Legislature(2019 - 2020)BUTROVICH 205

03/25/2019 03:30 PM Senate RESOURCES

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03:30:21 PM Start
03:31:07 PM Consideration of Governor's Appointees: Jessie Chmielowski, Alaska Oil and Gas Conservation Commission
03:47:14 PM Presentation: the Pebble Partnership: Project Update, Draft Eis and Next Steps
04:33:19 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Alaska Oil & Gas Conservation Commission -
Jessie Chmielowski
The Pebble Partnership: Project Update, Draft
EIS & Next Steps by:
- Tom Collier, CEO
- John Shively, Chairman
- James Fueg, VP of Permitting
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 25, 2019                                                                                         
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Chris Birch, Chair                                                                                                      
Senator John Coghill, Vice Chair                                                                                                
Senator Cathy Giessel                                                                                                           
Senator Lora Reinbold                                                                                                           
Senator Scott Kawasaki                                                                                                          
Senator Jesse Kiehl                                                                                                             
MEMBERS ABSENT                                                                                                                
Senator Click Bishop                                                                                                            
COMMITTEE CALENDAR                                                                                                            
Alaska Oil and Gas Conservation Commission                                                                                    
Jessie Chmielowski - Anchorage                                                                                                  
     - CONFIRMATION ADVANCED                                                                                                    
PRESENTATION: "The Pebble Partnership: Project Update, Draft EIS                                                                
and Next Steps"                                                                                                                 
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
JESSIE CHMIELOWSKI, Appointee                                                                                                   
Alaska Oil and Gas Conservation Commission                                                                                      
Anchorage, Alaska                                                                                                               
POSITION   STATEMENT:    Addressed   questions    regarding   her                                                             
appointment to AOGCC.                                                                                                           
TOM COLLIER, CEO                                                                                                                
Pebble Limited Partnership                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated in  the overview of  the Pebble                                                             
JOHN SHIVELY, Chairman of the Board of Directors                                                                                
Pebble Project                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated in  the overview of  the Pebble                                                             
JAMES FUEG, Vice President of Permitting                                                                                        
Pebble Limited Partnership                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated in  the overview of  the Pebble                                                             
ACTION NARRATIVE                                                                                                              
3:30:21 PM                                                                                                                    
CHAIR CHRIS BIRCH called the  Senate Resources Standing Committee                                                             
meeting to order  at 3:30 p.m. Present at the  call to order were                                                               
Senators Coghill,  Giessel, Reinbold, Kawasaki, Kiehl,  and Chair                                                               
^Consideration  of  Governor's  Appointees:  Jessie  Chmielowski,                                                               
Alaska Oil and Gas Conservation Commission                                                                                      
                     CONFIRMATION HEARING:                                                                                  
           Alaska Oil and Gas Conservation Commission                                                                       
3:31:07 PM                                                                                                                    
CHAIR BIRCH announced the consideration  of an appointment to the                                                               
Alaska Oil  and Gas Conservation  Commission (AOGCC). AOGCC  is a                                                               
three-member  commission  that  oversees oil  and  gas  drilling,                                                               
development  and  production,  reservoir depletion  and  metering                                                               
operations. AOGCC acts  on behalf of the state  to prevent waste,                                                               
protect  correlative  rights,   improve  ultimate  recovery,  and                                                               
protect underground fresh water.                                                                                                
He  said   Ms.  Chmielowski  was   appointed  to   the  petroleum                                                               
engineer's  seat on  March  7,  2019. Her  term  with AOGCC  will                                                               
expire in 2025.                                                                                                                 
3:31:56 PM                                                                                                                    
JESSIE CHMIELOWSKI,  Appointee, Alaska  Oil and  Gas Conservation                                                               
Commission,  Anchorage,   Alaska,  said  she  wants   to  be  the                                                               
Petroleum   Engineering  Commissioner   for  AOGCC   because  the                                                               
position is  a very  important role  that she  thinks she  can do                                                               
very well.  She said using  her skills and experience  to protect                                                               
the  public  interest  in  Alaska's  oil  and  gas  resources  is                                                               
something  that  she  will  be  honored  and  proud  to  do.  She                                                               
disclosed that  Alaska has been  her home for nearly  two decades                                                               
and  the state  is where  she  plans to  stay. She  said she  has                                                               
enjoyed  working on  projects cooperatively  with AOGCC  and said                                                               
she  will be  happy to  join the  commission's smart  and capable                                                               
3:32:46 PM                                                                                                                    
MS. CHMIELOWSKI  provided her personal background  information as                                                               
   • Grew up in the San Francisco area.                                                                                         
   • Attended Rice University:                                                                                                  
        o Received a Bachelor of Science Degree in Chemical                                                                     
        o Received a Bachelor of Arts Degree in Environmental                                                                   
   • Moved to Alaska in 2000.                                                                                                   
   • Her husband and children were born in Alaska.                                                                              
She   provided  her   professional  background   information  and                                                               
qualifications for her AOGCC appointment as follows:                                                                            
   • Registered as a professional petroleum engineer in the                                                                     
     State of Alaska.                                                                                                           
   • Nineteen years of experience, all in Alaska.                                                                               
   • Spent three years as an engineer on the North Slope and                                                                    
     understands oil field operations from "sand face to sales                                                                  
   • Engineering knowledge includes seismic in geology, drilling                                                                
     incompletions, well work artificial lift, operations and                                                                   
     facilities, metering, and oil integrity issues.                                                                            
   • Deep and broad understanding of oil and gas developments in                                                                
     Alaska having worked as an engineer on a variety of                                                                        
     reservoirs and fluid types: light oil, viscous oil, and                                                                    
     heavy oil.                                                                                                                 
   • Direct government regulatory experience from her position                                                                  
     as the Senior Petroleum Engineer for the Bureau of Land                                                                    
     Management (BLM) in Alaska.                                                                                                
        o Covered the regulatory oversite functions of both the                                                                 
          AOGCC and the Division of Oil and Gas.                                                                                
        o Worked on projects cooperatively with the State of                                                                    
        o Reviewed    drilling   permits    and   fiscal    meter                                                               
          applications like the AOGCC.                                                                                          
        o Worked on unit agreements and development obligations.                                                                
        o Main point of contact at BLM for decision pertaining                                                                  
          to ConocoPhillips' new developments in the National                                                                   
          Petroleum Reserve-Alaska (NPRA).                                                                                      
MS. CHMIELOWSKI  summarized that she  has a holistic view  of the                                                               
entire oil and  gas process and her experience will  be a benefit                                                               
to the State of Alaska.                                                                                                         
3:34:50 PM                                                                                                                    
SENATOR REINBOLD asked Ms. Chmielowski  to detail her engineering                                                               
MS.  CHMIELOWSKI  specified  that  she has  degrees  in  chemical                                                               
engineering and  environmental sciences, and she  is a registered                                                               
professional petroleum engineer.                                                                                                
SENATOR  REINBOLD  commented  that  she  is  impressed  with  Ms.                                                               
Chmielowski's background.                                                                                                       
SENATOR  KAWASAKI  noted  that  something  was  redacted  in  Ms.                                                               
Chmielowski's resume regarding her education.                                                                                   
MS.  CHMIELOWSKI replied  that  there is  nothing  in her  resume                                                               
regarding education that she thinks  is confidential and she does                                                               
not know why there is a redaction.                                                                                              
CHAIR BIRCH  remarked that  the year  noted on  Ms. Chmielowski's                                                               
resume may have been redacted.                                                                                                  
MS. CHMIELOWSKI concurred with Chair Birch.                                                                                     
SENATOR  KAWASAKI asked  if  during her  time  at BLM-Alaska  she                                                               
confidentially  held proprietary  information  regarding oil  and                                                               
gas leasing in NPRA.                                                                                                            
MS. CHMIELOWSKI  answered yes. She  said the information  is like                                                               
the confidential information AOGCC currently holds.                                                                             
SENATOR KAWASAKI  asked if there  will be a conflict  of interest                                                               
based on her BLM experience.                                                                                                    
3:37:15 PM                                                                                                                    
MS. CHMIELOWSKI answered  that there is no  conflict of interest.                                                               
The confidential information is available to both BLM and AOGCC.                                                                
SENATOR GIESSEL noted  that she was the lead on  the legacy wells                                                               
issue, also  known as  the Travesty Wells.  She asked  if someone                                                               
has taken over her position at BLM.                                                                                             
MS. CHMIELOWSKI  explained that she  spent two winter  seasons on                                                               
the legacy wells and then went  on to NPRA oversite. She said BLM                                                               
did not replace and noted her  concern that BLM is running out of                                                               
funds to continue plugging wells.                                                                                               
SENATOR GIESSEL noted  that she has been on the  job at AOGCC for                                                               
several weeks and  asked her impression of how  the commission is                                                               
functioning, its  staffing levels, and  if she believes  there is                                                               
enough funding to do her job well.                                                                                              
MS.  CHMIELOWSKI  answered  that  through her  work  at  BLM  and                                                               
working  on  projects  with  AOGCC, she  is  impressed  with  the                                                               
commission's high level of expertise.  She said her understanding                                                               
is  that   AOGCC  is  staffed   appropriately.  AOGCC   has  nine                                                               
inspectors  and that  is one  of the  critical pieces  for having                                                               
"eyes on the ground" to keep an eye on the operations.                                                                          
SENATOR GIESSEL asked  if she has the resources she  needs at the                                                               
MS. CHMIELOWSKI answered yes.                                                                                                   
SENATOR GIESSEL noted that Ms.  Chmielowski's husband is employed                                                               
by  Oil  Search  (Alaska)  LLC.   She  asked  how  her  husband's                                                               
employment will  be addressed should  an issue come  forward from                                                               
Oil Search.                                                                                                                     
MS.  CHMIELOWSKI answered  that AOGCC  is an  independent, quasi-                                                               
judicial commission that must be  unbiased. She said she is fully                                                               
open  and transparent  with all  her  personal relationships  and                                                               
will  fully recuse  herself if  appropriate. She  noted that  she                                                               
sold her  BP stock and  does not have  any interest in  any other                                                               
SENATOR GIESSEL asked what her husband's role is at Oil Search.                                                                 
MS. CHMIELOWSKI  answered that her  husband is Vice  President of                                                               
Exploration at Oil Search.                                                                                                      
3:40:24 PM                                                                                                                    
SENATOR  KIEHL asked  if  she  has a  background  for the  quasi-                                                               
judicial hearing part at AOGCC.                                                                                                 
MS.  CHMIELOWSKI  opined that  AOGCC  is  unique regarding  their                                                               
independent,  quasi-judicial, and  unbiased  role. She  explained                                                               
that through her role at BLM  she did enter the sphere of viewing                                                               
operations and  decisions from  a government  point of  view. She                                                               
said keeping her actions clear,  open, and transparent along with                                                               
consulting fellow AOGCC commissioners will be of value to her.                                                                  
SENATOR KIEHL  said she  made a  good point  that while  AOGCC is                                                               
quasi-judicial, the  commission does  not tend to  have a  lot of                                                               
hearings. He  asked if she  is receiving or seeking  any training                                                               
or help in learning the quasi-judicial functions at AOGCC.                                                                      
MS. CHMIELOWSKI answered  yes. She said she wants to  do the best                                                               
that she  can by seeking  mentorship or advice  where appropriate                                                               
on the correct way to handle meetings or hearings at AOGCC.                                                                     
3:41:58 PM                                                                                                                    
CHAIR BIRCH opened and closed public testimony.                                                                                 
SENATOR  GIESSEL reviewed  the qualifications  fact sheet  for an                                                               
appointee   serving  at   AOGCC  and   noted  that   adjudication                                                               
experience is not a requirement  for the regulatory position that                                                               
deals with fact and science  behind the extraction of the state's                                                               
resources  to maximize  extraction  for the  maximum benefit  for                                                               
Alaskans. She  detailed the qualifications for  the engineer seat                                                               
as follows:                                                                                                                     
     Qualified petroleum  engineer who  has earned  a degree                                                                    
     from a university  in the field of  engineering and has                                                                    
     at   least   10   years  of   professional   subsurface                                                                    
     experience  in the  oil and  gas industry  in drilling,                                                                    
     well   operations,   production   process   operations,                                                                    
     reservoir engineering, or a combination there of.                                                                          
She  said   Ms.  Chmielowski's  resume  certainly   and  robustly                                                               
represents  the  previously   noted  qualifications  for  AOGCC's                                                               
highly technical position.                                                                                                      
3:43:50 PM                                                                                                                    
CHAIR  BIRCH stated  that in  accordance with  AS 39.05.080,  the                                                               
Senate Resources Committee reviewed  the following and recommends                                                               
the   appointment   be  forwarded   to   a   joint  session   for                                                               
Alaska Oil and Gas Conservation Commission                                                                                      
Jessie Chmielowski - Anchorage.                                                                                                 
CHAIR  BIRCH  reminded members  that  this  does not  reflect  an                                                               
intent  by  any  of  the  members to  vote  for  or  against  the                                                               
confirmation of the individual during any further sessions.                                                                     
3:44:28 PM                                                                                                                    
At ease.                                                                                                                        
^PRESENTATION: The Pebble Partnership:  Project Update, Draft EIS                                                               
and Next Steps                                                                                                                  
PRESENTATION: The Pebble Partnership: Project Update, Draft EIS                                                             
                         and Next Steps                                                                                     
3:47:14 PM                                                                                                                    
CHAIR  BIRCH called  the committee  back  to order.  He said  the                                                               
Pebble Limited  Partnership (PLP) will  provide an update  on the                                                               
Pebble Project. He said the  Senate Resources Committee requested                                                               
an update on  the project considering the  recently released U.S.                                                               
Army  Corps  of  Engineers' (USACE)  Draft  Environmental  Impact                                                               
Statement (EIS) that details the  potential impacts of developing                                                               
a  large copper  and gold  mine in  the Bristol  Bay region.  The                                                               
Draft EIS is open for public comment until May 30, 2019.                                                                        
3:48:11 PM                                                                                                                    
TOM COLLIER, CEO, Pebble  Limited Partnership, Anchorage, Alaska,                                                               
explained that during his career  he has dealt with environmental                                                               
issues and  permitting large controversial  projects. He  said he                                                               
worked during  the Clinton Administration  as the Chief  of Staff                                                               
for  Bruce  Babbitt, Secretary  of  the  U.S. Department  of  the                                                               
Interior, and  addressed some  of the  nation's biggest  and most                                                               
difficult environmental challenges at the time.                                                                                 
He said one of  the reasons he was chosen for the  job at PLP was                                                               
his perspective  that natural resource opportunities  should only                                                               
be   done  responsibly.   Choosing   between  natural   resources                                                               
development and  environmental protection is a  false dilemma and                                                               
the two can  coexist. Determining coexistence is  done by looking                                                               
intensively and comprehensively at  the available science and the                                                               
way  to do  that is  through an  EIS. PLP  has gotten  the Pebble                                                               
Project to  the point  where an  independent assessment  by USACE                                                               
addresses the project's controversial issues.                                                                                   
3:50:33 PM                                                                                                                    
MR. COLLIER addressed "Copper is  Essential for Green Technology"                                                               
from  his  presentation  and opined  that  modern  life  probably                                                               
traces back  to mining  of some type,  especially for  copper. He                                                               
said for technology in America, when  people tell him they do not                                                               
want copper  mines built, he said  he asks if they  will hand him                                                               
their cellphone.  He emphasized  that copper  mining is  not just                                                               
about the  use of  copper in technology,  but especially  for its                                                               
use in green technology where  enormous amounts of copper is used                                                               
for wind turbines, solar panels, and electric vehicles.                                                                         
He said there is a  "dirty little secret" where forecasts predict                                                               
there  will be  a massive  gap in  worldwide copper  availability                                                               
starting  in 2021  when copper  resources start  to fall  off and                                                               
demand  increases. The  Pebble Project  will fit  right into  the                                                               
copper  availability  gap as  a  necessary  source to  solve  the                                                               
supply dilemma.                                                                                                                 
He explained that  needing to develop copper  raises the question                                                               
about where to  develop copper. Copper can be  developed in third                                                               
world countries  where there is  no environmental  protection and                                                               
disasters occur,  or copper  can be developed  in the  U.S. where                                                               
the country has the most  rigorous environmental regime that will                                                               
protect the environment  while allowing PLP to  develop copper at                                                               
the  same time.  Alaska has  the highest  standards for  resource                                                               
development and PLP thinks the state  is the place to do a copper                                                               
3:52:26 PM                                                                                                                    
He addressed  "Facts about Pebble"  in his overview. He  said the                                                               
project will mine copper, gold,  silver, molybdenum, and rhenium.                                                               
He explained that rhenium is a  critical mineral that is used for                                                               
propeller  blades in  jet fighters'  engines. He  noted that  the                                                               
Pebble Project has a large source of rhenium.                                                                                   
He detailed that the Pebble  Project's deposit is located on land                                                               
that is owned by  the state. He pointed out that  the land is not                                                               
accidentally  owned  by  the  state, the  state  went  after  the                                                               
location  for  possible  mineral   development  in  exchange  for                                                               
valuable timber land.                                                                                                           
3:55:40 PM                                                                                                                    
He addressed  the Pebble  Project's redesigned  mining footprint.                                                               
He noted that mine opponents  show pictures of the project's site                                                               
teaming  with  rivers,  but  the location  is  not  teaming  with                                                               
rivers. He explained  that when he and Mr.  Shively came onboard,                                                               
the project was  at a crossroads and a decision  was made to take                                                               
a step  back and  assess the  opposition's concerns  and redesign                                                               
the  project  in a  way  that  is  directly responsive  to  those                                                               
MR.  COLLIER  opined  that  PLP's response  to  the  concerns  is                                                               
dramatic. The mine  has been reduced to a 20-year  project with a                                                               
smaller footprint.  The project's smaller footprint  is no longer                                                               
within the Upper Talarik and  Kvichak watershed. Cyanide will not                                                               
be brought  in to  recover approximately 12  percent of  the gold                                                               
from the mine. The project is  now designed to not have any waste                                                               
rock  piles.   A  significant   amount  of   work  was   done  on                                                               
environmental safeguards,  particularly with water  treatment and                                                               
the tailing's facilities.  The mining project that  PLP has taken                                                               
into permitting  is not the  project that was being  talked about                                                               
over the last 12 years. He  noted that the project's footprint is                                                               
one-fifth the size of what was initially proposed.                                                                              
He opined  that the Pebble  Project is  a real asset  for Alaska.                                                               
The project is going to create  thousands of jobs and hundreds of                                                               
millions in  tax revenue.  PLP believes  that the  Pebble Project                                                               
can be developed safely without  damaging the Bristol Bay fishery                                                               
via the EIS  process. PLP has invested a lot  of time, money, and                                                               
effort in the  EIS process and now an  independent federal agency                                                               
has agreed  that the Pebble  Project will not damage  the Bristol                                                               
Bay fishery.                                                                                                                    
3:57:36 PM                                                                                                                    
He explained  that the National  Environmental Policy  Act (NEPA)                                                               
process  involves 60  separate  permit  categories with  federal,                                                               
state, and local  authorities. The NEPA process  is a substantial                                                               
one that  is rigorous,  demanding, transparent,  and accountable;                                                               
however, the NEPA process is the right process.                                                                                 
He  said one  of  the  Pebble Project's  major  opponents is  the                                                               
Natural Resources Defense Council  (NRDC). He disclosed that NRDC                                                               
says  NEPA  is the  "democratic  process"  to make  environmental                                                               
decisions. The  NRDC also says the  EIS, done under NEPA,  is the                                                               
"Magna Carte" of  environmental protection and that  is where the                                                               
Pebble Project is today via the Draft EIS.                                                                                      
MR.  COLLIER explained  that the  Draft  EIS is  produced by  the                                                               
USACE,  but most  importantly the  Draft EIS  is independent.  He                                                               
emphasized that no one could have  worked on the project's EIS if                                                               
they had previously  worked on either side of  the Pebble Project                                                               
or  had  publicly expressed  an  opinion  about the  project.  He                                                               
detailed  that independent  scientists  were brought  to the  EIS                                                               
effort, but  they did  not work alone.  Agencies involved  in the                                                               
Draft EIS  process includes the  U.S. Fish and  Wildlife Service,                                                               
the U.S.  Environmental Protection Agency (EPA),  state agencies,                                                               
the  Lake   and  Peninsula  Borough,   and  35   separate  tribal                                                               
3:59:16 PM                                                                                                                    
SENATOR  KIEHL asked  him  to explain  the  involvement of  state                                                               
agencies  with the  Pebble  Project. He  inquired  if the  Alaska                                                               
Department  of Environmental  Conservation (DEC)  and the  Alaska                                                               
Department of Fish  and Game (ADF&G) have been  fully involved or                                                               
are now involved with the project.                                                                                              
MR. COLLIER replied that the  departments have been involved in a                                                               
little  bit of  both.  He explained  that  there was  involvement                                                               
during the  Draft EIS  process, but  more involvement  will occur                                                               
during the public  comment period for both the Draft  EIS and the                                                               
Final EIS.                                                                                                                      
SENATOR KIEHL pointed to  the government-to-government section in                                                               
the  overview where  the Pebble  Project has  35 Bristol  Bay and                                                               
Cook  Inlet tribal  governments  involved. He  asked  if all  the                                                               
tribal governments are supportive or  have taken positions on the                                                               
MR. COLLIER  replied that  there are  tribes that  are supportive                                                               
and tribes that are not supportive.  He conceded that most of the                                                               
Bristol   Bay  and   Cook  Inlet   tribal  governments   are  not                                                               
supportive.  The  EPA  invited  all  the  tribal  governments  to                                                               
participate  in  the government-to-government  negotiations  with                                                               
respect to the EIS. The 35  tribal governments noted in the Draft                                                               
EIS overview are the ones that chose to participate.                                                                            
He addressed the EIS schedule as follows:                                                                                       
   • EIS application filed in December 2017.                                                                                    
   • Draft EIS has just been issued and the public review                                                                       
     process has started.                                                                                                       
   • The public comment period and public hearings will last                                                                    
     through May 30.                                                                                                            
   • The projection for the draft of the Final EIS will be early                                                                
     2020 with a Record of Decision (ROD) in mid-2020.                                                                          
4:01:28 PM                                                                                                                    
MR. COLLIER said there have been  a lot of conversation about the                                                               
Pebble Project  process being rushed,  but the project  is moving                                                               
through the permit process in  two-and-a-half to three years. PLP                                                               
has looked at  other development projects in Alaska  and how long                                                               
they have taken is detailed as follows:                                                                                         
   • Pogo Mine:                                                                                                                 
        o In August  2000, Teck-Pogo Inc.  applied for  a Section                                                               
          404  permit  for  a proposed  underground  cut-and-fill                                                               
          gold  mine  on  State   of  Alaska-owned  land  in  the                                                               
          Goodpaster River Valley.                                                                                              
        o EPA, in close consultation  with the USACE, published a                                                               
          Draft  EIS in  March 2003,  then a  Final EIS  in Sept.                                                               
          2003  three years and a month after the application.                                                                  
   • Kensington Mine:                                                                                                           
        o In  2001,  Coeur Mining  redefined  the  scope for  its                                                               
          development  of an  underground  gold  mine within  the                                                               
          Tongass National Forest outside of Juneau.                                                                            
        o This  necessitated   a  new  NEPA  review,   which  was                                                               
         completed three years later in December 2004.                                                                          
   • Red Dog Mine:                                                                                                              
        o EPA prepared the  EIS for the expansion of  the Red Dog                                                               
          Mine into the Aqqaluk deposit in northwest Alaska.                                                                    
        o The permitting process started in  mid-2007 and the EIS                                                               
          was  finished during  Fall 2009,  taking just  over two                                                               
        o USACE was a cooperating agency.                                                                                       
   • Point Thomson:                                                                                                             
        o USACE  was  the  lead  agency   for  the  EIS  for  the                                                               
          development of ExxonMobil's  Point Thomson oil facility                                                               
          on the North Slope of Alaska.                                                                                         
        o The EIS  process began in  late 2009 and the  Final EIS                                                               
          was  issued mid=2012,  taking approximately  two and  a                                                               
          half years.                                                                                                           
   • ConocoPhillips GMT-1 Project:                                                                                              
        o In 2013,  ConocoPhillips moved forward  with permitting                                                               
          of  its proposed  Greater Moose's  Tooth-1 oil  and gas                                                               
          project in the National Petroleum Reserve-Alaska.                                                                     
        o The  Bureau  of  Land  Management (BLM)  was  the  lead                                                               
          agency and USACE was a cooperating agency.                                                                            
        o The EIS process  began in August 2013  and concluded by                                                               
          November 2014, taking just over a year.                                                                               
   • ConocoPhillips GMT-2 Project:                                                                                              
        o ConocoPhillips  began permitting  the Greater  Mooses-2                                                               
          project in 2016.                                                                                                      
        o Like  GMT-1,  the  GMT-2 project  is  in  the  National                                                               
          Petroleum Reserve-Alaska.                                                                                             
        o The  EIS   was  overseen  by   BLM  with  USACE   as  a                                                               
          cooperating agency.                                                                                                   
        o The EIS  process began during  July 2016  and concluded                                                               
          just over two years later in September 2018.                                                                          
   • Hilcorp Liberty Project:                                                                                                   
        o Hilcorp  is the  operator of  the Liberty  oil and  gas                                                               
          leases in the federal OCS off the North Slope of                                                                      
        o The leases are  overseen by the Bureau  of Ocean Energy                                                               
          Management (BOEM).                                                                                                    
        o Hilcorp began permitting the Liberty Project in 2015.                                                                 
        o BOEM  started the  EIS process  in  September 2015  and                                                               
         completed it three years later in August 2018.                                                                         
MR.  COLLIER  opined  that  the Point  Thomson  Project  is  most                                                               
comparable to  the Pebble Project.  The project at  Point Thomson                                                               
was  a new  project  going into  a  new area  in  the state.  The                                                               
project had a  lot of issues associated with it,  but the project                                                               
was able  to move  through the entire  permitting process  in two                                                               
and a  half years. He  said PLP  believes that the  Point Thomson                                                               
Project is  the analog to Pebble  Project and acts as  proof that                                                               
PLP is on the right timeline.                                                                                                   
He said one  of the other issues that has  been raised is whether                                                               
the public  comment period for  the Pebble Project has  been long                                                               
enough. The  statute requires 45  days, the Corps  announced that                                                               
the Pebble Project  will have a 90-day public  comment period. He                                                               
disclosed  that  there has  been  some  concern that  the  Pebble                                                               
Project's  90-day public  comment period  is not  long enough,  a                                                               
time period  that is somehow  shorter than what has  usually been                                                               
the  case for  projects in  Alaska. He  cited the  public comment                                                               
periods for the following projects:                                                                                             
   • ANWR Coastal Plain Oil and Gas Leasing:                                                                                    
        o Comment period: 45 days.                                                                                              
        o Comment period extended: 30 days.                                                                                     
   • Tongass Timber Sale on Prince of Wales (POW) Island:                                                                       
        o Comment period: 45 days.                                                                                              
   • ConocoPhillips GMT 2:                                                                                                      
        o Comment period: 45 days.                                                                                              
        o Comment period extended: 10 days.                                                                                     
   • Oil Search Nanushuk Project:                                                                                               
        o Comment period: 45 days.                                                                                              
        o Comment period extended: 30 days.                                                                                     
   • Hilcorp Liberty Project:                                                                                                   
        o Comment period: 90 days.                                                                                              
        o Comment period extended: 22 days.                                                                                     
   • Alaska Stand Alone Pipeline Project:                                                                                       
        o Comment period: 45 days.                                                                                              
        o Comment period extended: 15 days.                                                                                     
   • Donlin Gold:                                                                                                               
        o Comment period: 155 days.                                                                                             
        o Comment period extended: 31 days.                                                                                     
   • Chukchi Sea OCS Oil and Gas Lease Sale 193:                                                                                
        o Comment period: 45 days.                                                                                              
   • Bristol Bay Watershed Assessment:                                                                                          
        o Comment period: 32 days.                                                                                              
        o Comment period extended: 6 days.                                                                                      
   • ConocoPhillips GMT1:                                                                                                       
        o Comment period: 60 days.                                                                                              
   • Exxon Mobile Corporation - Point Thomson:                                                                                  
        o Comment period: 45 days.                                                                                              
        o Comment period extended: 15 days.                                                                                     
   • Point Mackenzie Railroad Expansion:                                                                                        
        o Comment period: 56 days.                                                                                              
   • Red Dog Aqqaluk Expansion:                                                                                                 
        o Comment period: 60 days.                                                                                              
MR. COLLIER opined that the Pebble Project is "right in the                                                                     
sweet spot" and maybe on the "high end" of what is usual for a                                                                  
public comment period.                                                                                                          
He summarized that the Draft  EIS addresses three issues that are                                                               
most important:  water quality and  quantity are  not diminished,                                                               
cyanide is not coming into the  region, and all water the project                                                               
comes  in  contact  with  will  be treated  to  Clean  Water  Act                                                               
standards and released with  a sophisticated computerized program                                                               
to optimize conditions for salmon in the region.                                                                                
4:04:31 PM                                                                                                                    
MR.  COLLIER detailed  the  project's  water treatment  operation                                                               
that involves  a bulk tailings  facility and a  water containment                                                               
pond   for  treatment   prior  to   release,  even   during  high                                                               
precipitation  years.  The  Draft  EIS  carefully  looks  at  the                                                               
project's water  resource issue  and concludes,  "A sophisticated                                                               
management  plan  will  discharge  water into  all  three  nearby                                                               
streams to  benefit fish  habitat." He added  that the  Draft EIS                                                               
also states,  "There will be  no downstream impacts from  the pit                                                               
in post closure."                                                                                                               
He said PLP  looked hard at the project's  tailings facilities to                                                               
address concerns with respect to  what has happened with tailings                                                               
in  other   countries.  The  Pebble  Project   has  combined  the                                                               
location's natural  resources and  features to  engineer features                                                               
that  are designed  according to  very conservative  criteria for                                                               
maximum safety.  The bulk tailings  facility will allow  water to                                                               
flow through and get captured in  a containment pond on the other                                                               
side  of the  facility's  dam.  The reason  for  the water  flow-                                                               
through is to  avoid failures like what occurred  at Mount Polley                                                               
in Canada due to the capture and containment of too much water.                                                                 
4:07:25 PM                                                                                                                    
He   explained   that   prior   to   the   tailings   facilities'                                                               
construction, the  Alaska Dam Safety  Program must  first certify                                                               
the  project.  He  opined  that certification  is  a  "big  deal"                                                               
because  the  Alaska Dam  Safety  Program  is probably  the  most                                                               
rigorous program in the country  and its day-to-day management is                                                               
certainly the most rigorous in the country.                                                                                     
SENATOR  KIEHL   noted  that  the   legislature  just   passed  a                                                               
supplemental appropriation bill for  recent earthquake damage. He                                                               
asked  what  the  project's seismic  standards  are  designed  to                                                               
MR. COLLIER  answered that the  seismic standards the  project is                                                               
designed to  withstand are "huge".  He opined that  Alaska thinks                                                               
of itself as  an earthquake zone, but not  many earthquakes occur                                                               
in the Bristol Bay area. He  noted that the "big earthquake" that                                                               
occurred in Anchorage  was not felt at the mine  site because the                                                               
fault  lines  are  not  in  the area;  however,  the  project  is                                                               
designed for a  very significant earthquake. He  pointed out that                                                               
the  recent earthquakes  in  Chile  impacted tailings  facilities                                                               
that  were essentially  "pilings of  sand". The  Pebble Project's                                                               
tailings  facilities  are designed  to  a  much higher  than  the                                                               
necessary standard.                                                                                                             
SENATOR  KIEHL asked  what  page in  the  Draft EIS  specifically                                                               
provides  the seismic  number that  the  tailings facilities  are                                                               
designed to withstand.                                                                                                          
MR. COLLIER replied  that he will provide the  information to the                                                               
4:09:54 PM                                                                                                                    
He explained  that the pyritic  tailings facility is  fully lined                                                               
because  pyritic   tailings  present  the  risk   of  potentially                                                               
generating acid.  He provided details on  the tailings facilities                                                               
as follows:                                                                                                                     
   • Pyritic tailings:                                                                                                          
        o Water must cover the tailings.                                                                                        
        o Facility is fully lined.                                                                                              
        o Account for 12 percent of the total tailings.                                                                         
        o Separating the tailings results in a smaller facility.                                                                
   • Bulk tailings:                                                                                                             
        o Facility will not be lined.                                                                                           
        o Tailings stored below the water table.                                                                                
        o A lake will cover the tailings.                                                                                       
He noted that the Draft  EIS addressed the tailings facilities as                                                               
   • Catastrophic failure is extremely unlikely.                                                                                
   • USACE did multiple failure scenario evaluations and                                                                        
     concluded that there are no population level impacts for                                                                   
     fish from the tailings' releases.                                                                                          
He reiterated that the Pebble  Partners will not build the Pebble                                                               
mine if salmon  in the region are  going to be at  risk. Over the                                                               
past decade the  Pebble Project spent $150  million just studying                                                               
the  area's:  wetlands,  groundwater,  surface  water,  migration                                                               
patterns, and fish habitat.                                                                                                     
4:12:07 PM                                                                                                                    
He explained  that the  starting point for  the analysis  is that                                                               
escapement is  very low in  the mine  area because there  are not                                                               
many fish.  The Upper  Talarik drainage  had about  four-tenth of                                                               
one percent of all the salmon in  Bristol Bay that come up to the                                                               
mine  area. The  South Fork  Koktuli and  the North  Fork Koktuli                                                               
account  for  eight-one-hundredths  of one  percent  of  all  the                                                               
salmon in Bristol Bay that would be at risk in the mine area.                                                                   
SENATOR COGHILL  asked if  the escapement is  for all  of Bristol                                                               
Bay or just the fish that flow up the river.                                                                                    
MR.  COLLIER specified  that it  is the  escapement up  the river                                                               
from Bristol Bay.                                                                                                               
He opined that  mining and fish do coexist.  The Pebble Project's                                                               
plan applies the best science  and Alaska's highest standards. He                                                               
pointed  out  that   in  Alaska  there  is  a   long  history  of                                                               
responsible development  that coexists with fish  and wildlife at                                                               
Fort Knox, Greens Creek, Kensington, Pogo, and Red Dog mines.                                                                   
He said  over 12  years has  been spent  talking about  whether a                                                               
mine  will risk  Bristol Bay's  fishery. He  emphasized that  the                                                               
Draft EIS  provides an independent  and scientific  analysis that                                                               
there  is no  long-term  change  to the  health  effect from  the                                                               
Pebble  Project  on Bristol  Bay  and  Cook Inlet  fisheries.  He                                                               
detailed that the study shows  the Pebble Project will not reduce                                                               
the returning of adult salmon  in Bristol Bay's river systems and                                                               
the impact  from the project  will not decrease the  abundance of                                                               
the fish and wildlife resource.                                                                                                 
4:14:34 PM                                                                                                                    
JOHN  SHIVELY,  Chairman  of  the   Board  of  Directors,  Pebble                                                               
Project, Anchorage,  Alaska, provided his  background information                                                               
to committee members. He emphasized  that he took the position at                                                               
Pebble  Project  because he  is  convinced  by science  that  the                                                               
project can  be built  safely while  bringing major  economic and                                                               
cultural  benefits to  the region's  rural communities.  He noted                                                               
that he had worked on getting  the Red Dog mine started with NANA                                                               
and Cominco  American. He highlighted the  project's significance                                                               
for the region: it allowed a  borough government to be set up, it                                                               
allowed money to flow into  the borough government to improve the                                                               
education system, and it created  jobs. He opined that the Pebble                                                               
Project will provide  both economic and cultural  benefits to the                                                               
region.  He said  rural  communities are  losing  people and  the                                                               
project  will allow  people  to  stay and  work.  Working at  the                                                               
Pebble  mine  will  allow  for   participation  in  the  region's                                                               
subsistence  economy which  is so  important to  local's economic                                                               
and cultural wellbeing.                                                                                                         
4:17:18 PM                                                                                                                    
He pointed  out that  the Pebble  Project will  provide statewide                                                               
benefits. The Pebble Project will  spend over $400 million a year                                                               
in operations  that will go  towards wages,  equipment companies,                                                               
airlines, and food service companies.                                                                                           
MR.  SHIVELY opined  that  the  Pebble Project  will  have a  tax                                                               
impact.   The   Lake   and   Peninsula   Borough   will   receive                                                               
approximately three times  its current budget. He  noted that the                                                               
borough is  facing very  serious difficulties,  particularly with                                                               
their education system. Last year  the borough reduced the school                                                               
year  by 20  days due  to the  economic problems  the borough  is                                                               
He emphasized that the Pebble Project  will have an impact on the                                                               
state.  The project  will  pay  three kinds  of  payments to  the                                                               
state:  mining  license  tax, corporate  income  tax,  and  state                                                               
royalties which  go into the  permanent fund because  the project                                                               
is on state land.                                                                                                               
He  detailed that  the Pebble  Project  will provide  750 to  850                                                               
jobs. PLP believes  that a number of the project's  jobs, as with                                                               
the  Red Dog  mine, will  be  held by  local people  who will  be                                                               
trained  to take  those jobs.  The  average mining  wage is  over                                                               
$100,000 a  year. The project's  jobs are  primarily "rotational"                                                               
and that  will allow employees to  both make money to  feed their                                                               
families and to participate in subsistence activities.                                                                          
He  said the  Draft EIS  points out  that the  project's benefits                                                               
will be  most apparent in  the region's small  rural communities.                                                               
He  noted that  the project's  strongest support  is from  people                                                               
that are closest to the mine  because they have already seen some                                                               
of the project's benefits that  were provided during exploration.                                                               
The  Draft EIS  says  the  project will  have  minimal impact  on                                                               
access  to  subsistence  resources  with no  change  in  resource                                                               
4:19:49 PM                                                                                                                    
He opined that jobs and tax  revenues are important, but the most                                                               
effective  social  program the  project  will  provide is  giving                                                               
somebody a  job. He  emphasized that  providing jobs  will change                                                               
people's  lives. People  with jobs  tend  to have  more hope  and                                                               
behave better because they have a reason to behave better.                                                                      
He noted  that during the  Pebble Project's  exploration program,                                                               
PLP supported  the Alaska Native Science  and Engineering Program                                                               
at  $75,000  a year  as  well  as  supported geology  and  mining                                                               
programs  in  Fairbanks  and  Anchorage.  PLP  also  supported  a                                                               
variety of  social programs throughout  the region and  state. He                                                               
summarized that  when the  state gets a  project like  the Pebble                                                               
Project, the state  gets a company that is dedicated  to not only                                                               
jobs, tax revenues and economic impact,  but the state will see a                                                               
very important underlying social impact as well.                                                                                
MR. COLLIER summarized  that PLP thinks the Draft  EIS provides a                                                               
clear  path  forward.  It clearly  says  that  Alaska's  resource                                                               
projects already  coexist with fishing.  The Pebble  Project will                                                               
use  industry  best  practices. The  project's  benefits  include                                                               
increasing revenue,  employment, and education. There  will be no                                                               
downstream impacts from  the pit in post closure,  and there will                                                               
be no  long-term change  in the  health of  Bristol Bay  and Cook                                                               
Inlet fisheries.  Alaska knows how  to develop  resource projects                                                               
and PLP is eager  for the Pebble Project to be  the next one that                                                               
is developed. PLP  believes that the Pebble Project  is the right                                                               
mine  at the  right time  and the  partnership is  moving forward                                                               
with the project.                                                                                                               
SENATOR REINBOLD asked  Mr. Fueg if there are  competing mines or                                                               
competing opportunities in the area.                                                                                            
4:22:36 PM                                                                                                                    
JAMES  FUEG,   Vice  President  of  Permitting,   Pebble  Limited                                                               
Partnership, Anchorage,  Alaska, answered  that there  is nothing                                                               
in the  immediate area that  PLP is aware  of. He said  there are                                                               
other  exploration projects  out there,  but to  the best  of his                                                               
knowledge  none   of  the  projects   have  a   defined  resource                                                               
associated with them.                                                                                                           
SENATOR  REINBOLD  asked  Mr.  Shively  if  he  will  "drink  the                                                               
tailings" as he previously has done.                                                                                            
MR. SHIVELY answered  that he will drink the water  from the bulk                                                               
tailings because they  are not toxic, but not the  water from the                                                               
pyritic tailings.                                                                                                               
SENATOR KIEHL asked  Mr. Collier whether the  mineral he referred                                                               
to earlier in the overview was "rhenium" or "radium".                                                                           
MR. COLLIER replied that he said rhenium.                                                                                       
SENATOR  KIEHL  asked  him  to  provide  greater  detail  on  the                                                               
project's waste rock storage.                                                                                                   
MR. COLLIER answered that the  project has no waste rock storage.                                                               
He explained  that when the  Pebble Project redesigned  a smaller                                                               
mine, it  allows for the  lowest strip  ration, so there  will be                                                               
almost no  waste rock  to rip off  to get to  the ore.  The waste                                                               
rock  that  the project  finds  will  be  put into  the  tailings                                                               
facility  so there  will not  be separate  waste-rock piles.  The                                                               
smaller  mine is  a  significant development  that  is much  more                                                               
environmentally sensitive.                                                                                                      
4:24:24 PM                                                                                                                    
SENATOR KIEHL asked  how much of the project's  probable ore body                                                               
can be mined based on the tailings facility's capacity.                                                                         
MR. COLLIER answered approximately 10 percent.                                                                                  
SENATOR KIEHL asked what the  likelihood is for future expansion,                                                               
especially when the project will only  mine 10 percent of the ore                                                               
body, the infrastructure is in place, and workers are trained.                                                                  
MR.  COLLIER  answered that  he  would  not  be surprised  if  an                                                               
expansion  plan  comes  along.  He  emphasized  that  the  Pebble                                                               
Project currently does  not have plans for  expansion. He pointed                                                               
out that any expansion will require another permitting process.                                                                 
4:26:28 PM                                                                                                                    
SENATOR KIEHL asked if a new EIS will be required for expansion.                                                                
MR.  COLLIER answered  that a  new  EIS depends  on the  proposed                                                               
expansion. He  said a sliver around  an edge might not  require a                                                               
new EIS, but  any kind of significant expansion  will require the                                                               
entire EIS process to be done again.                                                                                            
SENATOR KIEHL  noted that  there are several  hard rock  mines in                                                               
his district that have worked  hard to recruit and train locally;                                                               
however,  their   percentage  of   Alaskans  hired   has  dropped                                                               
precipitously. He  asked Mr.  Collier how  much thought  has been                                                               
put into avoiding dislocation in the region by hiring locally.                                                                  
MR. COLLIER  answered that the  Pebble Project  has put a  lot of                                                               
time  and   effort  into   planning  its   workforce  development                                                               
strategy. PLP  wants to  recruit people that  live in  the region                                                               
and want  to stay in the  region. The Pebble Project  has already                                                               
gone  out  soliciting  those  that might  be  interested  in  the                                                               
necessary training, but the project  must be careful not to train                                                               
workers too much in advance.                                                                                                    
4:29:07 PM                                                                                                                    
MR. SHIVELY opined that one  of the other differences between the                                                               
Pebble mine and  the mines that Senator Kiehl  referenced is that                                                               
the  mines  in  Senator  Kiehl's  district  are  underground  and                                                               
underground mining is  much more difficult to  recruit people who                                                               
end up  "living in  the dark".  He added  that another  factor in                                                               
trying to  keep people in Juneau  is the fact that  the flight is                                                               
short between Juneau and Seattle.                                                                                               
SENATOR KAWASAKI asked Mr. Collier  if the current EIS will cover                                                               
expansion, the  use of cyanide  to enhance gold recovery,  or the                                                               
creation of waste rock piles.                                                                                                   
MR. COLLIER answered that the  changes Senator Kawasaki described                                                               
probably will require different permit types.                                                                                   
SENATOR KAWASAKI asked whether the  changes he noted will require                                                               
the Pebble Project to redo its EIS process.                                                                                     
MR.  COLLIER replied  that the  requirement to  redo the  process                                                               
depends on  the changes. If  the change  is to double  the mine's                                                               
size, that  will probably  require the entire  EIS process  to be                                                               
SENATOR KAWASAKI asked who ultimately  makes the decision to redo                                                               
an EIS.                                                                                                                         
MR. COLLIER  replied that regulatory agencies  make the decision,                                                               
not the Pebble Project.                                                                                                         
4:31:27 PM                                                                                                                    
SENATOR KAWASAKI asked if the  smaller footprint has impacted the                                                               
project's economic feasibility.                                                                                                 
MR.  COLLIER  admitted  that  a  smaller  mine  is  not  as  good                                                               
economically   as  the   bigger  design.   He  said   the  Pebble                                                               
Partnership found  the "sweet spot"  in making enough  profit and                                                               
being confident the mine will get developed.                                                                                    
SENATOR  KAWASAKI  asked  if there  is  an  economic  feasibility                                                               
proposal on the Pebble Project.                                                                                                 
MR. COLLIER answered that PLP has  a lot of internal economics on                                                               
the project,  but PLP is  not presently able to  release economic                                                               
information due to regulatory requirements.                                                                                     
CHAIR BIRCH  thanked PLP for  providing the update on  the Pebble                                                               
Project's Draft EIS.                                                                                                            
4:33:19 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Birch adjourned the Senate Resources Standing Committee                                                                   
meeting at 4:33 p.m.                                                                                                            

Document Name Date/Time Subjects
Pebble Partnership SRES Presentation 3.25.19.pdf SRES 3/25/2019 3:30:00 PM
Governor's Appointee AOGCC Chmielowski Resume 3.22.19.pdf SRES 3/25/2019 3:30:00 PM
Pebble Project DEIS Sec 4.15.1-2 Geohazards.pdf SRES 3/25/2019 3:30:00 PM
Pebble Project DEIS Sec 3.15.1 Geohazards.pdf SRES 3/25/2019 3:30:00 PM