Mining

YEAR IN REVIEW: Pebble promises permit application after hurdles fall

This was the first good year in a long time for Pebble Limited Partnership and its owner Northern Dynasty Minerals and equally as bad a year for those trying to stop the massive mining project. After months of talks, the Environmental Protection Agency and Pebble Partnership settled a lawsuit in May that the company filed against the agency in 2014. The suit claimed the EPA, under the Obama administration, was biased in its drafting of the Bristol Bay Watershed Assessment and colluded with anti-mine scientists to reach the conclusion that a large, open-pit mine would cause too much damage to the region’s fisheries. The 1,000-plus page assessment was the basis for the EPA’s 2014 attempt to use its Clean Water Act authority to ostensibly prohibit development of Pebble. Per the settlement, the EPA is in the process of withdrawing its Clean Water Act 404(c) proposed determination and Pebble has 30 months and counting from the time of the May 12 agreement to file for the project’s federal permits. However, Pebble also agreed that the watershed assessment, the only official scientific document examining the potential impacts of the project, would remain valid. The EPA under the Trump administration is just not invoking it any longer. In early October Pebble released a new, smaller mine plan than original concepts that entails a reduced overall footprint and fewer roads to reach it by way of a ferry across giant Iliamna Lake. Pebble executives left open the possibility of expanding the mine after initial development and noted that would require a separate permitting process of its own. They also proposed setting up a corporation to distribute revenue from the mine to local Native village corporations and directly to area residents once it is in production. Most recently on Dec. 18, Northern Dynasty and fellow Canadian mining company First Quantum Minerals announced the framework of an investment deal in which First Quantum could put $150 million into the project over up to six years. The first $37.5 million would go towards permitting costs but First Quantum is still evaluating whether or not to finalize the potential investment, according to its press release about the deal. It could also buy a 50 percent stake in the project for $1.35 billion, according to Northern Dynasty. The parent company to Pebble has said it will need a large investment partner to help fund development and wants to secure one by the end of the year. Additionally, Pebble leaders have said they plan to file environmental permit applications by the end of 2017, which is coming soon. (Editor's note: This story has been changed to correctly state that the EPA is in the process of withdrawing its 404(c) proposal, but has not done so yet.) No. 2: Habitat initiative heads to Supreme Court Three Alaskans from Bristol Bay and Talkeetna filed a proposed ballot initiative to overhaul the state’s anadromous fish habitat permitting requirements and another fight over what are acceptable rules for development in and around salmon habitat has predictably followed. Proponents contend the “Stand for Salmon” initiative would give the Department of Fish and Game much-needed enforcement authority over unlawful salmon habitat disruption, which they say it currently lacks. They further note the state actually has no formal permitting structure for development in salmon habitat; rather, just a couple vague lines of statute that direct the department to authorize projects that provide “proper protection of fish and game.” In a June 30 letter to the sponsors, the Department of Law deemed the first iteration of the initiative an unconstitutional allocation of resources and would prohibit projects such as the Pebble and Chuitna mines and Susitna-Watana dam, which the initiative sponsors have opposed. After the sponsors revised the initiative, Lt. Gov. Byron Mallott still rejected it based on the opinion of Law Department attorneys and wrote that the measure “essentially usurps the Legislature’s resource allocation role.” He has insisted the state’s position is based on the constitutional implications and has nothing to do with the politics. In an interesting twist, Elizabeth Bakalar, the assistant attorney general assigned to the matter, said the June 30 letter was in large part a response to industry concerns about the initiative that the department heard. It is the same type of opinion state attorneys issue on any ballot measure, except earlier, she said. She commented that the department isn’t likely to issue “courtesy” opinions in the future because this one has been incorrectly perceived as the state helping the petitioners. However, it could just as easily be seen as a way to calm development industry concerns by clarifying ahead of time that the initiative would not be certified. The petitioners appealed to the Superior Court and Oct. 9 Judge Mark Rindner overturned Mallott’s decision, meaning the initiative could be put on the 2018 ballot. The state Supreme Court has instructed lower courts interpret initiatives broadly to give voters a say whenever possible, Rindner noted in his order. The state appealed Rindner’s ruling to the Supreme Court Oct. 25. The high court has since been quiet about its path forward and in the meantime the sponsors are gathering the required signatures to place it on the 2018 general election ballot. No. 3: NANA rebound High zinc prices made it a much better year for NANA Regional Corp. NANA, the Native regional corporation for Northwest Alaska, owns the Red Dog Mine — one of the largest zinc mines on Earth — that is operated by Vancouver-based Teck Resources Ltd. In September, Teck said it expects production from Red Dog to be between 525,000 and 550,000 metric tonnes this year. Output in that range would be about 10 percent above prior production forecasts. Zinc sold on spot markets for between 80 cents and about $1 per pound for several years before dipping to 70 cents per pound in early 2016. Since, the corrosion-resistant metal commonly used in steel coatings has steadily increased in value to its current spot price of about $1.45 per pound. NANA CEO Wayne Westlake said Red Dog’s increased revenue of late has largely made up for the recent decline in 7(i) distributions brought on by $50 oil. He noted that the resource development payments — required to be shared among the 12 Native regional corporations, with NANA a major contributor for its mineral royalties — are often one of few private cash flows going into rural Alaska communities. While the oil price depression hit Native corporations through revenue sharing, NANA is also among the group of corporations that is heavily invested in the business side of Alaska’s oil and gas, with seven subsidiary firms working on the support services side of the industry in Alaska, Colorado and the Gulf Coast. About 40 percent of NANA’s revenues come from the oil and gas sector in some fashion, according to company leaders. That led to NANA absorbing a $109 million loss in 2016 and its business operations company, NANA Development Corp., also had its credit rating downgraded last year as a result of its oil business struggles. No. 4: Ambler Road permitting begins with AIDEA in lead Development of the Ambler Mining District road project is now in federal hands. The Bureau of Land Management issued a Federal Register notice Feb. 28 requesting public input regarding what topics the agency should consider in drafting the environmental impact statement, or EIS, for the mining access road. Early environmental and financial study work for the proposed gravel road running west from the Dalton Highway for 211 miles to the remote Ambler Mining District has to this point been led by the state Department of Transportation and more recently the Alaska Industrial Development and Export Authority. The Ambler Mining District stretches for about 75 miles along the southern flank of the Brooks Range in the upper Kobuk River drainage. It has long been identified as an area of great potential for copper, zinc and precious metals but access issues have largely inhibited development. Vancouver-based Trilogy Metals Inc., formerly NovaCopper, is one company that has been busy exploring multiple prospects in the region. According to Trilogy, its well-defined Arctic deposit in the Ambler district likely holds about 2.3 billion pounds of zinc, more than 1.7 billion pounds of copper, 40 million ounces of silver and a small amount of gold. No. 5: Southeast exploration Alaska Mental Health Trust Land Office officials keep plugging away at their heavy mineral prospect on the Gulf Coast near Yakutat. In October, the Mental Health Trust Authority Board of Trustees approved $3 million more for exploration at the Icy Cape prospect in 2018. The prospect is a long stretch of coastline about 75 miles northwest of Yakutat in Southeast Alaska owned by the trust at the entrance of Icy Bay that appears to hold world-class deposits of several heavy minerals. The entirety of the area is roughly 48,000 acres and stretches for more than 30 miles along the Gulf of Alaska coast. Trust Land Office leaders have stressed that they are still in the preliminary exploration phase of evaluating the prospect but early drilling samples from the broad delta at the point of the cape indicate the ore there could be up to 40 percent heavy minerals. Overall, an average of 26 percent of the sands are heavy minerals, according to the Trust Land Office reports. The minerals of value in the “ore” — which is mostly old beach sands — are roughly equal portions of epidote and garnet in the areas of highest concentration with small amounts of zircon and even gold. Epidote and zircon are semiprecious gemstones. Garnet has also been used as a gemstone for hundreds of years, but more recently the hard mineral has been put to use as an industrial abrasive on sandpapers and in sandblasting applications. It is also used in water filtration; garnet’s small pores allow for the passage of liquid while catching some contaminants. If developed, the Trust property would be the only source for garnets on the West Coast, Land Office officials have said.

Pebble prospect owners might have new investor

The owners of the Pebble project are one step closer to securing the investment partner that will be key to advancing the contentious mine, according to Dec. 18 announcements. Vancouver-based Northern Dynasty Minerals Ltd. has inked what a company press release characterizes as a “framework agreement” with fellow Canadian mining company First Quantum Minerals Ltd. “The option agreement contemplates an option payment of $150 million (U.S.) staged over four years which option will entitle First Quantum to acquire the right to earn a 50 percent interest in the Pebble Limited Partnership for $1.35 billion,” a Northern Dynasty release stated. First Quantum can also extend the option and make the payments over an additional two years, according to the company. Northern Dynasty is the sole owner of Pebble after previous partners, Anglo American and Rio Tinto walked away from the controversial copper and gold project several years ago. Northern Dynasty leaders have said they will start filing environmental permit applications for Pebble by the end of the year. At the same time, they have acknowledged the company needs a new partner to help fund permitting and development. “We have made good progress in the partnering process and are very pleased to be in advanced-stage discussions with First Quantum, an industry leader in mine development and management,” Northern Dynasty CEO Ron Thiessen said in a formal statement. As soon as the agreement is finalized, First Quantum will make a $37.5 million payment to Northern Dynasty to fund permitting, according to a company release. First Quantum operates six mines worldwide primarily producing gold, copper and zinc. Thiessen added that Northern Dynasty will initiate state and federal permitting “in the very near term.” According to a release from First Quantum the company is still conducting a due diligence review of the potential partnership and will finalize the agreement contingent upon a favorable review. First Quantum CEO Philip Pascall said his company remains primarily focused on advancing a copper project in Panama, but Pebble could provide long-term growth for the mine developer. “We are well aware of the environmental and social sensitivity of (the Pebble) project and will utilize the lengthy option period to apply our extensive project development and operating expertise to ensure that this project can be developed with the support of stakeholders,” Pascall said further. Opposition stakeholders from the Bristol Bay region quickly responded with statements that they will continue to fight Pebble development and First Quantum should follow Northern Dynasty’s ex-partners and stay out of the project. “An overwhelming majority of Bristol Bay residents — fearful of the threat large-scale mining poses to their livelihoods and their way of life — are strongly against the Pebble project,” House Speaker Bryce Edgmon, D-Dillingham, said. “As their representative in the state House, it is my clear responsibility to oppose development of the proposed Pebble mine and the unacceptable risks it represents for the Bristol Bay watershed and the many communities I serve. A new investor in Northern Dynasty’s venture does nothing to change that.” The Pebble Limited Partnership unveiled high-level plans in early October for a smaller Pebble mine aimed at lessening the project’s environmental impacts and appeasing skeptics. Pebble CEO Tom Collier said the company might eventually look to expand the project but noted that would require another thorough permitting examination. A Northern Dynasty investor presentation from earlier this year states the company estimates the Pebble prospect holds 1.9 percent of all the gold ever mined in recorded history. Elwood Brehmer can be reached at [email protected]

More exploration approved at Icy Cape

Alaska Mental Health Trust Land Office officials are spending the winter reviewing the results of last year’s drilling campaign and preparing for another at their Icy Cape heavy mineral prospect. Those results were promising enough for the Alaska Mental Health Trust Authority Board of Trustees to approve $3 million in October to spend on more exploratory drilling next year, according to Trust Land Office Executive Director Wyn Menefee. The Icy Cape prospect is a long stretch of coastline about 75 miles northwest of Yakutat in Southeast Alaska owned by the trust at the entrance of Icy Bay that appears to hold world-class deposits of several heavy minerals. The entirety of the area is roughly 48,000 acres and stretches for more than 30 miles along the Gulf of Alaska coast. “We have a lot more to do in the sense that we didn’t cover any of the western portion of the property,” Menefee said in an interview. “We also need to do some more on the eastern side of the property. There’s just more to do before you have a better picture of where everything’s located.” Trust Land Office leaders have stressed that they are still in the preliminary exploration phase of evaluating the prospect but early drilling samples from the broad delta at the point of the cape indicate the ore there could be up to 40 percent heavy minerals. Overall, an average of 26 percent of the sands are heavy minerals, according to the Trust Land Office’s 2016 annual report. The minerals of value in the “ore” — which is mostly old beach sands — are roughly equal portions of epidote and garnet in the areas of highest concentration with small amounts of zircon and even gold. Epidote and zircon are semiprecious gemstones. Garnet has also been used as a gemstone for hundreds of years, but more recently the hard mineral has been put to use as an industrial abrasive on sandpapers and in sandblasting applications. It is also used in water filtration; garnet’s small pores allow for the passage of liquid while catching some contaminants. If developed, the Trust property would be the only source for garnets on the West Coast, Land Office officials have said. The Trust Land Office manages roughly 1 million acres of land across Alaska for real estate and resource development purposes, the proceeds of which go to fund the Alaska Mental Health Trust Authority’s work to benefit Alaskans with mental health and addiction challenges. Menefee said there is a misconception about the project that mining Icy Cape heavy minerals would literally mean digging up the beach. Much of the area is forested, he added, and portions of it have been logged. “It’s the course of time that creates these sandy forelands; so even though they are considered beach sands, it’s not the beach,” he said. The sands that comprise the substrate are the result of two sediment patterns coming from opposite directions, those materials that have eroded and washed down from the steep mountain faces above and sediments that tidal and wave action have pushed up to the shoreline. Most of that drilling has been done right from the logging roads that are already there, Menefee said. The area also has an airstrip. The drilling activity — and any future mine — doesn’t and won’t resemble the hard rock mines many people associate with the industry. Most of the drilling is to less than 100 feet down and it’s done with a sonic drill rig that uses vibration, not water, to make its way down. “It just vibrates its way down. We may go 75 to 100 feet, something like that, and then we take out the sand core samples,” Menefee described. “It’s a pretty low-intensity drilling program.” Because it’s a placer deposit, the mine would be “much more akin to gravel operations,” he added. Accordingly, the minerals would be sorted either using water, gravity, vibration, magnets or a combination of the processes, Menefee said, noting there is no need for chemical leaching. Trust Land Office revenues have varied greatly over its 22 years of existence, as money from timber and land sales and other resource projects has come and gone. Since 2011, its annual revenue has been between about $9 million and $16 million. Income from an Icy Cape mine — either as a royalty-collecting passive landowner or an active partner — could multiply the Trust Land Office’s annual revenue several times over and continue for decades, leaders have said. Menefee also emphasized that development is still a long ways off, saying it’s “way too preliminary” to even forecast a development or partnership structure and what role the trust would play in that. “I think that likely we are going to have anything from a few to several more years (of exploration) and a lot depends on the results of our drilling, the distribution of what we find,” he said. “It’s hard to tell right at the moment how long that (drilling) program will last before we would move towards an actual mine.” Between exploration and development the Trust Land Office might also demonstrate the viability of the prospect with prototype sorting equipment, depending on what potential mining company partners want to see, Menefee said as well. The simplicity of the operation and the fact that it’s all on trust, or state, land means federal permits and the often lengthy and costly environmental impact statement review process won’t be needed, according to Menefee. However, he again noted that permitting a full mine operation is a long ways off. “We are attempting to keep the communities and the public informed of where we’re going. We just held public meetings in Cordova and Yakutat and we intend to keep doing that after each field season to let people know where we’re at,” Menefee said. Elwood Brehmer can be reached at [email protected]

State appeals habitat initiative ruling

The ballot initiative proposed to strengthen laws protecting salmon habitat is headed for a supreme resolution, which doesn’t bother the initiative’s primary sponsor. On Oct. 20 the state Department of Law appealed to the Alaska Supreme Court to have a Superior Court ruling upholding the initiative on constitutional grounds overturned. Subsequent to that, Lt. Gov. Byron Mallott wrote a letter to lead sponsor and Cook Inlet commercial fishermen Mike Wood informing him of the administration’s decision to appeal the Oct. 9 Superior Court decision. Mallott stressed in his one-page letter that the appeal is meant to settle a legal issue, not a political one. “Although I believe an appeal was the right thing to do, I want to make it abundantly clear that this decision is based solely on the Alaska Department of Law’s unbiased analysis of the constitutionality of your proposed initiative,” Mallott wrote in the second sentence of the letter. The lieutenant governor — whose primary responsibility is to oversee state elections — also noted the Law Department has requested expedited consideration of the time-sensitive issue to ensure it is resolved in time for next year’s elections if the initiative ultimately succeeds. “Despite the spurious claims that my stance is solely political in nature, I want to remind you and all Alaskans that when I became lieutenant governor in 2014 I took an oath of office and swore to ‘support and defend the Constitution of the United States and the Constitution of the State of Alaska,’” Mallott wrote further. “I do not take those words for granted. I also believe this is an important issue that our highest court should ultimately decide.” Attorney General Jahna Lindemuth echoed Mallott in a formal statement issued by the Department of Law. “We take no position on whether (the initiative) is good policy. This is about the Superior Court’s legal conclusion and our duty to defend the Alaska Constitution, and we believe the Superior Court got it wrong,” Lindemuth said. Wood said in an interview that he understands the public perception bind the issue has put Mallott and Gov. Bill Walker in. “They have to do this. This isn’t a surprise,” Wood said of the appeal. “In many ways, I’m like, ‘go for it,’ let them push it that far. I think we’ll come out on top in the end, which will just strengthen our position.” Mallott refused to certify the “Stand for Salmon” ballot initiative Sept. 12 based on a Law Department opinion that concluded the changes to state law in the language of the measure would constitute prioritizing using state waters as salmon habitat above all other uses, such as in industrial or infrastructure developments. The Alaska Constitution prohibits citizen initiatives from prescribing such resource allocations; that power is reserved for the Legislature. However, Superior Court Judge Mark Rindner overturned Mallott’s rejection Oct. 9, ruling the initiative, which aims to prevent projects that would have “significant adverse effects” on salmon waters as a resource regulation, not an allocation. Wood also chairs the nonprofit group Stand for Salmon. He and other supporters of the law change contend the current language in Title 16, the state’s fish and game habitat permitting statute, which state’s the Fish and Game commissioner shall approve projects that “provide for the proper protection of fish and game,” is too ambiguous and has been eroded over time. Industry groups including the Resource Development Council for Alaska and the Alaska Chamber insist enacting the initiative would kill any meaningful development right down to local infrastructure projects, such as roads, bridges and utility projects. In July, the heads of the 12 Alaska Native regional corporations signed a joint letter opposing the ballot measure. Jason Metrokin, CEO of Bristol Bay Native Corp., which has led the fight against the proposed Pebble mine — a project the initiative sponsors have said they also hope to stop — wrote in a statement for the Journal that notwithstanding BBNC’s position on Pebble, the corporation believes developments that align with local opinion and don’t threaten fisheries should be allowed to proceed. BBNC also opposes House Bill 199, which largely mirrors the initiative language, and the Stand for Salmon initiative. “Each would unnecessarily and negatively impact resource development projects and potentially the subsistence activities upon which our shareholders depend,” Metrokin wrote. “Accordingly, BBNC is interested in working with the Walker administration, the Legislature and all stakeholders to appropriately update Title 16’s anadromous fish habitat provisions.” House Bill 199, sponsored by Rep. Louise Stutes, R-Kodiak, and the initiative were spurred in large part by an open-ended January request by the Board of Fisheries to update Title 16 at the behest of fishing groups. Similarly, the Kenai Peninsula Borough Assembly unanimously passed a resolution last year asking for further habitat protections in Title 16, which hasn’t been changed since statehood. Cook Inlet Region Inc. CEO Sophie Minich co-authored an op-ed opposing the initiative while the Eklutna and Chickaloon Native village councils — comprised of CIRI shareholders — have supported HB 199 in written testimony to the Legislature. CIRI spokesman Jason Moore said the regional corporation respects the rights and motivations of the Tribal organizations on this issue, but added that the initiative could restrict economic development opportunities on CIRI land that would ultimately benefit its shareholders. “We just think this measure is trying to solve a problem that doesn’t exist,” Moore said. On Oct. 18, RDC Executive Director Marleanna Hall, Alaska Chamber CEO Curtis Thayer and Doyon Ltd. CEO Aaron Schutt and Joey Merrick, a manager for the Laborers’ Union Local 341 filed with the Alaska Public Offices Commission to form Stand for Alaska, a group aimed at campaigning against the initiative. Hall said in an interview that the language in the measure “would leave too much speculation and uncertainty” for developers regarding what would be allowable disruption and mostly ignores accepted mitigation practices to improve habitat in one area of another is damaged. She also questioned why the sponsors are not being asked to prove why the initiative is necessary, saying that goes back to her belief that it is “seeking an answer to a problem that doesn’t exist.” “This initiative goes way beyond what the original request was from the Board of Fish to the Legislature in January. It goes way beyond our existing regulations that are already protecting fish habitat,” Hall said. “I think people get really excited about something that they get emotional about instead of looking at the facts.” Supporters insist the measure allows for habitat disruption if corresponding mitigation and recovery efforts are made to the same water body. A court affidavit submitted prior to the Oct. 9 Superior Court ruling by Alvin Ott, a fisheries biologist and manager in Fish and Game’s Habitat Division states that Ott believes the current plan for the massive Donlin gold mine proposed for the Upper Kuskokwim River drainage would not be permissible under the initiative because it calls for destroying American and Anaconda creeks. As an offset, Donlin is planning to enhance coho salmon rearing habitat in nearby Crooked Creek; however, such mitigation to an offsite stream would not be sufficient under the initiative, which requires that the impacted waters eventually be restored, according to Ott. Wood contends the initiative would provide industry interests clarity around about what activities are allowable, instead of relying on the open-ended “proper protection” phrase. He and other initiative backers have also said the only reason Alaska’s premier salmon fisheries have not been damaged so far is the state’s large mines are in the Interior and other areas away from large salmon runs. “We’re trying to make sure that industry can continue with assurances on both sides that it won’t affect fish. This is not designed to stop development at all. This raises the bar again,” he said. ^ Elwood Brehmer can be reached at [email protected]

Zinc prices help NANA rebound from oil crash

Strong returns from the Red Dog mine are helping NANA Regional Corp. overcome oil and gas industry losses. NANA CEO Wayne Westlake said in an interview that the Northwest Alaska zinc mine is outpacing production forecasts at a time when zinc prices are high. The open-pit Red Dog mine sits about 90 miles north of Kotzebue, the largest community in the region. NANA, the Alaska Native regional corporation for the area, owns the mine that is operated by Vancouver-based Teck Resources Ltd. Teck expects production from Red Dog to be between 525,000 and 550,000 metric tonnes this year, according to a September release from the company. Output in that range would be about 10 percent above prior production forecasts. The uptick in production is the result of changes to mine sequencing and advancements in metallurgical recoveries, Teck states. It also comes at a time when zinc prices are more than double what they were less than two years ago. Zinc sold on spot markets for between 80 cents and about $1 per pound for several years before dipping to 70 cents per pound in early 2016. Since, the corrosion-resistant metal commonly used in steel coatings has steadily increased in value to its current spot price of about $1.45 per pound. For an owner of one of the largest zinc mines on Earth, like NANA, the production bump and price spike add up to a big deal. It’s also a positive equation for the other 11 Alaska Native regional corporations and the roughly 200 Native village corporations that share in the mine’s revenues. The Alaska Native Claims Settlement Act mandates Native regional corporations share 70 percent of their timber and subsurface resource revenues with their fellow Native corporations in the state in a system known as 7(i) resource revenue payments. Much of the 7(i) revenue dispersed amongst the Native corporations has historically come via oil and gas royalties from production on Arctic Slope Regional Corp. holdings on the North Slope and Cook Inlet Region Inc. lands in Southcentral Alaska. NANA also became a significant 7(i) contributor when Red Dog opened in 1989. However, when oil prices started to drop by roughly half in late 2014, 7(i) revenues fell accordingly as well. Westlake said Red Dog’s increased revenue of late has largely made up for the recent decline in 7(i) distributions brought on by $50 oil. He noted that the resource development payments are often one of few private cash flows going into rural Alaska communities. “It’s not coming from the state; it’s not coming from the federal government. It’s coming from another Alaska Native corporation,” Westlake said of the 7(i) funds. “It’s been very important to the state especially with the price of oil down.” While the oil price depression hit Native corporations through revenue sharing, NANA is among the group of corporations that is heavily invested in the business side of Alaska’s oil and gas, with seven subsidiary firms working on the support services side of the industry in Alaska, Colorado and the Gulf Coast. About 40 percent of NANA’s revenues come from the oil and gas sector in some fashion, according to company leaders. That led to NANA absorbing a $109 million loss in 2016 and its business operations company, NANA Development Corp., also had its credit rating downgraded last year as a result of its oil business struggles. “The good news is that we’re doing better than last year; we’ve taken a number of steps to make that happen,” Westlake said. NANA shuttered two of its challenged subsidiaries doing work outside Alaska — NANA Pacific and NANA Australia — and has sold other companies working Outside to refocus on its strong federal contracting businesses and in-state operations, according to Westlake. Which companies NANA has divested are still confidential at this point, he added. “You just got to keep cutting and trimming,” he said, given oil prices and Alaska’s associated recession. Another positive for NANA on the mining side this year came in April when Teck agreed to a 10-year payment in-lieu of taxes, or PILT, deal with the Northwest Arctic Borough for the severance tax the borough levies on mineral production. The previous PILT agreement expired in 2015 and when a new deal couldn’t be reached the borough moved to impose a tax that would have increased Teck’s severance payments from $12 million in 2015 to somewhere between $30 million and $40 million. Teck sued, contending the borough was singling out the mine operation, which is a primary economic driver in the region. The new PILT is about 30 percent larger than the prior agreement, according to Teck. Westlake said the 10-year deal provides NANA and Teck with greater business stability versus the PILT arrangements that had been made previously. “We can at least now have some ability to plan, to understand what the tax would be and in the past it was over five years and its seemed like in a few years you had to be thinking about planning for the next round of negotiations,” he said. Westlake further described the successful PILT negotiations as a “win-win,” not only because it settles a contentious issue for the companies and the local government, but also because the PILT payments go directly to fund services used by NANA shareholders. “It’s something that we look at as a cooperative exercise because of where the (PILT) benefits go,” he said. Teck focused long-term While Red Dog is a current bright spot for NANA, its future is looking equally as positive. Teck is in the midst of a $110 million upgrade to the mine’s mill, which should increase its production capacity by about 15 percent. That ultimately will help keep zinc production steady despite the declining grade and harder ore in the existing deposit. Red Dog’s current life is expected to expire in 2031, but with Teck describing the mill upgrade as having “robust economics” in a September release, the company is clearly looking further out with its investment. Teck also announced in September that the Aktigiruq deposit it has been exploring for several years on state land about 7 miles northwest of the mine could hold up to 150 million tonnes of 16 percent zinc ore with smaller amounts of lead as well. If the estimates prove out, the Aktigiruq deposit is another world-class zinc discovery near what is already a world-scale zinc mine. Westlake said the new find could potentially support Red Dog many decades to come. To date, Red Dog has milled 78 million tonnes of ore of 19 percent zinc and 5 percent lead, according to Teck. Elwood Brehmer can be reached at [email protected]

Judge overturns Mallott on salmon habitat proposal

Alaskans seeking more protections for the state’s salmon notched a victory Oct. 9 when a Superior Court ruling overturned Lt. Gov. Byron Mallott’s denial of a ballot initiative to overhaul permitting laws for projects in and around salmon-bearing waters. Judge Mark Rindner wrote in a 20-page order that the salmon habitat initiative does not prescribe how countless miles of state rivers and wetlands be used, but rather simply regulates the quality of that water while it is in use. In September the Department of Law deemed the initiative, pushed by the conservation group Stand for Salmon, as an unconstitutional appropriation of state assets and thus recommended Mallott reject its inclusion on the 2018 statewide ballot. He did so Sept. 12. The Alaska Constitution prohibits voter initiatives from appropriating state assets; that power is reserved for the Legislature. In June, Assistant Attorney General Elizabeth Bakalar wrote a letter to initiative sponsors Mike Wood, a commercial fisherman, Bristol Bay lodge owner Brian Kraft and Gayla Hoseth of Dillingham, informing them that a prior version of the initiative would likely be denied because it was deemed to appropriate state resources. At the same time, the state Supreme Court has instructed lower courts interpret initiatives broadly to give voters a say whenever possible, Rindner noted in his order. “We need to have clear rules for projects proposed in sensitive salmon habitat to ensure they’re being done responsibly — as well as provide more certainty in the permitting process for the industry that is proposing the project. That’s exactly what this measure calls for. It works to ensure a prosperous economy for all Alaskans by bringing balance to our approach for permitting,” said Wood, who chairs Stand for Salmon. The decision comes just six days after Bakalar and Trustees for Alaska argued the case in front of Rindner. The mining group Council of Alaska Producers also argued in support of the state’s position. Trustees for Alaska is a nonprofit environmental advocacy law firm, which is representing Stand for Salmon in its appeal. Bakalar contended in oral arguments that a plain-language reading of the eight-page initiative leads to the conclusion that fish habitat is prioritized above all other uses, namely any type of meaningful development. And she said Rindner needed to rule based on how voters would interpret the initiative in the voting booth. Bakalar said, and Rindner similarly wrote, that the dispute is not over whether or not the initiative is good policy, but whether or not it ties the Legislature’s hands when deciding how to appropriate state resources. History suggests the case is headed for the Supreme Court, as a high court ruling is the only way it is truly settled, but Bakalar wrote in an email to the Journal that evaluating whether or not to appeal will take several weeks. Valerie Brown, legal director for Trustees for Alaska and the attorney who argued on behalf of Stand for Salmon, centered her argument on language in the initiative that mirrors what was in a 2008 ballot initiative attempting to restrict mine waste from being discharged into state waters. Voters ultimately shot down that initiative but the Supreme Court upheld its constitutionality after a challenge by Pebble Ltd. Partnership, which similarly claimed it amounted to an unconstitutional appropriation of state water. The habitat initiative aims to restrict developments that, even after attempts at mitigation, would inflict “significant adverse effects” on salmon streams. The 2008 “Pebble” initiative looked to prohibit operations that “could adversely affect water that is used by humans or salmon.” The current initiative would allow for developments that could restore damaged habitat in a “reasonable period.” Council of Alaska Producers attorney James Leik told Rindner during the Oct. 3 hearing that Stand for Salmon just scattered the words “adverse effect” into the revised initiative to align it with the Pebble case. If so, it worked. Rindner concluded there is leeway in the language for it to be a permissible regulation and not prescriptive appropriation in favor of fish. “(The initiative’s) definition of ‘substantial damage’ leaves the Legislature the discretion to determine ‘accepted mitigation measures,’ what level of impact ‘adversely affects’ the habitat, the acceptable probability of recovery for fish habitat to ‘likely recover,’ and what timeframe constitutes recovery within a ‘reasonable period,’” he wrote. If the Pebble initiative was constitutional, the one in question today is too because it also “leaves the Legislature discretion in its implementation through the use of a plethora of undefined terms,” Rindner continued. Opponents argue the language ostensibly prohibits any large development that could result in such impacts, but the issue at hand is a matter of law and no one has been able to provide any evidence supporting that claim, according to Rindner. “The impact of the initiative at this time is pure speculation,” he wrote. He wrote further that the Legislature would still have enough room that it “could implement” the initiative in a way that allows development projects. The state’s current salmon habitat law, Title 16, directs the Fish and Game commissioner to issue a development permit as long as a project provides “proper protection of fish and game.” The petitioners contend that is far too vague and an update is needed to just define what “proper protection” means. Rindner added that the argument purported by the Council of Alaska Producers that the initiative favors water for fish habitat mischaracterizes the basis of what the proposed law change is. That argument concludes that water is a public asset and fish habitat is how that asset is used, which is wrong, according to Rindner. “The correct taxonomy is that water is a genus of public asset, and anadromous fish habitat is a particular species of public asset within the water genus,” he described. “(The initiative) does not explicitly favor any particular use of anadromous fish habitat between recreational fishing, kayaking, commercial fishing, hatcheries, mining, pipeline, or dams; it only concerns itself with the condition of the water,” Rindner continued. He ordered the Division of Elections to immediately begin printing petition booklets for the initiative and have them ready by Oct. 17. Bakalar said that while the state obviously disagrees with the decision, officials have been working with Stand for Salmon during the litigation process to make sure the booklets were ready if need be. Even a favorable court ruling does not mean the initiative will surely reach the 2018 ballot. The sponsors still need to get more than 30,000 signatures supporting it statewide before it can be fully certified. Elwood Brehmer can be reached at [email protected]

CEO unveils Pebble 2.0

Pebble Limited Partnership has finally done one of the things it has long been criticized for not doing: the company released an actual mine plan. CEO Tom Collier discussed the major points of the plan Oct. 5 at a Resource Development Council for Alaska meeting in Anchorage. Long a topic of ample speculation, Collier said the mine plan the company plans to submit for environmental review to the U.S. Army Corps of Engineers in December has a footprint that is 60 percent smaller than the concept the Environmental Protection Agency used to determine Pebble’s prospective impacts in the 2014 Bristol Bay Watershed Assessment. He noted that the 1,000-plus page assessment, which Pebble contends was a biased document from its genesis aimed at stopping the project, determined a much smaller mine could pass permitting muster. Pebble’s plan is for a mine pit, waste rock and tailings storage facility to cover 5.4 square miles, which Collier described as “in the ballpark” of the 4.2 square mile project the EPA then deemed acceptable. The EPA used a concept operation covering 13.5 square miles when it concluded in the Bristol Bay Watershed Assessment that what was believed to be the company’s plan was unacceptable. In May, the company settled a lawsuit it filed in 2014 against the EPA over the process behind the watershed assessment and the agency’s subsequent proposal to preemptively prohibit the project, which put intense criticism on the Trump administration by Pebble’s opponents. However, Collier said the company also had a deal with the Obama administration that fell apart. “Few people know this — we actually negotiated a settlement with the Obama team before they left the White House and at the very last minute the administrator of the EPA (Gina McCarthy) refused to sign the document that we’d been told for a week had been approved,” he revealed. The EPA is currently taking public comments on whether it should reverse the process started in 2014 to ban a large mine in the Bristol Bay region, despite the fact that as a condition of the Pebble settlement the assessment remains valid and on which the Pebble “veto” was based. In late 2014, Alaska U.S. District Court Judge H. Russel Holland issued an injunction stopping the EPA from completing the Pebble veto until that suit was resolved. Three-quarters of Pebble’s proposed footprint would be the tailings storage facility. Shrinking the size of the project allowed Pebble to move it out of the Upper Talarik Creek drainage that feeds Iliamna Lake and the Kvichak River. The Kvichak River has one of the two largest sockeye returns in Bristol Bay most years. The smaller mine plan also eliminates waste rock piles, as the company will start mining where the copper and gold ore is closest to the surface, according to Collier. Waste rock that is removed will be used in the tailings dam. Additionally, Collier said Pebble acquiesced to opponents over one of their biggest concerns with the project and will not be leaching gold out of the ore. The secondary recovery process would otherwise recover about 15 percent of the available gold, he said. “We’re going to leave that 15 percent of gold in the rock at the mine site and there won’t be any cyanide at Pebble,” Collier said. A redesigned tailings facility with improved buttresses and a more gradual slope increases protection against earthquakes, according to Collier. He said the tailings dam would be built to withstand ground acceleration more than twice what the U.S. Geological Survey believes there is a 2 percent chance to exceed every 50 years at the project site. He also noted the nearest fault line — the Lake Clark fault northwest of the project site — has not been active since the last ice age. “We believe that our mine has been designed to withstand the greatest possible seismicity predicted by science, period,” Collier asserted. Tailings with acid generating potential would be stored in a separate, lined containment facility. Leading up the expected release of Pebble’s new plan, many mine opponents, including state House Speaker Rep. Bryce Edgmon, D-Dillingham, who represents the Bristol Bay region, said there is nothing Pebble can do to change their minds about the project they feel will unnecessarily put the region’s world-class salmon fisheries — and the jobs linked to those fisheries — at risk. Alannah Hurley, executive director of United Tribes of Bristol Bay, an organization that has been at the forefront of the fight against Pebble, said the revised vision for the mine was met with skepticism from Bristol Bay tribes in a release from the group and would still be one of the world’s largest mines. “This is just a wolf in sheep’s clothing. For more than a decade, the Pebble Limited Partnership has tried to convince Alaskans that it should build a mine in Bristol Bay, at the headwaters of the world’s last great salmon runs,” Hurley said. “In that time, opposition has only increased, and Bristol Bay has been crystal clear on its feelings towards Pebble.” If the worst were to happen and the tailings dam failed — a scenario Collier said many inside Pebble did not want him to discuss — the smaller project would now impact only the North Fork of the Koktuli River, he said, as it is no longer in the Upper Talarik drainage. He added that based on the Bristol Bay Watershed Assessment, about 20 miles of the North Fork of the Koktuli would be severely damaged for about a decade from turbidity in the water. After that the river would eventually return to being viable fish habitat. The North Fork of the Koktuli, which feeds the Mulchatna River and eventually the famed Nushagak River, produces approximately 0.02 percent of the sockeye salmon that return to Bristol Bay each year, according to Pebble. “I can’t tell you how many times I’ve spoken to people and asked them why are they against the Pebble project and the answer they tell me is that if we have an accident we’ll kill all the fish in Bristol Bay,” Collier said. “The Obama administration EPA says we’re only going to kill two one-hundredths of one percent if we have a catastrophic incident that we don’t think is even possible to have.” Finally, Pebble has scrapped plans for a road around giant Iliamna Lake in favor of employing an ice-breaking ferry to traverse the lake to supply the mine via a shorter road from a new port that would be built on Cook Inlet near Augustine Island. Cutting out miles of roads removes much of the project’s impacts to wetlands, Collier said. The EPA’s Pebble concept had 86 miles of new roads; the new plan needs 42 miles, according to the company. “Is this project worth building given all the other benefits, given all the risks of it? Damn straight it is and these numbers I think show that,” he said. He continued: “The key, though, is that all this stuff I talked to you about today has to go into the environmental impact statement process and it will be tested. And if the calculations we’ve done are correct we’re going to get a permit. If they’re not correct, if they’re not reliable, we’ll have to change them; we’re going to have to modify our proposal so that it will be correct. “We’re not going to build a project that’s going to damage that fishery. We’re not going to build a project that’s going to have significant environmental damage to that region. But we’re confident that we can build the one that we’re talking about now without any of those consequences and we’re going to move it forward aggressively.” Gov. Bill Walker said that he doesn’t have enough information on Pebble’s new plan to support it in a recent interview with Alaska Public Radio. In an Oct. 6 prepared response to Walker’s comments, Collier said Walker’s hesitancy towards the project is appropriate at this point. Walker “should be skeptical; ask hard questions; and allow the permitting agencies to do their work,” Collier said. The governor said during his 2014 campaign that he was against the — at that point — large mine concept because of the potential impacts it could have on Bristol Bay fisheries, but also criticized the EPA for its move to preemptively prohibit the project because of the fear it could apply the same process to other projects in the state. Collier said in an interview following his talk that the company doesn’t have plans now to expand the project beyond the current proposal if it reaches production but noted any expansion would trigger another scrupulous environmental review. Pebble’s owner company, Northern Dynasty Minerals has indicated in recent investor presentations that it estimates the Pebble deposit holds up to 1.9 percent of all the gold ever mined in recorded history. “It’s not like since you’ve done phase one you get a leg up at all. You start all over, from scratch, new permit,” Collier said of expanding the mine. “And the key to that new permit is it’s going to look at whether the two together are too big and if it’s too big then it’s not going to get a permit but that doesn’t affect the first one. The first one stands on its own. If it works, it works and then if we propose a second one and it’s concluded that’s too big, it’s too much for the region then it doesn’t get built but that’s tomorrow’s question.” He also said that while Pebble and Northern Dynasty leaders previously said the parent company needs to secure a second investor in the project before starting what is expected to be a $150 million environmental impact statement, or EIS, process, that isn’t necessarily the case any longer. But he also said during his presentation that Northern Dynasty should announce a partner on Pebble by the end of the year — the time by which it will be known if Pebble makes good in its statements to formally apply for permits this go-round. Sharing the project The benefits of the mine start with jobs and could end with direct revenue payments to local residents based on the programs Pebble is proposing. Collier acknowledged that “Pebble’s got a credibility problem,” which in part stems from numerous claims not coming to fruition over a decade that the company would advance the project. Further, he noted that because the project is on state land there is no established way for Alaska Native residents in the region to benefit from it as have Natives closer to other mines in the state on Native corporation land. As a result, Pebble is suggesting it could set up a corporation to hold 5 percent of the project and distribute that revenue to the five area Native village corporations and nearby residents. Based on the company’s projections, such a setup would directly pay each of the village corporations about $500,000 and each resident, assuming about 5,000 people signed up, about $500 annually. Pebble would also bring excess power to a region that has exorbitant electricity prices — upwards of 80 cents per kilowatt-hour, Collier said. The company is in discussions with some of the large regional Native corporations in the state about owning the prospective power plant and other infrastructure related to the project, he added. “We’ll need to work with the state; we’ll need to work with the villages on how we wheel that power from the mine site to the region but that’s our clear intention,” Collier said. Pebble is also investigating ways it could benefit the Bristol Bay commercial sockeye fishery, he continued. “We’d like to do something with some of the revenue that this mine generates that would be seen as us showing that we’re good neighbors to that fishery. We don’t buy the dichotomy that you have to choose between the fishery and the mine. We think they can both coexist,” Collier said. The company is pursuing a crop insurance-like concept to mitigate the economic volatility in fishery. Collier described a plan that would pay fishing permit holders in years when the average vessel revenue fleet-wide dropped below a certain point. “When I first looked at this the numbers were daunting but when I went back and looked at it perhaps only for the fishermen from Bristol Bay that hold permits or perhaps only the Alaskan permit holders, the numbers are not quite so daunting,” he said. He also suggested a permit buyback program for Outsiders that hold permits as a way to get more ownership of the fishery back to the region. “We haven’t decided what we’re going to do yet but we have decided we’re going to do something,” Collier said, adding Pebble has economists running numbers while discussing the possibilities with fishermen. Hurley dismissed the revenue sharing concepts as more attempts to purchase support for the project, saying the salmon fishery will sustain the region longer than the life of any mine. In hard numbers, even the smaller project would bring about 2,000 jobs over the projected 20-year life of the mine to the region, according to the company’s figures. It would add about $20 million to the Lake and Peninsula Borough’s annual revenue and pay the state between $49 million and $66 million per year, Pebble estimates. Elwood Brehmer can be reached at [email protected]

Habitat initiative proponents argue appeal in Superior Court

Is there discretion in the term “significant adverse effects?” That is the question at the center of the court debate over a ballot initiative aimed at reforming Alaska’s permitting laws to better protect salmon habitat from large development projects. The Department of Law doesn’t think so, and Assistant Attorney General Elizabeth Bakalar stressed as much during about 90 minutes of oral arguments Oct. 3 in Anchorage for Stand for Salmon’s appeal of Lt. Gov. Byron Mallott’s rejection of the initiative, which was based on a Department of Law recommendation. Superior Court Judge Mark Rindner heard the appeal. Valerie Brown, legal director for the nonprofit environmental advocacy law firm Trustees for Alaska, argued on behalf of fellow nonprofit Stand for Salmon that the initiative entitled, “An Act providing for protection of wild salmon and fish and wildlife habitat,” indeed affords the Department of Fish and Game adequate discretion to determine what constitutes significant adverse effects on salmon habitat. Mallott rejected the citizens’ ballot initiative Sept. 12 after receiving a legal opinion from Bakalar, who wrote that the proposed law change would blatantly limit the Legislature’s ability to allocate state assets; in this case anadromous fish habitat. In June, Bakalar wrote a letter to initiative sponsors Mike Wood, a commercial fisherman, Bristol Bay lodge owner Brian Kraft and Gayla Hoseth of Dillingham, informing them that a prior version of the initiative would likely be denied because it was deemed to appropriate state resources. The Alaska Constitution reserves the power of resource appropriation for the Legislature and thus prohibits ballot measures from doing so. Brown repeatedly stressed that the initiative’s key language mirrors a 2008 initiative that was rejected by voters after making it to the ballot after being upheld by the Alaska Supreme Court. In that case, the initiative, aimed at restricting discharges from the proposed Pebble mine, would have prohibited large mining operations from releasing or storing pollutants that “could adversely affect water that is used by humans or salmon.” The state’s current salmon habitat law, Title 16, directs the Fish and Game commissioner to issue a development permit as long as a project provides “proper protection of fish and game.” The petitioners contend that is far too vague and an update is needed to just define what “proper protection” means. Opponents in the mining, oil and gas, and construction industries argue the initiative would ostensibly prohibit projects of any meaningful size, including many pipeline and road construction efforts, among others. Bakalar reiterated that argument as proof that the initiative would appropriate waters for fish habitat. However, she said, “This is not a policy debate. It’s a question of Article XI, Section 7 (of the Alaska Constitution.)” Bakalar added that the initiative’s language might indeed be good policy, but that is up to the Legislature to decide. To that end, House Bill 199 sponsored by Rep. Louise Stutes, R-Kodiak, which mirrors the language in the voter proposal, is up for consideration by the Legislature come the regular legislative session in January. According to Bakalar, even if the initiative is not a strict appropriation, Judge Rindner must rule on how voters would interpret the proposed changes in the voting booth. She said it “defies plain English” to read the language of the proposal as anything but putting water for salmon habitat above all other uses. Brown said the current initiative in question would add scrutiny to the permitting process for large development projects but would still allow them to go forward if Fish and Game determined they would not have those “significant adverse effects” on salmon-bearing waters. Additionally, the department would have the discretion to permit large projects even if they impacted salmon waters as long as mitigation and restoration measures helped the waters recover to be viable fish habitat in a “reasonable period,” as the initiative states. “The definition of substantial damage includes the discretion of Fish and Game to determine how much harm is substantial damage so that makes it very similar to the Pebble case where the commissioner can allow some kinds of harm,” Brown argued. “He can’t allow harm that is so significant that it rises to substantial damage and that’s exactly the kind of regulation that’s allowed to prohibit harm to a state asset.” The first iteration of the initiative also required restoration to support historic levels of water flow and fish populations, Brown noted, but that requirement was pulled from the version now in court. “It would have to say no disturbance of fish habitat is permitted” to be an appropriation of assets, she added. Brown said that the now-abandoned Chuitna coal mine, which Stand for Salmon fought to prevent, would have been allowed under the initiative if the habitat restoration methods proposed could be proven effective. Bakalar noted that the initiative generally requires water restoration to account for the life cycle of salmon; meaning restoration could have to happen in such a short time frame to make it unfeasible. “There’s simply no way to build some of these projects without dewatering habitat,” Bakalar said. James Leik, arguing on behalf of the Council of Alaska Producers, a mining industry group, said the initiative is much broader than the 2008 Pebble case emphasized by Brown. “Very fundamentally the initiative changes the priority for the use of these assets. That in itself restricts the Legislature’s ability to allocate those assets,” Leik said. The petitioners simply “scattered the words ‘adverse effect’ into several of the provisions” of the revised initiative to make the claim it aligns with the Pebble case, he contended. Brown rebutted that Rindner shouldn’t speculate on how Fish and Game would implement the provisions, but that he must only determine whether or not there is discretion in the language. “The initiative doesn’t establish a preferred use as anadromous fish habitat. Anadromous fish habitat is the asset that’s being regulated and the question is: Is the initiative a permissible regulation of harm to that asset?” Brown said. “It’s clearly not a priority of use initiative; it is about protecting a specific asset, anadromous fish habitat, from harm.” Rindner said he would rule on the appeal as expeditiously as possible, acknowledging trial court judges such as himself are often seen as “speed bumps” on the way to the Supreme Court, a nod to the almost certain appeal that will follow his ruling, whichever side it favors. Elwood Brehmer can be reached at [email protected]kajournal

Ballot measure would give greater say to ADFG

Alaska fishing groups concerned about the impacts that large-scale development projects could have on salmon habitat are pushing to reform the state’s permitting requirements through a voter initiative on the 2018 ballot. The initiative would primarily establish a two-tiered permitting structure for projects with the potential to impact salmon-bearing waters. It would give the Department of Fish and Game commissioner the authority to issue broad approval for projects deemed “minor,” but also require proponents of larger projects to prove they would not have a significant adverse impact on salmon habitat. Additionally, it would require project advocates to prove to Fish and Game that the area of the water body the development could damage is not used by salmon sometime in their life cycle if the water is connected to one known to have salmon. The initiative was sponsored by Cook Inlet commercial fisherman Mike Wood, Bristol Bay lodge owner Brian Kraft and Gayla Hoseth of Bristol Bay Native Association. Lt. Gov. Byron Mallott will decide whether to certify the initiative by Sept. 12. In an interview, Wood said it is not intended to stop development projects, but rather to simply update the state’s protections for salmon as the Board of Fisheries requested. Current law directs the Fish and Game commissioner to approve fish habitat permits if a project is deemed to provide “the proper protection for fish and game.” Board of Fisheries Chair John Jensen wrote in a Jan. 19 letter to House and Senate leaders that there is nothing in current state laws or regulations defining what is a proper protection. “Additional guidance is warranted for the protection of fish, to set clear expectations for permit applicants and to reduce uncertainty in predevelopment planning costs,” Jensen wrote. “To strengthen ADF&G’s implementation enforcement of the permitting program, the Legislature may want to consider creating enforceable standards in statute to protect fish habitat, and to guide and create a more certain permitting system.” The Board of Fisheries letter was spurred by public pressure to amend Title 16, the state’s general laws relating to Fish and Game, according to Jensen. To that end, the initiative, which would rewrite state law, is mirrored after House Bill 199 sponsored by Rep. Louise Stutes, R-Kodiak. “We don’t want to stop (development); we want to make sure that the permitting process is rigorous so that we don’t destroy the fish habitat that we need to get the returns that are so important to the Alaska economy,” Wood said. The Alaska Constitution was written with a huge amount of thought toward salmon resources and the effort is to get back to that mindset in the state, he added. “It’s gotten a little blown out of proportion because this won’t stop things; it’s just trying to elevate the level of accountability back to where we believe it began at statehood. Over the years the regulations have been whittled away from administration to administration,” Wood said. Initiative opponents have cited federal laws, such as the Clean Water Act and National Environmental Policy Act that guides the environmental impact statement process as additional adequate salmon habitat protections; meaning an update to Title 16 is unnecessary. “I think there was a time when we thought we could have faith in the feds, the EPA, to have those standards and I think now we’re seeing that we can’t and it’s just part of the state having a greater say in its own outcome to have those high (permitting) standards,” Wood said. Wood characterized Alaska as simply “lucky” it hasn’t seen a large-scale manmade disaster of late similar to the 2014 Mount Polley mine tailings dam failure in British Columbia. He noted many of the state’s largest mines and other developments are in the Interior region or otherwise away from major salmon-bearing watersheds. The Department of Law deemed an earlier iteration of the initiative as a means to allocate resources and prohibit projects such as the Pebble and Chuitna mines and Susitna-Watana dam, which the initiative sponsors have opposed. A June 30 Department of Law letter to the sponsors outlined the provisions in the first draft of the initiative that would not pass legal muster. Assistant Attorney General Elizabeth Bakalar emphasized in an interview that the letter was in large part a response to industry concerns about the initiative that the department heard and is the same type of opinion state attorneys issue on any ballot measure — just earlier. She commented that the department isn’t likely to issue “courtesy” opinions in the future because this one has been incorrectly perceived as the state helping the petitioners. However, it could just as easily be seen as a way to calm development industry concerns by clarifying ahead of time that the initiative would not be ratified. “It’s just a heads up; do with it what you will,” Bakalar said. Wood said small changes were made to the latest version to hopefully meet the Department of Law standards. He acknowledged that the preferable vehicle to address salmon habitat protections would be through HB 199, which could be amended to include input from development proponents, but characterized the ballot proposal as a “belt and suspenders” approach to the issue. The Resource Development Council and other pro-development groups stressed in testimony on HB 199 that reforming the state’s habitat permit requirements is a solution searching for a problem. “The intent to safeguard Alaska’s salmon fisheries is an objective we share and it is why we support Alaska’s existing rigorous and science-based regulatory system,” wrote a coalition including the Alaska Chamber, Southeast Conference and the Anchorage and Fairbanks economic development corporations in an April letter to legislators. “As a coalition that includes urban and rural Alaskans and businesses and associations representing tens of thousands of jobs for our state’s citizens, we cannot overstate how important it is to have consistent regulator and permitting processes.” They continued to contend that HB 199 or the initiative would likely cause delays to smaller community projects like wastewater facility upgrades or airport expansions while worsening the state’s fiscal crisis by slowing or stopping economic development without any true benefits to fish habitat. Alaska Native corporations such as Cook Inlet Region Inc., Calista Corp. and Doyon Ltd. have opposed the measures, while Native tribal organizations such as the Tanana Chiefs Conference and the Native Village of Eklutna support it. The Kenai Peninsula Borough Assembly unanimously approved a resolution in September 2016 supporting an update to Title 16 to further protect fish habitat. A 2014 state ballot measure requiring legislative approval for a large mine in Bristol Bay — which Pebble argues is a blatant violation of the Alaska Constitution — was billed as a way to protect the region’s salmon and passed with 66 percent support among Alaska voters. It was supported by 72 percent of voters in Bristol Bay and greater southwest Alaska, according to Division of Election results. Elwood Brehmer can be reached at [email protected]

Bristol Bay study stands, but EPA moves to halt its finding

Is Environmental Protection Agency Administrator Scott Pruitt just putting the shoe on the other foot? The EPA announced July 11 that it was starting the process to withdraw the proposed determination reached under President Barack Obama’s administration to prohibit large-scale mining in Bristol Bay — a roundabout way of saying the Pebble mine project. A 90-day public comment period on the proposed withdrawal is now open through Oct. 17. Pebble Limited Partnership and its parent company Northern Dynasty Minerals hailed the decision as a major step toward returning to a normal and fair permitting process. “The current administration at EPA is closely focused on enforcing environmental standards and permitting requirements for major development projects like Pebble in a way that is both rigorous and robust, but also consistent in order to provide predictability and an even playing field for all resource developers,” Pebble CEO Tom Collier said in a formal statement. “It’s an approach all Alaskans and all Americans should support because it has the benefit of maintaining the high standards for environmental protection for which the state and country are known, while attracting investment in projects that create high-wage jobs and other much-needed economic benefits in our country.” Pebble has long held that the EPA’s push in 2014 to block mine development through its Clean Water Act Section 404(c) authority was a biased decision. That’s because the junior mining company contends the 1,000-plus page Bristol Bay Watershed Assessment, on which the 404(c) proposal was largely based, is an erroneous document developed over several years to be used as a means to reach a predetermined decision that the mine must be stopped. The Bristol Bay Watershed Assessment ultimately determined that large-scale mining in the region would irreparably harm Bristol Bay’s world-class salmon fisheries that currently support much of the areas economy. Pebble subsequently sued the EPA in 2014, alleging the agency had colluded with anti-mine activists and environmental-leaning scientists in drafting the assessment. Federal District Court of Alaska Judge H. Russel Holland saw enough validity to Pebble’s argument to issue an injunction in November 2014 halting the 404(c) proceedings until the lawsuit was resolved. A January 2016 EPA Inspector General report supported the validity of the assessment, but scolded the agency for months’ worth of missing emails and other procedural missteps related to evaluating the prospective Pebble project. Settlement talks in December 2016 that preceded President Donald Trump’s administration concluded this spring when the sides reached agreement, giving Pebble 30 months to submit its environmental permit applications for the mine at which point the 404(c) process could be resumed. However, the settlement also allows the Bristol Bay Watershed Assessment to stand. Pebble also contends the assessment’s conclusions are highly speculative, given the company has yet to submit a formal mine plan. Yet, despite the assessment being the only valid, on-the-record, scientific document upon which decisions regarding Pebble can be made at this point, Collier is confident the proposed determination to block Pebble will be withdrawn at the end of the comment period. Pebble spokesman Mike Heatwole said in an interview that a fair review of the project in a normal permitting process is all the company has ever wanted. In moving the 404(c) process prior to Pebble even applying for permits, the EPA broke from precedent, but Holland also dismissed another suit in which Pebble claimed the agency had overstepped its authority. Withdrawing the proposed determination “allows us to get an environmental impact statement on the record, which is a far more legitimate, fact-based and thorough document that has to be based upon an actual plan of development with actual science,” Heatwole said. “If you have that level of rigor it would probably make the watershed assessment moot. We have held all along that the process and that document is flawed on its premise.” Alannah Hurley, head of United Tribes of Bristol Bay, the Dillingham-based coalition that has led the fight against Pebble, said if EPA Administrator Pruitt appropriately considers all of the public comments that have been submitted supporting protections for Bristol Bay the withdrawal will be short-lived. “If they listen to the people and actually take the public comment seriously and they look at the immense amount of scientific work that went into that determination it will not be rescinded,” Hurley said in an interview. “If they choose to ignore that and ignore the scientific rigor and the will of the people — if they choose to ignore that and not take it seriously, it will be.” Hurley further argued “99.9 percent of the comments” submitted in 2014 supported the proposed determination. While a large majority of people who testified during August 2014 public meetings supported the EPA’s move, the agency’s Alaska spokeswoman Suzanne Skadowski said Holland’s injunction prevented the results of the 671,517 written comments submitted on the Federal Register from being tabulated. Heatwole contends many of the comments in support of the agency at the time were “postcards” or form letters from individuals without adequate knowledge of, or an appropriate stake in, the issue. A 2014 state ballot measure requiring legislative approval for a large mine in Bristol Bay — which Pebble argues is a blatant violation of the Alaska Constitution — was billed as a way to protect the region’s salmon and passed with 66 percent support among Alaska voters. It was supported by 72 percent of voters in Bristol Bay and greater southwest Alaska, according to Division of Election results. Skadowski called reversing course and moving ahead with the withdrawal despite the assessment being the only available science on Pebble “a policy call” made by Pruitt to see what Pebble’s plans are before making a decision. “We’ll use that existing science and whatever becomes available at that time,” Skadowski said. Heatwole cited a line in the EPA’s Federal Register notice about the withdrawal which states, “A withdrawal of the proposed determination would remove any uncertainty, real or perceived, about (Pebble’s) ability to submit a permit application and have that permit application reviewed.” The notice further reiterates that under the settlement the EPA retains the right to eventually use its 404(c) authority on Pebble if it is deemed necessary. Pebble leaders continue to say they intend to file permit applications this year for a smaller, less impactful mine than had previously been conceptualized. A recent investor presentation on Northern Dynasty’s website states the Pebble copper and gold deposit contains 1.9 percent of all the gold ever mined in recorded history. The company has been roundly criticized, even by some Republican lawmakers who have also criticized the EPA’s actions, for repeatedly stating over more than a decade that a mine plan and permit applications were coming soon, without making good on the promise. Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Infrastructure plan could be stymied by lack of key resources

Recently, President Trump announced a $1 trillion plan to fix the nation’s roads, bridges, dams, and airports. And while Congressional approval may hinge on the specifics of funding these projects, Americans should be concerned with whether the country can obtain sufficient metals and minerals to undertake such a large effort. There’s no doubt that a robust plan to rebuild America’s declining infrastructure could spur activity and employment throughout the economy. And thankfully, America enjoys a particularly rich endowment of the copper, nickel, zinc, and other metals that serve as building blocks for new roads, bridges, and dams. But acquiring enough raw materials in a timely fashion may prove problematic since America’s mining operations are currently beset with a number of obstacles. For starters, access to the mineral resources needed for infrastructure renewal could well be thwarted by conflicting and duplicative mine permit reviews conducted by multiple federal and state agencies. It currently takes seven to 10 years for companies to successfully obtain the necessary permits for a major new mining operation. Such delays have become the inevitable outgrowth of too many agencies moving too much paperwork too slowly. President Trump acknowledged this problem recently when he contrasted current permit delays with the comparatively brief five-year timespan needed to build the famed Hoover Dam. In the current mining environment, it would take more than five years simply to open new mines that could provide the requisite metals and materials for the dam itself. Significantly, America is home to an estimated $6.2 trillion in minerals and metals reserves. But this advantage is compromised when companies face long delays to open new mining operations. This is all the more egregious when competitors in countries like Australia and Canada—with similar environmental standards—typically receive mining clearances in only two to three years. An added hurdle for mining projects is former President Obama’s 2015 decision to further restrict mining activity on 67 million acres of mineral-rich federal land. This includes a proposal to withdraw 10 million acres of western lands to conserve the habitat of the sage grouse, a bird that is neither threatened nor endangered. In fact, the government’s own environmental assessment has determined that wildfires and invasive species of vegetation—not mining—have periodically threatened the bird’s habitat. The bird’s population has already increased 63 percent since 2013, thanks in part to contributions from state, local, and private conservation plans that have been largely ignored by federal planners. If such land use restrictions are left in place, however, they will simply combine with permitting delays to further limit access to the vast majority of the nation’s mineral reserves. These bottlenecks will directly affect any efforts to rebuild domestic infrastructure, since federal lands in the Western United States produce much of America’s mineral wealth. Without more timely access to these resources, the nation will be forced to continue its growing and risky dependence on imports to supply critical minerals needed in both high-tech and industrial manufacturing. The United States is already entirely import-dependent for 19 key minerals, and more than 50 percent import-reliant for another 24 minerals. With half of the nation’s mineral wealth already off-limits or under restrictions, further limitations and land withdrawals will undoubtedly increase America’s import reliance—and from countries that may lack comparable environmental protections. Thankfully, Washington is taking notice. Interior Secretary Ryan Zinke has asked for a 60-day review of new restrictions placed on mining in federal lands—a key step toward potentially accessing the minerals and metals needed for President Trump’s infrastructure plan. Reviews are also underway to streamline the duplicative permitting process for major projects. America can minimize such impediments through better decision-making, while still retaining environmental safeguards. And that could help to build the foundation for a modern infrastructure that the nation urgently needs. ^ Hal Quinn is president of the National Mining Association.

Pebble, EPA reach court settlement

Pebble Limited Partnership and the Environmental Protection Agency have agreed to walk away from the courtroom, with Pebble getting to keep its project alive and the EPA holding on to its critical Bristol Bay Watershed Assessment. The sides announced a deal May 12 to settle two lawsuits brought by Pebble owner Northern Dynasty Minerals Ltd., a Vancouver-based junior mining company, against the federal agency in 2014 that contended the EPA under former President Barack Obama illegally colluded with opponents of the massive proposed Bristol Bay-area copper and gold project in drafting the Bristol Bay Watershed Assessment. The 1,000-plus page environmental assessment is the document upon which the agency founded its proposed determination that a large open-pit mine would cause significant and irreparable harm to the prolific salmon fisheries that are the foundation of the region’s economy. Specifically, the settlement approved by Alaska Federal District Court Judge H. Russel Holland calls for the EPA to withdraw its proposed “veto” of the mine under Section 404(c) of the Clean Water Act, which the agency started in the summer of 2014. In November 2014, Holland issued an injunction against the EPA prohibiting it from finalizing the proposed determination until the lawsuits were settled. Additionally, the EPA cannot revisit the Section 404(c) action for four years or until the Army Corps of Engineers has completed an environmental impact statement for the project, whichever comes first. Pebble must also file its federal environmental permit applications for the mine within 30 months from now. Pebble parent company Northern Dynasty Minerals has been roundly criticized — including by some state politicians opposed to the EPA’s actions — for failing to follow through on repeated claims made over more than a decade that they would apply for the permits and ultimately end speculation over the scope of the mine and whether it will ever be built. The Clean Water Act gives the EPA administrator broad authority to prohibit development projects he or she determines would unacceptably harm the nation’s wetlands and waterways, regardless of other state and federal approvals a project may receive. In the case of Pebble, however, the seldom-used 404(c) action was initiated earlier in a project’s maturation than the EPA had done previously and without a mine plan in place, points Pebble leaders emphasized. The mining company also argued that the watershed assessment was a jaded and therefore meaningless document because the EPA did not follow Federal Advisory Committee Act guidelines and adequately consult with the company while compiling information for it. Rather, EPA scientists and other agency officials sought out third-party experts opposed to the mine and then tried to hide their actions by limiting what was released in Freedom of Information Act requests made by Pebble, the company alleged further. Now, Alaska Native, commercial fishing and conservation groups that have long insisted Pebble is a threat to the world’s largest sockeye salmon fishery — and by extension Bristol Bay residents’ longstanding way of life — argue the EPA under President Donald Trump and Administrator Scott Pruitt has colluded with Pebble in closed-door negotiations to reach a favorable settlement for the mining company. “We are committed to due process and the rule of law,” Pruitt said in a formal statement about the Pebble settlement. “We understand how much the community cares about this issue, with passionate advocates on all sides. The agreement will not guarantee or prejudge a particular outcome, but will provide Pebble a fair process for their permit application and help steer EPA away from costly and time-consuming litigation. We are committed to listening to all voices as this process unfolds.” Pebble Partnership CEO Tom Collier said the company is “excited to be able to introduce several new initiatives in the coming year that will more clearly define how the project will benefit residents of Bristol Bay and Alaska. Our project will be significantly smaller with demonstrable environmental protections. Chief among these is protecting the important salmon resource in Bristol Bay. It will be a busy and exciting year for the project and we look forward to engaging with Alaskans to discuss our plans.” Northern Dynasty CEO Ron Thiessen told investors in January that the company plans to initiate Pebble’s permitting this year. However, Northern Dynasty and Pebble leaders have also said they also need to attract another large company to help finance the process, which will likely cost several hundred million dollars even before construction. Northern Dynasty’s former partner in Pebble London-based Anglo American dumped the project in 2013 after spending roughly $500 million on it. State House Speaker Rep. Bryce Edgmon, who represents the Bristol Bay region, said in a May 12 statement that he is “keenly disappointed” by the settlement. “Backing away from the agency’s painstaking work and analysis of the 404(c) issue following years of work to carefully construct a position that not only was supported by a number of tribes in the region but once again the majority of the people in the region,” Edgmon said. “The people of the Bristol Bay region do not need this kind of stress hanging over our heads continuing on year after year.” Pebble opponents have also stressed that a majority of Alaskans do not want the mine developed based on a statewide voter referendum approved to limit mining in the Bristol Bay region. Pebble leaders have discounted the 2014 ballot measure, asserting it is a clear violation of the Alaska Constitution. United Tribes of Bristol Bay Executive Director Alannah Hurley said in a Friday release that the settlement won’t slow the fight against the mine. “If there’s one thing I want you all (to) leave here with today, it’s this: Pebble may have its short-term victory today,” she said. “But, we as indigenous people have been on this land for over 10,000 years and we’re not going anywhere.” Elwood Brehmer can be reached at [email protected]

Red Dog mine owner Teck reaches tax deal with borough

A contentious dispute over taxes is close to resolution between Teck Alaska, operator of the Red Dog Mine north of Kotzebue and the North West Arctic Borough. A new payment-in-lieu-of-tax, or PILT, has been agreed to by Teck and borough administrators, and is expected to be approved by the North West Arctic Borough assembly. It would result in payments to the borough ranging from $18 million to $26 million per year for 10 years. According to Teck’s annual financial filing, the new PILT will be about 30 percent larger than the last agreement. A previous PILT agreement had Teck paying the borough about $8.6 million per year as well as a separate payment of $2.4 million per year to the North West Arctic School District, for which the company received a 50 percent state tax credit. That agreement expired in December 2015. When negotiations on a new PILT broke down, the borough imposed a minerals severance tax that had been held in abeyance under the PILT. Teck then sued the borough. The new severance tax would have increased the amount Teck pays the borough from $12 million in 2015 to an estimated $30 million to $40 million in 2016. According to Teck, Red Dog supports 715 mine-related jobs with $75 million in annual payroll, and the company spends $160 million on supplies within Alaska each year. More than 600 of the jobs are held by shareholders of NANA Regional Corp., the Alaska Native regional corporation for the area. The controversy focused attention on a dispute that has long been simmering over whether the borough was getting a fair share of in-lieu payments from the mine to help support local services. With state funds for community programs being cut, the question assumed greater sensitivity. Since Red Dog went into production in 1989 the relationship between the mine, which is the world’s largest zinc and lead producer, and Inupiat communities in the Northwest Alaska region has been amicable. That’s mainly because NANA Regional Corp., the Alaska Native regional corporation based in Kotzbue, owns the land where the mine is built and receives royalties. By its 25th anniversary in 2014, royalty payments had topped $1 billion. Those help bolster dividends paid to NANA to its shareholders. The royalties are also shared with other Alaska Native corporations. The new PILT agreement functions in two parts. One is a proxy for a property tax where the mine will pay an annual payment, estimated at $14 million to $18 million per year, based on estimates of the value of Teck’s fixed assets at the mine. This comes under a PILT because the borough has no property tax. A second part of the agreement is an annual payment made by Teck into a new Village Investment Fund, with a first-year deposit of $11 million into the fund and subsequent payments that will be made on a percentage of Red Dog’s annual gross profit. The borough will administer the fund, with details yet to be worked out. The intent is that the fund will help support community programs, services and local infrastructure. Sources close to the negotiations said that Teck itself proposed the Village Investment Fund. Clement Richards, mayor of the borough, said he is pleased to get a proposal before the assembly to settle the dispute. “The (borough) administration has worked hard to negotiate an agreement that meets the needs of our borough, which is of utmost importance,” he said. Henri Letient, Red Dog’s general manager of operations, said, “The agreement will provide more resources for the people and communities of the region, while also supporting Red Dog’s ability to stay competitive and continue generating jobs and economic activity.” Overall, Red Dog has been doing well. Zinc prices have increased in recent months and Teck Alaska’s latest financial statement for Red Dog shows that production at the mine has been generally steady. The parent company, Teck Resources Ltd., reported profit of $1.1 billion in 2016 compared to just $188 million in 2015. Zinc production in the fourth quarter of 2016 was up 7 percent, the report said, due to higher recoveries of metal from the ore in the mill at Red Dog, but lead production declined by 4 percent due to lower grades in the ore. Production costs declined also due to lower fuel prices and optimization of the stripping ratio, or the volume of fill moved to reach the ore, at the mine. Production in 2017 is estimated at 545,000 tons of zinc and 115,000 tonnes of lead. A tonne, a common unit of measurement in mining, is 2,200 pounds, compared with a ton, which is 2,000 pounds. From 2018 through 2020, production is estimated at 500,000 to 525,000 tonnes of zinc and 85,000 to 115,000 tonnes of lead, mainly due to lower grades of ore being mined. Feasbility studies are now underway on ways to “debottleneck” the mill to improve metal recovery even as the grade of ore declines, according to the financial statement. ^ Tim Bradner is co-publisher of Alaska Legislative Digest and a contributor to the Journal of Commerce. He can be reached at [email protected]

Minerals prices rebounding, but jobs still off from 2012 highs

Alaska saw a dip in mining jobs during 2016, numbers attributed to losses in the oil patch as well as hard rock mines when commodities prices took a dive. Employment numbers are tallied in different ways by various agencies. Alaska Department of Labor statistics show Alaska went from 17,400 mining jobs in 2015 to 14,200 jobs in 2016. That number lumped in petroleum jobs, said Alaska Economist Neal Fried, with “mom and pop” placer mines and large entities such as Usibelli coal. The Alaska Miners Association separates out minerals and construction materials mining to get its tally: Jobs went from a high of in 2012 of 10,000 to 8,600 in 2016, said AMA President Deantha Crocket. “But overall, it’s been pretty stable,” Crocket said. That outlook could change in the placer mining sector as new developments include a spike in the price of gold to $1,294 an ounce as of April 18. But at the only Alaska coal mine in operation, Usibelli Coal has no international trade partners for the first time in more than 30 years and has severely downsized. Last year the company sold its last trainload to Japan. “We have no export customers this year,” said Lorali Simon, Usibelli’s vice president of external affairs. Production fell to 1 million tons in 2016 when Usibelli lost trade partners located in Chili, South Korea and Japan. Customers now are located only in-state. “In our heyday, we produced 2.1 million tons a year,” Simon said. Currently, Usibelli supplies coal for six coal-burning power plants located in Interior Alaska. “We’re looking for trade opportunities but currently marketing conditions don’t support exports,” Simon said. “There’s a long explanation for that. It’s based on the strength of the U.S. dollar. It’s due to the fact there’s more natural gas on the market, and cheaper coal out of Indonesia and Australia.” The “onslaught of regulations” from the Obama administration is easing under the Trump administration, Simon said. “A lot of damage was done the last eight years to our industry,” she said. “Being able to climb out of that is a source of optimism for us. We’re looking for every opportunity to expand and the only opportunity is on the export market.” Employment at Usibelli fell from 150 in 2011 to the current 100 employees. Some were laid off, others involved positions that went unfilled after attrition, Simon said. Total payroll for all mineral resource mining saw a payroll of $675 million in 2016. The industry produces zinc, lead, copper, gold, silver, coal, as well as construction materials, including rock, sand and gravel. These are good jobs, Crocket notes, so losses are felt in the Alaska economy. The average annual wage is $108,000, or twice the state average income. A haul truck driver earns between $85,000 to $100,000. Diesel mechanics are in high demand. Jobs that require degrees such as metallurgists also are in need and pay well. “We calculate a diverse spectrum of jobs. Mines operate like small independent cities,” Crocket said. “They also employ medics, chefs, everything needed in the day-to-day life for the operation of a mine.” A McDowell Group study in 2011 had predicted a rosier future for mining based on several advanced exploration projects that had the potential to dramatically increase Alaska’s mining employment. The Chuitna coal project on the west side of Cook Inlet was predicted to create 300 to 350 jobs; Wishbone Hill coal project was to employ 100 workers once in production; and the Pebble mine in Southwest Alaska would require an operations labor force of 800-1,000, the study predicted. Now Chuitna’s prospects are shuttered, along with Wishbone Hill. Pebble may be on the comeback but that’s still years away. Yet another statistic collected by the Alaska Department of Labor looks at a narrow window into those employed mining hard rock and other minerals. Economist Fried notes those numbers have been stable. In 2015, the state counted 2,983 jobs. In 2016, the number was 2,943. The price of gold dropped in December to $1,130, then rose to $1,294 per ounce by April 18. “These are still good prices for gold. They’re not historic prices, but they have rebounded substantially. That’s a good trend,” Fried said. Non-production time when prices are good is a time for marketing mines to investors, AMA’s Crocket said. According to discussions at AMA meetings, investments have boded well in the past year for several projects, she said. New projects for other minerals are in development. The farthest along is the Donlin Gold project, which is nearing completion of its environmental impact statement. A graphite prospect near Nome, a copper mine at Ambler and more small gold operations in waters around Nome could boost state numbers in a new direction for the coming years. The state, through the Alaska Industrial Development and Export Authority, has started the permitting process for the Ambler Road to reach the prospect. The scoping period for the environmental impact statement was recently extended to the end of this year. Overall prices have improved on commodities since a low in 2014-15, Fried said. “We can expect those numbers to go up again,” he said. “Price is a plus. As a result of prices, exploration activity should improve. I think there’s signs of that. Prices help make possible for other mines to open. It improves the economic environment for opening new mines. That’s one of the most important things.” Naomi Klouda is a correspondent for the Journal. She can be reached at [email protected]

Habitat bill draws attention, but won’t get vote this year

JUNEAU — It is already being dubbed, “fish first, nothing else.” Reps. Louise Stutes, R-Kodiak, and Andy Josephson, D-Anchorage, have introduced a bill that would set up a new fisheries habitat permitting system, to be administered by the state Department of Fish and Game, for construction projects that affect waterways. Critics say the legislation would add serious burdens to environmental permit systems that are complicated enough, and set standards that many development projects will be unable to meet. Stutes brought the bill up in the House Special Fisheries Committee, which she chairs, for an initial hearing April 11. She said she will not push to move the bill this year, but will hold it for interim work and possible action in 2018. Although he is not listed as a co-sponsor, the bill is reportedly a priority for House Speaker Bryce Edgmon, D-Dillingham. One effect of the bill is a presumption that all waters of the state support anadromous fish and would be listed by ADFG, which would trigger the permit requirement. Many Alaska streams do not support anadromous fish, and for those the developers would have to do site-specific studies to show salmon or other species are not present. Under current law, the Habitat Division of ADFG maintains the Anadromous Waters Catalog of streams that support anadromous fish. If projects affect a listed stream a state permit is now required, but what is proposed in HB 199 is far more stringent. For major projects ADFG would have to do a detailed analysis not unlike the state Best Interest Finding documents prepared by the Department of Natural Resources for major state decisions. Fisheries groups supporting HB 199 say the current Title 16, which sets out the anadromous fish stream protection dates from the early 1960s, needs an update. The state Board of Fisheries wrote a letter in January urging legislators to update the statute and include public notifications, which are not in the current law. Advocates for HB 199 argue the process for listing streams is cumbersome and expensive because state biologists must do field work to test for fish. Because of that only 50 percent of the streams that actually support anadromous fish are listed, it’s argued. HB 199 would also lay out criteria for unacceptable projects causing stream impacts, which would automatically trigger a denial. Unacceptable projects would be those requiring water treatment in perpetuity, which some mining projects must do; replacement of a wild salmon stock that would be affected with hatchery stock, or a project that would dewater or divert an anadromous fish habitat for more than five years. These requirements would effectively block projects like Pebble, the Chuitna coalmine and Susitna hydro projects. At the April 11 hearing, fisheries groups supporting the bill said it was proposals for the Susitna and Pebble mine projects that caused them to push for specific standards to protect salmon as well as public notice requirements, both which are absent from current law. Lindsey Bloom, a member of Juneau-based “Stand for Salmon,” said her group was among those urging the Board of Fisheries to write its letter in January. At the hearing, critics of HB 199 said the bill goes far beyond what the Board of Fisheries recommended, however. Maver Carey, president of The Kuskokwim Corp., or TKC, an Alaska Native Claims Settlement Act village corporation formed by several mid-Kuskokwim communities, said, “House Bill 199 appears to be an effort to fix something that is not currently broken.” “The overreaching regulation and processes proposed will not only have a detrimental effect on proposed economic activities in the Middle Kuskokwim region, but may have detrimental effects on our much-needed community infrastructure projects along the Kuskokwim and its tributaries,” Carey wrote. TKC is the surface landowner at the proposed Donlin Gold mine, a large project now in advanced permitting. Two Native regional corporations, Doyon Ltd. and Cook Inlet Region Inc., shared TKC’s concerns in letter to the committee. Both corporations signed on to a letter opposing the bill submitted by the Resource Development Council, or RDC. The letter was also signed by several business and community organizations. “Concerns with this bill start with the question of why it is necessary. What is it trying to fix?” said Marleanna Hall, executive director of the RDC, an Anchorage-based development advocacy group that counts both mining and fishing as its member industries along with oil and gas, timber and tourism. To comply with the bill, “the added time to resource agencies, as well as permit applicants, would increase uncertainty and costs for development opportunities without a corresponding benefit to fish habitat,” Hall told the committee. There would be effects on upgrades to community infrastructure, such as airports and roads and construction of wastewater treatment plants as well as economic development with fish processing, timber harvesting and mining and oil and gas development, Hall said. However, the state’s premier commercial fisheries group, United Fishermen of Alaska, and other commercial and recreational fish groups have signed on with support, as well as several Native organizations. Not all fisheries groups support HB 199, however. One, the Bristol Bay Fishermen’s Association, weighed in against the bill April 11, arguing that everything HB 199 proposes could be done by regulation, said David Harsila, president of the association, and Anchorage attorney Geoffrey Parker, who works with the Bristol Bay association. Several at the hearing said ADFG now has authority and the flexibility to achieve the goals of HB 199 without setting up a new permit system. In a separate statement, Kara Moriarty, president of the Alaska Oil and Gas Association, weighed in against the bill: “HB 199 would create an expensive and cumbersome state permitting system that would be more onerous than current federal regulations. It would be harder to get state approval for oil and gas projects than it would be to get a section 7 permit under the ESA (Endangered Species Act) or a 404 (Clean Water Act) permit from the Corps of Engineers,” Moriarty said. “The bill would be duplicative,” of other permit systems, she said. “It’s easy for the anti-Pebble community to try and make this a fish verses mining bill, but it’s way beyond that.” Tim Bradner is co-publisher of Alaska Legislative Digest and a contributor to the Journal of Commerce. He can be reached at [email protected]

DNR approves Pebble permit, with conditions

Natural Resources Commissioner Andy Mack approved Pebble Limited Partnership’s long-awaited land-use permit April 11 with stipulations that include a $2 million bond to backstop exploration cleanup. The permit is for 12 months; Pebble had sought a permit through 2018. Pebble applied for the miscellaneous land-use permit, or MLUP, last Oct. 13. MLUP approval for most activities is often little more than a formality, but next to nothing about Pebble is normal either, from the size of the project to the fervor it generates. That DNR received more than 2,000 comments on the annual Pebble MLUP lends credence to that fact, which Mack acknowledged in a department release. A vast majority of the commenters supported, at a minimum, increased oversight of Pebble’s activities. “It is unusual for a state land-use permit to get so much public attention, but it is not unusual for DNR to add stipulations to a land-use permit,” Mack said. “We have carefully considered and applied new stipulations to this permit that are reasonable, comply with our legal requirements and address concerns we heard in the comment period.” It is also unusual for DNR to hold a formal public comment period for an MLUP application. However, a 2015 Alaska Supreme Court decision in one of the numerous court cases surrounding Pebble requires the department to hold a 30-day comment period on permits for the project until DNR drafts regulations in accordance with the decision. Some level of financial surety typically accompanies an MLUP unless DNR waives the requirement, according to department spokeswoman Elizabeth Bluemink. Similar performance guarantees have been required for some mining operations in the state and are often sought for non-mining activities on state land as well, Bluemink said. Pebble spokesman Mike Heatwole described the $2 million guaranty as “very workable,” adding it was not a surprise and had come up in discussions with DNR officials. Mack wrote in a letter approving the permit that the $2 million figure equals what DNR estimates it would cost for the state to remove Pebble’s on-site equipment and temporary storage facilities and otherwise restore the area should the company for some reason fail to meet its obligations. The money will eventually be returned to Pebble if the company completes the restoration work. Heatwole said other stipulations in the permit approval, such as an expectation Pebble will appropriately abandon 138 boreholes this year and inspect at least 300 of the 612 exploration holes that are to remain open, were part of a summer work plan the company submitted to the department about a month ago. The 612 holes will stay open for ongoing monitoring and additional data collection. More than 1,300 boreholes have been drilled on the claims by several companies since 1988, according to DNR. “We’re focusing on getting a (MLUP) permit and continuing our summer work program,” Heatwole said in a brief interview. That work program will largely resemble what Pebble has done in recent years — monitor and maintain drill sites and equipment, according to Heatwole. No further exploration is planned at this point. Bluemink also noted that the performance guaranty is not a reclamation bond, which Pebble is not required to post for its work to date. The State of Alaska generally requires mining project operators to post a reclamation bond if the activity disturbs more than five cumulative acres. Because Pebble chose to conduct operations via helicopter, thus reducing its footprint, and all of its temporary facilities were placed on “tundra mats” to limit impacts to vegetation that will grow back once the equipment is removed, the company has yet to meet the five-acre threshold, according to DNR officials. Pebble Partnership holds title to mining claims covering 266,300 acres of state land near Iliamna Lake at the headwaters of the Bristol Bay drainage. The location of the proposed gold and copper mine in the midst of one of the world’s most prolific salmon-rearing watersheds has naturally made it an extremely controversial project. A study released last November and commissioned by the United Tribes of Bristol Bay, a Dillingham-based nonprofit that has led the charge against Pebble, alleged the company had neglected many of its work sites leading to limited but unnecessary environmental damage. The report led to increased public interest in the usually low-key MLUP review. At the time DNR officials said Pebble was in compliance with its state permits and the Montana-based Center for Science in Public Participation, which conducted the study, may have misinterpreted some of Alaska’s regulations in drawing its conclusions. United Tribes of Bristol Bay and other environmental and fishing groups lauded DNR’s permit contingencies as needed oversight protections. A short press release from Pebble’s parent company Northern Dynasty Minerals Ltd. says Pebble is closely reviewing the MLUP approval. “The Alaska Department of Natural Resources and other state agencies have had an active oversight presence at the Pebble project site for more than a decade and have confirmed that Pebble is a well-managed exploration project. We will continue our site operations in 2017 in full compliance with the state’s permit conditions, and in a manner that protects the broader public interest in the lands and resources surrounding the Pebble property,” Pebble CEO Tom Collier said in a formal statement. Heatwole added the permit approval checks off the first of several “high level” goals Pebble Partnership has for 2017. Next on the list is settling its lawsuit against the Environmental Protection Agency, which is on hold for ongoing negotiations. After that, Northern Dynasty hopes to secure another large investment partner to help fund the expensive, multi-year federal Clean Water Act and National Environmental Policy Act permitting processes that will require additional field study. He said Pebble still plans to apply for the environmental permits this year if its parent can find another partner for the project, as Collier indicated in a January investor presentation. Northern Dynasty’s previous partner in Pebble, London-based Anglo American Plc, pulled out of the project in 2013.

PacRim owners shelve Chuitna coal mine plans

PacRim Coal’s plan for a 12.5 million-tons per year export coal mine has been put on hold, very likely ending work to develop the mine that has spanned decades. PacRim, an affiliate of Dallas-based Hunt Oil Co., has withdrawn from a lengthy quest for regulatory approvals for its Chuitna Coal Project, a spokesman said. The project is in the Beluga coalfields on the west side of Cook Inlet, 50 miles west of Anchorage. “Following several months of internal review and discussions, the partners in PacRim Coal, LP have decided to suspend pursuit of its permitting efforts to invest in other projects,” company vice president Joe Lucas said in a statement. Lucas said the company isn’t yet ready to say the project is dead, but “will be clarifying its intentions with the relevant agencies,” including the landowner, the State of Alaska’s Mental Health Trust Land Office. State officials were notified March 31 of the decision to withdraw from preparations of a state surface mining permit, said Russ Kirkhan, chief coal regulator in the state Department of Natural Resources. The decision by the owners, the Hunt family, was made the March 21, the state was told. The action came as a surprise as PacRim had been working on its state application as recently as two weeks ago, Kirkhan said. PacRim had been working on a draft environmental impact statement, or EIS, with the U.S. Army Corps of Engineers as lead agency. The Corps had put the EIS work on hold last November to allow the company to complete its application for the state surface mine permit, a Corps spokeswoman said. A complication for PacRim has been an extended permitting process and regulatory uncertainties caused by impacts of a surface mine development on local salmon streams. This also stirred opposition from environmental groups and residents of Tyonek, a nearby Alaska Native village. About 300 million tons of subbituminous coal reserves had been confirmed by PacRim’s drilling in a 5,000-acre area, but the region, known as the Beluga coal deposit, is estimated to potentially hold several billions tons of coal. While the coal is low-rank it has very low sulfur content, which makes it attractive as a blend stock to enable coal-fired power plants to meet air emissions standards. Usibelli Coal Mine Inc. now mines similar low-rank coal at its mine at Healy, and has exported coal to power plants in Asia and to Chile for use as blend-stock, although most of Usibelli’s production is sold to power plants in Interior Alaska. It has shipped only one export load in the last two years and the Alaska Railroad has shut down its coal terminal at Seward. PacRim wouldn’t say what motivated its decision but the continued outlook for a soft Pacific steam coal market and the political drag created by environmental opposition were no doubt contributing factors. The company has worked on the project since the 1970s and at one time, in 1990, it was fully permitted and ready to build. A slump in Pacific coal markets caused the Hunts to put a pause on construction, and when markets recovered and planning resumed, most of the permitting and environmental work had to be redone. State-owned lands in the area are held by the state Mental Health Trust Authority. An estimated $300 million in coal production royalties the project would have produced would have gone to the authority, which funds state programs for mental health and the disabled. Alaskans expressed disappointment in PacRim’s decision. “The Chuitna Coal Project would have provided many economic benefits to Alaskans, including an estimated construction cost of $750 million dollars, employing up to 500 workers over the two-year construction phase,” said Marleanna Hall, director of the Resource Development Council of Alaska. “It would have employed 350 people in production with an annual payroll of $35 million dollars. These are good, family-wage paying jobs.” The project has seen about $150 million spent on it with around $50 million of that in the last decade. “It’s unfortunate to have this investment no longer coming to Alaska,” Hall said. Local environmental groups took the opposite position. “This was a bad deal all around for Alaskans. It would have set a horrible precedent for mining through salmon streams,” said Bob Shavelson, director of Cook Inletkeeper, a local environmental watchdog, a reference to PacRim’s plan to temporarily divert, but then restore, several miles of a salmon-bearing stream. Tribal leaders at Tyonek voiced similar feelings. “Our waters are safe now! We can fish our river without any worries of harmful effects to our fish as well as the wildlife that surround the waters of our river,” said Arthur Standifer, Tribal president of the Native Village of Tyonek. Not everyone in Tyonek village shared that view. Leo Barlow, CEO of Tyonek Native Corp., the community-owned development corporation, said, “PacRim was a great company to work with. They have spent a lot of money and many years in planning, and had developed some pretty innovative strategies, such as moving coal in containers in ways that would eliminate dust and pollution. They hired our shareholders and consulted with us frequently.” In recent years, two companies have explored other ways of commercializing the Beluga. Cook Inlet Region Inc., the Anchorage-based Alaska Native regional corporation for Southcentral, owns extensive coal lands in the area and has done test drilling and planning for underground coal gasification, a process that would manufacture a coal synthesis gas through a combustion in deeply-buried coal seams. The gas could then be used in power generation or other uses. Australia-based Linc Energy, an independent, also conducted test drilling. Neither entity developed a project, however. Tim Bradner is co-publisher of Alaska Legislative Digest and a contributor to the Journal of Commerce. He can be reached at [email protected]

Graphite mining company considering plant on peninsula

Kenai, Homer and Seward are up for consideration as sites for a new graphite processing plant. A Vancouver-based company is working on plans to develop Alaska’s sole graphite find, located on the Seward Peninsula about 37 miles north of Nome. Part of the development plan includes a value-added manufacturing facility to process the raw graphite from the mine into coated spherical graphite for lithium-ion electric vehicles batteries and other products. The company is still selecting a site for the manufacturing facility, though it signed a memorandum of understanding with the Alaska Industrial Development and Export Authority to consider locations in Alaska for the plant in February, according to a news release from the company. Of the four communities currently under consideration, three are on the Kenai Peninsula, said Kenai Peninsula Economic Development District Executive Director Tim Dillon at the Kenai Peninsula Borough Assembly’s meeting March 21. “What we’re trying to do is make sure the product doesn’t go from Nome down to the state of Washington to get processed and then over to Asia,” he said. “What we want is we want it to stay in Alaska.” Dillon said the plant would bring 150 new jobs to the peninsula, if one of the cities is selected. It’s still early, but there could be a variety of jobs available, he said. There may more workforce training and planning needed if Graphite One Resources chooses a location on the peninsula, he said, such as housing in Homer and Seward. AIDEA is working with the company to select a site. The final choice will take a number of factors into consideration, including sufficient industrial land, electrical infrastructure to power the plant and industry infrastructure like a port and dock with shallow-draft barge access and potential need for access for lager vessels that would bring in processing materials, wrote AIDEA External Affairs Officers Karsten Rodvik in an email. “Nearby road and rail access, as well as storage silos on-site for incoming material and finished product round out the infrastructure requirements,” he wrote. The Kenai area, with its multiple oil support docks to the north, has long been a center for heavy industry in Southcentral Alaska. With the recent decline in oil prices and production, multiple longstanding oil companies have also scaled back operations or withdrawn, including the Arctic Slope Regional Corp. shuttering its fabrication facility and ConocoPhillips seeking to sell its LNG export facility. However, Homer and Seward have been building their industrial capacity in recent years. A consulting firm is wrapping up a feasibility study for Homer to expand its deep water dock, which serves fishing vessels, cruise ships, oil drilling jack-up rigs and other large vessels. The multi-million dollar project has not taken a final direction yet, and the Homer City Council has a variety of options to choose from in expanding the dock. Seward, meanwhile, has been expanding and improving its Seward Marine Industrial Center on the east side of Resurrection Bay, which also serves heavy vessels and oil drilling rigs. The goal is to expand its capacity for large vessels, including the cruise ships that arrive in Seward all summer, bringing thousands of tourists. In October 2016, the city and multiple partners — including AIDEA — finished a study on upland development at the industrial center, allowing for further business development at the site. The city is also finishing up work on its breakwater there to provide more shelter from swell and wake action, according to the upland development study. Dillon told the assembly the consideration of the three cities is a good sign for the peninsula, whether or not the company ultimately chooses to build its plant here. “My hope is that just having three qualified communities, whether this work outs or not, it’s showing people that, ‘Hey, the Kenai Peninsula is looking to be diverse with different things, and they want to work,’” he said. Reach Elizabeth Earl at [email protected]

Pebble, EPA pushing to settle lawsuit

With the sides reportedly closing in on a settlement, an Alaska federal judge agreed to hit pause on Pebble Limited Partnership’s lawsuit against the Environmental Protection Agency one more time. On March 20 U.S. District Court of Alaska Judge H. Russel Holland signed an order to stay proceedings in the suit until May 4, the deadline by which he expects Pebble and the EPA to have reached a deal to close the case, the order states. The sides originally proposed negotiating through a mediator but have been in direct talks of late, with the EPA represented by nonpartisan agency leaders and officials from President Donald Trump’s administration, according to the joint motion to stay the case. Initial talks about working out a settlement began early last August, based on court documents. A joint motion to pause the lawsuit was first filed Dec. 30 and approved by Holland Jan. 4. That stay was in effect through March 20. Having not yet reached a deal, the sides subsequently asked for another six weeks to negotiate. Pebble sued the EPA in September 2014 on the belief the EPA was biased in compiling the Bristol Bay Assessment, which determined a large mine in the Bristol Bay watershed would irreparably harm the region’s world-class salmon fisheries, among other impacts. The gold and copper mine proponents further contend the EPA violated the Federal Advisory Committee Act by improperly collaborating with mine opponents and not adequately consulting Pebble Partnership in the crafting of the Bristol Bay assessment. The EPA used the assessment as justification to move to stop Pebble from applying for federal environmental permits in 2014. In late 2014 Holland issued an injunction in the suit to stop the EPA from stopping Pebble until the court fight is resolved. “Active discussions between all parties involved have been positive and very constructive. We remain confident in achieving a prompt and fair resolution that follows the rule of law, supports the interests of the parties involved and allows the Pebble project to move into a normal course permitting process,” Pebble CEO Tom Collier said March 20. With a presumably more mine-friendly administration in the White House, leaders of Pebble’s owner company Northern Dynasty Minerals informed their investors in January that they plan to file for environmental permits this year. However, Northern Dynasty has said it will likely need to find another partner to develop the multibillion-dollar project and more than a decade worth of unfulfilled claims Pebble will start permitting has drawn sharp criticism even from traditional resource development advocates in Alaska. Meanwhile, Pebble is still waiting on the Alaska Department of Natural Resources to renew its two-year land-use permit for its Bristol Bay claims, which are on state land. Mine opponents argue Pebble Partnership has been lax in cleaning and maintaining its exploration sites leading to small cases of damage to the landscape. DNR has countered those claims, saying Pebble has met state environmental standards but the state agency has been slow to re-up the key permit.

Permitting process starts for Ambler road

Development of the Ambler Mining District road project is now in federal hands. The Bureau of Land Management issued a Federal Register notice Feb. 28 requesting public input regarding what topics the agency should consider in drafting the environmental impact statement, or EIS, for the mining access road. Early environmental and financial study work for the proposed gravel road running west from the Dalton Highway for 211 miles to the remote Ambler Mining District has to this point been led by the state Department of Transportation and more recently the Alaska Industrial Development and Export Authority. The Ambler Mining District stretches for about 75 miles along the southern flank of the Brooks Range in the upper Kobuk River drainage. It has long been identified as an area of great potential for copper, zinc and precious metals but access issues have largely inhibited development. Vancouver-based Trilogy Metals Inc., formerly NovaCopper, is one company that has been busy exploring multiple prospects in the region. According to Trilogy, its well-defined Arctic deposit in the Ambler district likely holds about 2.3 billion pounds of zinc, more than 1.7 billion pounds of copper, 40 million ounces of silver and a small amount of gold. Trilogy CEO Rick Van Nieuwenhuyse said in a December interview with the Journal the company is shifting its focus from resource delineation to engineering and environmental studies. At the time, Van Nieuwenhuyse said he was happy the state is continuing to pursue the Ambler road. Absent the road, mining the isolated region is simply not feasible, Van Nieuwenhuyse and others familiar with the project have said. The National Park Service will also be conducting an economic and environmental analysis concurrent with the BLM’s EIS to evaluate the best route for a segment of the road that would cut through Gates of the Arctic National Preserve. The Alaska National Interest Lands Conservation Act, or ANILCA, passed by Congress in 1980, contains language directing the Interior Department secretary to approve a road through the preserve on the anticipation the Ambler Mining District would one day be developed. ANILCA also generally prescribes a final EIS be completed within one year of the start of the scoping period. However, the BLM has extended that timeline substantially for the Ambler road project, citing its complexity and the multiple landowners and managers along the route as well as the need to have detailed consultation with the numerous isolated communities in the region. Thus, the agency has self-imposed a March 2019 deadline for publication of the draft EIS and the final document is due Dec. 30, 2019. In October 2015, Gov. Bill Walker gave permission for AIDEA to spend $3.6 million left from the prior capital appropriations to the Ambler road after “pausing” it and other large projects the state had undertaken to review their necessity and financial viability as the state struggles with nearly $3 billion annual budget deficits. While the Juneau access, Knik Arm bridge and Susitna-Watana hydro projects were all halted by the administration, the Ambler road survived. To date, the State of Alaska has spent $26.2 million studying the project, money approved in capital budgets since 2011. The Ambler road was a large part of former Gov. Sean Parnell’s statewide Roads to Resources initiative. Use of the road would mostly be restricted to mining activity, but it could also help provide lower-cost energy and other goods to villages clustered near both ends of the proposed route, proponents note. While state general funds have supported the project to this point, money for actual construction, which AIDEA estimates at between $305 million and $346 million, would be financed by the authority through bonds and recouped through tolls paid by Trilogy Metals or any other companies that develop resources in the area. The plan is very similar to the Red Dog mine-DeLong Mountain Transportation System in far Northwest Alaska that development proponents have cited as a model for other isolated resource prospects in the road-scarce state. However, many residents of the area are skeptical of the road and the mines. They contend the construction of the road could disrupt the Western Arctic caribou herd that migrates through the corridor and is a primary subsistence food source for the villages clustered at each end of the route. The proposed mines have also drawn scrutiny for potential impacts to salmon and whitefish runs in the Kobuk River drainage. John Gaedeke, a wilderness guide and owner of a remote Brooks Range lodge, founded the nonprofit Brooks Range Council in 2012 to fight development of the road. He wrote in an email that he is "truly dismayed the project has gotten this far," contending the Walker's authorization to continue it means the state will spend on it that should be funding services, such as public education, that have been impacted by recent budget cuts. He does not have any confidence the EIS process will adequately address the concerns regarding the project he and others have said AIDEA has not resolved because "an EIS process never says no to development, despite whatever impacts are outlined," according to Gaedeke. "The potential impacts I would like to see most thoroghly vetted is the extent to which this road will open the land to industrial development for coal, copper, gold and lead," Gaedeke wrote. "The cumulative impact is difficult to assess. The state wants to justify the road by claiming all the potential industries it could reach. If that is the case we must also look at their cumulative environmental impacts." Lois Epstein, Arctic program director for The Wilderness Society, also a professional engineer, said her organization is pushing back against Ambler development to support local governments and Native village corporations in the area that have passed resolutions in opposing the project. Epstein also questioned why the state continues to spend money analyzing the road without related commitments to build the mines the road would access. “In the end this project is going nowhere because the state doesn’t have the money for it,” she said. Alaska’s ongoing budget deficits have forced lawmakers to cut any discretionary spending out of the state capital budget, the source for previous Ambler road funding. AIDEA anticipates it would net up to $150 million from an Ambler toll road even after accounting for another $270 million in maintenance costs over the 30-year life of the road — on the expectation Trilogy’s Arctic deposit would be one of several mines to spring up after the road was built. The authority plans to evaluate options to fund the roughly $7 million it will take to complete the EIS once the scoping process is complete, according to spokesman Karsten Rodvik. The BLM’s public scoping period is open until May 30. Elwood Brehmer can be reached at [email protected]

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