Wishbone Hill permit awaits federal call after court order

Usibelli Coal Mine Inc.’s operating permits for its Wishbone Hill coal development are “in limbo” after a July 7 federal court order, according to officials in the state Department of Natural Resources.

Alaska Coal Program Manager Russell Kirkham said the state is waiting on a decision from the federal Office of Surface Mining, Reclamation and Enforcement before it acts on the coal permits.

“We have not taken the step to terminate the permits,” Kirkham said. “Right now the permits are there but they’re pretty much in limbo until the final order comes out.”

Usibelli’s Wishbone Hill is a longstanding proposed surface coal project on state land northeast of Palmer along the Glenn Highway.

U.S. District Court of Alaska Judge Sharon Gleason’s July 7 ruling ordered the Office of Surface Mining to reevaluate its November 2014 decision that indirectly validated Usibelli’s permits for the mostly idle project.

A group of environmental organizations, including Cook Inletkeeper, Alaska Center for the Environment, the Sierra Club, and the Chickaloon Village Traditional Council, sued the Office of Surface Mining in March 2015, claiming the Interior Department agency did not enforce its own requirement to pull permits if mine work does not start within the permit period.

Gleason largely agreed, and determined that the federal regulators failed to follow the law by allowing DNR to implicitly renew and extend the permits without the commencement of mining activities.

The permits to operate can be renewed for up to five years or extended for three.

The State of Alaska holds primacy over federal coal mining regulations. Thus, DNR handles all permitting and the Office of Surface Mining intervenes only if required to do so.

Specifically, language in the federal Surface Mining Control and Reclamation Act stating operating permits “shall terminate” if mining activity has not occurred within the permit period. Gleason wrote, it “is unambiguous, in that a surface mining permit terminates by operation of law if mining operations have not timely commenced under that statute, unless an extension has been granted pursuant to the statute’s terms.”

Kirkham said the federal mining regulators are working on a new decision that jives with Gleason’s ruling and the state is waiting for that decision, which is expected soon, before taking further action.

“In this case the district court, reversing the federal Office of Surface Mining, held that the termination provision of a federal surface coal mining statute is self-executing. The decision was not, in itself, a ruling on the validity of the Wishbone Hill permits. Instead the court has remanded the matter to the federal agency for further proceedings where that question and others may be resolved.  We are continuing to review the decision and appropriate next steps,” according to a statement from the Alaska Department of Law.

Office of Surface Mining Western Region officials, located in Denver, could not be reached for comment.

Usibelli acquired the Wishbone Hill project in 1997 from North Pacific Mining Corp., a Cook Inlet Region Inc. subsidiary. The mining company then applied for and received several five-year permit renewals from DNR through 2014.

The first state permits to operate the mine were issued to Idemitsu Alaska Inc. in 1991. Idemitsu was granted one extension before it sold the project to North Pacific Mining in 1995.

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, according to company spokeswoman Lorali Simon.

Office of Surface Mining Western Region Division Manager Robert Postle wrote in the November 2014 notice to state coal regulators that DNR was correct in not taking action against Usibelli for operating at Wishbone Hill without permits because the company’s permits had not been terminated.

However, that was only because DNR didn’t follow the appropriate procedure when it implicitly granted extensions to the companies that owned Wishbone Hill before Usibelli by not actively pulling the permits, according to Postle.

“To terminate a permit, the regulatory authority must take affirmative action based on the record,” Postle wrote in 2014. “In this case, DNR failed to do so, and consequently, Usibelli was not operating without a permit. I find that DNR, consequently, had ‘good cause’ for not taking action against Usibelli for operating without a permit. I also find, however, DNR had a responsibility to issue prompt determinations on the failure of Usibelli’s predecessors to initiate mining and that it failed to do so. This situation cannot be allowed to happen again.”

The 2014 notice to the state was spurred by a citizen’s complaint filed with the Office of Surface Mining by several of the same groups that filed the lawsuit against the federal agency. The complaint requested federal action to stop coal mining operations at Wishbone Hill until Usibelli obtained valid permits.

Usibelli, which operates the state’s lone active coal mine near Healy in the Interior, has invested millions of dollars in Wishbone Hill and still has plans to bring the mine, Simon said, but a myriad of factors have always prevented that.

She said DNR has been continuously apprised of Usibelli’s plans and consequently kept approving the permits and that Gleason “erred because she did not recognize the state’s primacy” over coal mining operations.

“Because the ball is in (the Office of Surface Mining’s) court, we’re waiting to see what OSM says to DNR,” Simon said.

Elwood Brehmer can be reached at [email protected].


08/03/2016 - 1:07pm