Pipeline right-of-way permit under review for Donlin mine

  • A Donlin Gold employee checks samples at a drilling core shack in this courtesy file photo. The 2020 drilling program has resumed at the prospect site after being temporarily suspended in response to the coronavirus pandemic, but a January permit for right-of-way to construct a natural gas pipeline is now under reconsideration by the Department of Natural Resources. (Photo/Courtesy/Donlin Gold)

Rising gold prices are fueling excitement among the owners of the Donlin gold mine but groups opposed to the project are raising questions about the thoroughness of its permitting process.

Alaska Department of Natural Resources Commissioner Corri Feige on April 30 granted a request to reconsider her Jan. 17 approval of a right-of-way lease for Donlin’s natural gas pipeline following a Superior Court appeal of her decision to approve the lease and initially deny a request for consideration filed Feb. 6.

Homer-based conservation advocacy group Cook Inletkeeper filed the permit appeal on behalf of several Kuskokwim-area Tribes.

Feige initially denied the reconsideration request but reversed that decision in an April 30 letter to Cook Inletkeeper Advocacy Director Bob Shavelson. However, the two-page letter does not explain what motivated her to reverse course.

Cook Inletkeeper and the Orutsararmiut, Chevak and Chuloonawick Native council and villages appealed Feige’s decisions to Superior Court March 19. The appeal was dropped following the April 30 ruling.

The 14-inch pipeline would run 315 miles from near Beluga on the west shore of Cook Inlet to the mine site in the Crooked Creek drainage in the Upper Kuskokwim Valley. It would supply feedstock gas to the mine’s large power plant.

Cook Inletkeeper’s request to reconsider the permit contends it is premature to issue the right-of-way for a pipeline that has yet to receive state fish habitat and other permits.

The groups also argue it is DNR’s responsibility to consider the cumulative impacts of the $7 billion-plus project in granting the right-of-way lease.

“The pipeline is proposed as part of a massive gold mine with substantial environmental impacts, including habitat loss and degradation, water and air quality impacts, and risk of tailings dam failure, to name a few,” the request states. “If the benefits of the entire Donlin project can be used to bolster DNR’s analysis of the public interest, the detriments of the entire project should also be used in its analysis to ensure the agency is truly acting consistent with the public interest.”

Feige wrote in her decision that state law does not require a cumulative effects analysis and emphasized DNR’s role as a cooperating agency in the project’s environmental impact statement that was approved in 2018, “which stringently considered cumulative and reasonably foreseeable impacts.”

“Nonetheless,” she wrote, “the Department of Natural Resources will conduct a further analysis of the cumulative and reasonably foreseeable impacts of the right-of-way lease for the Donlin pipeline. Once this analysis is complete, a new decision will be issued, and notice will be provided of a new comment period consistent with Alaska law.”

She also wrote that granting the reconsideration “does not imply that the issues raised in the request have merit.”

DNR spokesman Dan Saddler wrote in response to questions that the he could not provide more detail behind the reasoning for reversing the decision than is in the letter because it is an ongoing matter. According to Saddler, the department does not believe the additional look will set a precendent for when the state must review the cumulative impacts of a project for various permitting decisions.

"By virtue of the state's participation in the (National Environmental Policy Act) process as a cooperating agency, DNR performed a cumulative impacts analysis leading up to its issuance of the right-of-way at issue here, but it is nonetheless undertaking addtional analysis thorugh the Commissioner's reconsideration," Saddler wrote.

Feige and Gov. Mike Dunleavy have both expressed strong support for the Donlin project, stressing the roughly 1,400 jobs its estimated the mine would support are badly needed in the remote region of the state.

The Tribes oppose the project that would be located on land owned by The Kuskowkim Corp., a Native village corporation largely because they fear the impacts it will have on subsistence resources, primarily salmon and whitefish in the Kuskowkim River.

Donlin Gold LLC spokeswoman Kristina Woolston wrote via email that the reconsideration will not impact the project’s timeline and the company is awaiting the state’s updated decision.

Donlin suspended its 2020 work program in early April in response to the COVID-19 pandemic but work resumed last month. The company is employing four drilling rigs and has 120 workers at the deposit that include Calista Corp. shareholders and Yukon-Kuskokwim residents, according to Woolston.

Gold prices have increased nearly 30 percent in the past year to a recent plateau of approximately $1,700 per ounce.

Tom Kaplan, chairman of Vancouver-based NOVAGold, which owns a 50 percent stake in the Donlin project, said during the company’s annual shareholder call in May that he is confident gold will soon exceed $3,000 per ounce.

Donlin’s size as one of the largest gold mines in the world — with planned production of 1.1 million ounces per year — and its remote location mean the project will require a very strong gold market to develop. Company leaders have not said what price or market condition would trigger development if the project reaches that stage.

The Tribes on June 5 also appealed a May 7 Department of Environmental Conservation decision to maintain a Certificate of Reasonable Assurance to Donlin that the project will meet Clean Water Act Section 401 discharge standards.

The Tribes argue the EIS conducted by the Army Corps of Engineers concluded the project would result in elevated mercury levels, loss of salmon habitat and could increase stream temperatures.

The appeal states that the area already has naturally-elevated mercury levels and the mine could add to that and exceed allowable levels.

DEC Commissioner Jason Brune has 10 days to approve or rule on the request, per state regulations.

DEC officials wrote in response to comments about the certification decision that they believe mitigation measures taken at the mine will be sufficient to limit stream mercury levels.

Elwood Brehmer can be reached at [email protected].

Updated: 
06/11/2020 - 11:05am