Legislature(2009 - 2010)BUTROVICH 205
02/27/2009 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Pebble Mine Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 27, 2009
3:37 p.m.
MEMBERS PRESENT
Senator Lesil McGuire, Co-Chair
Senator Bill Wielechowski, Co-Chair
Senator Hollis French
Senator Gary Stevens
Senator Thomas Wagoner - via teleconference
MEMBERS ABSENT
Senator Charlie Huggins, Vice Chair
Senator Bert Stedman
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon
COMMITTEE CALENDAR
Overview of Pebble Mine Permitting and Associated Issues
The Pebble Partnership: John Shively, CEO, and Ken Taylor, Vice
President, Environment
Department of Natural Resources: Ed Fogels, Director, Office of
Project Management and Permitting & Dick Mylius, Director,
Division of Mining, Land and Water
Bristol Bay Native Corporation: Mel Brown, Director
Birch Horton, Bittner & Cherot: Bill Horn, Esq., representing
Trout Unlimited
University of Washington Fisheries Research Institute: Dr.
Daniel Schindler
Center for Science in Public Participation: Dr. Kendra Zamzow,
Environmental Geochemist
Lodge Owner: Brian Kraft
PREVIOUS COMMITTEE ACTION
No previous action to consider
WITNESS REGISTER
JOHN SHIVELY, CEO
Pebble Partnership
POSITION STATEMENT: Commented on Pebble Mine permitting issues.
KEN TAYLOR, Vice President
Environment
Pebble Partnership
POSITION STATEMENT: Commented on Pebble Mine permitting issues.
ED FOGELS, Director
Office of Project Management and Permitting
Department of Natural Resources (DNR)
POSITION STATEMENT: Reviewed the state's mine permitting
policies.
BILL HORN, ESQ.
Birch Horton, Bittner & Cherot
Trout Unlimited
POSITION STATEMENT: Commented on destructive consequences of
mining in the Bristol Bay area.
MEL BROWN
Bristol Bay commercial fisherman
POSITION STATEMENT: Related the serious concerns of Bristol
Bay's commercial fishermen on advancing the Pebble Mine project
in that area.
BRIAN KRAFT
Fishing lodge owner in Bristol Bay
POSITION STATEMENT: Raised serious water quality issues related
to allowing a mine in the Bristol Bay area.
DR. DANIEL SCHINDLER, Professor of Aquatic Sciences
Fisheries Research Institute
University of Washington
POSITION STATEMENT: Commented on what makes Bristol Bay
fisheries sustainable and how mining isn't compatible.
DR. KENDRA ZAMZOW, Environmental Geochemist
Center for Science in Public Participation
POSITION STATEMENT: Elaborated on serious technical risks
associated with a Pebble Mine project in the Bristol Bay area.
RICK HALFORD
Representing himself
POSITION STATEMENT: Related some history and perspective on why
he opposed the Pebble Mine project in Bristol Bay.
ACTION NARRATIVE
3:37:05 PM
CO-CHAIR BILL WIELECHOWSKI called the Senate Resources Standing
Committee meeting to order at 3:37 p.m. Present at the call to
order Senators McGuire, French, and Wielechowski. Senator
Wagoner was present via teleconference.
^Pebble Mine Overview
3:37:35 PM
JOHN SHIVELY, CEO, Pebble Partnership, and Ken Taylor, Vice
President, Environment, Pebble Partnership, introduced
themselves.
Mr. Shively said this project holds certain opportunities for
the state even though it is very controversial. He said the
Pebble Partnership is made up of two companies - Northern
Dynasty, a Canadian junior mining company that actually did most
of the exploration on the Pebble project, and Anglo American,
which is a major international mining firm that joined the
partnership in the middle of 2007 in a 50/50 partnership. The
board of directors is made up of six people, three from each
company.
He showed maps of the Pebble location north of Iliamna and
Newhalen and a little west of Nondalton in an area that feeds
into two of the major rivers in the Bristol Bay watershed. The
prospect is made up of two pieces of land; Pebble West (towards
the surface) originally found by Cominco in the early 80s and
Pebble East. At Pebble West Cominco did some prospecting for a
while and decided they weren't really interested. Northern
Dynasty took over the prospect, although Cominco retained an
interest. Northern Dynasty did further exploration and increased
the reserves at Pebble West and found a deeper and richer
prospect called Pebble East. It is estimated to have about 72
million pounds of copper, 94 million ounces of gold, and 4.8
billion pounds of molybdenum. It is not likely they would try to
permit the whole prospect at one time, and general that's not
how these kinds of prospects are developed. But the Pebble
Partnership doesn't have a defined project at this time; they
have a defined prospect. Getting there presents certain
challenges.
MR. SHIVELY said he is particularly proud of the low impact
footprint for the exploration. They have one small camp, not to
keep people, but to store pipe and things like that. Over 800
holes have been drilled in this prospect; the drill rigs are set
on pallets to keep them off the tundra. When they are through
drilling the hole, they pick everything and reclaim the area
within weeks. By the next season you can't see where the holes
were drilled.
MR. SHIVELY then turned the presentation over to Mr. Taylor, who
he said has had a number of positions in state government. He
was head of the Division of Habitat when he was commissioner of
the Department of Natural Resources (DNR). When he looked for
someone who would give him an honest answer about environmental
issues for this project, Mr. Taylor was at the top of his list.
KEN TAYLOR, Vice President, Environment, Pebble Partnership,
said the Pebble Project is in the process of finishing the most
intense environmental studies ever conducted in the state. He
highlighted a few of the disciplines used. Since 2004, hydrology
studies have been ongoing in all three of the tributaries, which
include the Upper Talarik Creek, and the North and South Forks
of the Koktuli River. They have monitored 29 continuously gaged
stations, three of them operated by the U.S. Geological Survey
(USGS). The USGS has less than 50 stations in Alaska, so this is
a huge number of stations for this small geographic area.
3:44:26 PM
In addition to that, 125 instantaneous measurement sites take
hydrological records while consultants are out in the field. In
addition to surface water monitoring, they have an extensive
ground water monitoring program. It has expanded over the last
five years as new deposits were found. As of 2008, there were
almost 5,000 monitors for ground water.
3:45:28 PM
Fisheries studies have been intensive. They look at everything
from the spawning activity of salmon to flying replicate surveys
up all of the tributaries to determine where they are spawning
the extent of spawning distribution. They are also doing a lot
of work on radio telemetry with rainbow trout having had
experience in conducting a grayling radio telemetry study a
couple of years ago.
SENATOR MCGUIRE asked him to expand on that.
3:46:16 PM
MR. TAYLOR explained that radio telemetry is a tool biologists
use to track individual animals or fish. Once they even used it
to track rocks to see what the channel forming flows of the
various streams were. These kinds of studies allow biologists to
get a better idea of whether or not more than one species is
spawning in the same area year after year. For instance, rainbow
trout have a fidelity to the Upper Talarik. In addition, they
have a very extensive fish habitat mapping project that involves
transits cross the streams looking at off-channel habitats,
which are the little ponds and slews connected to the streams.
These are important overwintering habitats primarily for Coho
and Chinook. Understanding that habitat in extent at different
flow rates is going to be very important if a project ever gets
developed in this area.
3:48:06 PM
The department has had a lot of requests for the fisheries data
their independent environmental consultants are collecting and a
data release schedule indicated when it would be available.
These consultants are very good and go through all of their data
sets and quality assurance/quality control procedures before
those data are released to the public. Information on the extent
of the anadromous water bodies was wanted, so Pebble worked with
the agencies to go through their data sets to pull out the upper
most observations of all anadromous fish to include them in the
anadromous waters catalogue. This is important from a permitting
standpoint, because it gives them more authority.
The department has released a number of data sets so far and
yesterday they released data on tissue sampling of vegetation,
fish and mammals. A number of other releases are scheduled for
2009; the fisheries data set should be released early in 2010.
MR. TAYLOR said once they complete all of the environmental
baseline characterization work, they put together an
environmental baseline document. There will be about 52 chapters
to this document and it will be done probably some time in 2010.
Receiving a viable project design from the engineering team
would trigger the permitting process that would go to the lead
federal agency. Then they would begin the EIS process.
3:50:03 PM
Typically, a third-party contractor is hired to weigh the
alternatives and to put a project together. The permitting
challenge is large, and they are working with several state and
federal agencies concurrently to get the 67 different types of
permits that would be involved.
3:51:28 PM
SENATOR STEVENS joined the committee.
3:51:40 PM
MR. SHIVELY said the project needs to develop an existing 82-
mile road that is now used largely by fishermen for transferring
boats between Iliamna Lake and Cook Inlet. The port would
probably be in Inishkin Bay, but there is also talk about using
Williamsport. It would be a substantial port because a lot of
supplies would have to be imported and the concentrate would
have to be exported on ore ships. In addition, the land up
towards the mine is primarily state land until you get to
Iliamna where large chunks are owned by the Iliamna Native
Corporation and Pedro Bay Native Corporation on the Bristol Bay
side. On the Cook Inlet side six village corporations own part
of the land. In addition to the road, they intend to transport
the concentrate in a slurry by pipeline. The slurry would be
dewatered at the port and the water would be piped back up to
the mine for reuse. So they would likely have two pipelines; one
a diesel and, depending on how they do power, they might have a
gas pipeline.
3:53:51 PM
The project needs 300-600 MW of power and none is readily
available. Their base case will probably be importing LNG into
Nikiski and producing the power there as part of what would be
the Railbelt grid. Because Pebble would be a large industrial
user, it may have impacts on other developing projects such as
the bullet line and both hydro projects. In addition, wind is
being tested at the sight.
If inexpensive power is brought into the mine, Mr. Shively said,
they really have a responsibility to get it to the rest of the
region. They would probably look to the state to help with the
transmission of that power, and given the fact that it would
positively impact the PCE program for the region, it is
something the state might look seriously at.
3:55:39 PM
MR. SHIVELY said they had done some social economic studies. The
two boroughs closest to this project both have had significant
decreases in student population for the years between 2000-2007
where it has dropped faster than the drop in population as a
whole. This is not a good sign, and that probably doesn't take
into account the fact that generally in rural Alaska you find
higher birth rates. One of their employees was a Bristol Bay
High School graduate, and when he graduated there were 28
students in his graduating class and now there are 37 students
in the whole high school. This is just one of the signs of
economic problems in the region despite the fact that it has a
very healthy and vibrant fishing industry, which is important to
local people for a whole variety of reasons.
In closing, he said, they have an ore body, an intensive
environmental studies program, and the potential for a lot of
economic opportunity. It could provide as many as 1,000
permanent jobs, it could provide energy, and it is a state-owned
resource; it would provide a fiscal base for the local
government, some fiscal support for the state government and
support Alaska businesses. They don't have a mine plan, because
they have not come to the conclusion that they can have a plan
that would be economic and meet the high standards that it will
have to meet. He said:
We've never gone out and asked people to support the
Pebble Mine, because we don't have a Pebble Mine. All
we've ever asked for is that people wait and see if we
can have a plan and then test that plan against what
we know will be extremely high standards, probably the
highest standards any mine in the world has been
tested against.
3:58:16 PM
SENATOR STEVENS asked if they expect much traffic on the road if
they have a slurry line.
MR. SHIVELY replied that having the slurry pipeline would
substantially cut down traffic on the road that would only be
used for bringing supplies to the mine. It is a potentially
difficult drive in the winter time. Pipelines have less operator
error, and the road is hazardous in the winter time.
3:59:10 PM
SENATOR STEVENS asked if he looked at the mine's possible impact
on subsistence hunting and caribou herds there.
MR. SHIVELY replied they would shut the road down during
migrations, the same as they do at the Red Dog.
4:00:03 PM
ED FOGELS, Director, Office of Project Management and
Permitting, Department of Natural Resources (DNR), briefed the
committee on how large mines are permitted in Alaska.
MR. FOGELS showed a map of mines in Alaska from the perspective
of being the permitter; it showed Greens Creek, Pogo, Fort Knox,
Usibelli and Red Dog as currently operating. Rock Creek Mine was
operating, but is in temporary closure. The only mine the state
is currently permitting is the Chuitna Coal Project near
Anchorage. The Kensington Mine is awaiting the resolution of a
Supreme Court decision as to whether it can proceed or not. The
two big mines in Alaska that are on the horizon are the Pebble
Project and Donlin Creek. Southeast has a company exploring the
Niblack prospect and it is in permitting. Tulsequah Chief and
the Galore Creek Mines are Canadian. Their trans-boundary
watersheds drain into Alaskan waters and could potential affect
our fish; so, the department is watching those projects also.
4:02:14 PM
He said one of his main messages is that many permits are
required to mine. The Department of Natural Resources (DNR) is
at the top of the list of state agencies that issue permits and
that is primarily because of its coordination role that is laid
out in statute. Because of that, the department formed the
"Large Mine Permitting Team" that involves a lot of agencies. A
tremendous body of experienced people work in these agencies, he
said; they have worked on large mine projects and have advanced
degrees in hydrology, biology, mine engineering and they also
now have public health officials.
The U.S. Environmental Protection Agency (EPA) and the Army
Corps of Engineers are at the top of the federal agencies list.
The last three agencies, the Bureau of Land Management, The
Forest Service and the National Park Service are typically
involved when a mine is on their property or close to it.
4:03:42 PM
MR. FOGELS said because of federal agency involvement, almost
all mines will trigger the National Environmental Policy Act
(NEPA) and for large projects this will almost always require
the development of an Environmental Impact Statement (EIS). The
EIS process is the driver of the large mine permitting process.
The state does not require one, but it helps them make their
decisions. Permitting has a tremendous amount of public
involvement.
4:05:14 PM
MR. FOGELS said he would give them "an incredibly brief Mining
101 overview," because it is really important to understand what
is going on from an environmental perspective. He showed them a
photograph of a Fort Knox pit near Fairbanks showing ore and
waste. He explained that ore is the rock that the miners are
after because it has economic concentrations of metals in it. To
get to that ore they have to remove waste that does not have
that economic concentration in it and that waste has to be put
somewhere. It is first removed and placed in rock dumps that are
all subject to permitting requirements. That reveals the ore
that is taken to the mill, which is a facility that through a
process of grinding, crushing, and chemical extraction removes
whatever the miners are after.
He said that all agencies are concerned mostly with the waste
from the mill called "tailings" and these can be pretty
significant in volume. They can be disposed of in a number of
different ways; the two most common methods in Alaska are dry
stack tailings and wet tailings impoundments. In dry stack
tailings the tailings are compressed and the water is squeezed
out. The tailings can then be built up into some kind of
engineered structure that is designed to be stable. In a wet
tailings scenario, the tailings are slurried in a wet slurry
form behind some kind of dam and stored in an impoundment. There
they settle out and typically a water cap is maintained on top
that will keep those tailings from contacting oxygen.
4:08:08 PM
He said some mines have very benign waste materials. At Fort
Knox, for example, the waste rock is essentially clean granite
chips that a person could landscape with, and you don't have to
worry about those. At other mines, such as Red Dog, the waste
rock and tailings are very reactive; they still have a lot of
mineralization in them. As rain water percolates through these
tailings facilities, it can pick up metals and turn acidic. This
is what concerns them. So all that water has to be captured,
treated and handled appropriately before it can be released to
the environment. No two mines are alike and there is a very wide
spectrum. So, a lot of time is spent looking at the geochemical
analysis of all the rock types in a mine.
4:09:05 PM
The main state permit that addresses the waste materials at a
mine is the Department of Environmental Conservation (DEC)
Integrated Waste Management Permit. That essentially allows a
company to store this waste in an approved manner after thorough
engineering and chemical analyses. This authorization also
requires financial assurance, a financial mechanism that allows
the department to take care of the property should the mining
company not be able to do so.
4:09:44 PM
Another very important state authorization is the Reclamation
Plan Approval. All mines in Alaska must be reclaimed by state
law; the mine site must returned to a stable condition and this
permit also requires financial assurance should the mining
company not be able to reclaim the site.
4:10:14 PM
The Dam Safety Certification is issued by the DNR; all large
dams in the state need it. Dams have to be designed to strict
state standards which include seismic standards appropriate to
the seismic risk in the area. The dams also need financial
assurance "so there is some financial mechanism to take care of
those dams as long as they exist."
MR. FOGELS said financial assurance is essentially a very
detailed engineering analysis of what it would cost the state to
take care of and maintain the various components of a mining
site. It's based on a thorough engineering analysis; the
department gets spread sheets that may be hundreds of pages long
that are very detailed. The cost for pounds of grass seed
required for revegetation, for instance, is calculated and
review by agency experts. If the state doesn't have the
expertise somewhere, they will contract out to other experts to
cross check or supplement their work. Costs are way lower if all
you have to do is revegetate, but as soon as you get into long-
term monitoring or water treatment, they really escalate. He
said the Red Dog will need monitoring and water treatment for a
very long time. He explained that the Division of Habitat in the
Department of Fish and Game has to approve any work in any fish
bearing waters.
4:12:04 PM
There are two Title 16 permits. All mines must have a monitoring
plan, which explains how they are going to monitor the
environment - air quality, surface and ground water quality -
and fish and wildlife populations. They have to do this not only
before they mine, but during mining and post closure. Agencies
have to approve this monitoring plan. This is vital, because
this allows people to catch problems early if something isn't
working as planned.
4:13:02 PM
Environmental audits of all environmental systems at each mine
are required every five years. How well the agencies do their
jobs is also audited. They are done by third-party experts who
also reevaluate the financial assurances to make sure the
amounts are current.
MR. FOGELS wrapped up that many permits are required and many
agencies are involved, not just DNR. They have really good
experts who have been doing mine permitting for years and they
have financial assurance requirements to protect the state's
interests should something go wrong. Contamination is an issue
at all sites and there are ways to prevent it from occurring and
to control it if something should happen that was unforeseen. He
explained:
The key is to understand the waste
characteristics...if you understand that, then you
really know what the long-term risks are going to be.
You need to know the water balance, how the water
travels through the mine site. Every drop of water in
that mine site has to be accounted for and where it's
going to go eventually. You minimize the footprint;
minimize that contact with water. We make the
companies design for closure. Now-a-days we want to
know how they are going to close the mine before they
even start it. That's so critical. Monitoring - we've
got to have good monitoring, and we back it all up
with our five-year health check up, the environmental
audit.
4:15:03 PM
SENATOR WAGONER wanted more explanation of the financial
assurances. For instance, how is the bond amount determined if
the Red Dog decides to expand? What type of monitoring will the
Red Dog get after it closes and for how long?
MR. FOGELS answered that the amount of the bond by law has to be
adequate to cover the liabilities of a project at all times. If
the mine should expand, the financial assurances need to be
reevaluated. This is essentially what the five-year audit does.
The Red Dog Extension Project is currently in the permitting
process. The extension would allow them to mine an additional
pit that would extend its life for another 30 years. The bond
will go up considerably.
He explained that monitoring typically scales back a little bit
after closure, but they determine what the environmental risks
are and make sure the appropriate monitoring stations are there.
For Red Dog, water quality is the biggest concern; so, all the
ground and surface monitoring stations will be active well past
closure and monitoring will essentially go on forever. The bond
will have to reflect that.
SENATOR WAGONER said the only fear he has with the bonding is
what if the corporation that was responsible for the Red Dog
Mine, through a reorganizational plan, declares bankruptcy. What
would that do to the bond and the state's ability to collect the
money to do the reclamation the company escaped from doing by
declaring bankruptcy?
MR. FOGELS replied the state's financial assurances are designed
to deal with that type of situation. The Red Dog Mine's bond
amount is in the form of a letter of credit through a third-
party major banking institution. So if at any time the company
goes bankrupt or even if it reorganizes they still have the
letter of credit. It is designed so that the state would get a
check for whatever the current amount is - now it's $154.9
million. A piece of that would go into a trust fund that's
designed to generate the income necessary for that perpetual
care and maintenance. "It's not really a bond as such. It's
designed to eventually be a trust fund controlled by the State
of Alaska."
SENATOR WAGONER commented that he has heard that scenario played
out by several people as a way for companies to get away from
liability.
SENATOR STEVENS said his biggest concern is seismic risks. "What
if there is a breach of that dam? What would escape from behind
that dam and what effect could it have on the river system and
Bristol Bay?"
4:21:15 PM
MR. FOGELS replied that the state's dam safety regulations
require that any dam be designed appropriately for the area's
seismic risk. It's an engineering exercise, essentially, and it
would just cost more to beef up that dam to be strong enough to
withstand "the maximum credible earthquake that you can
foreseeably expect to find in that area." The first step would
be to design it so it's really strong.
A tailings facility consists mostly of solids with a thin water
cap on top. So if the dam fails, it's not that the dam is
holding back nothing but water. The water may be a couple
hundred feet behind the face of the dam. The Red Dog dam has a
300-400 foot beach from the crest back toward the water. If that
dam broke in half, very little water would come gushing through,
however it would be a major issue for the mining company and the
state.
MR. FOGELS said he couldn't speak about the impacts of a
catastrophic failure without seeing specific facility designs.
For instance, it's possible to "fraction out your waste
products" into clean tailings and dirty tailings. You might
mitigate some risk by putting the dirty tailings way back from
the face of the dam and have the clean tailings up against the
face of it.
4:23:14 PM
SENATOR STEVENS asked if they had studied the record of various
companies' successes or failures with reclamation.
MR. FOGELS answered that the department has a lot of reclamation
experience in Alaska, but it hasn't spent a lot of time looking
at the records of specific companies. A lot of mines are still
operating here; some are temporarily shut down because they are
waiting for metals prices to go back up.
SENATOR FRENCH said the public believes the failure of the
project rests in the legislature's hands. How much fate rests in
the hands of the DNR commissioner and the governor or would this
truly be a discretionary decision made by professionals in the
DNR?
4:25:13 PM
MR. FOGELS answered that was a tough question. The company has
purchased claims and has mineral rights to the area. The
department is bound to evaluate their proposal and give them a
reasonable opportunity to demonstrate they can make the project
go while still protecting the state's other resources. If they
can demonstrate they can build the mine and protect the fish to
the state's satisfaction, the state agencies may have no choice
but to issue their permits to proceed. The state could change
its set of standards by changing the law one way or the other.
4:26:16 PM
SENATOR MCGUIRE said this mine is an unprecedented size for
Alaska. Has he looked at how regulations in other states or
other countries with mines of this size compare to Alaska's?
MR. FOGELS answered they had looked at other mine projects in
other areas; some in more detail than others. Some of the
biggest mines in the world are international. The department
works very closely with Canadian government officials on their
projects. The state's process is strong. It really comes down to
some very basic things. You have to demonstrate an engineering
design that keeps the dirty water inside the mine, and won't let
it leave the mine without being treated in some fashion. It's a
matter of technical expertise to cross-check the designs and
make sure the risks are understood. State water quality
standards are high.
SENATOR MCGUIRE asked what some of the cutting edge technologies
are in tailings disposal.
4:29:07 PM
MR. FOGELS answered one of the issues with tailings is their
sheer volume, and you can't do anything about that. About half
the tailings of an underground mine can be mixed with cement and
be pumped back down into the mine. This is a good way for
dealing with that volume. For above-ground disposal, you can dry
out the tailings and make them into a dry stack, which could be
sculpted to blend into the environment better. A wet tailings
impoundment is always going to have a dam and a flatter area.
The real technology comes in when addressing the geochemistry
issues with the rock. The very reactive tailings at Red Dog, for
instance, need to have the acid neutralized so oxygen is kept
from the tailings. So, a tremendous amount of research is being
done on that right now.
4:31:50 PM
BILL HORN, ESQ., Birch Horton, Bittner & Cherot, representing
Trout Unlimited, said Bristol Bay, its river systems and its
salmon runs are an extraordinary resource that merit an
extraordinary review process before major activity is allowed to
put those resources at risk. The incomparable fisheries in this
region have long been recognized in the state by many historic
designations and protections (listed in his briefing). The
fisheries, especially the sockeye salmon fishery, constitute a
sustainable renewable resource that supports millions of dollars
of economic activity in presently well-established commercial
and sport fish sectors. In addition, that same resource has
sustained the subsistence economies in dozens of villages for
centuries.
Into this established sustainable economy now come proposals for
an enormous sulfide mine project. Unfortunately, the historic
record of such operations provides a lot of evidence that such
activity can pose substantial risks to fishery resources.
Because of that risk, special care must be taken and an informed
decision has to be made before any determination is made to
allow a major sulfide mining project to precede inside the
Bristol Bay drainages. This is especially critical, because the
effects of the mine would be far-reaching. He pointed out that
Mr. Shively made it clear that the mine, itself, is only a small
part of the equation. If permitted, ultimately all of the
infrastructure he outlines in addition to massive dams, tailing
disposal reservoirs and a new town will be part and parcel of
the project. Once of full complement of infrastructure is built,
it is completely foreseeable that other nearby mineral sites
will become economically viable and put on the path to
development. He concluded that, "Just as at Prudhoe Bay, the
development of the oil field and its related infrastructure
prompted the development of all the satellite oil fields on the
North Slope, the development of Pebble and its infrastructure
will likely to the same in the Bristol Bay drainage."
MR. HORN stated that the decision to permit the Pebble Mine to
proceed is in reality a decision to let a full-scale sulfide
mining district take root in the head waters from the Kvichak
and Nushigak River systems. A decision of that magnitude goes
well beyond specific concerns about water quality, tailing dam
specifications or the size of the mining pit, and the permit
review process needs to be scaled accordingly to the
consequences associated with the mine.
4:34:20 PM
As a legal matter, Mr. Horn said, every time someone suggests an
additional review process or elevated substantive review
standards, someone raises the specter of takings claims, but in
this situation, takings is a red herring. The Alaska Supreme
Court has made it very clear in cases like Beluga that a state
mining claim carries with it no right to mine and any rights or
privileges associated with a claim are only prospective and
contingent; the state is fully within its rights to deny
permission to mine without any liability to compensate the
claimant. The bottom line, he emphasized, is that permit review
procedures, as well as standards, may be altered and may be made
tougher without triggering any takings under state or federal
law.
Accordingly, he recommended that because of the enormous long-
term consequences to the region of allowing Pebble and its
infrastructure to proceed, to ensure that whatever decision is
made is based on complete information and a comprehensive
appreciation of its aggregate impacts and consequences. "We just
think that Bristol Bay's extraordinary resources demand no
less."
MEL BROWN, representing Bristol Bay area commercial fisherman,
said, "We have huge concerns." He noted that he is not
representing Bristol Bay Native Corporation. The Pebble Project
is the most high profile event that has happened to Bristol Bay
in the last few years, he said. They are learning and beginning
to realize if it ever happens, it's going to be one of the
largest mines in the world. However, the ore is not that high of
a grade and it will need to be crushed into a dust to get the
copper and gold out.
He said they are also seriously concerned that the Pebble
Project is located in a saddle where the flow of the water goes
in all directions and tailings containment will supposedly have
to hold toxins forever. The media has recently reminded them
about a number of earthen dams that have released toxins into
river systems in Tennessee and Kentucky with huge impacts.
The first Exxon Valdez oil spill distribution went to 3,600
fishermen. That figure gives them an idea of how many people are
involved in the Bristol Bay red salmon fishery. "It's the
largest in the world....and there isn't any other class that
produces that much red salmon. And we want to be sure that we're
thinking of this on a long-term basis - that this will continue
to sustain the commercial fishermen and also the subsistence
people."
4:40:43 PM
MR. BROWN said 80 percent of the people in the area want Bristol
Bay absolutely protected. The next competing river for fish used
to be the Frazier River, but now you can hardly catch a fish
there.
4:42:10 PM
BRIAN KRAFT, said he owns two fishing lodges in the Bristol Bay
area, one in the Naknek and one on the Kvichak by Lake Iliamna;
he said he understands the situation - they need jobs and they
have to be self-sustaining. He said it's the ultimate irony that
they have the world's most prolific salmon runs and their head
waters are in an area that also has a massive mineral deposit.
"The concern is the immediate massive consumption of water."
Mr. Fogels said the department is doing its job, but he also
hears Commissioner Irwin say it is 140 people short and even the
State of Montana has a stricter permitting process.
Bristol Bay is special, he said, and deserves some special
protection. In 1972 this body recognized that and passed the
Bristol Bay Fisheries Reserve.
He repeated that he was not against mining, but it's unfortunate
that Pebble is located where it is. Seventy-five percent of the
large mines that have been permitted since NEPA have had ground
water problems, and just one mistake would critically adversely
affect other industries in the area.
4:46:55 PM
SENATOR STEVENS asked what he is thinking of for developing the
economy out there short of mining.
MR. KRAFT replied besides the seasonal fishery jobs that are
already there, every village corporation could get involved in
tourism and vertically integrate within the fishing and tourism
industries. Had Pebble not come along, he had hoped that Iliamna
would have found something to sustain its economy, but when it
comes to water and mining at that location, he urged them to err
on the side of caution.
4:49:17 PM
DR. DANIEL SCHINDLER, Professor of Aquatic Sciences at the
University of Washington Fisheries Research Institute, said he
is one of its principle investigators and has worked on sockeye
salmon in this part of the world since 1946. He said he would
relate to them what makes the Bristol Bay fisheries so
sustainable and give them a long-term perspective of where his
research is headed.
What he has learned about the salmon in Bristol Bay challenges a
lot of conventional wisdom about fisheries sciences. This can be
appreciated by looking at this type of landscape that the salmon
have so successfully colonized. It's a geologically diverse
landscape that includes glaciers, coastal planes, rivers,
streams, and lakes. The overriding characteristic is a highly
permeable geology with a lot of water. That water moves freely
through the geological structures and that water movement is
needed for successful incubation of the embryonic salmon, which
is why the salmon have been so successful there.
4:50:59 PM
The issue they have learned by studying salmon for 60-plus years
in this part of Alaska is they need to ask carefully about what
constitutes salmon habitat. They have learned in the last decade
that streams are not necessarily interchangeable; and again he
said you need to think about the network of habitat that
supports fisheries. Disturbed salmon that can't reach their
spawning ground happens simultaneously with very high production
in adjacent streams.
Basically, he explained, because this landscape is so permeable
and easily disturbed by hydrologic and climate processes, he
developed a "portfolio effect" with the idea that every
component of the stock isn't necessarily operating synchronously
with each other. As some parts of the population increase in
abundance, others may decline and these different dynamics
balance themselves out over the long term. For instance, if you
think about your retirement investments, one of the smart things
you are going to do is diversify your portfolio, which
stabilizes it and actually produces higher long-term gains than
if you have a very simplified portfolio. He explained:
The reason this analogy is important is that Bristol
Bay sockeye are supported by a very diverse habitat
portfolio that involves populations that are
specifically adapted to each of those streams, rivers,
and lakes that they spawn in. The fishery integrates
across all this diversity and as a result the fishery
is much more stable and much more productive - because
we have this vast and diverse network of habitat.
Evidence is quite striking in looking at Bristol Bay catch
statistics, he said, illustrating with a graph. Production has
been variable, but sustained for over 100 years, and in fact it
has increased in the last 20 years. Certain districts dominate
the catch for a while and then other districts overtake them.
This shows how the diversity of watershed types and the
populations associated with them have stabilized catch in the
system. This is called the "portfolio effect."
4:54:40 PM
They see the same thing at smaller scales, like the Wood River
system where many of its streams can be stepped across with four
steps and hip waders, but they produce from a couple thousand
fish per year up to 60,000 per year. The dynamics are not
synchronous; different populations are doing different things in
different years.
4:56:16 PM
DR. SCHINDLER said it's important to realize that natural
populations and natural landscapes have incredible capacity to
for renewal. Salmon are very highly adapted to living and
flourishing on disturbed landscapes and they can be rejuvenated
from flooding and droughts. As an example of this, he said the
Kvichak River system in the early 90s was barely replacing
itself and went into a massive decline. In the last four years,
however, the system bounced back without any help from
hatcheries or habitat restoration. It was simply the reflection
of the natural capacity of a system with its intact portfolio of
habitat to bounce back from natural disturbances.
4:58:32 PM
DR. SCHINDLER finished with a short movie about assessing what
toxins do to fish in the water environment. Salmon have a good
sense of smell, he said; they smell their way to their home
stream. But, it turns out that copper interferes with the
ability of salmon to smell things.
He explained that in addition to being able to smell their way
home, juvenile salmon are able to smell danger in the water, and
one of the major sources of mortality for them is being eaten by
a large predator. When the predator abrades the skin of a Coho
salmon, the skin releases a "smell" to the environment that
changes the behaviors of its surviving brothers and sisters.
He presented a short movie that showed how juvenile Cohos hide
in the gravel when a tiny piece of baby coho skin is dropped in
the water; however, when they are exposed to a very low dose of
copper, they become oblivious to the piece of skin. So they
don't go for cover. These levels of copper are not toxic to
salmon, but it drastically changes their behavior abilities to
respond to the presence of predators. These are the types of
ecological responses that are going to be very hard to assess
with standard toxicological techniques, which is illustrative of
the types of things they need to think about in doing a true
impact assessment of mining's potential impacts on fresh water
resources, especially salmon.
5:01:11 PM
SENATOR WIELECHOWSKI asked if copper is the only substance that
can drastically change salmon behavior.
DR. SCHINDLER replied that other substances can imperil
olfaction; copper is the one that has been studied the most.
5:01:42 PM
SENATOR WAGONER asked how many parts per million can copper get
to before it starts to affect the ability of the salmon to
smell.
DR. SCHINDLER replied that the movie they just saw about
olfactory impairment used l0parts/billion, a relatively low
concentration. This research group based with NOAA has started
working with how low concentrations have to be before it no
longer impairs salmons' ability to smell things. The point is
that they are lower concentrations than would cause direct
toxicity to the salmon itself.
SENATOR WAGONER asked how familiar he is with the Bristol Bay
salmon fishery.
DR. SCHINDLER replied that he has a pretty fair assessment of
the salmon production across Bristol Bay; he has been there
since 1993.
SENATOR WAGONER asked what percentage of the Bristol Bay
watershed the mine might affect.
DR. SCHINDLER replied the mine site is quite small, but if you
start asking how far contaminants would go if a catastrophic dam
failure happened, it would go through a large chunk of the
watershed area. The area's contaminants are very soluble in
water and the geology is extremely permeable. That is why the
salmon are there in such high densities, and also why they are
so vulnerable.
5:04:44 PM
SENATOR WAGONER asked how one corrects 10 parts/billion of
copper.
DR. SCHINDLER replied the most common way is through dilution.
5:05:48 PM
SENATOR STEVENS said he grew up in Oregon and during that time
the salmon fishery was lost, and asked if he had any examples of
a lost fishery being revived in an area like this.
DR. SCHINDLER replied the reality is that diverse habitat
portfolios just don't exist anymore in the Lower 48. Most of
Oregon's surviving fisheries are propped up through hatchery
production and very intensive restoration programs, not natural
salmon runs. Last year, the Sacramento River's King fishery was
closed down because of poor ocean conditions, a prime example of
when a "portfolio" is reduced to a single strategy. When that
population goes down, there is no alternative. Alaska still has
all the options. The best place to look for ideas about
opportunity and capacity for renewal are in our own backyard.
5:07:48 PM
DR. KENDRA ZAMZOW, (power point not in folder) Environmental
Geochemist at the Center for Science in Public Participation,
said she would address some of the technical risks associated
with the Pebble Mine project. She has been a resident of Alaska
since 1985, and prior to the work she does now she was a set
netter and owned and operated a drift net boat in the
Copper River.
She went to Senator Wagner's question about copper and said she
found it's not so much the amount of copper in the water as the
suddenness of increasing it. Fish can take a certain amount of
copper if they are used to it over time, but sudden increases of
even 2-5 parts/billion can have some disruptions.
5:09:27 PM
She said this is sort of continuing to Mining 102 where you
start with some tunnels, you have economic ore that comes out
and then you have waste rock. Some waste rock is fairly benign
and other is reactive and the difference is usually attributable
to the amount of sulphide in it. When sulphide contacts oxygen
and water, it becomes sulphuric acid, which is battery acid.
Sometimes it happens naturally if you have outcroppings of this
material or if you are putting in a highway. It becomes a big
problem with larger volumes.
DR. ZAMZOW explained that the ore goes into the mill and when it
comes out, you have you send the economic metals to market in a
finely ground version and the processed chemicals is put in a
slurry that goes to the tailings dam. The ore and the waste are
very close to each other and a geologist is on-site during the
blasting separating the two. They do the best they can as the
process is ongoing.
5:11:48 PM
DR. ZAMZOW said the proposed Pebble project will dwarf the size
of the state's other mines. They are worried about the
geochemistry. Northern Dynasty had 400 drill-hole samples from
Pebble West and a lot of the material is known to be acid-
generating. Given that acid could form, they would have to
figure out where it would travel. She remarked that other
developments could eventually happen once Pebble was operating.
5:12:45 PM
The Pebble East deposit has better grade of ore, but it's much
deeper at 500-1,000 ft. Underground methods have been proposed
for getting it out. Block caving is one method and that would
require going down below the ore and shooting explosives up and
allowing it to "rubblize." Then it gets hauled out. This method
not only rubblizes the ore, but it fractures the rock above it
and eventually the ground surface subsides. So, there is a
conduit to the surface with a lot of fractures and the ground
water has the potential to contact air and water in a lot of
ways it didn't have previously - creating the potential for the
creation of sulphuric acid that can mix with the groundwater and
go anywhere.
Another concern, Dr. Zamzow said, is that the dams, which would
have to be very large, would have material move through the
soils under them. Whether that becomes an issue or not has to do
with how quickly it moves through the soils. If it moves slowly
it could be diluted in the groundwater, but if it moves quickly
it could be more of an issue. She has heard that about 9 billion
tons of material would have to be handled. Dams can hold 2.5
billion tons of material; she would hope that the remaining
material would be nonreactive, which could be used for roads,
but she didn't know that for sure.
5:15:39 PM
The Pebble Partnership has shown a connection between the South
Fork Koktuli and the Upper Talarik River underneath the ridge.
So the groundwater, itself, is connected, she warned. This could
potentially happen in other areas, but they don't know that for
sure, either.
Some drilling muds have the potential for toxicity, she
explained, and the DEC is looking into that. Some spills have
happened in other projects and there is concern that some of the
kettle lakes might be upwelling areas affecting salmon spawning
areas. There are also concerns with seismic risks.
5:16:35 PM
She said Pebble proposed at least two dams that are fairly
large, one is approximately 740 ft. and another about 710 ft.
Those numbers could change as the mine plan is developed. But,
there are known faults in the area - one is only 18-20 miles
away and they expect the dam to be built for that. They don't
know if there are any faults that could potentially be closer. A
2007 earthquake was relatively close and that needs some on-the
ground work with trenches and aerial imagery to really define
the seismic risk.
5:17:54 PM
She also showed a picture of a 90 ft.-high dam that was once
actually one of the best built tailings dams. It was basically a
lot like the Red Dog mine, a lead/zinc mine with some acid in
it. A portion of the tailings area was built on a limestone
layer that had clay underneath it. The acid dissolved the
calcium carbonate. Water on clay is very slick, and a 50 ft.
section slipped and the dam collapsed. "It's just an
illustration that we can do things with as best we know how and
things we can't predict may happen."
5:19:04 PM
She said as part of the EIS, 180 mines' water quality were
looked at and about 25 were looked at in great detail. They
found that about 93 percent of the mines that had the potential
to contaminate ground water actually did. This is a small study,
but the USGS out of Reston, VA, is doing a much larger study
with more recent mines.
5:20:15 PM
RICK HALFORD, Trout Unlimited, said he spent his life being
supportive of the mining industry, "but this one is different."
It is overwhelmingly large, and it is a special type which is
dangerous. Because of its infrastructure cost, it's more of an
all-or-nothing question than anything else the state has ever
looked at - and - it's in a very difficult location.
5:22:27 PM
He stated, "There is a reason that a company as experienced as
Cominco sold these claims for substantially less than they had
invested. There's a reason that the claims didn't go forward,
and that reason is a cloud on all the rest of the industry in
the state today." He said the Pebble Mine dispute and everything
about it makes it very hard for lots of other legitimate
prospects to get money. So, it's important for the legislature
to look at it as much as it can and for them to all help each
other get to a decision as soon as possible.
MR. HALFORD explained that the legislative branch has the right,
the opportunity and the obligation to gather as much information
as it can. The legislature is an ideal place to go to the
National Academy of Sciences with a program receipt
appropriation that the applicant has to pay for - and it's
certainly legitimate to say they have to pay for it - to get a
truly objective view of a cost benefit analysis of this project.
Actually waiting until there is an application everything
shortens the timeline for everything, and Pebble will have spent
a lot more money and the rest of the industry has stayed under
that cloud a lot longer. Again he encouraged them to go to the
Academy of Science for a truly objective view; it could be run
through either the legislature or the DNR. If the Pebble Project
is found to be impossible then the Pebble Partnership will have
spent less money to find that out.
5:23:41 PM
SENATOR STEVENS asked if he thought science could find the
answer - yes or no - at the end of the day.
MR. HALFORD answered he has always felt that they could do more
with resources in conflict with better continuous active
management. It has to be objective and based on complete
information.
5:24:29 PM
SENATOR MCGUIRE asked if asking the mining industry to pay for
those kinds of studies has any precedence.
MR. HALFORD replied that generally program receipts are what pay
for most of the regulation of applicants in these kind of cases.
5:25:32 PM
MR. SHIVELY admitted that all the concerns they have heard are
legitimate; fishermen should be concerned. His job is to
mitigate the risks. However, he corrected that Pebble won't
build a new town, but it'll be a camp situation. Right now they
have a rule that if you come out to work for them you can't hunt
or fish.
MR. TAYLOR added that this is a complicated project,
particularly when you get into water chemistry. They are doing
the very best job they can through their consultants to collect
good water chemistry information.
5:27:44 PM
SENATOR FRENCH drew from a June 2008 Alaska Law Review article
that said the state's regulatory scheme allows too much
discretion; it doesn't fully articulate the sorts of things the
state should be thinking about in awarding the many permits. He
asked Mr. Fogels his view of the article and the strength or
weakness of the state's current regulatory scheme.
MR. FOGELS answered that he read the article and so have most of
the agency people on the team. "To put it bluntly, we
respectfully disagree with that article." The writer seemed to
forget that other agencies are involved in mine permitting, and
it faulted DNR for not having the authority to regulate water
quality, but that's DEC's role. A lot of agencies are involved.
5:29:46 PM
SENATOR STEVENS asked his opinion about going to the National
Academy of Sciences for a cost benefit analysis and to comment
on how it would be funded.
MR. FOGELS answered they had actually met with Academy staff to
discuss this very issue and they said a half million bucks would
get the legislature and the state an answer. Right now, he
wasn't sure they actually had a question. He needs a project
proposal and engineering diagrams in hand. The department has
already asked third-party experts to help them, and it has no
experience with the Academy. He didn't know how long it would
take them to come up with they analysis. The department already
bills back all the state services to the project applicant for
probably 15 other projects throughout the state; so that
wouldn't be a problem.
5:32:31 PM
CO-CHAIR WIELECHOWSKI thanked everyone would who testified and
adjourned the meeting at 5:32 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Overview on Large Mine Permit Process by DNR.pdf |
SRES 2/27/2009 3:30:00 PM |
|
| Kendra Zamzow - Pebble Mine Technical Concerns.ppt |
SRES 2/27/2009 3:30:00 PM |
|
| Pebble Partnership Overview - 02-27-09.pdf |
SRES 2/27/2009 3:30:00 PM |
|
| Pebble Mine - Biological Technical Issues.pdf |
SRES 2/27/2009 3:30:00 PM |
|
| Proposed Pebble Mine - Potential Salmon Impacts.pdf |
SRES 2/27/2009 3:30:00 PM |
|
| Schindler AK Senate Resources Comm 2009.ppt |
SRES 2/27/2009 3:30:00 PM |