Legislature(2023 - 2024)BUTROVICH 205

03/01/2023 03:30 PM Senate RESOURCES

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Audio Topic
03:32:22 PM Start
03:33:19 PM SB67
03:55:55 PM Presentation(s): Mining Industry Update
05:00:15 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Testimony <Invitation Only> --
Presentation: Mining Industry Update by
Karen Matthias, Executive Director, Council of
Alaska Producers (CAP)
Deantha Skibinski, Executive Director, Alaska
Miners Association (AMA)
Mike Satre, Governmental Affairs, Hecla Ltd.
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                     ALASKA STATE LEGISLATURE                                                                                 
               SENATE RESOURCES STANDING COMMITTEE                                                                            
                          March 1, 2023                                                                                         
                            3:32 p.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Cathy Giessel, Co-Chair                                                                                                 
Senator Bill Wielechowski, Vice Chair                                                                                           
Senator Scott Kawasaki                                                                                                          
Senator  James Kaufman                                                                                                          
Senator  Forrest Dunbar                                                                                                         
Senator Matt Claman                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 67                                                                                                              
"An Act relating to firefighting substances; and providing for                                                                  
an effective date."                                                                                                             
     - HEARD & HELD                                                                                                             
PRESENTATION(S):  MINING INDUSTRY UPDATE                                                                                        
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  67                                                                                                                  
SHORT TITLE: PFAS USE FIREFIGHTING                                                                                              
SPONSOR(s): SENATOR(s) KIEHL                                                                                                    
02/10/23        (S)        READ THE FIRST TIME - REFERRALS                                                                      
02/10/23        (S)        RES, FIN                                                                                             
03/01/23        (S)        RES AT 3:30 PM BUTROVICH 205                                                                         
WITNESS REGISTER                                                                                                              
SENATOR JESSE KIEHL, District B                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 67.                                                                                         
CATHY SCHLINGHEYDE, Staff                                                                                                       
Senator Jesse Kiehl                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the sectional analysis for SB 67                                                                
on behalf of the sponsor.                                                                                                       
JUSTIN MACK, Secretary/Treasurer                                                                                                
Alaska Professional Fire Fighters Association (AKPFFA)                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified by invitation in support of SB 67.                                                              
DAVID PRUHS,  Mayor                                                                                                             
City of Fairbanks                                                                                                               
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified by invitation in support of SB 67.                                                              
DEANTHA SKIBINSKI, Executive Director                                                                                           
Alaska Miners Association                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Co-presented the Mining Industry Update.                                                                  
KAREN MATTHIAS, Executive Director                                                                                              
Council of Alaska Producers                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Co-presented the Mining Industry Update.                                                                  
MIKE SATRE,  Director                                                                                                           
Governmental  Affairs                                                                                                           
Hecla Mining  Company                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Co-presented the Mining Industry Update.                                                                  
ACTION NARRATIVE                                                                                                              
3:32:22 PM                                                                                                                  
CO-CHAIR   CLICK  BISHOP   called  the   Senate  Resources   Standing                                                         
Committee  meeting  to order  at  3:32 p.m.  Present  at the  call  to                                                          
order  were   Senators  Kawasaki,   Claman,  Wielechowski,   Co-Chair                                                           
Giessel,   and  Co-Chair   Bishop.   Senators   Dunbar   and  Kaufman                                                           
arrived soon thereafter.                                                                                                        
                   SB  67-PFAS USE FIREFIGHTING                                                                             
3:33:19 PM                                                                                                                    
CO-CHAIR  BISHOP  announced  the  consideration  of  SENATE  BILL NO.                                                           
67  "An  Act relating   to firefighting   substances;  and  providing                                                           
for an effective date."                                                                                                         
3:33:36 PM                                                                                                                    
SENATOR   JESSE  KIEHL,   District  B,   Alaska  State   Legislature,                                                           
Juneau,  Alaska,  sponsor   of  SB  67, introduced   the  legislation                                                           
speaking to the following sponsor statement:                                                                                    
     Per-  and polyfluoroalkyl   substances  (PFAS) are  a group                                                                
     of  chemicals  harmful  to human  health.  They are  linked                                                                
     to   serious   health  conditions   including   low   birth                                                                
     weight,  thyroid  disease,  and  cancereven   at  extremely                                                                
     small concentrations.                                                                                                      
     They  also  make  excellent  ingredients   in firefighting                                                                 
     foams,  in part  because  they resist  breaking down.  When                                                                
     firefighting   foams or  other  compounds  containing  PFAS                                                                
     seep    into   drinking    water,   the   toxic    "forever                                                                
     chemicals" linger for years.                                                                                               
     The   Alaska  Department   of  Environmental  Conservation                                                                 
     declared  PFAS  hazardous  substances  several  years  ago.                                                                
     Senate  Bill  67 protects  Alaskans'  health  and  prevents                                                                
     future  pollution  by  banning  PFAS foams  unless  federal                                                                
     law  preempts.  The bill also  requires  the state  to take                                                                
     back   small  quantities  of  PFAS   foam  to  ensure  it's                                                                
     disposed of safely.                                                                                                        
     Because  there  is not  yet  an effective  alternative  for                                                                
     the  intensity  of fire threat  oil &  gas operations  face                                                                
     at  refineries  or  the  Trans  Alaska  Pipeline  terminal,                                                                
     the   bill  exempts  those   producing,  transporting,   or                                                                
     refining   oil  and  gas  until  the  State   Fire  Marshal                                                                
     determines   an  effective  non-PFAS   substance  could  do                                                                
     the job.                                                                                                                   
3:34:01 PM                                                                                                                    
SENATOR KAUFMAN and SENATOR DUNBAR joined the committee.                                                                        
SENATOR  KIEHL  stated  that  with  a  few small  exceptions,   SB  67                                                          
says  no new  spraying  of PFAS-containing  firefighting   foams into                                                           
Alaska's  environment.  The  bill acknowledges  that  as long  as the                                                           
FAA  maintains  its requirement,  the  prohibition  against  spraying                                                           
PFAS-containing   foams will  be  federally  preempted.  Fortunately,                                                           
there  is  a  congressional   mandate   for  the  FAA  to  lift  that                                                           
requirement,  and  several  products  are  in the  process  that meet                                                           
US military specifications for fluorine-free foam.                                                                              
SENATOR  KIEHL  said  the  other  issue is  right  now  there  are  no                                                          
fluorine-free  foams  that  will handle  the  volume of  hydrocarbons                                                           
in  the oil  and  gas  industry.  Research  is ongoing  and  products                                                           
are  available  now that  come close  to  putting  out large  oil and                                                           
gas  fires.  SB 67  says  that  once those  products  are  available,                                                           
certified   effective,  and   have  gone  through   the  full  public                                                           
regulatory   process,   the  state   fire   marshal  will   mark  the                                                           
transition for the oil and gas industry.                                                                                        
SENATOR  KIEHL  also flagged  the  takeback provision.   He explained                                                           
that  the bill  requires  the executive  branch  to  take back  up  to                                                          
25 gallons  of PFAS-containing   foam from  small entities  to ensure                                                           
that  the foam  is  disposed  of appropriately.   His expectation   is                                                          
these  small  quantities   will  be  put  with   the  PFAS-containing                                                           
foams   that  the  State   Airport  System   owns  and   disposed   of                                                          
3:42:24 PM                                                                                                                    
CATHY  SCHLINGHEYDE,   Staff,  Senator   Jesse  Kiehl,  Alaska  State                                                           
Legislature,   Juneau,  Alaska,  presented   the  sectional  analysis                                                           
for SB 67 on behalf of the sponsor:                                                                                             
     Sec. 1 of the bill creates a new section:                                                                                  
     Sec.   46.03.340(a):   Everyone  outside   the  oil  &  gas                                                                
     industry  must  stop using  PFAS containing  foams,  unless                                                                
     federal law preempts Alaska law.                                                                                           
     Sec.  46.03.340(b):  The oil  & gas  industry may  continue                                                                
     using   PFAS-containing  foams   until  an  alternative  is                                                                
     approved by regulation.                                                                                                    
     Sec.    46.03.340(c):   The   state    fire   marshal   can                                                                
     determine  there  is a safe  and effective  PFAS-free  foam                                                                
     for  fighting  oil or gas  fires if the  alternate  foam is                                                                
     listed   by   an   organization    in  OSHA's    Nationally                                                                
     Recognized    Testing   Laboratory    Program.   The   fire                                                                
     marshal  must  require  the new  foam by  regulation,  with                                                                
     a stated effective date.                                                                                                   
     Sec.  46.03.350(d):  DEC  must take  up to  25 gallons  per                                                                
     year    of   PFAS-containing    firefighting    foam   from                                                                
     Alaskans for disposal.                                                                                                     
       Sec. 2 of the bill sets an effective date of January                                                                     
     1, 2024.                                                                                                                   
3:43:18 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  if  there was  reason  to believe  that                                                           
safe alternative firefighting substances were available.                                                                        
SENATOR  KIEHL answered  yes,  with the  exception  of the  large and                                                           
intense   fires   that   might   occur  at   oil   and  gas   storage                                                           
facilities.   Nearly  all  of  Europe  has  been   fluorine-free  for                                                           
years  and  those foams  are  plenty  effective  for  the  volumes  of                                                          
air  traffic  that go  through  Anchorage,  Fairbanks,  and  anywhere                                                           
else that jets land in Alaska.                                                                                                  
SENATOR   WIELECHOWSKI  asked   if  PFAS  is  still   used  at  major                                                           
airports in Alaska.                                                                                                             
SENATOR  KIEHL  answered  yes; the  Federal  Aviation  Administration                                                           
still  requires DOT  to use those  foams.  However, the  testing that                                                           
used to  occur on  runways is  done in contained  areas  so the PFAS-                                                           
containing  foam  does  not escape  into  the environment.   If there                                                           
were  a  fire,  the  PFAS-containing   foam  would  be  used  at this                                                           
3:44:37 PM                                                                                                                    
SENATOR  GIESSEL  mentioned  an  article  that  highlighted   PFAS  in                                                          
ski wax and commented on firefighters' risk of exposure.                                                                        
SENATOR  KIEHL  confirmed  that first  responders  often  are exposed                                                           
to  significant  quantities  of PFAS.  He  said it's  a concern  that                                                           
PFAS  chemicals  are present  in  a lot  of products.  SB  67 focuses                                                           
on the single greatest threat; PFAS in drinking water.                                                                          
3:46:14 PM                                                                                                                    
SENATOR  KAWASAKI  asked  if  there  was a  large  cost  differential                                                           
between  the  firefighting   foams  used  in  Europe  and  the  PFAS-                                                           
containing foams used in the US.                                                                                                
SENATOR  KIEHL  said he  didn't  have a  cost comparison,  but  it  is                                                          
good  news  that  established  manufacturers   throughout  the  world                                                           
produce fluorine-free foams that work.                                                                                          
3:47:08 PM                                                                                                                    
SENATOR  CLAMAN asked  if  he had a  timeline  for when  the military                                                           
will approve PFAS-free firefighting foams.                                                                                      
SENATOR  KIEHL said  the process  is expected  to be 60-90  days, and                                                           
it's  begun  for some  products.  He  said  that  should trigger  the                                                           
FAA  to   lift  its   requirement   to  use   fluorinated   foams   at                                                          
airports.  It already  is  well past  the congressional   deadline  to                                                          
do so.  He  said there  is no  guarantee,  but he  believes  that the                                                           
FAA  will  begin   the  process  to  lift   its  requirement  in  3-4                                                           
SENATOR  CLAMAN commented  that  it sounds  as though this  could all                                                           
occur within the next 6-12 months.                                                                                              
MS.  SCHLINGHEYDE   responded   that  the  FAA  indicated   it  would                                                           
remove  the   requirement  to   use  fluorinated   foams  within  3-4                                                           
CO-CHAIR BISHOP turned to invited testimony.                                                                                    
3:49:13 PM                                                                                                                    
JUSTIN   MACK,   Secretary/Treasurer,    Alaska   Professional   Fire                                                           
Fighters  Association   (AKPFFA),  Anchorage,  Alaska,  testified   by                                                          
invitation   in  support  of   SB  67.  He  provided   his  extensive                                                           
professional  background,  and said  being a  fire fighter  is unique                                                           
and  routine  until  it isn't.  He  described  going  into  buildings                                                           
with zero  visibility  and responding  to victims  who  might not see                                                           
another   day.  He  said   it's  clear   that  this   career  can   be                                                          
He said  he learned  how to keep  himself  safe early in  his career,                                                           
but what  he failed  to understand  was that  despite  being careful,                                                           
following  standard  guidelines,   decontaminating   himself  and his                                                           
equipment,  and  wearing   the  most  up to  date  equipment   he and                                                           
other  fire  fighters  were  going  to  be  exposed  to  some  of the                                                           
worst  chemicals on  earth. These  chemicals  permeate  gear and seep                                                           
into fire  fighters'  pores. The  data shows  that firefighters  have                                                           
significantly    higher   rates   of    cancer   than   the   general                                                           
population.   The   World   Health    Organization   classifies   the                                                           
occupation as carcinogenic.                                                                                                     
MR. MACK  stated that  SB 67 is  an attempt  to limit  fire fighters'                                                           
and  the  public's  exposure  to  known  carcinogens.  He  emphasized                                                           
that  there  are alternatives  to  the  use of  PFAS-containing  foam                                                           
and strongly urged support for SB 67.                                                                                           
3:52:41 PM                                                                                                                    
DAVID   PRUHS,  Mayor,   City   of  Fairbanks,   Fairbanks,   Alaska,                                                           
testified  by invitation  in  support  of SB 67.  He stated  that the                                                           
Interior  has an  extensive  problem  associated  with the  dispersal                                                           
of  PFAS.  The  City  of  Fairbanks  spent  $5.4  million  to  supply                                                           
water  to 74 homes  after PFAS  from a firefighting  training  center                                                           
migrated  into  a  private  utility's  water  system.  The  city also                                                           
has  an  issue  with   concentrate  discharge   from  its  wastewater                                                           
system  and  is seeking  help  from  DEC on  behalf  of Golden  Heart                                                           
Utilities  for a  biosolids incinerator  testing  project.  He agreed                                                           
with  Senator   Kiehl  that  alleviating   the  problem  starts  with                                                           
removing PFAS from the system.                                                                                                  
3:55:00  PM                                                                                                                   
CO-CHAIR BISHOP held SB 67 in committee.                                                                                        
3:55:07  PM                                                                                                                   
At ease                                                                                                                         
^PRESENTATION(S):  MINING INDUSTRY UPDATE                                                                                       
             PRESENTATION(S):  MINING INDUSTRY UPDATE                                                                       
3:55:55  PM                                                                                                                   
CO-CHAIR  BISHOP  reconvened   the meeting  and  announced   a mining                                                           
industry update.                                                                                                                
3:56:39  PM                                                                                                                   
DEANTHA    SKIBINSKI,     Executive    Director,     Alaska    Miners                                                           
Association, Anchorage, Alaska, introduced herself.                                                                             
3:56:50  PM                                                                                                                   
KAREN  MATTHIAS, Executive  Director,  Council  of Alaska  Producers,                                                           
Anchorage, Alaska, introduced herself.                                                                                          
3:56:52  PM                                                                                                                   
MIKE   SATRE,   Director,   Governmental    Affairs,   Hecla   Mining                                                           
Company,  Juneau,  Alaska,  began  with a  safety  share  from Greens                                                           
Creek  Mine, which  is  how each  meeting  is started  in  the mining                                                           
industry.  It demonstrated  that  Hecla employees  are  well schooled                                                           
in how  to recognize  and  act in  emergency  medical situations.   It                                                          
also  highlighted  the  importance   of  self-awareness  and  knowing                                                           
when to ask for help.                                                                                                           
3:59:27  PM                                                                                                                   
MS.  MATTHIAS   began   by  describing   the   three  parts   of  the                                                           
   similar First, she would discuss the global outlook including:                                                               
        similar the soaring demand for minerals to meet the need for                                                            
           more renewable technologies and energy storage;                                                                      
        similar the increasing    non-partisan      concern     about                                                           
           overdependence in the US on mineral imports being a                                                                  
           threat to national security and the economy; and                                                                     
        similar the agreement that more domestic production of                                                                  
           minerals is needed.                                                                                                  
       similar Alaska embodies the principle of the USG and its                                                                 
          mineral assets should be leveraged.                                                                                   
   similar Next, Ms.  Skibinski    would    discuss     Alaska's                                                                
       environmental standards, community partnerships with                                                                     
     local mines, and the benefits that accrue.                                                                                 
   similar Finally, Mr. Satre would answer the question of why Alaska                                                           
     doesn't have more mines and how it can be positioned to be                                                                 
     more competitive.                                                                                                          
MS.  MATTHIAS   turned  to  slide   3,  New  Technologies   are  More                                                           
Mineral  Intensive.  She  directed  attention  to  the  image  of the                                                           
house  on the top  left that identifies  the  minerals  that are used                                                           
in daily  life.  It illustrates  that  everything  that's  used today                                                           
is either  made  of minerals  or it  was grown  or transported  using                                                           
metals  and minerals.  The  image of  cell phones  on the  lower left                                                           
illustrates   the  mineral   intensity   of  new  technologies.   The                                                           
periodic  table below  the first  generation  cell phone  shows it  is                                                          
much  less  mineral  intensive  than  the  current  generation  smart                                                           
phone.  The third  image  shows  the enormous  increases  in  the use                                                           
of  specific  minerals   to produce   electric  vehicles.  She  noted                                                           
that  zinc  and  silver  are  already  produced  in  Alaska.  Copper,                                                           
cobalt,  and graphite  are also  present in  resources  that could  be                                                          
developed in Alaska in projects already under development.                                                                      
4:02:08 PM                                                                                                                    
MS.  MATTHIAS   displayed   slide  4,   stating  that   international                                                           
organizations  like  The  World  Bank and  The  International  Energy                                                           
Agency  have  published  reports  about  the  increasing  demand  for                                                           
minerals.   There  is   also  a  growing   awareness   that  not  all                                                           
countries   enforce   health   and   safety  regulations    or  sound                                                           
environmental   practices.  She   cited  cobalt  as  an  example  and                                                           
noted  that most  of it  comes from  the Democratic  Republic  of the                                                           
Congo  where  child  labor is  exploited.  This  points  to  the need                                                           
for  companies  and  countries   to  commit  to  responsibly  sourced                                                           
production and processing.                                                                                                      
MS.  MATTHIAS   turned   to  slide  5,   noting  that   some  ask   if                                                          
recycling  is  the  solution.  She said  it's  important  but  only  a                                                          
small  part of  the solution.  She  read  an excerpt  from  The World                                                           
     ?even  if we  scale up recycling  rates  for minerals  like                                                                
     copper  and aluminum  by  100%, recycling  and reuse  would                                                                
     still  not  be enough  to  meet  the demand  for  renewable                                                                
     energy technologies and energy storage.                                                                                    
4:03:49 PM                                                                                                                    
MS.  MATTHIAS  turned  to  slide  6,  The US  Dependency  on  Mineral                                                           
Imports.   She  pointed   to  the   chart   showing  the   top  three                                                           
countries   that  extract  critical   minerals   and  the  top  three                                                           
countries  that  process  critical  minerals.  The  US  is  not among                                                           
those  countries even  though it  has the  potential. She  noted that                                                           
China  dominates  the  supply  chain  in processing   and that  China                                                           
owns 15  of the 17  industrial  operations  for cobalt  mining in the                                                           
Congo. China dominates extraction more than the slide shows.                                                                    
4:04:59 PM                                                                                                                    
CO-CHAIR  BISHOP stated  that the  US could  achieve net  zero carbon                                                           
by 2050  faster if  it mined minerals  in  the US instead  of relying                                                           
on supplies from foreign countries.                                                                                             
4:05:25 PM                                                                                                                    
MS.  MATTHIAS   continued   to  slide   7,  stating   that  there   is                                                          
increasing  recognition   that  America's  increasing  dependence   on                                                          
China  in   particular  for   critical  materials   is  a  threat   to                                                          
national   security  and  the   economy.  In  2020   President  Biden                                                           
issued  an Executive  Order  that addressed  the  threat  to domestic                                                           
supply  chains by  supporting  domestic  mining;  in 2021  he ordered                                                           
a  review  of US  supply  chains;  and  in  2022 he  announced  major                                                           
investments   to  expand  the   domestic  critical   minerals  supply                                                           
chain.  Senator  Murkowski  and  Senator  Sullivan  agreed,  pointing                                                           
to Alaska's extensive resources.                                                                                                
4:06:35 PM                                                                                                                    
MS. MATTHIAS  directed  attention  to the state  map on  slide 8 that                                                           
shows  the mining  activity  throughout  Alaska.  She noted  that the                                                           
large  mines in the  state were  developed  after the passage  of the                                                           
Clean   Water   Act,   the   Clean   Air   Act,  and   the   National                                                           
Environmental   Policy  Act   (NEPA).  These  laws   require  federal                                                           
agencies  to  assess  the  environmental   impacts  when  considering                                                           
permit  applications.  She  noted  that  the  handout  with  this map                                                           
includes information about each of the mines.                                                                                   
4:07:20 PM                                                                                                                    
DEANTHA    SKIBINSKI,     Executive    Director,     Alaska    Miners                                                           
Association,   stated  that  she  would   discuss  the  reasons  that                                                           
Alaska  can  contribute   to  the  mineral  supply  chain.  She  said                                                           
mines  in  the  state   are  permitted  under  strict   environmental                                                           
policies  that  provide  for closure  and  reclamation  of  the land.                                                           
Financial  assurance  is  required.  The  regulatory  regime  ensures                                                           
that  the environment  is  protected  and often  enhanced.  She noted                                                           
that she would provide examples later in the presentation.                                                                      
4:08:11 PM                                                                                                                    
MS.   SKIBINSKI   advanced    to   slide   10,   Strict   Operational                                                           
Oversight, and spoke to the following:                                                                                          
                 Alaska: the best mine monitoring                                                                               
                       system in the world                                                                                      
     • Water quality monitoring                                                                                                 
     • Bottom-to-top comprehensive biomonitoring                                                                                
     • 3rd party audits                                                                                                         
She  described  Alaska's  water  quality  monitoring  systems  as one                                                           
of  the  best  in  the  world.  Mining   companies  are  required   to                                                          
monitor  water quality  in streams  and the  ground water  downstream                                                           
from   the  mine.   Biomonitoring   looks  at   the  health   of  the                                                           
downstream  ecosystem,  from  the  bottom of  the food  chain  to the                                                           
top.  This  will  show  whether   juvenile  fish  are  absorbing  any                                                           
metals  and the algae  composition  at the  bottom of the  water bed.                                                           
Third-party  audits  of  the  mine  are  done  every  five years  and                                                           
this information is publicly available.                                                                                         
4:10:01 PM                                                                                                                    
MS.  SKIBINSKI  directed  attention  to the  picture  on slide  11  of                                                          
Red Dog  Creek  upstream from  the mine.  She said  the red  stain  in                                                          
the  water  and on  the  banks  comes  from  natural  mineralization.                                                           
This  resulted  in  little  vegetation   along  the  bank,  a  lot  of                                                          
sandbars,  and  poor  habitat  for  fish.  Today,  there is  abundant                                                           
vegetation  and fish  populations.  She pointed  to the  chart on the                                                           
right   that  shows  the   high  naturally   occurring   zinc  levels                                                           
reported  to DEC and  EPA before  mining operations  and  the reduced                                                           
levels after.                                                                                                                   
CO-CHAIR  BISHOP  noted that  this  water source  was  a tip  off for                                                           
the discovery of the mineral deposit at Red Dog.                                                                                
MS. SKIBINSKI agreed.                                                                                                           
MS.  SKIBINSKI   continued   to  slides   12  and  13   that  provide                                                           
additional  examples   of  restoration  projects   at the  Fort  Knox                                                           
Gold  Mine and  Greens Creek  Mine,  both of  which improved  habitat                                                           
and fish passage.                                                                                                               
4:13:24 PM                                                                                                                    
MS.  SKIBINSKI  advanced  to  slide  14 to  describe  how  regulatory                                                           
oversight  doesn't  stop  when a  mine closes.  The  pictures  at the                                                           
top of  the slide  show  the reclamation  done  at the  Usibelli Coal                                                           
Mine in January 2016 and July 2016. She spoke to the following:                                                                 
                     Reclamation and Closure                                                                                    
      • Alaska law (AS 27.19) requires that a mine site must                                                                    
        be returned to a stable condition compatible with                                                                       
        the post-mining land use                                                                                                
        • Plan must be approved by DNR Commissioner before                                                                      
        operations begin                                                                                                        
     • Financial assurance applies to all companies                                                                             
     • Reviewed every 5 years or earlier if necessary                                                                           
CO-CHAIR  BISHOP  commented   that  Joe  Usibelli  senior  was  doing                                                           
reclamation work before it was required.                                                                                        
CO-CHAIR  GIESSEL  added  that the  son of  the man  who  founded the                                                           
mine  told her  that they  collect native  seeds  from the  area that                                                           
are used in reclamation.                                                                                                        
MS.  SKIBINSKI   said   the  side  by   side  photos   are  a  visual                                                           
illustration of how successful reclamation is at Usibelli.                                                                      
4:15:45 PM                                                                                                                    
SENATOR  CLAMAN  referenced  slide  8  and  asked  whether  a federal                                                           
permit  would  still  be required  for  the  six  mines signified   by                                                          
red  stars,  regardless   of  whether   the  state  assumed  the  404                                                           
program, because of their locations relative to WOTUS.                                                                          
MS. SKIBINSKI offered to follow up with the answer.                                                                             
SENATOR  CLAMAN  said  he  was  curious  about  where  the  producing                                                           
mines fit in the rubric.                                                                                                        
4:17:19 PM                                                                                                                    
MS.  SKIBINSKI   turned   to  the   picture   on  slide   15  of  the                                                           
reclamation   project  that  was  done  after  the  True  North  Mine                                                           
closed. She highlighted the following:                                                                                          
       DNR Commissioner Corri Feige: "The developers leased                                                                     
        state land, produced a valuable commodity to serve                                                                      
     global   markets,   employed  Alaskans,   and   paid  state                                                                
     taxes   and   royalties.   When   they  were   done,   they                                                                
     remediated  the  effects  of their  work  and returned  the                                                                
     land  to the  state for its  next use.  The system  works."                                                                
     October 27, 2020                                                                                                           
4:18:09 PM                                                                                                                    
MS.  SKIBINSKI  directed  attention  to the  drawing  of the  tree  on                                                          
slide  16 that  shows the  benefits  mining brings  to the  people  of                                                          
Alaska.  She  noted  that  the  2022  data from  the  McKinley  Group                                                           
study  of  the  economic  and  community  benefits  was  forthcoming,                                                           
but  her message  today  was about  the  regional  impacts  that come                                                           
from  mining. She  pointed  to the  white  dots on  the state  map  on                                                          
slide  17  and  conveyed  that  those  represent   the  more  than  90                                                          
communities  throughout   the  state  where  mining  employees  live.                                                           
She said  it's  often in  rural Alaska  where there  aren't  a lot  of                                                          
other  opportunities.   She  noted  that  the pictures   on  the next                                                           
slide  illustrate  that  local  mines support  local  businesses.   In                                                          
2022,  they spent  $1 billion on  goods and  services from  more than                                                           
450 Alaska vendors.                                                                                                             
4:19:59 PM                                                                                                                    
MS.  SKIBINSKI  advanced  to slide  19,  Training  Opportunities  and                                                           
Jobs for Alaskans, and discussed the following:                                                                                 
     • $2.7 million to UA and vocational schools in 2022                                                                        
     • AVTEC, MAPTS, underground mine training center                                                                           
     • On-the-job training                                                                                                      
     • Scholarships: UA, ANSEP                                                                                                  
     • 11,400 direct, indirect & induced jobs                                                                                   
4:20:51 PM                                                                                                                    
SENATOR  KAWASAKI  shared 2019  data  that shows  that 37  percent  of                                                          
mine  workers   in  Alaska  are  nonresidents.   He  asked  what  the                                                           
industry was doing to increase Alaska hire.                                                                                     
4:21:36 PM                                                                                                                    
MS.  MATTHIAS  said  it makes  sense  to  hire Alaskans,   and mining                                                           
companies    have    been   investing    in    vocational    training                                                           
opportunities  for  years through  both  the university  and  some  K-                                                          
12  programs.  There is  also  an underground   mine training  center                                                           
in  Delta   Junction   that  Pogo,  Greens   Creek,   and  Kensington                                                           
utilize.   The  graduates   from  this   six  week   program  receive                                                           
conditional  employment   offers  from one  or  more  of those  three                                                           
underground   mines.  The  mining   industry   also  reaches  out   to                                                          
middle  and high school  students  to make  them aware  of the career                                                           
options  in mining.  She continued  that the  out migration  of young                                                           
working  age  Alaskans  has  been  a  challenge  for  mining  and all                                                           
other  industries.  She said  it will  take a  concerted  effort from                                                           
all sectors  and the  state to  resolve that  issue because  the jobs                                                           
are available.                                                                                                                  
CO-CHAIR  BISHOP  noted that  he and  Mr. Satre  worked on  the issue                                                           
of nonresident  miners  in Alaska  in 2007,  and the training  center                                                           
in Delta was a good example of that effort.                                                                                     
4:25:37 PM                                                                                                                    
MS.  SKIBINSKI  advanced  to  slide  20, Benefits   to Alaska  Native                                                           
Corporations, and spoke to the following:                                                                                       
     • ANCSA 7(i) and 7(j) royalty sharing:                                                                                     
        o $94 million to Alaska Native Corporations and at-large                                                                
           shareholders in 2022                                                                                                 
        o $1.7 billion since 1989                                                                                               
     • Jobs for shareholders. Red Dog example:                                                                                  
        o Regular: 52% NANA shareholders                                                                                        
        o Seasonal/temp: 97% NANA shareholders                                                                                  
     • Business partnerships                                                                                                    
4:27:09 PM                                                                                                                    
MS.  SKIBINSKI  displayed   slide  22,  Mining  Taxes  and  Royalties                                                           
Depend  on   Land  Status,  and   distinguished   between  taxes  and                                                           
royalties;  taxes are  paid to  a government  and royalties  are paid                                                           
to  the  landowner.  Landowners   could  be  the  state,  the  Alaska                                                           
Mental   Health  Trust,   the   federal  government,   or   a  native                                                           
corporation.   She  said  Pogo   is  the  only  metal   mine  located                                                           
entirely  on  state land  and  the only  coal  mine  in Alaska  is  on                                                          
state  land,  which means  the  state  receives  royalties  from just                                                           
these two mines.                                                                                                                
MS.  SKIBINSKI stated  that  the data  on slide  23, Mining  Industry                                                           
Payments  to  the  State,  2022,  came  from  the  McKinley  Research                                                           
Group.  She  encouraged  the  committee  to  also  look  at  the full                                                           
state  numbers that  are  published  in the  annual Mineral  Industry                                                           
report  that DNR's  Division of  Geological  and Geophysical  Surveys                                                           
produces.  It  breaks  the revenue  down  by  category,  so  it gives                                                           
the real  picture  of mining  revenue  and all  the ways  that mining                                                           
contributes   to the  state.  The  table  at  the  beginning   of the                                                           
report  has  5-6  years of  revenue  numbers  so  an  average  can  be                                                          
4:30:50 PM                                                                                                                    
CO-CHAIR   BISHOP  offered   his  understanding   that  the  Red  Dog                                                           
expansion  would  be on  state  land underground  so  the  state will                                                           
receive royalty payments from that.                                                                                             
MS. MATTHIAS agreed.                                                                                                            
4:31:23 PM                                                                                                                    
SENATOR  CLAMAN offered  his understanding   that the  state collects                                                           
corporate  income  tax  from  mines  but,  unlike  oil,  there  is  no                                                          
production tax on minerals.                                                                                                     
MS.  MATTHIAS  responded  that,  in  addition  to  corporate  tax and                                                           
royalties,  all mines  in  Alaska pay  a mining  license  tax and the                                                           
large mines pay 7 percent, which is the top tier.                                                                               
SENATOR CLAMAN asked for the basis of the 7 percent.                                                                            
MS. MATTHIAS replied it's based on net income.                                                                                  
4:32:22 PM                                                                                                                    
MS.  MATTHIAS  stated that  the  chart on  slide  24, Mining  Revenue                                                           
vs.  Costs   to   State,  comes   from  the   University   of  Alaska                                                           
Anchorage  Institute  of Social  and  Economic  Research.  This study                                                           
looked  at state  revenue  and  expenses  averaged  over  four years.                                                           
For  those  four  years  the  average   cumulative  state  and  local                                                           
revenue  was just  under  $100 million.  The  average state  expenses                                                           
and  capital budget  funds  expended  to manage  the mining  industry                                                           
were  significantly  lower than  the  average revenue,  so  there was                                                           
a  net  benefit  to the  state  from  mining.  She  said  one  of the                                                           
reasons   for  the   small   state   expenses   is  because   of  the                                                           
reimbursable  services  agreements  that most  large mines  and large                                                           
projects  enter  into  with  the Office  of  Project  Management  and                                                           
Permitting   (OPMP)   under  DNR.   The  costs   for   licensing  and                                                           
expansions  that  OPMP  and other  state  agencies  incur  are billed                                                           
back  to the  companies.  She noted  that  the bottom  four  lines  on                                                          
the  previous slide  are  agency costs  that  were reimbursable.  She                                                           
also  highlighted  that mines  are the  largest  single  taxpayers  in                                                          
the  Fairbanks   North  Star   Borough,  the  City   and  Borough   of                                                          
Juneau,  and the  Northwest Arctic  Borough.  It's a reliable  source                                                           
of revenue for local governments.                                                                                               
4:35:23 PM                                                                                                                    
MIKE   SATRE,   Director,   Governmental    Affairs,   Hecla   Mining                                                           
Company,   stated   that   he  was   asked   to   give  the   company                                                           
perspective  on  things  facing  the mining  industry  in  Alaska.  He                                                          
relayed  that  he has  been  in the  mining  industry  for  27 years,                                                           
some  of   which  was   underground,   and  now  his   role  includes                                                           
external  affairs.  He said Hecla  Mining  Company started  more than                                                           
100  years  ago  and  the  corporate  office  is  in  Coeur  d'Alene,                                                           
MR. SATRE  spoke to  the importance  the mining  industry  has always                                                           
placed  on the  metals and  mineral  space, noting  that  the general                                                           
public  and  policy  makers  seem  more  aware  that  the  future   is                                                          
built  on minerals.  Every  day  there are  new  and innovative  ways                                                           
to  use minerals  to  power  technologies  that  are  used  daily.  It                                                          
may be  minerals that  most people  haven't  heard of  like Germanium                                                           
(Ge)  or  Gallium  (Ga)  or  the  well-known   mineral  Silver  (Ag).                                                           
Hecla  produces 40  percent of  the US supply  of silver,  30 percent                                                           
of which comes from Greens Creek.                                                                                               
4:37:39 PM                                                                                                                    
MR.  SATRE  turned   to  slide  26  to  discuss   Alaska's  unlimited                                                           
mineral  potential.  He noted  that the DGGS  map identifies  mineral                                                           
occurrences   and  prospects  throughout   the  state.  Nearly  every                                                           
known  mineral  can  be  found  somewhere   in Alaska.   He said  the                                                           
question  now  is how  Alaska  can go  from being  America's  mineral                                                           
warehouse to becoming America's mineral powerhouse.                                                                             
MR. SATRE  advanced  to slide  27, Pathway  to (mineral)  prosperity,                                                           
and  asked  "What  can  we  do to  turn  the  dots  on  the  map into                                                           
operating  mines  that provide  the  regional  benefits  that Deantha                                                           
and Karen talked about?" He spoke to the following:                                                                             
     • Community support                                                                                                        
     • Infrastructure partnerships                                                                                              
     • Stable fiscal climate                                                                                                    
     • Stable regulatory regime                                                                                                 
He  said  new  mines   may  come  to  Alaska   if  the  foregoing   is                                                          
addressed.  He  noted  that  from  2001  to 2010,  $1.8  billion  was                                                           
spent  on exploration  in  the state;  over  that  time the  Pogo and                                                           
Kensington  mines opened.  From  2011 to 2020,  another  $1.6 billion                                                           
was  spent on  exploration  and no  new mines  opened.  He emphasized                                                           
the  importance   of  continuing  to  work  to   attract  exploration                                                           
dollars   into  Alaska   if  the   state   expects  to   produce  its                                                           
minerals,   improve  the  mineral   supply  chain   in  the  US,  and                                                           
provide  the  country  with  the  minerals  Americans   use  in their                                                           
daily lives.                                                                                                                    
MR.  SATRE   expressed   hope  that   the  committee   members  would                                                           
participate  in  the visit  to Kensington  in  April. He  opined that                                                           
boots  on the ground  and talking  to the  workforce about  what they                                                           
do was incredibly important.                                                                                                    
4:48:31 PM                                                                                                                    
SENATOR  KAUFMAN  mentioned  the planning  that  went into  the Trans                                                           
Alaska  Pipeline  System,  and  asked  whether  adequate  big-picture                                                           
strategic  planning  was being  done to identify  all  the interfaces                                                           
and  infrastructure   needs  for  mineral  production  and  delivery,                                                           
including  value-added   activities.   "What  are  the  prerequisites                                                           
that we  need to  have and what  sympathetic  elements do  we need  to                                                          
have  working  with  each  other  to  really  deliver   some  of this                                                           
MR.  SATRE replied  that  the  mining industry  currently  is  not  as                                                          
vertically  integrated  as  the  petroleum  industry.  He  said there                                                           
might  be opportunity  for value-added  products,  but  that probably                                                           
would  require  port  access to  worldwide  markets  because  markets                                                           
in  Alaska  aren't  large enough  to  support  a  smelter  or refiner                                                           
whether  it's  for  traditional  metals  or  rare  earths.  Access  to                                                          
power  would   also  be  critical.  He   cited  the  example  of  the                                                           
aluminum  smelter  at Kitimat  in Northern  BC  Canada that  was only                                                           
there  because  it  had  hydro  power.  He  continued   that  for the                                                           
mining  industry,   planning  starts  with  both  state  and  federal                                                           
land  management  plans that  recognize  there  is mineral  potential                                                           
throughout   and  identify   how  to   extract  those   minerals  yet                                                           
preserve  the   high  ecological  value.   He  cited  Hecla's  Greens                                                           
Creek  mine in  a national  monument  as an example  of how  that can                                                           
be   done.   Long    term,   he   said   it's    necessary   to   get                                                           
representatives  from  all  the industry  groups  in Alaska  together                                                           
to  look   at  where   roads  are  needed,   where   rail  access   is                                                          
appropriate,   where  ports  should  be  used,  and  where  there   is                                                          
adequate  power. He  said these  things aren't  unique  to the mining                                                           
industry;   they're  needs   for  communities   and   all  the  other                                                           
industries in Alaska.                                                                                                           
4:53:24 PM                                                                                                                    
MS. MATTHIAS  pointed  out that  the annual  reports from  the Alaska                                                           
Minerals   Commission   list  industry   priorities   and  there  are                                                           
commonalities   from  year  to  year.  They  are  an example   of the                                                           
mining  industry identifying  specifically   what's missing  in order                                                           
for the  industry  to be robust.  She also  posited that  the efforts                                                           
by  various  administrations   to  bring  roads  to resources   was  a                                                          
long-term  vision  of opening  areas  of Alaska  to mineral  resource                                                           
4:54:53 PM                                                                                                                    
SENATOR  CLAMAN  noted that  she described  most  of the  large mines                                                           
in  Alaska   as  world  class   and  asked  if   there  was  a  ready                                                           
definition for "world class mine."                                                                                              
MR.  SATRE   said  no,   but  companies   have  internal   evaluation                                                           
systems  and there  are  general industry  standards  based  on size.                                                           
From  a qualitative   perspective,  Red  Dog is  one  of the  largest                                                           
zinc  mines  in  the  world,  Greens  Creek  is  one  of the  largest                                                           
silver  producers  in the  world,  the Fort  Knox  district  is world                                                           
renowned  for the  volume  of production,  and  Pogo is  described  as                                                          
a Tier 1 gold asset.                                                                                                            
SENATOR   CLAMAN  commented   that  any  mine  that's   developed   in                                                          
Alaska  will need  to be a long-term  project  and probably  will fit                                                           
into  tier  1  or  be  described   as a  world-class   mine,  because                                                           
that's what it will take to justify the investment and expense.                                                                 
MR.  SATRE  agreed  that  was  a good  way  to  look  at it,  because                                                           
there  was  no  question  that  access  to roads,  ports,  and  power                                                           
were  key  things   that  allow  a  prospect   to  move  forward.   He                                                          
posited  that  if Donlin  were located  on  I-80 in  Nevada  it would                                                           
have been in production for the last 20 years.                                                                                  
4:57:45 PM                                                                                                                    
CO-CHAIR  GIESSEL  commented  that  it's not  always  a company  that                                                           
identifies  a  resource  for development.   She pointed  to  the Manh                                                           
Choh  project  on property  the  Village of  Tetlin  owns that  has  a                                                          
significant   amount  of  gold.   It's  under  development   and  has                                                           
brought  wealth,   educational   opportunities,   and  jobs  to  this                                                           
village that previously was lacking in all those areas.                                                                         
CO-CHAIR  BISHOP added  that the  deposit was  only 12  miles off the                                                           
road system.  He highlighted  the  2012 presentation  by  USGS at the                                                           
University  of  Alaska  that  said  Alaska  was  50  years behind   in                                                          
knowing  what it  has for  assets.  That is  how under-explored  this                                                           
state is.                                                                                                                       
4:59:42 PM                                                                                                                    
MR. SATRE  added  that USGS  and other  US agencies  have  spent over                                                           
$900 million  to  advance the  mineral opportunities   in Afghanistan                                                           
but very little in Alaska.                                                                                                      
5:00:15 PM                                                                                                                    
There  being  no  further  business  to come  before  the  committee,                                                           
Co-Chair   Bishop    adjourned   the   Senate    Resources   Standing                                                           
Committee meeting at 5:00 p.m.                                                                                                  

Document Name Date/Time Subjects
Presentation Mining Industry Update 03.01.2023.pdf SRES 3/1/2023 3:30:00 PM
SB 67 Sponsor Statement ver. A 2.13.2023.pdf SRES 3/1/2023 3:30:00 PM
SB 67
SB 67 Sectional Analysis ver. A 2.13.2023.pdf SRES 3/1/2023 3:30:00 PM
SB 67
SB 67 Fiscal Note DPS 2.24.2023.pdf SRES 3/1/2023 3:30:00 PM
SB 67
Presentation Support Document AMA AK Mines Map 03.01.2023.pdf SRES 3/1/2023 3:30:00 PM
SB 67 ver. B.PDF SRES 3/1/2023 3:30:00 PM
SB 67