Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/01/2012 03:30 PM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 204 LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ Overview: Toxins Release Inventory TELECONFERENCED
<Above Item Removed from Agenda>
= SB 148 GAS PIPELINE PROPERTY TAX EXEMPTION
Moved CSSB 148(CRA) Out of Committee
= SB 152 LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
Heard & Held
        SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE                                                                    
                                                                                                                              
4:23:03 PM                                                                                                                    
CHAIR OLSON announced  the consideration of SB 152  and asked Ms.                                                               
Peterson to remind the committee about the bill.                                                                                
                                                                                                                                
4:23:44 PM                                                                                                                    
KRISTEN  PETERSON, Staff,  Senator  Hollis  French, Alaska  State                                                               
Legislature, read  the first paragraph  of the  sponsor statement                                                               
for SB 152 as follows:                                                                                                          
                                                                                                                                
     Senate Bill  152 is designed to  engage the legislature                                                                    
     in  development issues  in  the  Bristol Bay  Fisheries                                                                    
     Reserve.  The bill  would  require  the legislature  to                                                                    
     enact a law  that includes a finding  that any proposed                                                                    
     large-scale    metallic    sulfide    mine    operation                                                                    
     constitutes  no  danger  to   the  fishery  within  the                                                                    
     reserve.  This would  have to  be completed  before the                                                                    
     issuance  of  an  authorization,  license,  permit,  or                                                                    
     approval  of  a plan  of  operation  that could  affect                                                                    
     water in or flowing into or over the reserve.                                                                              
                                                                                                                                
CHAIR OLSON opened public testimony.                                                                                            
                                                                                                                                
4:24:38 PM                                                                                                                    
RICK  ROGERS, Executive  Director,  Resource Development  Council                                                               
(RDC) for Alaska, Inc., said RDC  was strongly opposed to SB 152.                                                               
He relayed  that RDC was  a nonprofit organization  whose purpose                                                               
was  to link  its  diverse membership  interests  to encourage  a                                                               
strong,  diversified, private  sector in  Alaska, and  expand the                                                               
state's economic base through responsible resource development.                                                                 
                                                                                                                                
He  said that  one of  RDC's  top legislative  priorities was  to                                                               
encourage  the  state to  promote  and  defend the  integrity  of                                                               
Alaska's  permitting process  and  to  advocate for  predictable,                                                               
timely,  and efficient  permitting  processes that  are based  on                                                               
sound  science and  economic feasibility.  RDC's perspective  was                                                               
that SB  152 did the  opposite. The bill  was not about  just the                                                               
Pebble  mine; it  was  a legislative  referendum  on the  state's                                                               
permitting  process  for  projects   across  all  industries.  It                                                               
effectively  usurps the  permitting  authority  of the  executive                                                               
branch and  creates uncertainty for companies  that are investing                                                               
or contemplating investment in Alaska.  He urged the committee to                                                               
hold the bill.                                                                                                                  
                                                                                                                                
CHAIR OLSON asked  how to protect the fisheries  and maintain the                                                               
maximum sustainable yield.                                                                                                      
                                                                                                                                
MR.  ROGERS answered  that  there are  processes  and systems  in                                                               
place to  do that. Any  suggested improvements should  be vetted,                                                               
but  the  legislature should  not  adjudicate  whether a  project                                                               
should  get  permits.  Many  people will  review  a  project  the                                                               
magnitude of  Pebble before  it gets a  permit; that  process has                                                               
worked  for  Alaska for  years.  It's  been possible  to  develop                                                               
large-scale  projects  responsibly  while  maintaining  a  robust                                                               
fishery.                                                                                                                        
                                                                                                                                
4:29:08 PM                                                                                                                    
CHAIR OLSON commented that what  the Murkowski administration did                                                               
to the  coastal zone  management program  was devastating  to the                                                               
people of Alaska,  particularly those on the coast  who no longer                                                               
have a seat  at the table to voice concerns.  That's why there is                                                               
grave reservation about this particular mine, he said.                                                                          
                                                                                                                                
MR. ROGERS said he recognized  the concern about the magnitude of                                                               
the  project,  its  location,  and the  other  resources  in  the                                                               
Bristol Bay  region, but he  did not believe  that SB 152  was an                                                               
appropriate approach for dealing with those issues.                                                                             
                                                                                                                                
4:30:23 PM                                                                                                                    
ANDERS   GUSTAFSON,  Executive   Director,  Renewable   Resources                                                               
Coalition (RRC), said he was speaking  on behalf of the more than                                                               
6,000  Alaskan  members in  support  of  SB 152.  The  membership                                                               
consists  of  individuals,  businesses,  and  organizations  that                                                               
historically  have  fought over  allocation  of  the Bristol  Bay                                                               
fishery resource,  but have  since joined  forces to  protect the                                                               
habitat and water that is the building block of this resource.                                                                  
                                                                                                                                
In the early  1970s when Alaska was first developing  its oil and                                                               
gas  resources,   the  legislature  recognized   the  incredible,                                                               
renewable resource that  is the Bristol Bay  fishery and realized                                                               
it was  appropriate to designate  a boundary for  this watershed.                                                               
The  legislature also  realized  there should  be  a process  for                                                               
Alaskans   to  have   a  say   in   whether  massive   industrial                                                               
developments  should  be  allowed.  By  supporting  SB  152,  the                                                               
coalition is  asking the legislature  to give that same  level of                                                               
oversight  to  a  large-scale  mining  development  in  the  same                                                               
region. The  bill does not  affect mining development  across the                                                               
state;  it  is about  protecting  the  Bristol Bay  fishery.  The                                                               
members of  RRC also believe that  SB 152 will create  a level of                                                               
certainty in the  marketplace that this fishery  will continue to                                                               
be strong.  This will create  a friendlier environment  for those                                                               
dependent on the fishery to reinvest in their businesses.                                                                       
                                                                                                                                
MR. GUSTAFSON  reiterated that SB  152 does not  prohibit mining.                                                               
It  ensures a  process by  which  the people  of Alaska,  through                                                               
their  representatives, can  protect  the incredibly  significant                                                               
Bristol Bay fisheries resource.                                                                                                 
                                                                                                                                
4:33:29 PM                                                                                                                    
JIMMY  R. HURLEY,  representing  himself, said  he  had lived  in                                                               
Ekwok for  the past 50 years  and he strongly opposed  SB 152. He                                                               
said that the people who live in  this area don't want to live on                                                               
food stamps; they want jobs.                                                                                                    
                                                                                                                                
4:35:52 PM                                                                                                                    
SUE  ANELON, Member,  Iliamna  Village  Council, Iliamna  Natives                                                               
Limited  (INL),  stated that  the  council  and corporation  were                                                               
strongly  opposed to  SB 152,  because  a rigorous  science-based                                                               
permitting system  was already in  place. The  legislature should                                                               
instead be dealing  with the more important issues  of oil taxes,                                                               
helping companies create jobs, and  economic development in rural                                                               
communities. She  also stated  that the  bill could  affect other                                                               
landowners and development projects within the state.                                                                           
                                                                                                                                
CHAIR OLSON said he should  have pointed out earlier that Senator                                                               
French had visited  Southwest Alaska a number of  times to survey                                                               
the situation.                                                                                                                  
                                                                                                                                
4:37:59 PM                                                                                                                    
VERNER   WILSON  III,   Member,   Curyung   Tribal  Council   and                                                               
shareholder, Bristol Bay Native  Corporation (BBNC), testified in                                                               
support  of SB  152.  He said  he was  a  Bristol Bay  commercial                                                               
fisherman who  also did subsistence  fishing. He stated  that the                                                               
legislation  gives a  voice  to Alaskans  on  the very  important                                                               
issue  of  a   large-scale  mine  in  the   Bristol  Bay  region.                                                               
Proponents say the development could  create 2,000 jobs, but they                                                               
don't say how many jobs may  be impacted. He said his father paid                                                               
thousands of dollars for a permit  to fish in Bristol Bay and the                                                               
family depends  on the fishery.  This issue is important  to this                                                               
and future  generations. The Bristol  Bay fishery has  been there                                                               
for thousands of years and it  can continue for thousands more if                                                               
it  is  managed sustainably  and  the  habitat is  protected.  He                                                               
reiterated that  the legislation  gives voice  to Alaskans  on an                                                               
issue about which they really care.                                                                                             
                                                                                                                                
CHAIR OLSON asked  why he was interested in  protecting a fishery                                                               
that he didn't depend on any longer.                                                                                            
                                                                                                                                
MR.  WILSON clarified  that  he  did depend  on  the Bristol  Bay                                                               
fishery; his  parents still live  in the  area and he  returns to                                                               
fish  every  summer.   He  imagined  that  he   would  move  back                                                               
permanently after  he finished graduate school.  He began fishing                                                               
when  he was  about age  four  and looked  forward eventually  to                                                               
getting his  own boat and  permit. If  fishing and mining  are to                                                               
coexist, it's necessary to ask the tough questions, he said.                                                                    
                                                                                                                                
CHAIR OLSON  asked if  after he finished  graduate school  he can                                                               
imagine putting  on boots and rain  gear and working in  the fish                                                               
slime.                                                                                                                          
                                                                                                                                
MR.  WILSON answered  yes. He  added  that he  looked forward  to                                                               
being a  part of  further developing the  seafood industry  and a                                                               
sustainable economy.                                                                                                            
                                                                                                                                
4:44:23 PM                                                                                                                    
FRED  T.   ANGASAN,  Chair,  Land  Committee,   Alaska  Peninsula                                                               
Corporation  (APC), stated  that as  one of  the largest  private                                                               
landowners  within  the  Bristol  Bay  Salmon  Reserve,  APC  was                                                               
opposed  to SB  152.  Matters currently  committed  to the  sound                                                               
discretion  of  executive  agencies  based  on  science  and  the                                                               
concept  of  due  process  would instead  be  considered  in  the                                                               
political arena. He  said APC was convinced  that the legislation                                                               
violated state law.  APC's primary mission is to  manage its land                                                               
for  the benefit  of the  villages and  Congress has  charged the                                                               
corporation  with economic  development  of those  lands. SB  152                                                               
directly interferes  with that by creating  uncertainty about the                                                               
effect of  a metallic  sulfide deposit on  their land,  which has                                                               
tremendous potential  for mineral development. It  would place at                                                               
risk  the surface  exploration agreements  that  APC has  entered                                                               
into. APC has confidence in the current process, he stated.                                                                     
                                                                                                                                
4:51:29 PM                                                                                                                    
MIKE  SATRE,  Executive  Director, Council  of  Alaska  Producers                                                               
(CAP), said  CAP was a  nonprofit trade  association representing                                                               
the  producing  large  metal mines  and  large  mine  development                                                               
projects  in  the state.  He  said  he  was testifying  to  voice                                                               
opposition to SB  152. The bill uses  existing statutory language                                                               
that places limitations  on surface entry permits  to develop oil                                                               
and gas  leases or  exploration licenses  within the  Bristol Bay                                                               
Fisheries Reserve, but  it goes much farther. SB  152 attempts to                                                               
restrict mining  throughout the region regardless  of land status                                                               
or whether the activities are  in the fisheries reserve. It could                                                               
strip the  rights of individuals  who already hold  valid mineral                                                               
claims and exploration  permits in the area.  This could possibly                                                               
constitute  a taking,  which would  violate both  the Alaska  and                                                               
U.S. constitutions.  The existing  statute for  oil and  gas does                                                               
not assume that  the development will adversely  affect water; it                                                               
only requires  a finding that  the development will not  harm the                                                               
fishery.  SB  152 assumes  that  mining  activity will  adversely                                                               
affect water quality and the  proponents have stated their belief                                                               
that  it will  potentially stop  one project.  This, too,  raises                                                               
constitutional issues, he said.                                                                                                 
                                                                                                                                
MR.  SATRE said  CAP strongly  supports the  existing large  mine                                                               
permitting processes in the state  and all efforts to fully fund,                                                               
strengthen, and improve the permitting  functions of the resource                                                               
agencies.  If SB  152  were to  pass,  state permitting  agencies                                                               
would  be forced  to follow  the directives  of the  legislature,                                                               
rather  than  basing  decisions on  the  existing  science-based,                                                               
transparent, and predictable permitting processes.                                                                              
                                                                                                                                
4:54:11 PM                                                                                                                    
ED  FOGLES, Deputy  Commissioner,  Department Natural  Resources,                                                               
said  he was  not taking  a position  on the  bill. He  wanted to                                                               
discuss  the state's  regulatory process  and present  issues for                                                               
the  committee  to consider.  He  opined  that the  state's  mine                                                               
permitting process  was solid. The  seven operating mines  in the                                                               
state were  all operating  within environmental  compliance, with                                                               
no significant impact to the downstream fisheries.                                                                              
                                                                                                                                
He emphasized  that the permitting  process for a large  mine was                                                               
complex. It involves  a number of agencies and  dozens of experts                                                               
with advanced  degrees in addition  to the  federal environmental                                                               
impact statement  (EIS). He cautioned that  the legislature would                                                               
have to figure out  how to parse through that in  order to make a                                                               
decision, but it wouldn't be an easy task.                                                                                      
                                                                                                                                
SENATOR  MENARD asked  how many  people would  be dedicated  to a                                                               
project like the Pebble Mine.                                                                                                   
                                                                                                                                
MR. FOGLES  said that  approximately 20  agency experts  would be                                                               
involved, although the  number would vary throughout  the life of                                                               
the mine.                                                                                                                       
                                                                                                                                
SENATOR MENARD observed  that a tremendous number  of people were                                                               
already  dedicated  to  the  process,   which  was  why  she  was                                                               
uncomfortable.                                                                                                                  
                                                                                                                                
4:58:35 PM                                                                                                                    
MR. FOGLES said  that DNR's reading of the bill  is that it would                                                               
cover any hard  rock metal mine on both state  and private lands.                                                               
Thus,  any  significant  hard  rock  mining  project  within  the                                                               
Bristol  Bay area  would  have to  come  before the  legislature.                                                               
Because  each mine  project has  dozens and  dozens of  state and                                                               
federal  permits that  come out  at different  times, DNR  is not                                                               
clear on how that would work  for the legislature. Time lags will                                                               
also be  an issue  to evaluate because  the legislature  isn't in                                                               
session all the time.                                                                                                           
                                                                                                                                
5:00:33 PM                                                                                                                    
CHAIR OLSON  commented that he  anticipates more bills  like this                                                               
because there was  no coastal zone program where  people from the                                                               
local area have a seat at the table to voice their concerns.                                                                    
                                                                                                                                
MR. FOGLES  said he had been  involved in permitting a  number of                                                               
mines,  three  of  which  were  not  in  the  coastal  zone,  and                                                               
community concerns were always taken  into account. Regardless of                                                               
what is in place, DNR  will always address community concerns, he                                                               
said.                                                                                                                           
                                                                                                                                
CHAIR  OLSON said  public testimony  would continue  at the  next                                                               
meeting. He asked the sponsor to provide closing comments.                                                                      
                                                                                                                                
5:02:13 PM                                                                                                                    
SENATOR  HOLLIS FRENCH,  sponsor of  SB  152, said  the bill  was                                                               
based on the 1972 law that  was passed to protect the Bristol Bay                                                               
Fisheries Reserve  from oil and gas  development. The legislature                                                               
at the time  considered including mining but oil and  gas was the                                                               
immediate threat  to the fisheries  and that became the  topic of                                                               
the bill.  SB 152 is  designed to  put large-scale mining  on the                                                               
same footing as  oil and gas. If  it can be done  safely and with                                                               
no threat  to the  fishery, then  go ahead. If  it can't  be done                                                               
safely,  then  it should  stop.  The  legislature deserves  input                                                               
given the far-reaching  nature of the impact  on fishermen across                                                               
all of Alaska.                                                                                                                  
                                                                                                                                
CHAIR  OLSON  asked  the  sponsor  before  the  bill  moved  from                                                               
committee to  address the constitutional questions  that the bill                                                               
potentially raised.                                                                                                             
                                                                                                                                
CHAIR OLSON held SB 152 in committee.                                                                                           

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