How does “pebble” transform into a giant boulder? When it is followed by the word “mine.” Pebble Limited Partnership (“PLP”), a U.S. subsidiary of Canada’s Northern Dynasty Minerals Ltd., is seeking to develop its mineral claims and operate “Pebble Mine” in southwest Alaska. Conceivably, Pebble Mine could be the largest open pit copper mine in North America and one of the largest such mines in the world. Pebble Mine could have a significant economic impact on Alaska and the lower 48 states. Yet, Alaska Natives, fishermen, hunters, recreationalists, environmental advocates, trade associations, and various other groups contend the mine could have significant and irreversible negative impacts on the Bristol Bay watershed (“Watershed”), specifically the fish and wildlife that nurture therein and the Native Alaskan cultures that live and work therein.
Paramount amongst these interests is the world’s largest salmon hatchery. Salmon, however, are not tolerant of copper. The U.S. Environmental Protection Agency (“EPA”) agrees with the salmon and, pursuant to authority apparently granted it by the Clean Water Act (“CWA”), is taking bold steps to possibly preclude the issuance of discharge permits before PLP even applies. PLP responded by filing suit against the EPA, asking a federal judge to enjoin the EPA from exceeding its authority. In short, it’s copper versus salmon, with salmon in the early lead in what could be a very, very long race.
First discovered in 1988, the Pebble Deposit is located exclusively on remote, state-owned land about 200 air miles southwest of Anchorage in the Bristol Bay watershed (the “Watershed”). The Watershed is comprised of six major watersheds and a series of smaller watersheds draining from the North Alaska Peninsula. Pebble Mine would sit just 17 miles north of Lake Iliamna, the largest incubator of salmon in North America, and within a few miles of major fault lines causing historic seismic activity.
With a total population near 4,337, twenty-five Native Alaskan communities have lived and sustained their culture for 4,000 years in the Watershed. Subsistence hunting, fishing and gathering is nearly mandatory in the region. Due to its isolation, the region boasts few businesses and a high cost of living.
Government supplies the only substantial year-round employment. Fishing (commercial, sport and subsistence), hunting (sport and subsistence), and non-consumptive recreation (wildlife viewing and tourism) comprise the three largest non-government sectors, providing employment for 14,000 full and part-time workers and generating nearly $480 million in direct economic expenditures (i.e., money spent by these workers) annually.
While copper would like to be king in the Watershed, the wild sockeye salmon (“sockeye”) sits atop the throne. The Watershed produces an average of 37.5 million sockeye each year, nearly 50% of the world’s sockeye population. Harvesting over 27 million sockeye annually, Bristol Bay’s commercial salmon fishery is responsible for nearly 63% of jobs and 82% of annual expenditures in the non-government sector. The Watershed also supports four other species of Pacific salmon and is home to thirty-five other fish species (including some of the most renowned rainbow trout in the world), 190 bird species, and more than forty terrestrial mammal species, including caribou, moose, bears, and wolves.
Attempting to coexist with these desirable resources, the area also contains significant wealth in a variety of minerals. In addition to Pebble Mine, other mining companies have claimed over 1,000 acres.
PEBBLE MINE – ITS POTENTIAL FOOTPRINT AND ECONOMICS
Pebble Mine is estimated to contain 81 billion pounds of copper, 5.5 billion pounds of molybdenum, 107 million ounces of gold, and significant amounts of other minerals. PLP estimates the deposit contains enough copper to meet approximately 33% of the U.S. annual copper needs for many years.
If built and operated to its maximum potential, Pebble Mine project could cover twenty-eight square miles. Within this area, the mine’s open pit would cover about seven square miles and extend three-quarters of a mile into the earth. The “tailings facility,” the containment area for the materials left over after processing the ore, could have nine miles of 740-foot high dams. Pebble Mine could produce over ten billion tons of “waste rock,” the material that is displaced during the process of mining but is not processed for ore. This amount of waste rock would fill 108 million rail cars sixty-five feet in length — enough rail cars to circle the Earth at its equator over fifty times. Approximately 70% of Pebble Mine’s waste rock would be “acid-generating,” that is, capable of oxidizing and leaching acids into the water supply for as many as 100 years. Although PLP refers to Pebble Mine as merely “an idea,” over $720 million has been spent developing the idea thus far.
In May 2013, IHS Global Insight (“IHS”), headquartered in Englewood, Colorado, produced a detailed, sixty-nine page report addressing the potential contributions a conceptual Pebble Mine could have on the economies of Alaska and the United States. IHS based the report on a conceptual mine because, according to the report, “PLP does not have a definitive, approved, and permitted development plan in place.” During each year of an estimated five years of mine construction (the “construction phase”), IHS estimates that Pebble Mine could support over 16,000 jobs in Alaska and the lower forty-eight states, contribute $400 million to Alaska’s gross state product (“GSP”) and $1.6 billion to U.S. gross domestic product (“GDP”), and generate state and federal revenues of $323 million. For each of the initial twenty years during which minerals are produced (the “production phase”), IHS estimates the project could support 15,000 jobs in Alaska and the lower 48 states, contribute $1.1 billion to Alaska GSP and $2.4 billion to U.S. GDP, and generate over $670 million in state and federal revenues.
EPA’s SCIENTIFIC ASSESSMENT
In May 2012, the EPA undertook to perform a scientific assessment of the impacts of mining on salmon and those relying upon salmon in Bristol Bay, purportedly in response to concerns raised by nine federally recognized tribes and other stakeholders and consistent with the EPA’s authority under Sections 104(a) and 104(b) of the CWA. The EPA compiled the assessment using a scientific team with expertise in varying disciplines such as fisheries biology, mining, geochemistry, anthropology. After considering comments from the public and scientists, the EPA submitted another draft for comment and review in April 2013. In January 2014, the EPA submitted a 630 page report titled, An Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska (Final Report) (“Final Report”).
Just as IHS did not have a definitive, approved, and permitted development plan on which to base its economic opinion for Pebble Mine, the EPA had no final plans on which to base its scientific opinion. In lieu thereof, the EPA developed three “foreseeable” scenarios with a range of mine sizes and operating conditions. The Final Report focused on the Nushagak and Kvichak River watersheds in Bristol Bay, the major river watersheds closest to the Pebble Mine. Within these watersheds, the EPA further focused on the potential impacts to salmon and how these impacts might affect indigenous subsistence cultures and wildlife. Taking into account traditional operations and foreseeable failures of its hypothetical mines, the EPA concluded that mining in the Bristol Bay will have substantial, and perhaps irreversible, impacts on salmon, other fishes, fish habitats, wildlife, and Native Alaskan cultures.
THE EPA WIELDS ITS MIGHTY SWORD
On February 28, 2014, the EPA Region 10 gave notice to PLP, the State of Alaska, and the U.S. Army Corps of Engineers (“Corps”) that it is “proceed[ing] under its Clean Water Act section 404(c) regulations to review potential adverse environmental effects of discharges of dredged and fill material associated with mining the Pebble deposit in southwest Alaska.” In its February 28th letter, the EPA outlined a four-step process under Section 404(c): (i) to consult with the owners, the State of Alaska, and the Corps (collectively, the “stakeholders”), (ii) publish a Proposed Determination, (iii) receive public comments and develop a Recommended Determination, and (iv) consult with the stakeholders again. The EPA set an April 29, 2014, deadline to satisfy step one.
REACTIONS TO THE EPA’s ACTIONS
The reactions to the EPA’s assessment and actions have been wide and diverse. Naturally, the mining industry takes issue with the EPA’s Final Report, specifically arguing that the EPA’s hypothetical mining scenarios do not reflect reality, are biased, and violate the Due Process rights of the Pebble Deposit’s claimants. Proponents of mining, and others with an interest in Section 404(b) permitting, are referring to EPA’s action as a “preemptive veto” of discharge permits for which PLP has yet to apply.
In May 2014, PLP filed suit against EPA in the United States District Court for the District of Alaska seeking to enjoin it from preemptively denying its prospective permits. PLP’s CEO referred to the EPA’s action as a “massive federal overreach” and said, “Litigation is necessary in order to get the Agency’s attention and bring some rational perspective back to the US permitting process.” The State of Alaska filed a motion to intervene in the suit as a co-plaintiff to “prevent the EPA from taking land by prematurely limiting development before the state’s permitting processes have a chance to work.”
Numerous politicians have also chimed in. The U.S. House Oversight and Government Reform Committee (“House Oversight”) has initiated an investigation into allegations of “political motivation and unfair bias.” According to documents already obtained by House Oversight, the EPA may have been considering a preemptive veto as early as 2010, perhaps even before federal tribes and others began asking EPA to assess the risks of Pebble Mine.
On March 26, 2014, Senators David Vitter (R-Louisiana) and Sen. Joe Manchin (D-West Virginia) introduced the “Regulatory Fairness Act of 2014” (“RFA”). If passed, the RFA would prohibit the EPA from preemptively or retroactively vetoing a permit issued under Section 404 of the CWA.
On the other side of the coin, many individuals, businesses, environmentalists, and public interest groups are overjoyed by the EPA’s actions. According to one such group, the Wild Salmon Center, “There is too much at stake to conduct an experiment of this scale with a resource of Bristol Bay’s economic, ecological, and cultural value.” Trout Unlimited proclaims that pollution from Pebble Mine is a “virtual certainty” and represents “an epic threat to the region’s fish, jobs and a way of life for thousands of Alaska Natives.” In another entity’s opinion, if mining development begins in the Watershed, “the scope of the disaster is the only question.”
Investors have also bailed on Pebble Mine. Northern Dynasty’s original partner, Anglo American, pulled out of the project in September 2013, taking a $300 million hit in the process. In April 2014, Rio Tinto donated its 19.8% interest in Northern Dynasty Minerals to the Bristol Bay Native Corporation (“BBNC”) Education Foundation and the Alaska Community Foundation. Upon receipt, the BBNC publicly thanked Rio Tinto for its donation but admonished that “BBNC’s opposition to the proposed Pebble Mine has not changed.” In June 2014, BBNC sold its stock for $6.48 million and plans to use the funds for scholarships and a cultural heritage program.
In November 2014, barring court order otherwise, the issue will be put to Alaska voters. If passed, the “Bristol Bay Forever” initiative would “require legislative approval of any large-scale metallic sulfide mining operation within the Bristol Bay Fisheries Reserve, or which has the potential to adversely affect any anadromous waters within the reserve.”
THE FUTURE OF PEBBLE MINE
No mine has ever failed to get permitting in Alaska. But no previous mine has ever cast a shadow the size of Pebble Mine. Although Pebble Mine’s executives (and lawyers) remain hopeful, the anti-Pebble Mine groups will certainly continue to vigorously oppose mining in the Watershed. For now, the dispositive issue is whether and under what circumstances the EPA can pre-empt the ordinary process and summarily conclude that, based upon known science, there are no circumstances under which discharge permits could ever be issued to PLP under the CWA. Only time, politics, and, most certainly, years of litigation will determine the fates of Pebble Mine, the salmon, and everything the salmon represents.
The title picture is of Lake Iliamna in Alaska. The lake is the largest incubator for salmon in Bristol Bay Watershed. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. Subject to disclaimers and Alaska Trekker does no endorse this blog.
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