What will exploration permit ruling mean for industry?

The mining industry is waiting for the Department of Natural Resources to chart a path forward after an Alaska Supreme Court ruling that could change permitting procedures and require public notice for exploration work.

Two months after the ruling in the case over Pebble Limited Partnership exploration permits went against the State of Alaska, it is still unclear exactly what the state will do to respond.

Alaska Miners Association Executive Director Deantha Crockett she’s hopeful some members of the industry will be able to assist DNR in moving from “temporary permits for temporary activity to permanent permits for temporary activity.”

However, the detailed work has not yet taken place.

The case focused on whether or not temporary state land-use permits for exploration of Pebble’s claims were truly functionally revocable at any time, as the state claimed.

DNR typically issues five-year Miscellaneous Land Use Permits, or MLUPs, and Temporary Water Use Permits, or TWUPs, for mining exploration done on state land, as in the case of Pebble.

The plaintiffs listed, the anti-Pebble group Nunamta Aulukestai, Ricky Delkittie, Sr., the late Violet Willson, Vic Fischer and Bella Hammond claimed DNR should allow for public comment prior to issuing these permits, because among other things, permanent damage is could be done to state land. Exploration impacts that constitute a permanent “disposal” of land are something Alaska residents should be able to weigh in on under the state constitution, they argued.

Exploration drill, or bore, holes are usually filled with concrete or other impermeable cement-like mixtures to prevent movement of groundwater between layers of bedrock and subsequent possible contamination.

Robert Retherford, president of the exploration and geology consulting firm Alaska Earth Sciences, said steel drill casing is sometimes left in the hole when it becomes stuck or is needed to prevent collapse. In those instances, cement is forced down the casing until it pushes up around the outside of the casing, sealing and entrapping it in a safe concrete environment.

The Supreme Court found these “concrete pillars,” as it referred to them in its May 29 ruling, to be permanent structures, which in part made the exploration permits irrevocable.

DNR argued that the common practice of filling boreholes is environmentally benign. It’s a long-time common practice in the mining industry.

Retherford said defining old bore holes as permanent structures “creates a lot of fog and haze” around the permitting process.

Executive director for the environmental advocacy law firm Trustees for Alaska Vicki Clark said in a release after the ruling that the state has “issued permits behind closed doors without even looking at the harm to public resources,” and the Supreme Court ruling will put an end to that practice.

“This decision means that all Alaskans, especially those whose rights and livelihoods are jeopardized by intensive exploration activities like those at Pebble, have the constitutional right to participate in the decisions affecting them,” Clark said.

The court also found the permits to be irrevocable for large exploration projects such as Pebble’s, which totaled more than $300 million, because DNR staff could be swayed to issue or protect permits when such large sums of money are at stake. The court did not determine a monetary threshold where that becomes the case.

Retherford said the issue off permanent structures simply doesn’t make sense.

“We’re concluding that the people making the regulations, in this case the Supreme Court, that they’ve had enough coaching or enough time to really understand how (the exploration process) works. It doesn’t seem like that in this case, so we’ll see,” Retherford said.

When a borehole penetrates no aquifers, as is often the case in mountain drilling, putting the drill cuttings back would be an acceptable way to meet the new requirements if sealing a hole is unfeasible, he said.

Changing current regulations to meet the Supreme Court’s view could make some exploration cost prohibitive, according to Retherford. He said he uses a ballpark figure of $150 per foot for exploration drilling when discussing cost with potential clients.

“It’s not uncommon to see a million bucks go into a hole if you’re drilling say 3,000, 4,000, 5,000 feet” when preparatory work is included, he said.

The Supreme Court decision overturned a Superior Court ruling that shot down the plaintiffs’ six claims for relief.

Alaska Miners Association attorney Larry Albert noted that the court did not find evidence of actual environmental harm from the filled holes, but rather used potential harm as the basis for its ruling.

He also said the Supreme Court did an “end run” on the Superior Court ruling and did not rule on the merits of the case.

Rather, it determined the case to be moot because Pebble’s permits had expired and exploration had ceased, but decided to rule based on the need for a resolution that had implications in an associated case dealing with attorneys’ fees.

Albert said that is a legitimate course of action; however, the court ended up ruling on what happened in Pebble’s case and not on what would likely happen in future cases, thus issuing a contradictory ruling.

Crockett said the ruling should concern individuals on either side of the development debate — for or against — because it clouds a permitting process that should be built on science alone.

“We need to have a permitting process that’s clear, that’s predictable, that we understand and that we have confidence in,” she said.

Without a defined regulatory framework using the best available science, the confidence of the public and potential project investors is damaged, Crockett said.

Rick Van Nieuwenhuyse, CEO of NovaCopper, which is exploring copper deposits in the Ambler Mining District along the Brooks Range, said his company has always found Alaska to be a good permitting environment to conduct work.

NovaCopper’s $5 million summer season exploration and data gathering plan is one of the few significant mine exploration projects going on in the state this year.

Van Nieuwenhuyse commended the work DNR and the Department of Environmental Conservation have done in the past and said he expects state regulations “to reflect what’s reasonable.”

“What we do currently and what we’ll continue to do is meet the regulations,” Van Nieuwenhuyse said.

Elwood Brehmer can be reached at [email protected].

11/20/2016 - 3:20pm