Legislature(2011 - 2012)BELTZ 105 (TSBldg)


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Heard & Held
Moved SB 147 Out of Committee
Scheduled But Not Heard
        SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE                                                                    
3:35:18 PM                                                                                                                    
CHAIR OLSON announced the consideration of SB 152.                                                                              
3:35:47 PM                                                                                                                    
SENATOR HOLLIS  FRENCH, Alaska State  Legislature, sponsor  of SB
152,  said the  bill  was  designed to  help  further engage  the                                                               
legislature in  development issues  in the Bristol  Bay Fisheries                                                               
Reserve  (BBFR). He  said  BBFR  was created  in  1972  to add  a                                                               
heightened  level of  fisheries protection.  He said  a bill  was                                                               
enacted  which required  the legislature  to pass  a BBFR  impact                                                               
resolution prior  to oil  and gas development.  He said  the bill                                                               
was  sponsored by  Senator Jay  Hammond and  noted that  an early                                                               
provision included  a proposal similar  to SB  152. He said  in a                                                               
sense, SB 152 would finish the work that was initiated in 1972.                                                                 
CHAIR   OLSON  recognized   Representative   Pete  Peterson   and                                                               
Representative Bryce Edgmon were present.                                                                                       
3:37:19 PM                                                                                                                    
SENATOR FRENCH  said AS 38.05.140(f), provides  that BBFR surface                                                               
entry permits  and exploration  licenses to  develop oil  and gas                                                               
leases may not be issued on  state owned or controlled land until                                                               
the  legislature, by  appropriate resolution,  specifically finds                                                               
that entry  would not constitute  danger to the fishery.  He said                                                               
SB 152  would treat large  scale, metallic sulfide mining  in the                                                               
exact same way as oil and gas.  He said SB 152 would not prohibit                                                               
mining, it simply adds heightened protection.                                                                                   
3:37:34 PM                                                                                                                    
SENATOR ELLIS joined the meeting.                                                                                               
3:37:43 PM                                                                                                                    
CHAIR OLSON called an  at ease at 3:37 p.m. and  set SB 152 until                                                               
later in the meeting.                                                                                                           
        SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE                                                                    
CHAIR OLSON announced  the continued consideration of  SB 152. He                                                               
asked Senator French to continue his presentation.                                                                              
3:40:39 PM                                                                                                                    
SENATOR FRENCH  said the fishery  in Bristol  Bay was one  of the                                                               
top  producing wild  salmon systems  in  the world  and the  most                                                               
lucrative  salmon   fishery  in   Alaska.  He  said   the  salmon                                                               
populations  were  highly vulnerable  to  even  small changes  to                                                               
habitat water quality.                                                                                                          
He said Alaska  had never denied a permit to  a large-scale mine.                                                               
He  noted   that  the   facts  presented   warranted  legislative                                                               
oversight  and legislative  involvement in  the process.  He said                                                               
that  due  to  the  geochemistry and  location  of  Bristol  Bay,                                                               
sulfide deposits in  the headwaters run a high  risk of polluting                                                               
the bay.  He said  the magnitude  of the  potential risks  to the                                                               
BBFR  region and  the  potential  statewide impact,  legislatures                                                               
representing communities  from across the state  should weigh in.                                                               
He said the legislature may very  well decide to approve the mine                                                               
after a thorough hearing, but the process should be exacting.                                                                   
SENATOR  OLSON asked  where else  in Alaska  were there  metallic                                                               
sulfide  deposits  that  would challenge  the  magnitude  of  the                                                               
Pebble Mine (PM).                                                                                                               
SENATOR FRENCH answered that he did not know.                                                                                   
CHAIR OLSON commented  on the potential "slippery  slope" from SB
152 and  asked about  the potential  legislative impact  on other                                                               
mines in Alaska.                                                                                                                
SENATOR FRENCH  answered that  a precedent was  in place  for oil                                                               
and  gas  operations in  BBFR  and  that  was exactly  where  the                                                               
slippery  slope stopped.  He said  a legislator  could go  to any                                                               
constituent and say SB 152 put  mining on the same footing as oil                                                               
and gas  in BBFR  where so  many lives and  jobs depended  on the                                                               
annual salmon return.                                                                                                           
CHAIR OLSON asked  how politics would be kept  out of responsible                                                               
resource development.                                                                                                           
3:43:46 PM                                                                                                                    
SENATOR FRENCH  answered that politics  were going to  be infused                                                               
in  the  BBFR  issue  throughout  its life.  He  said  the  vital                                                               
question was how  the fish would be protected and  how the public                                                               
process would be protected.                                                                                                     
CHAIR  OLSON asked  if an  opportunity  would be  missed if  BBFR                                                               
mining would  not be  allowed to continue  and the  region's wild                                                               
salmon  fishing was  phased out  due  to the  impact from  farmed                                                               
SENATOR FRENCH answered that SB  152 would help cement the future                                                               
of  wild Alaska  fish as  being  much brighter  and stronger.  He                                                               
noted  that  fishermen  in  Sitka  were against  PM  due  to  the                                                               
potential  impact  on  the state's  fishing  industry  from  BBFR                                                               
tainted fish.                                                                                                                   
CHAIR OLSON responded that he agreed.                                                                                           
3:45:58 PM                                                                                                                    
RICK HALFORD,  consultant, Trout Unlimited-Alaska,  Chugiak, said                                                               
he did not recall  being opposed to mines in the  past and PM was                                                               
unique due to its location, type and size.                                                                                      
He said  an existing  law strictly regulated  BBFR's oil  and gas                                                               
development.  He  said adding  sulfide  mines  of more  than  one                                                               
square  mile  to  the  law   would  not  impact  any  other  BBFR                                                               
development projects.                                                                                                           
He said three companies were  involved with PM - Northern Dynasty                                                               
Minerals,  Rio Tinto  and Anglo  American. He  noted that  the PM                                                               
project  was  initiated by  Cominco  Alaska  Exploration and  the                                                               
company sold  its interest  below its  investment costs.  He said                                                               
Northern  Dynasty  Minerals was  continuously  for  sale and  the                                                               
market's assessment  of PM's probability  had affected  its stock                                                               
prices from a high of $20 per share  to the current low of $7 per                                                               
share. He  noted that  Tom Albanese,  Rio Tinto's  chairman, does                                                               
not believe PM would ever permit as an open pit mine.                                                                           
3:48:48 PM                                                                                                                    
He said many fisheries in  North America were threatened. He said                                                               
the real  stronghold of a  completely viable and  totally diverse                                                               
fishery was  Bristol Bay. He  said BBFR  was like no  other place                                                               
left  on  earth  and  was  truly a  state  resource  of  national                                                               
He  said  BBFR  was  interesting  due to  its  altitude  and  wet                                                               
conditions.  He said  the BBFR  spawning grounds  was a  thousand                                                               
foot plateau  in a  rolling hill area  with porous  soil material                                                               
where ground and  surface water mixed. He said  BBFR impact would                                                               
be from  the mine and  its 100-mile access corridor  that crossed                                                               
all of  the streams  of the  northeast end  of Iliamna  Lake, the                                                               
greatest red salmon lake on earth.                                                                                              
3:51:30 PM                                                                                                                    
MR. HALFORD said an all-weather road  would have to be created in                                                               
a  mountainous region  to haul  millions of  gallons of  fuel. He                                                               
noted that a fuel pipeline would  have to be installed due to the                                                               
size  of  the project.  He  said  a  1400  to 1600  gallon  spill                                                               
occurred during the initial fuel haul.                                                                                          
He said  PM's 10.8 billion  ton deposit  was very low  grade with                                                               
high  sulfur content  and  a copper  equivalent  value of  0.0033                                                               
percent. He noted that the Greens  Creek Mine (GCM) was a sulfide                                                               
mine located  25 miles south of  Juneau. He said PM  would be 300                                                               
times the  size of  GCM. He  said GCM  was an  underground mining                                                               
operation that  was very  well controlled  and operated.  He said                                                               
the  largest  open pit  mine  in  North America,  Utah's  Bingham                                                               
Canyon Mine  (BCM), would be  one-third the  size of PM.  He said                                                               
BCM was located  in a desert and has polluted  72 square miles of                                                               
the aquifer located underneath.                                                                                                 
3:53:43 PM                                                                                                                    
MR. HALFORD said  BBFR had been impacted by  the current drilling                                                               
program's  drilling-muds, fluids  and tailings.  He said  current                                                               
remediation efforts were lacking  and legislative oversight would                                                               
be a  big step  in the  right direction. He  said the  bill would                                                               
bring the  legislature to the  table in the biggest  decision for                                                               
Western Alaska.                                                                                                                 
3:58:15 PM                                                                                                                    
SENATOR MENARD  asked how  the legislature  would conduct  a BBFR                                                               
MR. HALFORD  answered that  the legislature  should get  the best                                                               
available scientific data and listen to the local people.                                                                       
SENATOR MENARD asked if the recent BBFR vote was close.                                                                         
MR. HALFORD answered that the  recent initiative was a close vote                                                               
and occurred  in a small portion  of the BBFR region.  He said 52                                                               
to 55 percent  favored PM. He noted that  Dillingham, the largest                                                               
community in  the area, was  not included. He noted  that polling                                                               
in  the  larger communities  indicated  that  80 percent  of  the                                                               
voters opposed PM.                                                                                                              
SENATOR MENARD asked which boroughs voted.                                                                                      
4:00:13 PM                                                                                                                    
MR. HALFORD answered  that the Lake and  Peninsula Borough voted.                                                               
He said boroughs that would  be affected downstream did not vote.                                                               
He said  the Bristol  Bay Native  Corporation (BBNC)  conducted a                                                               
regional poll that indicated that 70 to 80 percent opposed PM.                                                                  
CHAIR OLSON asked why Manokotak was considered in BBFR.                                                                         
MR. HALFORD answered  that Manokotak was considered to  be in the                                                               
BBFR drainage area.                                                                                                             
SENATOR MENARD asked how it  could be assured that politics would                                                               
not come into play.                                                                                                             
MR. HALFORD answered that a  former politician said that a person                                                               
not  interested  in   politics  was  like  a   drowning  man  not                                                               
interested in water. He said politics was the way we do things.                                                                 
SENATOR MENARD  responded that  lobbyists also  had an  impact on                                                               
CHAIR  OLSON asked  for  clarification on  the  results from  the                                                               
initiative vote.                                                                                                                
MR. HALFORD  answered that  the vote  was a  lot closer  than the                                                               
advocates  of the  ballot initiative  had expected.  He said  the                                                               
turnout  was in  the two  communities where  PM was  basing their                                                               
operations,  Iliamna and  Newhalen. He  estimated that  less than                                                               
half of the BBFR drainage population voted in the initiative.                                                                   
CHAIR OLSON  asked why Southwestern  Alaska's Donovan  Creek Mine                                                               
(DCM) was not receiving as much adversity.                                                                                      
4:03:46 PM                                                                                                                    
MR.  HALFORD answered  that DCM  was  owned by  the local  native                                                               
corporation.  He  said  the  fishery impacted  by  DCM  was  much                                                               
smaller than PM.                                                                                                                
CHAIR OLSON commented that many  families depend on the Kuskokwim                                                               
River King  Salmon run and  would be negatively impacted  by DCM.                                                               
He asked why the same PM  opposition effort was not being applied                                                               
to DCM.                                                                                                                         
MR.  HALFORD  answered  that  DCM  was  more  controversial  than                                                               
expected.  He said  he was  surprised that  Bethel voted  against                                                               
DCM. He  noted that DCM  would provide jobs and  local ownerships                                                               
opportunities  in  Bethel. He  said  DCM  had the  same  material                                                               
problems as PM, but the size of the mine was much smaller.                                                                      
CHAIR OLSON asked if gold mining  would have occurred in Nome 100                                                               
years ago if SB 152 legislation existed.                                                                                        
MR. HALFORD answered that he  believed he never ran for political                                                               
office  in opposition  to  mining. He  said  mining had  economic                                                               
importance  in  Alaska and  noted  there  had been  environmental                                                               
issues. He said  Bristol Bay was a unique  case where legislation                                                               
would be reasonable and he did  not oppose other mines in Alaska.                                                               
He said  PM's size, high  sulfur content and acid  drainage would                                                               
be deadly to BBFR's water.                                                                                                      
4:07:31 PM                                                                                                                    
CHAIR OLSON  asked if remediation  technology existed  to control                                                               
MR.  HALFORD answered  no.  He said  remediation  had never  been                                                               
successful in  a wet climate.  He said remediation would  have to                                                               
occur  in perpetuity  with acid  issues being  just as  dangerous                                                               
1000 years from now.                                                                                                            
CHAIR OLSON asked if muriatic acid would be produced.                                                                           
MR. HALFORD answered that sulfuric acid would be produced.                                                                      
CHAIR OLSON  asked how  we make sure  legislation to  stop mining                                                               
would not impact responsible resource  development. He noted that                                                               
the oil  industry was extracting  a nonrenewable resource  in the                                                               
North Slope's extreme conditions.                                                                                               
4:09:29 PM                                                                                                                    
MR.  HALFORD said  onshore  oil  and gas  drilling  had far  less                                                               
environmental impact  than mining. He said  rising mineral values                                                               
made mining low-grade ore feasible.  He said low-grade ore mining                                                               
generated high levels of waste.  He noted that the state received                                                               
ten  times more  money  from the  oil  industry's gross  taxation                                                               
versus the mining industry's net taxation system.                                                                               
4:11:03 PM                                                                                                                    
CHAIR  OLSON asked  if he  would  oppose development  if oil  was                                                               
discovered in Bristol Bay.                                                                                                      
MR.  HALFORD  answered that  he  supported  onshore drilling  and                                                               
opposed offshore drilling.                                                                                                      
SENATOR   MENARD  referenced   a   National  Geographic   article                                                               
regarding Alaska's choice  between gold and salmon.  She asked if                                                               
there was any way Alaska could have both gold and salmon.                                                                       
MR. HALFORD answered  that was the argument made in  every one of                                                               
those considerations was  for one or the other. He  said that for                                                               
Bristol Bay  it was a choice  between salmon and gold  due to the                                                               
issue with perpetual remediation.                                                                                               
4:14:41 PM                                                                                                                    
SENATOR MENARD asked if Mr.  Halford owned several thousand acres                                                               
in BBFR.                                                                                                                        
MR. HALFORD  answered that he did  not own land in  BBFR. He said                                                               
he owned 150  acres north of Dillingham,  approximately 120 miles                                                               
from BBFR.                                                                                                                      
SENATOR  MENARD asked  if bringing  on a  scientifically educated                                                               
consultant had ever been considered.                                                                                            
MR. HALFORD  answered that  he did not  have a  science education                                                               
background. He said  right decisions would be made if  we were to                                                               
listen to local people, original  people of the area and science.                                                               
He  said PM  would not  occur if  people understand  what was  at                                                               
stake for BBFR. He said sulfide mines were very dangerous.                                                                      
SENATOR  MENARD commented  that  she was  a  strong supporter  of                                                               
mines  and understood  the conflict  with  commercial fishing  in                                                               
Bristol Bay.                                                                                                                    
4:17:33 PM                                                                                                                    
MR.  HALFORD responded  that he  liked the  people in  the mining                                                               
industry and did not begrudge  them of their investments. He said                                                               
danger from a  sulfide mine was more than the  rest of the system                                                               
in the  state could bear. He  said BBFR supported a  $400 million                                                               
to $500  million fishing  industry and the  soul of  the region's                                                               
people would be lost if salmon were gone.                                                                                       
4:18:43 PM                                                                                                                    
SENATOR MENARD asked about the impact from SB 152.                                                                              
MR. HALFORD  answered that  the legislation was  a small  step to                                                               
have the legislators involved in the process.                                                                                   
CHAIR  OLSON commented  that  SB 152  was not  a  small step  and                                                               
roadblocks could  be inserted  by the  legislature that  would be                                                               
fairly  significant. He  noted that  legislators were  holding up                                                               
the Coastal Resource Management Program  that was supported by 80                                                               
percent of  Alaskans. He said  he was  cautious on trying  to get                                                               
the legislature more involved.                                                                                                  
4:19:46 PM                                                                                                                    
DANIEL CHEYETTE,  Associate General  Counsel, Bristol  Bay Native                                                               
Corporation  (BBNC),  said  BBNC supported  responsible  resource                                                               
development  via  projects that  met  high  standards of  fiscal,                                                               
social and  environmental sustainability.  He said  projects must                                                               
provide long-term  economic returns  without risking  or damaging                                                               
subsistence resources,  native culture  or the  commercial salmon                                                               
fishery.  He said  Bristol Bay  commercial fishing  provided more                                                               
than 11,500  jobs and  $164 million  in wages  to the  region. He                                                               
said BBNC  would not  risk the crucial  fishing resource  for the                                                               
purpose of  developing other resources  and opposed  the proposed                                                               
PM project.                                                                                                                     
4:22:44 PM                                                                                                                    
MR. CHEYETTE  said BBNC shareholders  responded to a  survey with                                                               
81  percent  opposing  PM.  He said  BBNC  had  provided  written                                                               
testimony  with recommendations  for SB  152 to  include findings                                                               
that speak to the unique nature of Bristol Bay's fisheries.                                                                     
CHAIR  OLSON   asked  what  the   sentiment  of   the  non-native                                                               
population was for PM.                                                                                                          
MR. CHEYETTE answered that BBNC  did a statewide survey and found                                                               
less than 32 percent had a  positive opinion of PM. He noted that                                                               
other  industries,  including oil  and  gas,  had a  favorability                                                               
rating over 70 percent.                                                                                                         
4:25:45 PM                                                                                                                    
LISA  REIMERS,  CEO,  Iliamna Development  Corporation,  said  PM                                                               
would bring  needed jobs and an  economy to the area  with a high                                                               
cost of living.  She noted that the majority of  jobs provided by                                                               
BBFR were out of state. She  said Iliamna residents would like to                                                               
make their own decisions regarding PM.                                                                                          
CHAIR OLSON noted the importance of  jobs to survive as a western                                                               
culture and  asked what would happen  if there was a  problem and                                                               
the mine had to shut down.                                                                                                      
MS. REIMERS  answered that  Iliamna could  not solely  survive on                                                               
commercial  fishing   and  BBNC   was  not  creating   local  job                                                               
opportunities.  She said  Iliamna  residents  were adaptable  and                                                               
could move on if the PM was closed.                                                                                             
4:29:45 PM                                                                                                                    
TREFON  ANGASAN,   Chairman  of   the  Board,   Alaska  Peninsula                                                               
Corporation  (APC),  said  APC  was  a  merger  of  five  village                                                               
corporations with two  located in the Iliamna Lake  area. He said                                                               
SB  152  would insert  political  decision-making  and usurp  the                                                               
permitting  authority of  state agencies.  He said  the bill  was                                                               
poor public  policy and would  restrict mining in the  region. He                                                               
said the  bill would  violate APC's  property interest  under the                                                               
Alaska  Native Claims  Settlement Act  (ANCSA), the  Alaska State                                                               
Constitution and the U.S. Constitution.                                                                                         
4:35:38 PM                                                                                                                    
MR. ANGASAN said SB 152 was  a giveaway to the sports lodges that                                                               
threatened APC's ability  to develop its lands  and resources. He                                                               
said BBNC's  support for  SB 152 was  misplaced and  violated its                                                               
responsibilities under  ANCSA. He  said SB  152 would  expose the                                                               
state to enormous liabilities for inverse condemnation.                                                                         
4:37:13 PM                                                                                                                    
He  said  SB   152  would  substantially  reduce   the  value  of                                                               
investments  made by  APC and  mining  exploration companies.  He                                                               
said mining  companies were  taking enormous  risks and  would be                                                               
held hostage by  the political whims of the  legislature. He said                                                               
APC  had  confidence  in  the   process  and  it  should  not  be                                                               
threatened by ex  post facto actions for  a politically motivated                                                               
legislative body.                                                                                                               
4:40:37 PM                                                                                                                    
RICHARD KING,  Administrator, Ekwok Village Council,  Ekwok, said                                                               
the Senate  has a trust  responsibility to the people  of Bristol                                                               
Bay. He said  the people of Bristol Bay have  spoken with over 80                                                               
percent in opposition to large-scale  mining. He said he lived in                                                               
northern Minnesota and saw mining's negative impact on fishing.                                                                 
4:43:50 PM                                                                                                                    
RACHAEL  PETRO,  President  and  CEO,  Alaska  State  Chamber  of                                                               
Commerce (ASCC), said ASCC supports  an efficient and predictable                                                               
permitting process.  She said ASCC encourages  the legislature to                                                               
uphold  current  regulatory  and permitting  laws  to  facilitate                                                               
natural  resource  exploration.  She  said SB  152  would  insert                                                               
political decision making  into established regulatory structures                                                               
by  usurping  the  permitting authority  of  state  agencies  and                                                               
restrict  mining  throughout  Bristol   Bay  regardless  of  land                                                               
status.  She said  the  bill  was poor  public  policy and  would                                                               
establish  a   dangerous  precedent   for  all   future  resource                                                               
development in Alaska.                                                                                                          
4:46:40 PM                                                                                                                    
DENNIS ANDREW SR., President, New  Stuyahok Village Council, said                                                               
the village would  be the first community  affected downstream by                                                               
the  proposed PM.  He  said New  Stuyahok  relied on  subsistence                                                               
fishing  and  considered Bristol  Bay  their  "dinner table"  for                                                               
thousands of years. He said PB would  be too high of a risk for a                                                               
large mine in the Bristol Bay headwaters.                                                                                       
4:48:30 PM                                                                                                                    
THOMAS  TILDEN, Tribal  Chief, Curyung  Tribal  Council, said  an                                                               
extraordinary  mine requires  extraordinary  legislation for  the                                                               
future of the state. He said when  PB was proposed he was for the                                                               
mine and  the economic  opportunity it brought  to BBFR.  He said                                                               
his  mind changed  in opposition  to PM  after reviewing  data on                                                               
what might happen. He said  he attended meetings where the mining                                                               
companies would  not guarantee a percentage  of local employment.                                                               
He  said PM  would be  located in  BBFR's unique  upland-wetlands                                                               
where possible contamination would have wide spread impact.                                                                     
4:51:37 PM                                                                                                                    
GARY CLINE, Village Representative,  Nunamta Aulukestai, said the                                                               
respective  tribal  governments  support  legislation  for  added                                                               
protection within  BBFR. He  said the future  was on  a collision                                                               
course between the  subsistence foods and the  many mining claims                                                               
that  have  potential  to  impact the  BBFR  watershed.  He  said                                                               
trading  a prolific  salmon  habitat  for a  large  mine was  not                                                               
acceptable. He  said current  oversight from  government agencies                                                               
was  not  diligent  in  their  inspections  regarding  water  use                                                               
permits  during drilling  exploration.  He said  water was  taken                                                               
from streams where salmon were residing and spawning.                                                                           
4:54:36 PM                                                                                                                    
HERMAN  NELSON SR.,  President,  New  Koliganek Village  Council,                                                               
said the  village was located 50  miles west of the  proposed PM.                                                               
He said  legislative approval  that affects  BBFR water  and land                                                               
was necessary.                                                                                                                  
4:57:02 PM                                                                                                                    
KIMBERLY WILLIAMS,  Executive Director, Nunamta  Aulukestai, said                                                               
she supported the  passage of SB 152 for  future generations. She                                                               
said the  Department of  Natural Resources  had to  improve their                                                               
oversight and  noted that PM's  data shows fish  populations were                                                               
declining in streams impacted by exploratory drilling.                                                                          
4:58:52 PM                                                                                                                    
ABE WILLIAMS, President,  Nuna Resources, said SB 152  sets a bad                                                               
precedent  by turning  the current  regulatory  structure into  a                                                               
political  folly.  He  said Nuna  Resources  was  established  to                                                               
advocate for a sustainable economy  in BBFR including the support                                                               
for  responsible  resource  development and  advocating  for  due                                                               
process. He  said due process  was the key for  regional resource                                                               
diversification to address a dwindling population.                                                                              
5:01:22 PM                                                                                                                    
CHAIR OLSON said SB 152 would be held in committee.                                                                             

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