Homer Alaska - Business

Story last updated at 9:02 PM on Wednesday, May 25, 2011

Legislature kills Pebble study, will examine permit system

By Andrew Jensen
Morris News Service - Alaska

A state-funded third party study of the potential impacts of the proposed Pebble mine has been shelved.

A $750,000 appropriation near the end of the 2010 legislative session inserted into the capital budget directed the Legislative Council to award a contract for an "independent third party scientific and multidisciplinary study of the potential large mine development in the Bristol Bay drainage."

The latest capital budget, now on its way to Gov. Sean Parnell after the end of a contentious special session, has reappropriated that $750,000 for a third party study of the "statutory and permitting requirements and processes related to large mine development in the state."

The initial appropriation to study Pebble drew vigorous opposition from the Alaska Miners Association, Resource Development Council and the Pebble Limited Partnership.

The Pebble partnership is a 50-50 venture between Anglo American Plc of London and Northern Dynasty Minerals Ltd. of Vancouver to develop the massive copper, gold and molybdenum deposit estimated to hold $400 billion worth of minerals.

The groups unsuccessfully pressed Parnell to veto the study, and argued it was not only an unfair targeting of a specific project by the Legislature but was also unnecessary and duplicative given the rigorous examination the mine will face under the National Environmental Policy Act, or NEPA, when the permit process begins.

One of the first steps in the NEPA process is a third-party, independent assessment of the environmental baseline data submitted by the Pebble Partnership, which has spent the last six years and more than $400 million researching every environmental aspect of the proposed project site.

The partnership expects to release its baseline study, which could come in at more than 20,000 pages, this year and release its pre-feasibility study in 2012 that will finally give the public a clear vision of what the project would encompass.

When the Legislative Council took up the Pebble study during a pair of hearings last fall, members of the joint body from the House and Senate could not come to agreement on how to structure the study without an official mine plan or to whom to award the contract.

Opponents of Pebble have continually assailed the state's permitting process for large mines as insufficient to protect the environment. Senate President Gary Stevens, R-Kodiak, said this study of the state permitting system could help bring some order to the debate.

"There are a lot of lessons in this in how to do a public relations campaign and how not to do it," Stevens said of the ongoing battle over Pebble. "I think there have been a lot of mistakes made and now the public is a little bit confused and a little annoyed with some of the things they're seeing. Hopefully this study will move things ahead and we'll get some honest answers and get beyond the stage we're in right now — which has gotten pretty nasty in the media."

Stevens acknowledged industry concerns that the original study was targeting Pebble.

"People are taking sides, and that's what the Legislature has to be careful about — not take sides until we have some facts and let science lead us out of this, hopefully," he said.

Mike Heatwole, Pebble vice president of communications, said examining the state permit system is "clearly a better use of public money."

"We've long held that Alaskans hold up our permitting regime as world class, and if the Legislature wants to take a look at how that applies to mining, it could help evaluate it for everybody," Heatwole said.

Messages seeking reaction from Pebble opponents Trout Unlimited and Nunamta Aulukestai (a coalition of eight villages including and around Dillingham, and along the Nushagak River) were not returned by press time.

"We're seeing both sides arguing and getting their case out in the press; we just need to get some facts here to deal with," Stevens said. "The fishing communities I represent have some serious concerns about impact on the fisheries, as well they should. As someone not in the mining industry at all, the big question for me is the (tailings waste) dam of that size in an earthquake prone area."

One event that may have helped kill the Pebble study was the Feb. 7 announcement by the Environmental Protection Agency Region 10 office in Seattle that it would conduct an assessment of the Nushagak and Kvichak watersheds over the next year.

Opponents of Pebble have asked the EPA to use its authority under the Clean Water Act section 404(c) to preemptively stop the project from moving forward. In 40 years as an agency, the EPA has never preemptively asserted 404(c) authority to stop a project.

The EPA was careful in its announcement to not indicate such an outcome was forthcoming, but Heatwole said the partnership has many concerns about the study.

Chief among them is how the EPA will be able to complete a study of watersheds that total 22,000 square miles — the size of New Jersey and Maryland combined — and to adequately analyze Pebble's environmental baseline document in just one year.

"How is that going to be appropriately peer reviewed in such a short period of time?" Heatwole said. "Quite frankly, all of this being done pre-NEPA, does it prejudice our application? A whole host of other questions and concerns come to mind."

The EPA has been moving forward with its community involvement plan as part of its assessment. A meeting was held May 17 in Kokhanok, located on the south shore of Lake Iliamna and near the Pebble prospect.

An update meeting is scheduled for June 1 in Newhalen, also near the Pebble site. EPA representatives will travel by boat June 2 up the Nushagak to villages Ekwok and Koliganek, both members of Nunamta Aulukestai.

Mining "training sessions" to discuss the permit process hosted by EPA and the state Department of Natural Resources will take place June 2 in Newhalen and June 3 in Dillingham.

The Region 10 website is the source for updates on EPA's assessment (www.epa.gov/region10/bristolbay).

Andrew Jensen is a reporter for the Alaska Journal of Commerce. He can be reached at andrew.jensen@alaskajournal.com.