Legislature(2015 - 2016)BUTROVICH 205

03/07/2016 03:30 PM Senate RESOURCES

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Audio Topic
03:30:11 PM Start
03:31:27 PM Overview(s): the Cohen Group Report on the Environmental Protection Agency's Pebble Mine Action
04:23:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Joint with the House Resources Committee>
+ Overview: The Cohen Group Report on the TELECONFERENCED
Environmental Protection Agency's Pebble Mine
Action
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 7, 2016                                                                                          
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE RESOURCES STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Ben Nageak, Co-Chair                                                                                            
 Representative David Talerico, Co-Chair                                                                                        
 Representative Paul Seaton                                                                                                     
 Representative Andy Josephson                                                                                                  
 Representative Bob Herron                                                                                                      
 Representative Geran Tarr                                                                                                      
 Representative Craig Johnson                                                                                                   
                                                                                                                                
SENATE RESOURCES STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Cathy Giessel                                                                                                          
 Senator Bill Stoltze                                                                                                           
 Senator Bill Wielechowski                                                                                                      
 Senator John Coghill                                                                                                           
 Senator Bert Stedman                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
HOUSE RESOURCES STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Kurt Olson                                                                                                      
 Representative Mike Hawker                                                                                                     
                                                                                                                                
SENATE RESOURCES STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Peter Micciche                                                                                                         
                                                                                                                                
OTHER MEMBERS PRESENT                                                                                                         
                                                                                                                                
 Representative Mike Chenault                                                                                                   
 Senator Charlie Huggins                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):    THE  COHEN  GROUP  REPORT  ON  THE  ENVIRONMENTAL                                                               
PROTECTION AGENCY'S PEBBLE MINE ACTION                                                                                          
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GENERAL JOSEPH RALSTON, Retired, Consultant                                                                                     
The Cohen Group                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Presented  an overview  of the  Cohen Group                                                             
Report entitled, "Report  of An Independent Review  of the United                                                               
States  Environmental Protection  Agency's Actions  In Connection                                                               
With Its Evaluation  of Potential Mining in  Alaska's Bristol Bay                                                               
Watershed."                                                                                                                     
                                                                                                                                
HOLLY BUTLER, Law Partner                                                                                                       
DLA Piper LLP (US)                                                                                                              
Baltimore, Maryland                                                                                                             
POSITION STATEMENT:   Responded to questions  during the overview                                                             
of the  Cohen Group  Report entitled,  "Report of  An Independent                                                               
Review  of the  United States  Environmental Protection  Agency's                                                               
Actions in Connection with its  Evaluation of Potential Mining in                                                               
Alaska's Bristol Bay Watershed."                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
3:30:11 PM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  GIESSEL  called  the joint  meeting  of  the  House                                                             
Resources Standing  Committee and  the Senate  Resources Standing                                                               
Committee to  order at 3:30  p.m.  Present  at the call  to order                                                               
from the House Resources  Standing Committee were Representatives                                                               
Nageak, Talerico, Herron,  Josephson, and Seaton; Representatives                                                               
Tarr  and  Johnson  arrived  as  the  meeting  was  in  progress.                                                               
Present  from  the  Senate   Resources  Standing  Committee  were                                                               
Senators  Giessel, Stoltze,  Wielechowski, Coghill,  and Stedman;                                                               
Senator Costello arrived as the meeting was in progress.                                                                        
                                                                                                                                
^OVERVIEW(S):    The  Cohen Group  Report  on  the  Environmental                                                               
Protection Agency's Pebble Mine Action                                                                                          
   OVERVIEW(S):  The Cohen Group Report on the Environmental                                                                
             Protection Agency's Pebble Mine Action                                                                         
                                                                                                                                
3:31:27 PM                                                                                                                    
                                                                                                                                
CHAIR GIESSEL announced that the  only order of business would be                                                               
the Cohen  Group Report on the  Environmental Protection Agency's                                                               
Pebble Mine  Action.  Further,  she said that today's  hearing is                                                               
about  a federal  process that  falls under  the auspices  of the                                                               
Environmental  Protection Agency  (EPA).   During  the past  five                                                               
years,  she opined,  the state  has been  faced with  significant                                                               
federal restrictions  and challenges  for accessing  the abundant                                                               
resources  that   the  land  holds.     She   provided  examples,                                                               
including:  the  Department of the Interior  blocking the state's                                                               
efforts to  construct a public  safety road through  the [Izembek                                                               
National Wildlife Refuge]; the Clean  Air Act (CAA) challenges to                                                               
Alaska's coal  production, which  will be  followed by  the Clean                                                               
Power [Plan] regulations;  and the Clean Water  Act (CWA) placing                                                               
all  Alaskan waters  under federal  EPA jurisdiction  - currently                                                               
stayed by  the U.S.  Supreme Court.   Today's hearing  focuses on                                                               
one of the  many federal regulatory processes  under which Alaska                                                               
must function, she said.                                                                                                        
                                                                                                                                
3:33:36 PM                                                                                                                    
                                                                                                                                
GENERAL  JOSEPH  RALSTON,   Retired,  Consultant,  presented  the                                                               
overview titled, "Report  of An Independent Review  Of The United                                                               
States  Environmental Protection  Agency's Actions  In Connection                                                               
With Its Evaluation  Of Potential Mining In  Alaska's Bristol Bay                                                               
Watershed, Executive  Summary," compiled by Secretary  William S.                                                               
Cohen  [Secretary of  Defense 1997-2001],  The  Cohen Group,  DLA                                                               
Piper LLP (US),  dated October 6, 2015.  He  paraphrased from the                                                               
following  prepared statement,  which read  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
          Thank you for inviting me to testify on Secretary                                                                     
     Cohen's  independent  review of  EPA's  decision-making                                                                    
     process regarding  potential mining in the  Bristol Bay                                                                    
     watershed.                                                                                                                 
                                                                                                                                
          Let me start by saying that I have been an Alaska                                                                     
     resident  since   1992  and  spent  several   years  at                                                                    
     Elmendorf when  I commanded the Alaskan  Command during                                                                    
     my career as an Air  Force Officer.  I fully understand                                                                    
     and appreciate  the complexities  and the  views within                                                                    
     our State both pro and con regarding the Pebble Mine.                                                                      
                                                                                                                                
          The Secretary's review is not about the Pebble                                                                        
     Mine,  but  rather the  actions  of  EPA as  a  federal                                                                    
     agency.  Secretary  Cohen and I have spent  most of our                                                                    
     professional lives in service of  our country.  For the                                                                    
     Secretary - as a  Congressman, Senator and Secretary of                                                                    
     the largest  Department in the  Executive Branch  - and                                                                    
     my own  38 years of service  in the Air Force;  we both                                                                    
     feel  very  strongly  that  federal  agencies  have  an                                                                    
     obligation to act  in a fair manner.  This  is the only                                                                    
     way  they  can  maintain  the  trust  of  the  American                                                                    
     public.                                                                                                                    
                                                                                                                                
          I will summarize the basis under which the review                                                                     
     was undertaken, the process used, and the findings.                                                                        
                                                                                                                                
     Conditions of Acceptance                                                                                                   
                                                                                                                                
          Secretary Cohen was first approached by Tom                                                                           
     Collier  and the  Pebble  Limited  Partnership in  Fall                                                                    
     2014.   Pebble expressed concern about  the fairness of                                                                    
     EPA's decision-making process  in connection with EPA's                                                                    
     evaluation  of  potential  mining in  Bristol  Bay  and                                                                    
     wanted an objective party to examine that concern.                                                                         
                                                                                                                                
          After examining a wide range of documents,                                                                            
     including   those  obtained   under  [the   Freedom  of                                                                    
     Information Act (FOIA)],  the Secretary determined that                                                                    
     sufficient and  legitimate questions existed as  to the                                                                    
     fairness of EPA's process and  agreed to undertake this                                                                    
     review, assisted  by his  team at  The Cohen  Group and                                                                    
     the law firm DLA Piper.   One of the lead counselors on                                                                    
     this review, Holly Butler, is here today.                                                                                  
                                                                                                                                
          The Secretary conditioned his acceptance on                                                                           
     complete independence.   The Pebble Limited Partnership                                                                    
     had  no ability  to  edit  or censor  his  views.   The                                                                    
     conclusions  he  drew were  his  and  his alone.    The                                                                    
     Pebble   Limited  Partnership   compensated  our   team                                                                    
     according  to  commercially   standard  terms,  and  no                                                                    
     portion of  this compensation  was contingent  upon the                                                                    
     result or content of the report.                                                                                           
                                                                                                                                
          The Secretary did not make a determination on                                                                         
     whether a  mine should  be built -  this is  a question                                                                    
     for  engineers, scientists,  and the  State of  Alaska.                                                                    
     Nor did he comment on  the legality of EPA's preemptive                                                                    
     use of Section 404(c) of the  Clean Water Act - this is                                                                    
     a question for the Courts and Congressional review.                                                                        
                                                                                                                                
          Given his substantial Executive and Legislative                                                                       
     experience, Secretary  Cohen felt qualified  and agreed                                                                    
     to  review  the  process  by which  EPA  assessed,  and                                                                    
     proposed  restrictions  to  reduce,  the  environmental                                                                    
     risks associated  with potential mining in  the Bristol                                                                    
     Bay  watershed  from  the   perspective  of  a  Cabinet                                                                    
     official.                                                                                                                  
                                                                                                                                
     Process of Review                                                                                                          
                                                                                                                                
          The Cohen Group team had unfettered access to and                                                                     
     conducted  a  thorough  examination  of  the  extensive                                                                    
     written record  of more than 42,000  documents produced                                                                    
     by  federal  agencies  in response  to  FOIA  requests,                                                                    
     including EPA,  Fish and  Wildlife Service,  Army Corps                                                                    
     of  Engineers,  and  National Oceanic  and  Atmospheric                                                                    
     Administration.   We also  reviewed documents  from the                                                                    
     State  of Alaska,  EPA's own  published  record of  its                                                                    
     process,   Congressional  hearings,   and  the   Pebble                                                                    
     Partnership.                                                                                                               
                                                                                                                                
          We welcomed the opportunity to speak with anyone                                                                      
     who cared  to share with  us their perspective  on this                                                                    
     important topic, and  we made every effort  to seek out                                                                    
     and  speak with  as  many people  representing as  many                                                                    
     different points of view as we could.                                                                                      
                                                                                                                                
          Over sixty people representing all points of view                                                                     
     on  EPA's   actions  -  Pro,  Against   and  Neutral  -                                                                    
     voluntarily  spoke with  the  Secretary  and our  team.                                                                    
     This  included  three  former  EPA  Administrators  and                                                                    
     several former  EPA Assistant Administrators  for water                                                                    
     from  both Democratic  and Republican  Administrations,                                                                    
     as well  as members  of Alaska  Native Tribes  from the                                                                    
     Bristol Bay region, scientists (both  opposed to and in                                                                    
     support   of  the   mine),  former   Alaska  government                                                                    
     officials,   and   representatives    of   the   Pebble                                                                    
     Partnership.   We  also visited  the region,  including                                                                    
     the Pebble Deposit site.                                                                                                   
                                                                                                                                
          EPA, through the Justice Department, declined                                                                         
     Secretary Cohen's  request to making  current personnel                                                                    
     available for interviews,  citing ongoing Congressional                                                                    
     and (at the time)  the Inspector General (IG) inquiries                                                                    
     and  pending   litigation.    We  recognized   and  can                                                                    
     appreciate this decision.                                                                                                  
                                                                                                                                
     Findings                                                                                                                   
                                                                                                                                
          The Pebble Deposit is a mineral deposit located                                                                       
     in the  Bristol Bay  watershed.   The deposit  has been                                                                    
     described   by  the   Alaska   Department  of   Natural                                                                    
     Resources  as   one  of  the  world's   largest  copper                                                                    
     resources.  It  is located on lands owned  by the State                                                                    
     of Alaska, which have  been specifically designated for                                                                    
     mineral exploration and development  under an area plan                                                                    
     for state lands.                                                                                                           
                                                                                                                                
          The Bristol Bay watershed is largely undisturbed                                                                      
     by significant  development.  The economy  is dominated                                                                    
     by  commercial salmon  fishing  and  features a  Native                                                                    
     Alaskan  population  that  maintains a  strong  salmon-                                                                    
     centered culture and subsistence-based lifestyle.                                                                          
                                                                                                                                
          Thus any regulatory authority to be exercised                                                                         
     requires  the   most  fair  and   appropriate  process,                                                                    
     particularly as it interacts with  the State of Alaska,                                                                    
     the landowner in this case.                                                                                                
                                                                                                                                
          Here EPA did not employ the well-established                                                                          
     Permit/[National   Environmental  Policy   Act  (NEPA)]                                                                    
     process  to  evaluate   potential  development  in  the                                                                    
     Bristol  Bay  watershed.    Rather,  EPA  used  Section                                                                    
     404(c) of  the Clean  Water Act to  preemptively impose                                                                    
     restrictions on potential mining in the area.                                                                              
                                                                                                                                
        · Because, to date the Pebble Partnership has not                                                                       
          submitted  a  permit  application, EPA  relied  on                                                                    
          hypothetical   scenarios  for   its  Bristol   Bay                                                                    
          Watershed  Assessment   (BBWA)  rather   than  the                                                                    
          characteristics  of   a  mine  that   is  actually                                                                    
          proposed to be built and maintained                                                                                   
                                                                                                                                
        · EPA failed to address important considerations                                                                        
          that   would  be   included  in   the  Permit/NEPA                                                                    
          Process,  including  meaningful  participation  by                                                                    
          the State  of Alaska and other  federal government                                                                    
          agencies, mitigation  and controls as  proposed by                                                                    
          the  developer, and  an array  of public  interest                                                                    
          factors;                                                                                                              
                                                                                                                                
        · The Permit/NEPA Process has been used for decades                                                                     
          and  has  been  widely endorsed  by  environmental                                                                    
          groups as being "Democratic at its core";                                                                             
                                                                                                                                
        · EPA relied upon the BBWA in its Proposed                                                                              
          Determination  but  acknowledged that  there  were                                                                    
          significant  gaps in  its assessment  and that  it                                                                    
          was  not  designed  to duplicate  or  replace  the                                                                    
          Permit/NEPA Process; and                                                                                              
                                                                                                                                
        · EPA's unprecedented, preemptive use of Section                                                                        
          404(c)  inhibited  the   involvement  of  two  key                                                                    
          participants:   the State of  Alaska and  the Army                                                                    
          Corps of Engineers.                                                                                                   
                                                                                                                                
          These observations informed the Secretary's                                                                           
     conclusion  that EPA's  application  of Section  404(c)                                                                    
     prior to  the filing  of a  permit application  was not                                                                    
     fair to all stakeholders.                                                                                                  
                                                                                                                                
          The  fairest  and   most  appropriate  process  to                                                                    
          evaluate  possible   development  in   the  Pebble                                                                    
          Deposit Area would  use the established regulatory                                                                    
          Permit/NEPA  Process  to   assess  a  mine  permit                                                                    
          application,  rather  than   using  an  assessment                                                                    
          based  upon  the   hypothetical  mining  scenarios                                                                    
          described in  the BBWA as  the basis  for imposing                                                                    
          potentially  prohibitive  restrictions  on  future                                                                    
          mines.                                                                                                                
                                                                                                                                
          The Permit/NEPA Process is more comprehensive                                                                         
     than  the preemptive  Section  404(c) process  employed                                                                    
     here.   EPA conceded in  comments to peer  reviews that                                                                    
     there  were  gaps  in  its  assessment  that  would  be                                                                    
     addressed during a Permit/NEPA Process.                                                                                    
                                                                                                                                
          Here, as the Agency acknowledges, EPA initiated                                                                       
     Section 404(c)  in an unprecedented manner.   EPA's use                                                                    
     of Section  404(c) before  a permit  application filing                                                                    
     exacerbated the  shortcomings of the BBWA  noted by the                                                                    
     State  of  Alaska,  several  peer  reviewers,  and  the                                                                    
     Pebble  Partnership:     most   notably,  the   use  of                                                                    
     hypothetical  assumptions that  may  not accurately  or                                                                    
     fairly represent an actual project;  and the failure to                                                                    
     take  into account  mitigation  and control  techniques                                                                    
     required  by  the  State  or  that  a  developer  might                                                                    
     propose.   Stakeholders disagree about the  legality of                                                                    
     EPA's preemptive use of Section 404(c).                                                                                    
                                                                                                                                
          An environmental impact assessment is bound to                                                                        
     provide  more accurate  information  if  it analyzes  a                                                                    
     mine  that  will  be  built   in  accordance  with  the                                                                    
     developer's  plans,  rather  than a  hypothetical  mine                                                                    
     plan  which  even  EPA acknowledges  is  likely  to  be                                                                    
     different  from  a   developer-submitted  plan.    This                                                                    
     project  is too  important,  for  all stakeholders,  to                                                                    
     pilot  a new,  untested decision-making  process.   The                                                                    
     fairest  approach   is  to  use   the  well-established                                                                    
     Permit/NEPA Process, and Secretary  Cohen could find no                                                                    
     valid reason why that process was not used.                                                                                
                                                                                                                                
          During the course of this review, statements and                                                                      
     actions of  EPA personnel  have raised  questions about                                                                    
     EPA's  motives.   Although Secretary  Cohen found  many                                                                    
     troubling questions,  he did  not attempt to  reach any                                                                    
     conclusions  on these  issues and  instead urged  those                                                                    
     with subpoena power to pursue this incomplete record.                                                                      
                                                                                                                                
          The EPA Inspector General recently released a                                                                         
     report of  its investigation.  The  IG Report, however,                                                                    
     addressed only one component of  the broader process by                                                                    
     which EPA  determined it would propose  restrictions on                                                                    
     mining  in  the Pebble  Deposit  Area  and it  did  not                                                                    
     address  the fairness  of  EPA's  novel application  of                                                                    
     Section 404(c).                                                                                                            
                                                                                                                                
          As a result of this narrow scope, the IG Report                                                                       
     did   not  provide   any   information  that   directly                                                                    
     addresses  Secretary  Cohen's findings,  including  his                                                                    
     central finding  that the fairest and  most appropriate                                                                    
     process  to  evaluate  any development  in  the  Pebble                                                                    
     Deposit  Area  would  use  the  established  regulatory                                                                    
     Permit/NEPA   Process   to   assess   a   mine   permit                                                                    
     application.   The IG Report  left open  many questions                                                                    
     and   presented  an   incomplete  record   in  material                                                                    
     aspects.    Thus,  we believe  there  remain  troubling                                                                    
     aspects  that  merit  review  by  those  who  have  the                                                                    
     constituted responsibility  [to] take  a deeper  look -                                                                    
     be it in Congress the Courts, or the Administration.                                                                       
                                                                                                                                
          This is not about Pro-Pebble or Anti-Pebble, but                                                                      
     rather good  governance and the actions  of our federal                                                                    
       agencies and processes by which they interact with                                                                       
     their State partners and constituencies.                                                                                   
                                                                                                                                
          How EPA conducted the process to assess potential                                                                     
     development and  protect our  fish and  our environment                                                                    
     here in  Alaska is  of vital  importance to  our State,                                                                    
     region and country.                                                                                                        
                                                                                                                                
3:45:47 PM                                                                                                                    
                                                                                                                                
SENATOR  WIELECHOWSKI asked  whether  there has  been a  specific                                                               
impedance  that  has  prohibited   the  Pebble  Partnership  from                                                               
submitting a mining application.                                                                                                
                                                                                                                                
GENERAL  RALSTON responded  that  the  EPA statement,  indicating                                                               
that a  permit would  be declined due  to Section  404(c) issues,                                                               
has given the Pebble Partnership pause to proceed.                                                                              
                                                                                                                                
SENATOR WIELECHOWSKI  inquired about  the amount  of compensation                                                               
that the  Cohen group has  received from the  Pebble Partnership,                                                               
and  whether  the  contract  could   be  made  available  to  the                                                               
committee.                                                                                                                      
                                                                                                                                
GENERAL  RALSTON  responded  that the  requested  information  is                                                               
considered confidential,  and allowed  that the  compensation was                                                               
commensurate with standard rates and terms.                                                                                     
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that   the  law  firm,  DLA  Piper,                                                               
assisted in  the preparation of  the document, and  asked whether                                                               
Stewart B. Morrow is a senior partner in the firm.                                                                              
                                                                                                                                
3:47:26 PM                                                                                                                    
                                                                                                                                
HOLLY BUTLER,  Law Partner,  DLA Piper  LLP (US),  responded that                                                               
Mr. Morrow is a partner in DLA Piper's Canada office.                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI  cited a filing, with  the British Columbia,                                                               
Canada, Securities Commission (BCSC), by  a Mr. Morrow, in a $3.5                                                               
million stake with Northern Dynasty  Minerals, entered into about                                                               
40 days  prior to the release  of this report.   He asked whether                                                               
it is the same Mr. Morrow.                                                                                                      
                                                                                                                                
MS.  BUTLER responded  that Mr.  Morrow initiated  a company,  on                                                               
behalf  of a  client, for  deposit  of stock,  but he  personally                                                               
holds no interest  in, nor facilitated the  purchase of, Northern                                                               
Dynasty stock.   She reported that  no one in the  DLA Piper (US)                                                               
or Canada,  holds any interest  in stock for  Pebble Partnership,                                                               
Northern Dynasty, Hunter Dickenson, or  any of its affiliates; no                                                               
financial or business relationship exists.                                                                                      
                                                                                                                                
3:48:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  indicated that the EPA  has established                                                               
specific standards  and asked why  a permit application  would be                                                               
necessary in order  to have the standards apply  to a theoretical                                                               
situation.   He suggested  that the standards  should be  able to                                                               
stand alone.                                                                                                                    
                                                                                                                                
GENERAL  RALSTON  opined that  the  EPA  should  wait to  have  a                                                               
description of a  project prior to applying  standards and making                                                               
determinations.   Mitigation measures  are part of  the proposal,                                                               
and would need to be taken into account, he added.                                                                              
                                                                                                                                
3:50:20 PM                                                                                                                    
                                                                                                                                
CHAIR  COGHILL inquired  about national  precedent for  the EPA's                                                               
omission of the stakeholders in  the decision making process; the                                                               
Corps of Engineers and the State of Alaska.                                                                                     
                                                                                                                                
GENERAL RALSTON  responded that it  was an  unprecedented action.                                                               
The EPA  has no prior history  of invoking Section 404(c)  in the                                                               
absence of  a permit being filed.   He recalled actions  that did                                                               
invoke 404(c),  but a permit  had been filed on  those occasions.                                                               
He added that the EPA has  acknowledged that the action may serve                                                               
to establish  a precedent.  The  concern, he opined, is  that the                                                               
precedent may allow the EPA to make other preemptive rulings.                                                                   
                                                                                                                                
SENATOR   COGHILL  queried   whether   the   EPA  had   solicited                                                               
congressional  recommendations or  other  comments  prior to  the                                                               
action.                                                                                                                         
                                                                                                                                
GENERAL RALSTON  said the Cohen  Group was not allowed  access to                                                               
question personnel of  the EPA, and a number of  e-mails were not                                                               
made available.   An EPA official allegedly  violated protocol by                                                               
utilizing  a  personal computer  for  agency  purposes.   Due  to                                                               
computer  failure  or  misuse,  a 25  month  period  of  computer                                                               
communications  are  missing,  or  not available,  from  the  EPA                                                               
official  who  was  assigned  to  the  project  site.    The  EPA                                                               
inspector general  (IG) acknowledges that  there may have  been a                                                               
misuse  of position,  and Secretary  Cohen  has recommended  that                                                               
further  investigation  should  be   handled  by  a  sector  with                                                               
authority to  subpoena, such as  the courts, the US  Congress, or                                                               
the IG.                                                                                                                         
                                                                                                                                
SENATOR COGHILL  stated his understanding that  the EPA's primary                                                               
investigator  has  subsequently  fled  the  U.S.  and  cannot  be                                                               
sequestered.                                                                                                                    
                                                                                                                                
GENERAL RALSTON  acknowledged that  Phil North, the  EPA official                                                               
in  question, retired,  now lives  outside of  U.S. jurisdiction,                                                               
and has  refused to be  subpoenaed.   There may be  a possibility                                                               
that  Mr. North  will return  to the  US, which  would allow  the                                                               
authorities to continue the investigation.                                                                                      
                                                                                                                                
SENATOR COGHILL indicated that the  fairness question is of major                                                               
concern for  the state.  He  suggested that the specific  area to                                                               
be permitted  may have  varied significantly  from what  has been                                                               
perceived as the entire watershed, and asked for clarity.                                                                       
                                                                                                                                
GENERAL RALSTON deferred comment.                                                                                               
                                                                                                                                
SENATOR COGHILL opined that the  application process was thwarted                                                               
on every  account, and stopped  from reaching maturity.   He said                                                               
it was  unfortunate that a  legitimate proposal was  blocked from                                                               
being brought to the table.                                                                                                     
                                                                                                                                
3:55:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  noted that  today's debate is  not whether                                                               
the mine  should go  forward or not,  but rather  the possibility                                                               
that a government official has  corrupted a process.  He referred                                                               
to  the  Izembek  road  proposal, and  stated  his  belief  that,                                                               
following the  conclusion of  the Environmental  Impact Statement                                                               
(EIS) recommending  a go-ahead for  the road  project, corruption                                                               
may  have occurred  in Washington,  DC.   He  asked whether  it's                                                               
possible  that  an  individual  has  corrupted  a  very  thorough                                                               
process.                                                                                                                        
                                                                                                                                
GENERAL   RALSTON  said   the  questions   being  uncovered   are                                                               
troubling.   He opined  that the response  from the  IG regarding                                                               
Mr. North's  actions was dismissive.   He recounted  the protocol                                                               
that would  occur in a  military setting to  bring accountability                                                               
to such a situation.                                                                                                            
                                                                                                                                
3:57:38 PM                                                                                                                    
                                                                                                                                
SENATOR COGHILL noted that the  Freedom of Information Act (FOIA)                                                               
is one way to track  the performance of government officials, and                                                               
asked whether it was implemented to produce the report.                                                                         
                                                                                                                                
GENERAL RALSTON said  the FOIA was invoked,  which allowed access                                                               
and review  of over 42,000  documents; however, the 25  months of                                                               
e-mails have remained unaccounted for.                                                                                          
                                                                                                                                
SENATOR COGHILL commented that it  appears to be a general plague                                                               
to governance:  convenient computer  crashes and missing e-mails.                                                               
He opined that it creates a troubling atmosphere.                                                                               
                                                                                                                                
3:59:27 PM                                                                                                                    
                                                                                                                                
SENATOR WIELECHOWSKI  inquired about disclosure of  the names and                                                               
affiliations  of  the  people solicited  to  participate  in  the                                                               
report.                                                                                                                         
                                                                                                                                
GENERAL RALSTON  responded that over 60  people were interviewed;                                                               
however,  in the  interest of  receiving candid  responses, their                                                               
identity is confidential.                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI  queried whether  preliminary drafts  of the                                                               
report were made available to the public or the EPA.                                                                            
                                                                                                                                
GENERAL RALSTON indicated  that the EPA received a  copy prior to                                                               
publication, but not the public or the 60 participants.                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI asked  whether  the report  was subject  to                                                               
peer review.                                                                                                                    
                                                                                                                                
GENERAL  RALSTON said  the report  is not  a scientific  document                                                               
and, as such, not subject to peer review.                                                                                       
                                                                                                                                
4:00:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  noted  the observations  and  conclusions                                                               
section of  the Cohen Report states  that the purpose was  not to                                                               
comment on  whether the EPA acted  within the scope of  its legal                                                               
rights.  It  further indicates that the EPA had  the authority to                                                               
conduct the  study of the  Bristol Bay  Watershed, as well  as to                                                               
invoke Section 404(c)  at any time.  He noted  that the IG report                                                               
was solicited by the Cohen  Group and the Pebble Partnership, and                                                               
is   entitled,   "EPA's   Bristol   Bay   Watershed   Assessment:                                                               
Obtainable Records Show EPA  followed Required Procedures Without                                                               
Bias  or  Predetermination, but  a  Possible  Misuse of  Position                                                               
Noted," Report No.  16-P-0082, dated January 13, 2016.   He asked                                                               
what action  is being  suggested, given  the IG  report indicates                                                               
that bias and predetermination were absent from the ruling.                                                                     
                                                                                                                                
GENERAL  RALSTON pointed  out that  the IG  report is  narrow and                                                               
spans a discreet  section of time from  2008-2012.  Additionally,                                                               
it is  key that the  report is  based on obtainable  records, and                                                               
there were major  omissions that involved the  possible misuse of                                                               
position.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON  suggested that the scope  of the situation                                                               
appears nebulous.   The IG  report indicates that  an appropriate                                                               
ruling was made  by following procedures, and  arrived at without                                                               
bias or predetermination.  He said:                                                                                             
                                                                                                                                
     We can always  want more.  And is that  the point we're                                                                    
     at?      We   don't  like   the   inspector   general's                                                                    
     conclusions,  and therefore  we  are  saying we  should                                                                    
     have more.                                                                                                                 
                                                                                                                                
GENERAL  RALSTON repeated  that the  IG report  covered a  narrow                                                               
time span  and did not  address the fundamental issue  of whether                                                               
the fairest method  possible was being applied.   He reviewed the                                                               
continuing issues:   Phil North's  missing e-mails covering  a 25                                                               
month period; and  the Army Corp of Engineers  was not contacted,                                                               
which is  a mandated  coordination that the  EPA did  not follow.                                                               
He  opined that  a number  of deficiencies  may exist  in the  IG                                                               
report.                                                                                                                         
                                                                                                                                
MS. BUTLER added that a  number of questions and concerns alluded                                                               
were  not addressed  in  the  scope of  the  IG  report and  bear                                                               
directly on  the integrity of the  process.  These include:   the                                                               
use of  hypotheticals, third party communications  with anti-mine                                                               
advocates,  and   the  EPA's  refusal  to   accommodate  specific                                                               
requests made by the State of Alaska.                                                                                           
                                                                                                                                
4:05:17 PM                                                                                                                    
                                                                                                                                
SENATOR  COGHILL asked  whether  state  officials were  consulted                                                               
regarding the use of the 404(c).                                                                                                
                                                                                                                                
GENERAL  RALSTON recalled  that the  state made  repeated written                                                               
requests for additional time to address  the issues.  He said the                                                               
requests were discarded by the EPA.                                                                                             
                                                                                                                                
MS. BUTLER interjected  that the State of  Alaska voiced concerns                                                               
at  various stages  of  the  process and  included  a request  to                                                               
suspend determinations prior to a permit being filed.  She said:                                                                
                                                                                                                                
      The State of Alaska stated they were "damned if they                                                                      
     do, damned if they don't."  We have to participate or                                                                      
     you'll say we stood down, and if we do participate you                                                                     
     will say we had our opportunity.                                                                                           
                                                                                                                                
4:06:31 PM                                                                                                                    
                                                                                                                                
SENATOR COGHILL asked  about the credibility of  the science base                                                               
used by the EPA regarding the watershed determination.                                                                          
                                                                                                                                
GENERAL RALSTON  maintained that it  was not possible to  make an                                                               
assessment  without a  permit application  to  indicate what  the                                                               
developer was proposing.                                                                                                        
                                                                                                                                
MS.  BUTLER commented  that the  EPA established  a hypothetical,                                                               
relying  in  large  part  on   what  has  been  identified  as  a                                                               
mineral/material identification report,  necessary for investment                                                               
purposes, versus a mine plan.  A  mine plan focuses on how to get                                                               
the identified minerals out, she stipulated.                                                                                    
                                                                                                                                
SENATOR COGHILL asked whether there  were any assessments done on                                                               
the waters of Bristol Bay.                                                                                                      
                                                                                                                                
MS. BUTLER  responded that  an assessment  was conducted  and the                                                               
validity  of the  science used  was cause  for debate,  which the                                                               
report did not evaluate.                                                                                                        
                                                                                                                                
SENATOR  COGHILL  concluded  there  was a  hypothetical  with  an                                                               
existing  assessment that  is under  question.   He posited  that                                                               
Alaskans  should  pay close  attention  to  what that  assessment                                                               
actually says for the value.   He said the e-mails from the state                                                               
are  light,  but at  least  show  the  state made  some  appeals.                                                               
Regarding the statement about  appeals by anti-mine environmental                                                               
groups, he  asked whether those were  traced or were part  of the                                                               
missing e-mails.                                                                                                                
                                                                                                                                
GENERAL RALSTON  indicated that  the missing  communications from                                                               
the  25-month  period mentioned  could  be  illuminating on  this                                                               
topic.  However,  the EPA did not start the  404(c) process until                                                               
requested to do so by a  letter from the Alaska Native community.                                                               
Early e-mails indicate that Phil  North was coordinating with the                                                               
Native community to solicit specific action from the EPA.                                                                       
                                                                                                                                
MS. BUTLER  added that  the IG report  cites the  letter exchange                                                               
instance as the possible misuse of  position.  The impetus of the                                                               
watershed assessment was  the EPA's receipt of a  letter from the                                                               
Native Alaskan  tribes.  The investigation  revealed that someone                                                               
within the EPA  had facilitated the letter  exchange.  Allegedly,                                                               
drafts  of the  letter were  exchanged between  Mr. North  and an                                                               
agency attorney to craft a  viable correspondence, which resulted                                                               
in the watershed assessment.                                                                                                    
                                                                                                                                
SENATOR COGHILL noted  that the legal groups  involved would have                                                               
received compensation and  asked if the Cohen  Group pursued that                                                               
trail,  and opined  that it  would be  an important  direction to                                                               
follow.                                                                                                                         
                                                                                                                                
MS. BUTLER responded no.                                                                                                        
                                                                                                                                
4:11:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked whether  DLA Piper participated in                                                               
authoring the Cohen report.                                                                                                     
                                                                                                                                
MS. BUTLER replied no.                                                                                                          
                                                                                                                                
REPRESENTATIVE  JOSEPHSON recalled  that a  decade ago  there was                                                               
debate about  the U.S. Securities  and Exchange  Commission (SEC)                                                               
filings,   which   included   sworn  statements   outlining   the                                                               
expectations/scope of  the mine  project.   He asked  whether the                                                               
CWA prohibits  reliance on that  type of  data being used  for an                                                               
EPA ruling.                                                                                                                     
                                                                                                                                
GENERAL RALSTON  responded that the  SEC filing would have  to be                                                               
considered  insufficient  and in  no  way  representative of  the                                                               
scope of  the mine.  He  opined that it would  lack the necessary                                                               
level of detail required by a permit.                                                                                           
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  law  prohibits the  EPA                                                               
from applying the 404(c) action.                                                                                                
                                                                                                                                
GENERAL RALSTON  deferred comment and  opined that it is  for the                                                               
courts to decide.                                                                                                               
                                                                                                                                
4:13:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TARR  commented   that   Native  Alaskans   hold                                                               
unquestionable  rights  to  request   support  from  the  federal                                                               
government in  an area of such  great importance.  She  asked for                                                               
comment  on the  weight that  Native voices  hold at  the federal                                                               
level.    Also, she  pointed  out,  Pebble  could make  a  permit                                                               
application at any time, thus  triggering the NEPA process, which                                                               
hasn't  occurred,  and questioned  why  the  state would  involve                                                               
itself further.                                                                                                                 
                                                                                                                                
GENERAL  RALSTON   deferred  commenting  on   Pebble  Partnership                                                               
motives.  However,  he stressed, a permit cannot  be issued until                                                               
the ongoing legal  issue surrounding the EPA's  404(c) process is                                                               
resolved.    The requests  from  Alaska  Natives were  reportedly                                                               
heard from both sides, and the  NEPA process is the fairest means                                                               
for  incorporating  all  views  and  all  agencies  involved,  he                                                               
maintained.   One of the troubling  aspects of the Phil  North e-                                                               
mails, and  the missing  piece here,  is that  the EPA  IG Report                                                               
called the possible misuse of  position was his coordination with                                                               
anti-Pebble  Mine  groups when  he  is  an  EPA employee  who  is                                                               
supposedly looking at this process even-handed.                                                                                 
                                                                                                                                
MS. BUTLER added  that until a permit is issued  and subjected to                                                               
the NEPA process, a shovel can't  go into the ground, and the EPA                                                               
is not relinquishing its 404(c) right.                                                                                          
                                                                                                                                
4:16:41 PM                                                                                                                    
                                                                                                                                
CHAIR GIESSEL noted that once issued,  the agency is also able to                                                               
withdraw a permit,  and recalled a working mine  in West Virginia                                                               
having that action taken against it by the EPA.                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI pointed out  that the report being presented                                                               
today,  criticizing the  EPA for  process,  was paid  for by  the                                                               
Pebble  Partnership for  an undisclosed  amount, compiled  behind                                                               
closed  doors  in  a non-transparent  process,  and  involves  60                                                               
undisclosed sources.   He  said it is  a preliminary  report that                                                               
was not released for public  review before disclosure, nor was it                                                               
released to the 60 anonymous  participants, and has not been peer                                                               
reviewed.   The  report  doesn't deal  with  scientific or  legal                                                               
issues, he opined,  and holds no credibility as  it represents an                                                               
opinion paid for by the Pebble Partnership.                                                                                     
                                                                                                                                
4:17:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK recalled  that he  has lived  through this                                                               
type of  action before, where economic  opportunities are blocked                                                               
by the federal government.  As  an example, he offered the Arctic                                                               
National Wildlife Refuge (ANWR)  decision where the authorization                                                               
process may not have been followed.                                                                                             
                                                                                                                                
SENATOR COGHILL  said he  considers the document  to be  a public                                                               
report,  compiled  by an  outside  source,  and opined  that  the                                                               
result is non-biased.                                                                                                           
                                                                                                                                
CHAIR GIESSEL said that the state is faced with a number of                                                                     
federal regulations which often inhibit opportunities for                                                                       
development.                                                                                                                    
                                                                                                                                
4:23:12 PM                                                                                                                    
                                                                                                                                
CHAIR GIESSEL thanked the participants and announced the                                                                        
continuation of the Senate Resources Standing Committee.                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being no  further  business before  the committees,  Chair                                                               
Giessel  adjourned  the  joint meeting  of  the  House  Resources                                                               
Standing Committee  and Senate  Resources Standing  Committee, at                                                               
4:23 p.m.                                                                                                                       

Document Name Date/Time Subjects
Cohen Group Report-Executive Summary.pdf SRES 3/7/2016 3:30:00 PM
EPA-Cohen Group Report
EPA-IG Report- Bristol Bay Watershed Assessment.pdf SRES 3/7/2016 3:30:00 PM
EPA-Bristol Bay
SRES-HRES-Testimony-General Joseph Ralston.pdf SRES 3/7/2016 3:30:00 PM
Cohen Report-EPA