SCR 7-TULSEQUAH CHIEF MINE MR. WILLIAMS, testifying from Atlin, stated he believes the Tulsequah Chief Mine project will benefit the communities from Whitehorse to Skagway. He stated he represents about 40 people who support the project. CHAIRMAN HALFORD noted the committee received a petition signed by a number of people who support the project, and the petition has been entered into the record. MR. BOB CARMICHAEL, a local contractor and former road superintendent, testified from Atlin in support of the Tulsequah Chief Mine project as it will provide year-round employment for local people and allow them to stay in the community. SENATOR PEARCE informed committee members she sent a memo to both Commissioners Rue and Brown asking them to describe their continuing concerns about the project related to the response received from the British Columbia Ministry of Environment, Lands and Parks(BCMELP) in November about the Alaska Department of Environmental Conservation's (ADEC) and the Alaska Department of Fish and Game's (ADFG) environmental concerns. She noted neither department responded to the BCMELP response. She asked both Commissioners to bring the concerns that they do not believe can be resolved directly with the BCMELP to the Alaska Legislature. She explained her ongoing concern is that Alaska should not try to impose its permitting process on to another government and she believes the Administration has taken a position that will ultimately disable the project from moving forward. MR. MICHAEL CONWAY, Director of Statewide Public Service Division of DEC, stated he is involved in the coordination of permitting and overview of the Tulsequah Chief Mine. He stated one outcome of the government to government interaction that has benefitted both sides has been the ability to continue a dialog about the standards. The Canadians have reviewed Alaska's water quality standards and find their own to be comparable. ADEC and ADFG have told the BCMELP they are not interested in permitting the project but they want assurances that the resources at risk are protected. BCMELP has worked directly with Alaska permitting staff to exchange information. SENATOR PEARCE asked Mr. Conway to address ADEC's concerns in the order contained in the response from BCMELP. She pointed out it is her understanding that the response from BCMELP addressed each concern raised by the federal government and ADEC and ADFG. MR. CONWAY said ADEC and ADFG are in agreement with the points made in that response. He discussed the Summary of Technical Responses on page 3 as follows. The first issue is about the tailings impoundment. The USEPA is handling the tailings impoundment issue and continuing government to government negotiations between the Canadian government and Region X of EPA are ongoing. CHAIRMAN HALFORD asked if EPA Region X requested mediation. MR. CONWAY replied that he believes the request made was a consolidated effort by state and federal agencies. SENATOR 236 SENATOR PEARCE stated her concern is that it is unnecessary to use channels in Washington, D.C., and that Alaska officials can pick up the phone and call the Canadian officials. She asked Mr. Conway why the Administration is pushing state department intervention when he just said ADEC does not have any specific disagreements with the Canadian government's response. She emphasized there is no point in escalating problems with British Columbia unnecessarily, and that anytime the U.S. government and Ottawa get involved the issue gets more confusing and less is accomplished. MR. CONWAY replied ADEC is speaking directly with BC government officials so a direct process is ongoing. CHAIRMAN HALFORD asked Mr. Conway to continue discussing ADEC's specific concerns. MR. CONWAY stated monitoring long term enforcement has not been an issue with ADEC and the Migratory Bird Act issue is either an ADFG or US Fish and Wildlife concern, not ADEC's. MR. CONWAY referred to page 8 of the BC government's response to the development of design specifications covering mixing zones. BCMELP has reviewed the Alaska mixing zone regulation and agrees with the proposed remedy as it relates to the decision on the waste management act permit. CHAIRMAN HALFORD affirmed ADEC and the BC government are in agreement on that issue. MR. CONWAY said that is correct. MR. CONWAY stated ADEC and the BC government also agree on number 2(b) of the response, entitled "Chronic Mine Effluent Toxicity," which reads: Canada and BC agree with the three items identified in the remedy as it relates to the issuance of the waste management act permit and the approach to be undertaken is summarized below. MR. CONWAY referred to 2(c) on page 9, entitled, "Turbidity and Sedimentation," and read the following: BCMELP agrees with the two items identified in the remedy and the approach to the undertaking as summarized below. He said there is no disagreement here, nor with 2(d). MR. CONWAY summarized that, in essence, the Canadians have agreed to work with us to get information. The remaining issues we have pertain to getting the opportunity to review the actual information. They have agreed on the approach by working with us several times a week on exchanging information. There are about a dozen items the Division still needs to get information on even though DEC is busy permitting Alaska projects. CHAIRMAN HALFORD asked if DEC felt the IJC was necessary. MR. CONWAY answered that he didn't know since good progress is being made. But prior to the Governor requesting the referral, we were being left out of the discussion. He noted that the way Canada permits their projects, they do a different level of prepermitting and getting the permit out. Once the project starts, they go back and make changes and redesign the project. They have a lot of monitoring and oversight enforcement. Number 342 SENATOR PEARCE said she thought they used the same process to develop other mines in our joint watersheds in Southeast. She asked Mr. Conway if there was anything he had asked for that they had flat out said "No" to. MR. CONWAY answered no. SENATOR LINCOLN asked if there are major concerns on his list that feels won't be addressed. MR. CONWAY explained that most of the tasks on his list will take months to accumulate the information. Some of them require three or four months like the risk assessment which requires looking at the representative samples of the effluent. We also need mixing zone calculations which they call dilution. We haven't asked them to adopt Alaska's water quality standards, but have asked for something comparable. They are responding with what they say is an equivalent. Base line data is needed and spring is the best time to do that. Toxicity testing needs to be done for both acute and chronic toxicity. We haven't seen the data Mr. Ringstad referred to showing that the trout all survived after 36 hours (LC50 test). SENATOR LINCOLN asked if there was anything to keep the Canadian group from continuing their project and are we slowing it up with our list. MR. CONWAY said he didn't believe we were slowing them up. This project requires follow-through as with any U.S. mine. After four years of work, a U.S. mine is about ready to go; whereas the Canadian project is behind because their process is a bit different. SENATOR PEARCE clarified that no one alleged that the permitting process was stopping the project, but that going to the IJC would likely take two years which would slow down the mine. SENATOR LINCOLN wanted to make sure that the things they are requesting do not hold up the project. Number 420 MR. KEN TAYLOR, Director, Division of Habitat, said his concerns are primarily related to salmon and salmon habitat. The Taku is a producer of all five species of salmon in the Pacific and is the largest producer in Southeast, producing as much as 2 million salmon annually. About 400,000 are cohos, 300,000 are sockeyes, 100,000 king salmon, 1 million pinks, and about 50,000 chums. This river's production compares very evenly with the Copper River, the Susitna, and the Yukon Rivers. They would be asking the same questions and seeking the same assurances if a project were proposed in any of the other large rivers. The economic value of the Taku salmon resource is really large. The commercial gillnet fishery is worth about $2.8 million to about 100 permit holders and the commercial troll harvest of coho for 460 permit holders is worth about $1 million with an average catch of about 58,000 cohos. These don't include the value of the salmon to the seafood processors in local communities. Sport angling on the Taku is also extremely important, contributing about $6.4 million in direct spending to the Juneau economy. In high years, as many as 10,000 kings are taken - about 40 percent of which are from the Taku; about 50,000 cohos - about 40 percent from Taku; and about 32,000 anglers receive benefits from this system. In the US/Canada Salmon Treaty process, both countries have committed to special enhancement and conservation measures for trans boundary stocks that include the Taku River sockeyes. The State's special concern for Taku River salmon is consistent with our position in other treaty negotiations. MR. TAYLOR said our major concerns now are with the 75 miles of road that would access the mine site and the many river crossings. If they are not designed, constructed, and maintained properly, we are going to lose spawning habitat. We have very limited field studies documenting sockeye spawning adjacent to and immediately down stream of the mine site; this applies to juvenile coho, sockeye, and king salmon just downstream of the mine, as well. Most extensive thorough surveys are expected to document additional salmon spawning and rearing areas at stream crossings and in areas potentially affected by the effluent. The proposed tailings disposal site is on an active alluvial fan and adequate base line data and detailed engineering are not yet available to assure the State there will not be water quality problems. MR. TAYLOR said he thought it was reasonable that critically important concerns be resolved prior to permitting, but the Canadians have a different process. We are not asking them to adopt our process, but we do want to be involved in the critical decisions that should be made before the overall decision is made. The toxicity of mixing zones to fish is still unknown for several reasons and this is being worked on with DEC. The Tulsequah ore body is very similar to that of the Britannia Mine which has destroyed the salmon run in Britannia Creek and further impacted Howe Sound. Contingency plans for emergency closure of the mine and the level of government inspections and enforcement capability is one of the things we think should be finalized as part of the mine approval process, not something that should happen afterwards, he said. Our involvement in the Canadian review process has been constructive and we have been making progress. We still have numerous concerns regarding fish habitat protection. Many of these concerns have been protected in the response we got from Canada. The response is still fairly vague because there are a lot of unknowns. Our Canadian technical counterparts have agreed our resource concerns are legitimate ones. In discussions with Canada, MR. TAYLOR said, we have begun to agree on reasonably mine development standards, but so far it's informal and voluntary and relies on Canada's continued invitation to us to participate. In summary, Alaska has enormous economic interest in this watershed and we're proud of the fact that our salmon stocks are healthy including those in the Taku River and we want to keep them that way. Quite frankly, we look south across the border and are less than impressed with British Columbia's commitment to healthy and productive salmon fisheries. The bottom line is when we look at the cost and benefits of the Tulsequah Chief mine, it appears that the costs are all on our side of the border and the benefits are on the Canadian side, but we have never said no to the mine and we are looking to get answers to serious questions. We are asking to have a specified meeting for a role in the permit process. Because the mine is in a different country, we have had to use different tools to protect our vitally important salmon resources. CHAIRMAN HALFORD asked if there was any point at which the Department expects to have access to an evaluation on-site of raw data and information and actually look at potential stream crossings. MR. TAYLOR answered that he wasn't sure when that point would be, but when they get to the point of design, he hoped we would be involved since we have quite a bit of expertise in the Division on design and construction to mitigate or prevent damage to spawning habitats. He understands there are nine major stream crossing and probably as many as 200 culverts that will be necessary in this system. If they are not designed properly, they will cut off a lot of spawning habitat. CHAIRMAN HALFORD commented that it will take a lot of finesse not to look like a direct attack on the sovereignty of the country. MR. TAYLOR agreed and said they don't have any direct funding to do these kinds of things. We are working in cooperation with California, Washington, and Oregon on culvert designs that will benefit the spawning salmon. This is the cutting edge of construction design that will benefit everybody. If the Canadians are not interested now, they will be soon. SENATOR PEARCE asked if there are specific questions the Canadian government haven't addressed. MR. TAYLOR answered one of the problems we are having is in the mixing zone design. We are dealing with a river that changes channels quite a bit. The mixing zone requires a certain amount of water to accomplish the detoxifying of the effluent. We don't know, at this point, what will happen if the river changes channels and they have their mixing somewhere else. These types of questions need to still be addressed. SENATOR PEARCE asked if we are requiring cleaner effluent than the intake water like we do in our own state. MR. CONWAY answered that we are not requiring anything, but we are asking for the data they have on it. If it got to a situation where we had some concerns about that level of effluent, we would have a technical discussion about it to see if we could solve that dispute. We haven't gotten to that point, yet. We would not require them to have a higher standard than we have in Alaska. We have agreement on them doing mixing zone calculations and getting that information. We haven't seen the data. CHAIRMAN HALFORD asked who's in charge of mixing zones. MR. CONWAY answered that Division of Water Quality. CHAIRMAN HALFORD asked if he would be in charge of the migration of the mixing zone with the migration of the mixing stream. MR. CONWAY said that is correct; they would do modeling of it and set up a sampling plan that would show how it's moving according to that model. The Alaskans and Canadians have agreed to this, but in authorizing a mixing zone, there are a number of things people need to show. He also regularly consults with ADF&G to make sure they are comfortable that the habitat and biota are protected. Number 570 SENATOR PEARCE moved to adopt a conceptual amendment adding the name of the member of the BC Assembly from the Taku area to the list of people this resolution will be sent to. There were no objections and it was adopted. SENATOR PARNELL moved to pass CSSCR 7(RES) with individual recommendations. There were no objections and it was so ordered.