Creek Mine move forward. The infrastructure resulting from this
development could potentially aid in reducing the energy crisis
the region currently faces. The Marshall dock and quarry would
provide reduced public costs for the rock material to the Lower
Yukon projects. She asked for the committee's support of the
request of $1.34 million for the road design, engineering, and
permits. The Emmonak dock has possibilities of future expansion
for business development activities which potentially could
include support of offshore oil and gas and Arctic development
if the $7.5 million request can be funded collaboratively with
the State of Alaska and the federal government.
1:59:26 PM
REPRESENTATIVE TARR understood the $1.4 million would complete
the [Pilcher Mountain] Project. She calculated that roughly
$6.2 million is left for funding the [Emmonak Dock] Project and
surmised this funding would be coming from the federal
government.
MR. OWLETUCK replied correct, the original project was about
$14.2 [million] and that was from several years ago. The
engineers have come back to the City of Emmonak which has come
to Calista Corporation and added some inflation for the cost of
material, services, and energy. These are therefore the latest
numbers. There is a balance of about $13.8 million. Phase 1 in
its entirety will cost $7.5 million, which leaves about $6.9
million as the remaining balance.
2:00:52 PM
REPRESENTATIVE HERRON commented that he has watched Ms. James
and Mr. Owletuck grow up over and become leaders in the Calista
organization. He said what they have demonstrated to the
committee is that he represents a district of 32 communities
that have to stand alone as compared to Anchorage that has
multiple legislative members representing one common community.
He offered his appreciation to the Calista Corporation for
showing the challenges that he faces as a representative in
Western Alaska.
2:01:41 PM
REPRESENTATIVE TARR observed that the median income is about
$46,000 and the income of the 451 fishermen is about $46,000 per
fisherman. She asked where this median income comes from.
MR. OWLETUCK responded Emmonak is unique in that it is a CDQ
community, so it has a fleet of offshore trawlers that is able
to underwrite the cost of purchasing commercial salmon from the
commercial fishermen in the Lower Yukon. Therefore the wages
paid to the region's residents and the amount paid for ex-vessel
value of the salmon harvested commercially is an anomaly, the
rest of the region is mired in poverty because of a lack of
resource development due to lack of access to cheap
transportation in turn due to lack of access or ability to
produce cheap energy. The percentages are U.S. Census data as
an aggregate average of over 25,000 people, but the numbers for
Emmonak and that region are skewed due to access to the trawl
industry and they skew the average higher than it would
otherwise be.
The committee took an at-ease from 2:03 p.m. to 2:05 p.m.
2:05:27 PM
CO-CHAIR NAGEAK directed the committee's attention to the next
presentation by the Donlin Gold Project.
JAMES FUEG, Project Study Manager, Donlin Gold Project, Barrick
Gold Corporation, provided a PowerPoint presentation entitled
"Donlin Gold Project Update". Turning to slide 2 he explained
that Donlin Gold LLC is the operating company for the Donlin
Gold Project. Donlin Gold LLC is jointly owned by Barrick Gold
Corporation, the world's largest gold mining corporation, and
NOVAGOLD RESOURCES INC. Donlin Gold operates in partnership
with Calista Corporation with whom Donlin Gold has a mining
lease agreement. The deposit itself is located on lands owned
by Calista and The Kuskokwim Corporation (TKC). The lands were
selected several decades ago for their mineral potential. A
separate surface use agreement with TKC allows for the use of
the lands. Together with its partners Donlin Gold is committed
to advice in the Donlin Project in coordination with the
stakeholders in the region in an environmentally responsible
manner to bring benefits to everyone in the partnership.
2:07:02 PM
MR. FUEG displayed a map on slide 3 and pointed out that the
deposit is located about 270 miles west of Anchorage and 10
miles north of the closest community to the project, Crooked
Creek on the Kuskokwim River. Seen on the map is that there is
a complete lack of infrastructure between Anchorage and the
Railbelt and the project site. Should the project move ahead,
Donlin will propose to build and operate all the infrastructure
needed to support the project through construction and
operations.
MR. FUEG reviewed the site layout shown on slide 4, explaining
it shows what the project might look like after about 25 years
of operation. It would be a large open pit mine with a waste
rock storage facility, and a tailings storage facility. The
mill would be located on the ridge between the waste rock
storage and the tailings storage facilities. The deposit is
large with some 33 million ounces in the reserve, placing it in
the top fraction of undeveloped gold projects around the world.
That reserve would support a mine life of more than 27 years
with an annual production of more than a million ounces. If
developed it would be one of the few mines around the world that
actually produces more than a million ounces annually. The open
pit operation would move more than 400,000 tons of rock a day
and the mill itself would process some 60,000 tons of rock per
day. Power would be generated onsite using a gas fired power
plant with a pipeline from Cook Inlet to supply the gas.
2:08:57 PM
MR. FUEG described the tailings facility (slide 5), saying it
would be a state-of-the-art engineered tailings facility. It
would be a rock filled dam similar to the one at the Fort Knox
mine outside of Fairbanks. The rock filled dam abutment would
be constructed using the downstream construction method, which
is the most robust and sound method of construction similar to
that used for water retention dams around the world. The
overburden would be excavated down to the bedrock before placing
the rock fill and the dam wall. This would also be the first
tailings facility built in Alaska with a complete synthetic
liner to cover the full basin of the tailings storage facility,
thereby protecting the groundwater and other resources
underneath the tailings storage facility. The liner would be a
low-density polyethylene similar to that used in industrial
waste facilities throughout the country. Over the years of
developing and engineering the project, numerous subsurface
investigations have been conducted in the tailings dam footprint
to better understand the geotechnical conditions. This includes
some 41 core drill holes. Many were drilled with chilled fluids
so when the core is brought back to the surface the ice and clay
layers within those cores remains intact to provide an
understanding of the geotechnical conditions. Some 37 auger
holes were drilled, about 60 test pits were dug, 18 seismic
surveys were conducted, and 4 resistivity lines were run. As
the design advances through detailed design towards
construction, additional onsite investigations and drilling will
be conducted to fully identify the subsurface conditions that
have the potential to impact the design and construction.
2:10:54 PM
MR. FUEG discussed the map on slide 6, explaining that since
there is no existing infrastructure in the area, Donlin proposes
to build all the infrastructure needed to construct and operate
the project. This would include a 30-mile road from a port site
to be constructed on the Kuskokwim River near the mouth of
Jungjuk Creek, a 5,000 foot runway, a 600 man permanent camp to
support the project during operations, and a 2,500 man temporary
camp to support the project during construction. Together with
its partners, Donlin Gold would also propose to build a port
site specific for the project at the community of Bethel on the
downriver side of the Kuskokwim. Additionally, there would be
the 315-mile-long gas pipeline that Donlin Gold is proposing to
build from Cook Inlet.
MR. FUEG addressed the logistic and supply chain as depicted on
slide 7, noting that during operations the project would require
some 100,000 tons annually of consumables, including mining
consumables such as truck tires, as well as 30-40 million
gallons of fuel annually to power the mobile fleet associated
with the mine. The anticipation is to supply these consumables
and fuel directly from the West Coast. Consumables would come
via line-hold barge out of the West Coast, most likely Seattle
or Tacoma, into Bethel. Fuel would either by transported by
tanker to Dutch Harbor and then by a line-hold barge into
Bethel, or possibly direct from the West Coast into Bethel on
line-hold barges. In Bethel the fuel and consumables would be
transferred to shallow-draft river barges for the 185 mile trip
up the river to the port site at Jungjuk and then onto trucks
for transport to the mine site. There would be a tank farm and
storage areas large enough to hold all the supplies needed to
operate through the winter season when the river is frozen.
MR. FUEG provided further details regarding the proposed natural
gas pipeline (slide 8). The 315-mile-long pipeline would be a
buried, 14-inch steel pipeline carrying gas from the west side
of Cook Inlet near Beluga to the mine site. The pipeline would
use a single compressor station located near Beluga and its
current configuration would be able move about 70 million cubic
feet of gas per day. At this point it is anticipated needing
between 30 and 35 million cubic feet of gas a day to power the
mine site. The average running load at the mine site would be
around 150 megawatts, an amount similar to what the community of
Fairbanks uses. The pipeline would be constructed using
temporary infrastructure that would be reclaimed after
development. It would be an open access pipeline, most likely a
contract carrier, which is a requirement of the right-of-way
leases from both the state and federal governments whose lands
would be crossed to build the pipeline. While this is a lot
smaller than some of the pipeline projects currently being
considered in the state, it is by itself a challenging and
expensive project.
2:14:17 PM
MR. FUEG turned to slide 9, reporting that the permitting
process for the Donlin Gold Mine began in July 2012 when the
initial federal permit applications were filed with the U.S.
Army Corps of Engineers (Corps). The Corps is the lead agency
for the environmental impact statement (EIS) for the Donlin
Project. The project currently being permitted includes the
315-mile-long gas pipeline, the mine site facilities and
operations, and the infrastructure previously described. The
schedule shown on slide 9 is a schedule put out by the Corps and
represents the current view of when the EIS would be completed,
which right now looks like a Record of Decision (ROD) coming
sometime in 2017. A draft EIS will go out for public comment
later this year. He thanked the Department of Natural Resources
(DNR), the Department of Environmental Conservation (DEC), and
other Alaska state agencies for their role in the permitting
process and their efforts to keep the permitting on track and
comprehensive.
MR. FUEG reviewed the EIS public scoping meetings (slide 10)
that have been held. He said Donlin has been in the region for
20 years and through that time Donlin has been known for its
high level of stakeholder engagement and consultation. Donlin
has been supportive of that process continuing through the EIS.
He explained that slide 10 shows the process that the Corps used
in doing the scoping for the Donlin EIS. The Corps conducted 13
scoping meetings looking for local input and testimony at
various locations around the project site, one in Anchorage and
in twelve communities located in Western Alaska. Donlin
facilitated transportation from all the surrounding spoke
communities into the central hubs where the meetings were
conducted, thereby allowing residents of every community to
participate in the scoping process and give testimony as they
desired. Donlin believes this is one of the most comprehensive
scoping processes ever conducted for an EIS.
2:16:34 PM
MR. FUEG moved to slide 11 to further discuss the community
engagement. With its long history of partnership and engagement
with the communities, Donlin considers itself as part of the
family of Southwestern Alaska and continues to remain engaged
with the communities as the project moves through permitting.
Donlin maintains staffed year-round offices in Bethel and Aniak
and conducts 25-30 village meetings per year. Donlin has fluent
Yup'ik speakers on staff and the villages can choose to have
presentations provided in either English or Yup'ik. Materials
such as brochures are also provided in Yup'ik and Donlin staff
has developed a Yup'ik glossary of mining terms to help people
understand the technology being proposed for use at the site.
Donlin has a long reputation for local hire on the project.
Since field activities are limited while moving through
permitting, folks from Donlin's workforce development have
developed a school outreach and a lot of time is now being spent
in outreach to middle and high school students trying to help
them prepare for the jobs that would become available if the
project moves ahead. Donlin has an active scholarship program
that supports students in the region both for technical and
university level education. Donlin's community investment
program focuses on cultural preservation, environmental
protection, community wellness, and education. Donlin looks
forward to continuing its partnership with the communities of
the region as the project moves forward.
MR. FUEG concluded by reviewing the economic benefits listed on
slide 12. During construction the peak workforce would be
around 3,000 people, resulting in a direct payroll of some $375
million per year over the 3-4 years of construction. During the
more than 27 years of operations the average workforce would be
around 900 people with a direct annual payroll of $100 million.
Indirect and induced payroll would be about $60 million a year,
which Donlin believes could have many positive impacts for the
region. In addition to wages, significant royalties would be
going to partners Calista and TKC, with many of these being
further distributed throughout the entire state under the 7(i)
and 7(j) provisions of the Alaska Native Claims Settlement Act
(ANCSA). Additionally, the project would pay mining license
taxes and corporate income taxes to the State of Alaska.
2:19:49 PM
REPRESENTATIVE JOHNSON requested Mr. Fueg to explain the
difference between the tailings dam being proposed by the Donlin
Gold Project and the dam that recently failed in Canada [Mount
Polley dam, British Columbia].
MR. FUEG qualified he is not a geotechnical engineer, but
replied that there are substantial differences. The Donlin dam
would be 100 percent rock filled and he understands that the
[Mount Polley] dam was not. The [Mount Polley] dam was not
constructed using the downstream construction method and instead
utilized a process whereby the tailings actually become part of
the dam wall, which is not what Donlin is proposing to do. Most
importantly, Donlin has spent almost two decades collecting
climate data in the area and has accessed previous decades'
worth of climate data from government stations around the
region, allowing the production of various accurate models of
the climatic conditions, rainfall, and water flows expected
through the project area. Using that information Donlin has
built in more than redundant capacity to deal with water inflows
into the tailings facility and into the project area. Donlin is
also looking at state-of-the-art treatment for water discharge
from the site. Doing that avoids what was one of the major
causes of the problems in British Columbia where the dam was
actually overfilled with water that it wasn't designed to retain
and Donlin is not proposing to do that.
2:21:33 PM
CHARLIE COBB, Technical Engineer, Architect, Dam Safety and
Construction Unit, Division of Mining, Land and Water,
Department of Natural Resources (DNR), responded further to
Representative Johnson's question, noting there are some pretty
significant differences between the Donlin Project and the Mount
Polley Project other than the design of the dam itself. One of
the main problems at Mount Polley was the failure of the
engineers to understand the foundation conditions in that dam.
There was an unconsolidated deposit of glacier silts and sands
in the foundation that actually led to the failure of that dam
and there were some construction issues in that the dam was not
completed per the design. The issue is not so much the
difference between the dams as it is the failure of the
engineers to understand the site conditions of the Mount Polley
Project. Given Donlin's commitment to the research necessary to
understand the project setting, DNR is pretty confident there
will not be a repeat of something similar to Mount Polley.
REPRESENTATIVE JOHNSON stated he knew the answer when he asked
the question, but said he wanted the difference to be pointed
out because of campaigns against the Donlin Project using Mount
Polley as an example.
2:23:39 PM
REPRESENTATIVE HERRON disclosed that he and Mr. Fueg have known
each other for many years and that the dam would be located in
his election district. He inquired what some of the
possibilities are in the region for the excess generating
capacity of the plant that will be powered by gas.
MR. FUEG answered there wouldn't so much be excess generating
capacity with the plant, but there would be excess capacity
within the pipeline. It would be an open access pipeline and,
as such, would be available to any third party, whether private
or government, to tap into that pipeline for gas to power
generation.
REPRESENTATIVE HERRON noted that the Donlin Gold Project has
been flying under the radar compared to the [proposed Pebble
Creek] mine. He requested Mr. Fueg to address the difference
between the two mines.
MR. FUEG replied he hesitates to comment on the differences
because he is not an expert on the other mine. However, he
thinks one of the big factors that have led to Donlin's level of
advancement in permitting is its long history of cooperation and
engagement with its partners and individual communities and
individual people. He said he doesn't think there is any person
in the villages in the Calista region or up on the Yukon who
hasn't either worked at Donlin or has a family member or knows
somebody who has worked at Donlin. That long partner history
during the 20 years of development is the reason Donlin has been
able to move forward.
2:26:08 PM
REPRESENTATIVE HAWKER offered his wishes for the best of success
with the Donlin Project, saying it is important to the future of
the region and the future of the state. He inquired whether the
mine project has a committed source of gas for its pipeline.
MR. FUEG responded that at this point Donlin does not know. The
project is currently advancing through permitting. The partners
have committed to take the project through permitting but have
not yet made a commitment to construction of the project. As is
common in large projects like this, the partners are waiting to
see how the permitting ends up before making final decisions on
commitment and that would be the point at which the project
would start looking for hard commitments on gas.
REPRESENTATIVE HAWKER noted that the actual mining activities
are heavily regulated and involve a great deal with both state
and federal permitting processes. He asked whether the proposed
natural gas pipeline entails any public regulatory agency or
public regulatory oversight or permitting separate from Donlin's
activities involved in actually permitting the resource
development.
MR. FUEG answered the pipeline itself, the mine, and all the
associated infrastructure are covered under a single permitting
process as a single EIS. There will be a single wetlands permit
for the entire project. The various components of the project
will have various individual permits from the regulated
perspective. It will be an open access pipeline, a contract
carrier, and as such will be regulated by the state.
REPRESENTATIVE HAWKER understood the EIS schedule presented by
Mr. Fueg [slide 9] is one EIS for the entire project, including
resource development and the gas pipeline development.
MR. FUEG replied correct.
REPRESENTATIVE HAWKER further understood that Mr. Fueg believes
the regulatory authority over this particular pipeline would be
state regulatory authority through the Regulatory Commission of
Alaska (RCA).
MR. FUEG responded correct.
2:28:34 PM
REPRESENTATIVE TARR commented that the distinction between the
Donlin Project's tailings pond and the [Pebble Mine] is that the
[Pebble Mine's] proposed tailings pond is designed to be like
Mount Polley, the one that failed. A presentation last summer
reviewed the three different tailings pond options, which
provided a higher level of confidence in the safety surrounding
the Donlin Project.
2:29:26 PM
REPRESENTATIVE SEATON recalled the state having to take over the
Illinois Creek Mine due to its bankruptcy and pollution problems
and there was not enough bonding but enough gold was left and
recovered to pay the costs. Given the Donlin Project is not on
state land, he inquired whether there are still bonding
requirements in case of possible events.
MR. FUEG answered that the state bonding requirements on private
land are the same as they are on state land. Before any
construction can begin Donlin must have approval of both its
reclamation and closure plan and the bond or bonds associated
with that closure plan. Donlin is looking at a bonding
instrument both for the immediate physical closure activities,
which would be in the order of hundreds of millions of dollars,
and a further instrument for covering any long-term costs
associated with the closure, such as water treatment. So, it
will be fully bonded. The state process requires that that
closure plan and the associated bond be updated on a five-year
basis as the project moves through operations and construction.
2:31:11 PM
REPRESENTATIVE JOSEPHSON asked whether NOVAGOLD and Barrick Gold
have other projects in Alaska and what their big projects have
been in Canada.
MR. FUEG replied NOVAGOLD is a junior mining company and does
not own and operate any other projects, although it is involved
in the development of another project in British Columbia called
Galore Creek, which is currently in the pre-feasibility study of
engineering. Barrick Gold is the world's largest gold mining
corporation. The company was recently slimmed down from owning
something like 27 mines around the world to about 20. Barrick
Gold owns and operates many of the large mines in Nevada and
most of Barrick Gold's core assets are located in Nevada. He
believed Barrick Gold operates one, or possibly two, mines in
Canada.
REPRESENTATIVE JOSEPHSON inquired whether one of the mines on
the Seward Peninsula near Nome was owned by Nova Copper or
NOVAGOLD and further inquired whether there was any connection
between the two.
MR. FUEG responded it was NOVAGOLD, but said that operation has
been closed down. It was permitted and operated for a brief
while and then closed down a few years back. He believed the
property was sold, but said he doesn't know whether the state
has yet released the bond.
2:33:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:33 p.m.