Legislature(2009 - 2010)BUTROVICH 205
03/19/2010 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Preliminary Review of the Board of Fisheries Request for a Comprehensive Evaluation of Large-mine Permitting and Standards for Protection of Fish and Game Habitat in the Bristol Bay Watershed. | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| = | SB 228 | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE RESOURCES STANDING COMMITTEE
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 19, 2010
3:38 p.m.
MEMBERS PRESENT
SENATE RESOURCES
Senator Bill Wielechowski, Co-Chair
Senator Hollis French
Senator Thomas Wagoner
HOUSE FISHERIES
Representative Bryce Edgmon, Chair
Representative Charisse Millett
Representative Cathy Engstrom Munoz
Representative Robert L. "Bob" Buch
MEMBERS ABSENT
SENATE RESOURCES
Senator Lesil McGuire, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Bert Stedman
Senator Gary Stevens
HOUSE FISHERIES
Representative Wes Keller, Vice Chair
Representative Craig Johnson
Representative Scott Kawasaki
OTHER LEGISLATORS PRESENT
Representative Austerman
COMMITTEE CALENDAR
PRELIMINARY REVIEW OF THE BOARD OF FISHERIES REQUEST FOR A
COMPREHENSIVE EVALUATION OF LARGE-MINE PERMITTING AND STANDARDS
FOR PROTECTION OF FISH AND GAME HABITAT IN THE BRISTOL BAY
WATERSHED.
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ED FOGELS, director
Office of Project Management and Permitting
Department of Natural Resources (DNR)
Anchorage, AK
POSITION STATEMENT: Invited panelist.
DR. DAVID CHAMBERS, president
Center for Science in Public Participation (CSP2)
Bozeman, MT
POSITION STATEMENT: Invited panelist.
JOHN SHIVELY, CEO
Pebble Limited Partnership
POSITION STATEMENT: Invited panelist.
Senator Halford
Former Alaska Senate President Halford
Eagle River, AK
POSITION STATEMENT: Invited panelist.
ACTION NARRATIVE
3:38:00 PM
CO-CHAIR BILL WIELECHOWSKI called the joint meeting of the
Senate Resources Standing Committee and the House Special
Committee on Fisheries to order at 3:38 p.m. Present at the call
to order were Representatives Millet, Munoz, Edgmon and Senators
French, Wagoner and Wielechowski.
^PRELIMINARY REVIEW OF THE BOARD OF FISHERIES REQUEST FOR A
COMPREHENSIVE EVALUATION OF LARGE-MINE PERMITTING AND STANDARDS
FOR PROTECTION OF FISH AND GAME HABITAT IN THE BRISTOL BAY
WATERSHED.
3:38:28 PM
CO-CHAIR WIELECHOWSKI said the Alaska Board of Fisheries (BOF)
heard a lot of concerns, particularly from residents of the
Bristol Bay region, that the standards guiding permitting
agencies are not adequate to ensure that Pebble Mine will only
be developed if fisheries can be protected. He read from a
letter written by the BOF requesting that the Legislature:
Conduct a comprehensive evaluation of the permitting
protections and standards, including regulations and
statutes, which provide safeguards against
environmental damage. After such evaluation, we
further request that the legislature enact any
additional safeguards which are considered prudent to
provide strict protections to the fish and game
habitat of the drainages to prevent any chance of
environmental damage.
CO-CHAIR WIELECHOWSKI said he would like to hear from today's
panelists on whether or not the Legislature should embark on
such an analysis. He explained that four questions have been
given to each panelist to help the Legislature get a preliminary
sense of what to do in response to the BOF's request.
REPRESENTATIVE EDGMON said polls have repeatedly demonstrated
that the Bristol Bay region is concerned about the Pebble Mine
being in place right next to the last great sockeye salmon
fishery in the world. The panelists will offer a well-rounded
conversation about the existing system and whether or not, given
Pebble's size and proximity to Bristol Bay, a third-party,
multidisciplinary assessment of the mine is necessary to measure
the cumulative environmental and socio-economic impacts.
3:41:29 PM
REPRESENTATIVE EDGMON added that the Bristol Bay Native
Corporation, after three years of debate, has reluctantly come
out in opposition to Pebble Mine. Concern is warranted and he
hopes the meeting will help determine if the Pebble project is
more significant than most and an outside entity should study
its ramifications.
CO-CHAIR WIELECHOWSKI asked the panelists to answer the four
questions in sequential order in ten minutes and said ten
additional minutes for questions will be allowed.
The questions provided to the panelists were:
1. You are very familiar with the environmental
setting and value of fish and wildlife of Bristol Bay
to Alaskans. You are also familiar with the ore body
size, the minerals to be mined, the water
appropriations applied for, and the size of the
tailings dams that have been discussed for the Pebble
prospect. What are the biggest risks, in your opinion,
of this mine in this setting?
2. How would you compare the Pebble prospect to the
scale, character and setting of other sulfide ore body
mines in the US and Alaska, and what are the key
lessons learned from these other mines?
3. What areas of Alaska's statutes and regulations do
you think are most important for an analysis to focus
on, given the issues you see with the Pebble prospect
and the possible impacts it could have on Bristol
Bay's fisheries?
4. Do you support choosing the National Research
Council [(NRC)] of the National Academy of Sciences
[(NAS)] to conduct an evaluation of the adequacy of
Alaska statutes, regulations, and permitting capacity
to ensure the mine can be developed while protecting
Bristol Bay's fisheries? Why shouldn't the legislature
carry it out on its own? Why not an Alaskan research
group such as the McDowell Group or the Institute of
Social and Economic Research (ISER)?
3:43:58 PM
ED FOGELS, Director, Office of Project Management and
Permitting, Department of Natural Resources (DNR), said his
office is responsible for coordinating state permitting
activities for large resource development projects, including
mining. His office has no regulatory authority on its own but
coordinates other agencies.
MR. FOGELS referred to Question 1 and said he is familiar with
the ore deposit, the location, the setting, the value of Bristol
Bay fisheries and the water appropriations permits that were
submitted several years ago by the Pebble Partnership. He is not
familiar with the details of the project, the size of the dams
and the exact amount of water that will be used. Those details
will be received when Pebble applies for the project; the state
has not received permit applications. He feels the biggest risks
are with water quality which is driven by the geochemistry of
the tailings and waste rock facilities. Without those details,
specific risk evaluation is difficult. The management of water
must be understood: where it will be put and how it will be
treated. Monitoring systems around the project must also be
understood. He reiterated that the risk is about water quality.
3:46:59 PM
MR. FOGELS moved on to Question 2 and said the Pebble prospect
is one of the largest ore deposits in the world. The class of
the ore deposit has been studied and mined in other parts of the
world. Bristol Bay is a unique setting, one of the world's most
valuable fisheries. Additional information about the deposit is
needed before evaluating risks and reviewing permits. At the
review stage, the focus will be on how the acid-generating waste
material in the rock type will be watched, treated,
characterized and stored appropriately.
Paying careful attention to the geochemistry of the rock type,
as this drives water quality, is the biggest lesson learned from
similar mines around the world. Another lesson is the need to
tighten the monitoring net around a mine including ground and
surface water monitoring and bio-monitoring. Alaska now does
environmental audits on mines a minimum of every five years in
which a third party checks the mines and the agencies.
3:49:53 PM
MR. FOGELS moved on to Question 3 and said federal statutes and
regulations must be considered, not just Alaska's. For example,
the Environmental Protection Agency (EPA) administers the Clean
Water Act and issues permits limiting pollutant discharge. Any
waste product deposited in a wetland needs a permit from the
Army Corps of Engineers. Several state permits and regulations
apply to water quality including those overseen by the
Department of Environmental Conservation (DEC), the Integrated
Waste Management Program, DNR and Alaska Department of Fish and
Game (ADFG).
3:52:09 PM
MR. FOGELS moved on to Question 4 and said Alaska has a good
mine permitting process which is obvious from looking at
operating mines. ADFG has been looking at fish populations
downstream of each mine and all reports are on the web. He
suggested the Legislature consider a few things if embarking on
a study. If the state's large mine permitting process is going
to be studied, what will happen while the study is going on?
Will permitting have to be stopped? If a study is done for the
Pebble Project, will a similar study be required for every other
mining or resource development project in the state? He hopes
that any study would help do the work.
3:54:39 PM
REPRESENTATIVE EDGMON asked if Mr. Fogels was saying that the
permitting process in place is adequate to safeguard Bristol Bay
fisheries in perpetuity.
MR. FOGELS replied that the permitting process can do a good job
of permitting a project such as Pebble - going through the
process and determining if Pebble should be permitted or not. He
reiterated that decisions are made on many levels, including
federal and state agencies. The Pebble project will take a lot
more staff and resources to go through the documentation and
permitting process.
REPRESENTATIVE EDGMON said the range in between "good enough"
and 'no net loss' is where concern arises. Evidence is mounting
about the sensitivity of salmon habitat and the homing instinct.
Certainly some habitat will be destroyed with the development of
the mine. The concern is that "good enough" is not "good
enough". He noted that DNR has some reservations about an
outside, multi-disciplinary review of the Pebble project if it
could encumber the process for other large mines. Representative
Edgmon felt enough difference exists between Pebble, next to
Bristol Bay's watershed and fisheries, and other large mines,
that DNR should think an outside study would have some merit.
3:57:12 PM
MR. FOGELS replied that he had explained DNR's reservations
about a study but did not say a study would not have merit.
SENATOR FRENCH asked Mr. Fogels to elaborate on the concern
about acid generating waste material.
MR. FOGELS responded that he does not have details on
concentrations and volumes at Pebble. As rock is broken up and
exposed to oxygen and water, water percolates through, becomes
acidic and picks up heavy metals which can leach into the
environment. Some mines have benign waste material while others
have waste rock that is very prone to generating acidic water
heavy in metals.
SENATOR FRENCH asked where, between benign and highly acidic, do
the core samples of Pebble fall.
MR. FOGELS replied somewhere in the middle zone. There is no
question that materials will have to be carefully handled and
managed. How and where the materials are handled and disposed of
is the big question.
4:00:04 PM
SENATOR WAGONER said some metals will be suspended in water and
in processed material and will have to be disposed of; that's
the reason for the dams and containment. He asked how long it
takes for the chemicals and minerals to settle into a base that
will solidify.
MR. FOGELS replied that those details are different for every
mine and are unknown for the Pebble project. A classic way to
dispose of tailings is behind a dam with a water cap which keeps
the oxygen from getting into the tailings. Some mines need a
water cap maintained in perpetuity, others neutralize. These
details must be modeled in the application and addressed in the
Environmental Impact Study (EIS).
REPRESENTATIVE MUÑOZ asked if DNR can require this type of study
as a condition for the required permits.
MR. FOGELS asked if Representative Munoz meant an NAS study.
REPRESENTATIVE MUÑOZ replied yes.
MR. FOGELS replied that he is unsure if DNR would have the
regulatory authority to require a study. DNR normally requires
studies upfront to demonstrate appropriate evaluation of the
materials. DNR almost always hires third party experts to look
at the company's information. DNR could probably hire NAS to do
that; it comes down to having the funding to do so.
REPRESENTATIVE MILLETT asked if DNR needs a plan of development
with the geochemistry in order to go forward with the permitting
process and evaluation. She asked how far along the process is
at this point in time.
MR. FOGELS replied that DNR gets the geochemistry at same time
as the permit applications. A lot of information comes in at
once: a detailed design of the project, how they will mine, how
they will access the mine, how the waste will be disposed of -
all base and backup data collected over the last five years
including geochemistry data.
4:05:04 PM
REPRESENTATIVE MILLETT asked what DNR is doing to prepare for
that information and how long it will take to process it.
MR. FOGELS answered that DNR does not know when a company is
going to submit applications. When Pebble applications are
received, his division will assign a full-time coordinator
position just to Pebble. Other divisions of DNR, ADFG and DEC
will all have to ramp up and the company agrees to pay those
costs. The problem is finding staff to fill positions at the
right time. Theoretically, the funding is there to ramp up
immediately and hire third party contractors.
REPRESENTATIVE MILLETT asked if the level of expertise needed is
readily available in the industry right now.
MR. FOGELS replied that finding qualified people to work for the
state is not easy. A mining coordinator must have good working
knowledge of the industry and state and federal government.
Those people are making triple the money in the private sector.
REPRESENTATIVE BUCH joined the meeting.
4:07:56 PM
DR. DAVID CHAMBERS, President, Center for Science in Public
Participation (CSP2) said that CSP2 is a non-profit providing
technical advice to public interest groups and tribal
governments on the environmental impacts of mining. He spent 15
years working as an exploration geophysicist in the industry.
DR. CHAMBERS responded to Question 1 and said mines have a
triple bottom line: economic considerations, environmental and
social considerations. Consideration of the economics shows
almost entirely benefits; a mine like Pebble has hundreds of
billions of dollars of revenue. The environmental consideration
is almost always a risk analysis with very few environmental
benefits. Social considerations can go either way with both
benefits and risks. Environmental risks, with a mine like
Pebble, center on water and aquatic organisms which are
sensitive to metals. Key considerations are acid mine drainage
and hydrology, or where does the mine sit and where are
contaminants liable to move. Pebble's location poses significant
and unique issues.
DR. CHAMBERS moved on to Question 2 and said the scale of this
mine makes risk analysis more complicated. He showed a pie chart
depicting the total tons of ore available from all the hard rock
mines in Alaska, including Pebble. He added that the Bingham
Canyon mine, the largest mine in North America, is one-third the
size of Pebble based on the amount of ore. To give a sense of
the scale of Pebble, he showed a slide with the outline of
Pebble, as it was in the 2006 water rights permit applications
and again in press releases of February 2010, superimposed over
the city of Anchorage.
4:13:10 PM
He said the tailings dams have to be designed for perpetuity. To
illustrate the large scale of a dam, as proposed by Pebble
Partnership, he showed a slide of the dam superimposed over
Elliot Bay in Seattle. Since the mid-1970's, 75 percent of cases
involving mines like Pebble (close to ground and surface water,
with sulfite mineralization), incorrectly predicted whether
metals would be generated and could be controlled through
mitigation. He agreed with Mr. Fogels that significant gains
have been made in predicting impacts and how to mitigate them,
but we are still not doing well and still have a lot to learn.
DR. CHAMBERS moved on to Question 3 and said Alaska's statutes
and regulations leave room for improvement. Access to
information is lacking; the company has not released significant
information since 2004.
4:16:24 PM
Data collection and analysis is better done in an open and peer
review environment than by an interested party. Having DNR
driving the permit review process is a conflict of interest: DNR
is charged with responsibly developing mineral resources but how
does that balance against fisheries or subsistence resources? He
said it is fundamental problem that mining is exempted from a
Best Interest finding that officials must issue to some natural
resource developments in Alaska.
DR. CHAMBERS referred to Question 4 and said using NAS to
evaluate the process is a good idea. NAS can bring expertise to
the table and does not "have a dog in this fight". He would also
welcome a similar review by somebody like ISER because some
aspects are unique to the state. He suggested two studies could
be done. He suggested that the mine, due to its magnitude, be
looked at in addition to the regulatory process.
4:19:32 PM
REPRESENTATIVE BUCH said that some specific hydrology testing
was going on. Scientists told him they had specific water wells,
took samples during certain times of the year at specific depths
and sent them off to a party in Seattle and one in Oregon to
obtain third party verification of analysis. He asked if Mr.
Chambers could comment on empirical protocol.
DR. CHAMBERS replied that testing samples from those wells is
standard. His concern is not about present water quality abut
about where and how fast the water moves. Predicting what will
happen when a tailings pond is built in the area requires, for a
start, log information about material that has been drilled
through and information about flows. Pebble will be mining rocks
that are potentially acid generating. Lining the tailings pond,
which is very big and would be expensive, is not going to be
done. That presents more problems.
4:22:13 PM
REPRESENTATIVE BUCH said this seems to him to be the most
enhanced base-line study conducted in Alaska. He asked if Mr.
Chambers considered it to be an adequate baseline study.
DR. CHAMBERS replied he suspects it is the most extensive but
could not answer whether or not it is adequate. The results have
not been seen; until then, preliminary feedback and suggestions
can't be made for further information or studies.
REPRESENTATIVE BUCH asked if it is standard for all compiled
data to come in at the onset of the EIS. A department will be
overwhelmed if an assessment done over four or six years comes
in at once. His concern is that adequate opportunity is given
for discovery during the process.
DR. CHAMBERS said he agrees and would like to see data flowing
when collected. Sometimes mines will release information
voluntarily but regulatory agencies cannot require it. He said
he just finished an analysis of a mine in Minnesota for which a
huge amount of information had been made available by the
company.
REPRESENTATIVE BUCH asked if statutes exist in other states that
could be modeled if changes are made in Alaska statute.
DR. CHAMBERS said he is not aware of any state that has that
specific authority but said he could research Minnesota and
other states that do analysis more progressively.
CO-CHAIR WIELECHOWSKI asked about the track record of sulfite
mines around the world in terms of meeting water and air quality
standards.
DR. CHAMBERS replied that Pebble is in a class of mine that has
sulfitic ore in the ore body and is near ground and surface
water. About 75 percent of the time, these mines exceed their
permit limits for water discharges; that is concerning.
4:26:08 PM
CO-CHAIR WIELECHOWSKI asked what the impact would be to the
fishery and environment if there were to be a [permit] breach at
Pebble.
DR. CHAMBERS replied that quantifying the impact is difficult or
impossible. It boils down to how much risk you want to take and
what is at risk. He said this is the last big, healthy salmon
fishery in North America. Salmonids are very sensitive to metals
in general and copper in particular. Pebble could fall in the 25
percent of these mines that are ok but no one can know that.
SENATOR WAGONER said the containment dam is many people's
biggest fear. People don't understand that water is only the
cap, not the whole volume behind the dam. He asked how many
projects in the world are contained this way and how many have
had a problem with a containment dam rupturing.
DR. CHAMBERS replied that tailings dams are very common in most
places in the world. The type of construction proposed for the
tailings dam at Pebble uses the most fundamentally sound
engineering. The tailings are largely solid behind the dam;
unlike water, the reservoir cannot be drained if a problem with
the dam develops. The dam must be maintained in perpetuity;
conservative assumptions must be made about earthquakes and
other factors. Worldwide, a tailings dam fails once every 18
months.
4:29:48 PM
SENATOR FRENCH asked how much risk would be mitigated if the
mine were not an open pit mine.
DR. CHAMBERS said he has as much concern for the proposed
underground mine as for the open pit mine. A technique called
block caving, which structurally destroys the rock, is used to
mine a low-grade ore body underground. The process fractures
material that is mined and material all the way to the surface.
The rubble contains sulfide minerals and hydrology is still
important.
4:31:01 PM
JOHN SHIVELY, CEO, Pebble Limited Partnership, started with
Question 1. He said water quality is the first issue. The mine
needs to have a water handling system that works, a tailing
facility that holds back the tailings and the water and that
other water around the prospect must be managed. The real danger
to the fish is water quality. Pebble is not done engineering the
tailings facility and some questions cannot be answered yet.
MR. SHIVELY moved on to Question 2 and said Pebble is a big
prospect and the current resource could be mined for 80 to 100
years. Pebble's intent is not to permit the entire resource,
however, but 25 to 40 years. Red Dog is smaller but its
mineralization is 25 percent, meaning 25 percent of what comes
out of the ground is potentially acid generating. Pebble has a
lot more ore but it ranges from .2 percent to 3 percent. Acid
drainage will have to be dealt with but Pebble does not have as
much sulfite.
MR. SHIVELY referred to Question 3 and said permitting and
resource development in Alaska is a much broader issue than just
Pebble. He said the economy must be considered and he referred
to Red Dog being shut down, Conoco being turned down for an
[Alpine West CD5 404 permit] and Shell facing permitting
problems. He said any study should consider not just the
statutes but the process. Whether Pebble is permitted or not,
things in the economy do not bode well for the future with both
state and federal issues.
MR. SHIVELY moved onto Question 4 and said the National Science
Foundation is well respected and would do a good job. Focusing
on what you want to study is important, then bringing in
experts.
4:36:10 PM
He said he is a former commissioner of DNR and thinks the state
has a strong permitting process that is looked at independently
on a regular basis.
REPRESENTATIVE EDGMON said tributaries feed off into the major
salmon producing areas of the Bristol Bay salmon fishery which
was worth about $5 billion in the last 20 years. He asked if
Pebble can really understand those water flows, under and above
ground, enough to tell someone down river that they will be
protected in perpetuity.
MR. SHIVELY replied yes, Pebble's water monitoring studies are
extensive, go beyond the project itself and will be available.
Over $100 million has been spent getting information and a fair
amount of that is already available to the public. Until a mine
is planned, interpreting the meaning of all the information is
difficult. Any problem will be close to the mine and has to be
dealt with there.
REPRESENTATIVE EDGMON said he hears that Pebble is a proposal
with unknown size and impacts, but "there has got to be a plan
somewhere". The Legislature doesn't know what is going on behind
the scenes. He asked Mr. Shively how close he is to the
permitting process at this point.
MR. SHIVELY replied that Pebble has ideas and concepts but not a
plan sitting in London. Multiple pieces must be considered and
are all related: hydrology, tailings dam design, economics,
size, an 82 mile road, a port and power.
4:40:47 PM
In 2008, Pebble Partnership said it would be in the permitting
process at the end of 2008; now it might be in early 2011.
Pebble is not driven by a date but by putting a project together
that meets the high environmental standards and is economic.
SENATOR FRENCH said Pebble will be transporting fuel over the
next year to drive equipment. Recently a well-publicized diesel
spill occurred on the way to the site. He asked Mr. Shively for
the degree of responsibility that Pebble is going to assume for
that fuel transport.
MR. SHIVELY replied, "That was not our fuel spill and that fuel
actually wasn't necessarily designed for the project". Some fuel
might have gone to the project and some was being delivered to
the villages. A partner of Pebble's, Iliamna Development
Corporation was transporting the fuel. Their idea was to bring
fuel in over the Pile Bay road then by barge to communities
around the lake, substantially lowering the cost. The spill was
unfortunate but not particularly environmentally damaging.
SENATOR FRENCH asked Mr. Shively to talk about the fuel Pebble
is going to transport and how safe, environmentally sensitive
transport will be ensured.
MR. SHIVELY asked if Senator French is asking about transporting
fuel now or if there is a mine.
SENATOR FRENCH replied now.
MR. SHIVELY answered that Iliamna Development Corporation
currently brings fuel for Pebble into Iliamna where they have a
fuel storage area. Helicopters are fueled there. Fuel for
drilling is flown out in a fixed-wing plane to fuel storage and
then flown again in double-hulled containers to the drilling
rigs.
SENATOR FRENCH asked how Mr. Shively sees Pebble's involvement
in fuel transportation and if he is prepared to avoid spilling
fuel into Lake Iliamna.
MR. SHIVELY replied that if diesel is used, a pipeline will
probably go out of the port and along the road. Fuel will not be
transported across Lake Iliamna.
SENATOR FRENCH asked about construction to widen the road before
a pipeline can be put in. He said he is concerned about a lot
work being done there, with heavy equipment, already having had
a diesel spill. He asked at what level will Pebble step in and
assume responsibility for the handling of diesel in a sensitive
area.
4:45:19 PM
MR. SHIVELY said Pebble requires that fuel carriers have
insurance and reviews their safety. It is part of Pebble's
responsibility to make sure transport is safe. Who will
transport fuel has not been decided.
REPRESENTATIVE BUCH said he is not concerned about a lack of
information but is concerned that if information is presented
all at once it will overwhelm an agency.
MR. SHIVELY responded that Pebble will pay for the review which
will be done by more than just state employees. The state will
bring in others on contract, such as environmental consulting
firms. Information needs to be quality checked and put into a
readable format called the Environmental Baseline Document
(EBD). Pebble is producing that document now; it will have 53
chapters and will be available to the public. If needed, the
state will ask for more money to get more people or more time.
REPRESENTATIVE MILLETT thanked Mr. Shively for his company's
investment in the region so far. She said she has fished for 20
years in Bristol Bay and understands its dynamics and what is at
risk. She imagined that Mr. Shively understood the value of that
region, as a former DNR commissioner, and asked if he takes that
into the board room. She asked if Pebble understands what is at
risk and what conversations are like in the boardroom.
MR. SHIVELY replied that it is a big part of discussions and the
drive behind the engineering. He took the job because he felt an
Alaskan perspective was needed. He has friends in Bristol Bay
who oppose the project and others who see the potential economic
advantages. Everybody realizes it is about the fish. If Pebble
cannot show that the fish will be protected, it will go nowhere.
4:50:02 PM
CO-CHAIR WIELECHOWSKI said he heard the power needs for the
project are enormous: 400 -500 megawatts, which is about half of
the peak load of the Railbelt. He asked how Mr. Shively expects
to generate power in that area.
MR. SHIVELY replied that about 250 - 300 megawatts will be
needed. Natural gas would be the choice but it is not readily
available. A spur or bullet line would need industrial users to
make the price of gas reasonable without a large state subsidy
and Pebble could help. Without a huge find in Cook Inlet, the
Nikiski LNG plant will likely shut down and could be flipped to
a receiving plant, allowing gas to be brought in for Pebble and
others. Pebble would ship that gas across the inlet. Another
option is LNG barges that now have regasification capacity on
the barge.
He noted that if Pebble gets reasonably priced energy to the
mine, it would cooperate with the state to take that energy to
the western part of the region.
4:52:10 PM
Senator Halford [former Alaska Senate President Halford] said
Pebble is different than other mines he's dealt with, flown for,
advocated for or worked on legislation for. He can't think of a
place that would be more challenging to develop sulfite mine.
Pebble would have incredible value and incredible risk. He said
it is located in a saddle at about 1000 feet and the deposit
goes to about 3000 feet below sea level. He felt Mr. Shively's
comment about not wanting to negatively impact other Alaska
mines by what you do in Bristol Bay was valid; Pebble's size,
type and location are different.
4:55:43 PM
He showed a slide of Frying Pan Lake which is "ground zero" by
the Northern Dynasty plans and would be about 700 feet under
tailings. He showed another slide looking from Cook Inlet toward
the Pile Bay end of the Pile Bay road and said the full
transportation route is about 100 miles long. Another slide
looked back towards William's Port and one showed the road from
William's Port toward Pile Bay which can barely accommodate
loads that are 14 feet wide.
He said the size of the Pebble project is beyond imagination:
the largest mine in North America would only fill it about one-
third full. The level of the review should be commensurate with
the size, risk and duration of the transaction. The size is
astronomical, the risk is very high and the term is forever. The
Legislature should have as much information as it can.
4:59:12 PM
The review by NRC or NAS is only one piece of what the
Legislature should be doing. It should be go back to the
commissioners of DNR, ADFG and DEC and ask them for a capitol
project to beef up their information gathering ability. What is
done with this issue will be specific to Pebble and Bristol Bay.
He noted that a major dam failure is not the only way that
toxins can end up back in the water column.
He felt that no multi-national company is going to mine any less
than all the mineable ore. The application might be for a
portion of the ore, but the project and Legislature should be
driven by the size and scope of what is there to be mined. The
amount of sulfur in the ore body, which is potentially damaging,
outweighs the benefits. A bulk mining method will have to be
used. As a low-grade, high volume operation, the project does
not have the financial capacity to carry some of the
environmental necessities.
In conclusion, Senator Halford encouraged the Legislature to
look at NAS and the rest of the Legislature's authority to get
as much information as possible and to empower the
administration with the needed funding.
5:03:03 PM
He pointed out that Mr. Fogels said "assuming adequate
resources" and talked about a flexible process. In this case,
the maximum protection should be flexed and that is expensive.
REPRESENTATIVE EDGMON asked about the similarities and
differences between the Red Dog Mine, which has provided a lot
of income and jobs, and Pebble Mine.
SENATOR HALFORD replied that the Pebble Project is the opposite
in every way he can think of from the Red Dog Mine. The Red Dog
deposit, rich in toxic elements, had already significantly
hampered the water quality in its area through prospecting and
natural erosion. Red Dog had very few conflicting resources. The
Red Dog mine was incredibly rich with about 20 percent zinc and
5 percent lead as opposed to 1 percent average at Pebble. Red
Dog is also on native land which means it shares through all the
native corporations across Alaska and allows for local hire
provisions that are not enforceable otherwise. Red Dog was
overwhelming supported by people of the area. Opposite
conditions in Bristol Bay have resulted in overwhelming public
opposition.
He said a decision should not be postponed while waiting for a
plan; the size, location, ore type, and the necessity of a bulk
mining method are known. An advocate for Pebble might not show a
plan until he has worked through the process as much as possible
and can get it approved. Waiting endangers the resources in
conflict, the people of Western Alaska and the advocates for
every other mining project.
5:06:54 PM
REPRESENTATIVE BUCH said Pebble is entirely on state land and
asked Senator Halford to further touch on the issue of taxes.
SENATOR HALFORD replied that most mines in Alaska can't carry
anywhere near the taxes that the oil industry, or others, can
carry. Negotiations between native corporations and mineral
interests show agreement on reasonably high royalties. The state
system is based on profit after all expenses are taken out. A
profits-based tax is a very small percentage of a net smelter
royalty tax and would be somewhere in the range of 1 or 1.5
percent, not considering economic activity and local or property
taxes.
SENATOR FRENCH asked Senator Halford what he would do if he were
"on this side of the table".
SENATOR HALFORD replied that getting more information makes
sense. He advised going to every source possible which can be
difficult because "the other side is very, very well armed. They
are very well paid, they are very well educated, they have life-
long careers in the companies they work for." The state side is
elected and appointed and usually have to hire experts from that
other side of the table. He said he would not wait for somebody
to bring science forth that has been bought and paid for.
5:10:10 PM
SENATOR WAGONER asked about the worst case scenario and what
percentage of the Iliamna fishery could be affected.
SENATOR HALFORD responded that Iliamna is one-third of the
entire fishery and is one of the five major drainages. He
offered a sample scenario while just building the road: If a
sectional tanker, with four trailers of 10,000 gallons each,
came across the road and was lost in the middle of Lake Iliamna,
four tankers could bubble for years, corrode and fail. If filled
with separation chemicals, it would be even worse than petroleum
products. He said numbers are beyond comprehension. He said he
cannot answer Senator Wagoner's question.
CO-CHAIR WIELECHOWSKI closed the testimony.
REPRESENTATIVE EDGMON said he has constituents on both sides of
the Pebble issue but surveys show the majority are extremely
worried. He feels an independent, third-party review is
necessary. The project is unique in size and proximity; it is a
non-renewable project, with many unknowns, next to a renewable
resource. He questioned if the state has the resources to
monitor the project and the liability protections in place in
perpetuity. He is unsatisfied with qualified responses and
promises of protection and no net loss. The Legislature needs to
pursue this study, support DNR, support the developer in their
efforts and mostly support the Alaskans that live in the area as
they are the ones who will experience the benefits or the risks.
5:14:53 PM
SENATOR WAGONER said he has been a commercial fisherman in Cook
Inlet and said that salmon are tough creatures. He is in favor
of pursuing the mine the safest way possible. Bristol Bay is the
last bastion where a person can make a living fishing but Alaska
won't pump oil forever and needs to look at other job sources.
CO-CHAIR WIELECHOWSKI said this is a situation where we cannot
afford to be wrong and the more information the better. He would
support additional information and research from instate and out
of state. An independent, unbiased group would be a good thing
for all parties, to make sure our statutes and regulations are
good, strong and will protect the fishery and habitat.
5:17:27 PM
Seeing no further business to come before the committee, Co-
Chair Wielechowski adjourned the meeting at 5:17 p.m.
| Document Name | Date/Time | Subjects |
|---|