Federal court vacates oft-renewed Wishbone Hill permit

Usibelli Coal Mine Inc. is reviewing its options for the proposed Wishbone Hill mine after a July 7 ruling in the U.S. District Court of Alaska that vacated permits for the project.

District Court Judge Sharon Gleason ordered the state and federal permits for the planned surface coal mine north of Palmer vacated because Usibelli failed to develop the mine within the time allowed by the permitting process, according to her 35-page order.

A group of environmental organizations, including Cook Inletkeeper, Alaska Center for the Environment, the Sierra Club, and the Chickaloon Village Traditional Council sued the federal Office of Surface Mining Reclamation and Enforcement in March 2015, claiming the Interior Department agency did not enforce its own requirement to pull permits if a mine is not operational within three years of permits being issued.

The mine site is between Palmer and Sutton on state land near the Glenn Highway. The State of Alaska, which has assumed primacy, or management, of the federal permits, was an intervenor defendant in the suit, along with Usibelli.

Lisa Wade, a member of the Chickaloon Traditional Council, called it “shameful” that the state Department of Natural Resources and the Office of Surface Mining allowed Usibelli to hold the permits for so long.

“Usibelli is trying to start up a toxic coal strip mine on lands that are sacred to us, using a permit that was issued 25 years ago. This mine threatens our children’s health, our salmon, our water and air quality, our traditions and our way of life,” Wade said.

Usibelli operates its namesake coal mine near Healy, about 120 miles south of Fairbanks along the Parks Highway. It is the only active coal mine in Alaska and is the oldest continuously operating mine in the state.

Usibelli has said the Wishbone Hill would produce about 500,000 tons of coal per year and employ between 75 and 125 workers.

The majority of the company’s current production is sold in state. Coal exports to Asia and Chile have slipped in recent years as a strong U.S. dollar has made exports expensive. The company made a single export sale in 2016, sending a load of 75,000 tons to Japan this summer.

The first two Wishbone Hill permits were issued to Idemitsu Alaska Inc. in 1991. After DNR issued one extension, Idemitsu sold the project to North Pacific Mining Corp., a subsidiary of Cook Inlet Region Inc. in 1995.

Usibelli acquired the project in 1997 and requested several five-year permit extensions through 2011 that were granted by DNR.

“Neither Usibelli’s 2001 permit renewal request nor its 2006 permit renewal request contained a request for an extension of the time to commence mining operations; likewise, each permit renewal by DNR was silent in that regard,” Gleason wrote.

Early coal mining operations started in 2010 when Usibelli began work on a road to the mine site.

About that same time, Usibelli started a feasibility study on the project, company spokeswoman Lorali Simon said.

Usibelli, which Simon said found the ruling “surprising,” is analyzing its path forward, but still sees significant value in Wishbone Hill. She said the company has invested millions of dollars in the project based on the assumption that it was properly permitted, but “the planets never aligned” to bring it into production.

“(Wishbone Hill) remains important to us. It is something that we are very determined to further develop,” Simon said in an interview.

She noted that DNR and the Office of Surface Mining were always well informed about Usibelli’s plans and thus kept approving the permits.

Despite that, Gleason concluded that the letter of the law, which states, “(A coal mining) permit shall terminate if the permittee has not commenced the surface mining operations within three years of issuance of the permit,” according to her ruling, trumps any extenuating circumstances in regards to Wishbone Hill.

Simon said lawsuits such as this one just brings “further divisiveness” between companies like Usibelli and anti-development groups.

“This is another indicator of how this country’s regulatory system is based on process versus purpose,” she said.


07/13/2016 - 10:36am