Pebble rising?


A Pebble mine exploratory drill rig/Erin McKittrick, Wikimedia Commons

Once thought to be on the verge of death, Alaska’s proposed Pebble prospect copper and gold mine seems to be taking on a new life.

First came the July announcement by the Environmental Protection Agency of President Donald Trump that it planned to lift a proposed ban on the mine ordered by the EPA of President Barrack Obama.

And now is reporting conservative Anchorage talk-show host Rick Rydell – a hunting, fishing and development advocate – could be in line to become EPA’s man in Alaska for the Trump. Reached by phone on Sunday, Rydell said, only “no comment.”

Rydell is not unqualified for the job. He once worked as an environmental manager for Bristol Environmental Services, a subsidiary of the Bristol Bay Native Corporation. The company cleaned up old, U.S. Air Force dumpsites near King Salmon on the east edge of the bay. 

Friends of Rydell said he is well familiar with federal environment laws.

The Obama administration wanted to use those laws, the Clean Water Act in particular, to prohibit the discharge of any dredged or fill material into any water in the Pebble mining area near Iliamna Lake, about 200 miles west of Anchorage, an EPA press release said.

Such a ruling would have made a mine impossible given that you can’t mine without moving dirt and even if you store tailings on dry land water runs somewhere after every rain.

Business strikes back

The Pebble Limited Partnership sued the Obama administration and the EPA of Trump – taking a page from the playbook of enviromental organizations fond of filing lawsuits to leverage legal settlements – in this case negotiated an agreement allowing Pebble to apply for the necessary permits.

With the door cracked open, the mine this month proposed a scaled down version of the earlier mine with increased environmental safeguards – among them a ban on the use of cyanide to aid in leaching gold, strengthened facilities to protect against any imaginable earthquake, and a ferry across Iliamna Lake to avoid the need for a road connection between the community of Iliamna and Cook Inlet.

Nearly the size of Rhode Island, Iliamna is the largest lake in the 49th state and the third largest lake fully within U.S. boundaries. Primitive, 15.5 mile Williamsport Road already connects Cook Inlet to Pile Bay on the lake, but Iliamna residents have worried that if the road were upgraded and connected to the communities of Iliamna, population 110, and nearby Newhalen, population 160, they might face an invasion of tourists and residents of urban Alaska.

Perceived people problems – whether real or imagined – invariably complicate discussion of any sort of development in rural Alaska and especially around Iliamna Lake.

The streams that drain into the lake and feed to the sea via the Kvichak River support massive salmon runs. The Alaska Department of Fish and Game estimates that about 25 percent of the 56 million sockeye salmon that returned to the Bay this summer were bound for the Kvichak/Iliamna watershed. 

Bristol Bay commercial fishermen, 81 percent of whom are non-residents, have almost unanimously opposed the mine because any sort of water pollution might reduce salmon runs. Exclusive fishing lodges in the area, which cater to global clients wanting a wilderness experience, have opposed the mine because the jobs associated with mine development are likely to spark population growth.

And Alaskans, in general, have opposed the mine because they’ve bought into the idea that it is impossible to mine without destroying the environment.

“Residents have overwhelmingly opposed the mine because they know it would destroy their livelihoods, culture, and way of life,” the environmental group Trustees for Alaska says in summing all these concerns. 

Sweetening the deal

With Alaska in a recession and looking to have few ways out, Pebble’s answer is now a promise to share the wealth if the project goes forward. The company has promised to:

  • Create some sort of local and regional revenue-sharing plan.
  • Prioritize the development of low-cost energy in the Iliamna area, where some now struggle to pay their electric and heating bills.
  • And work with commercial fishermen on ways to help stabilize their markets and get local fishermen back into the fishing business.

Given the politics of the situation, though, promises of a smaller, environmentally friendly mine with benefits doesn’t seem to have done much to change minds.

Even before Pebble rolled out the new plan at the Alaska Resource Development Council in Anchorage on Thursday, Gov. Bill Walker was voicing his opposition.

“I’m not supportive of the mine,” he told Elizaeth Harball, a reporter for KTOO public radio and TV in the state’s capital. “I do not have information sufficient for me to be comfortable or supportive of the Pebble Mine. The burden is on them to prove that it can be done without a risk to the fish in that area. It’s a high burden – it’s the highest burden, and to me, they have not met that yet.”

The reaction of Pebble Limited Partnership CEO Tom Collier, who played ball in the big leagues as chief of staff for Secretary of the Interior Bruce Babbitt in the Clinton Administration, was to embrace Walker’s comments and volley back.

“Gov. Walker specifically said he did not have sufficient information for him to be comfortable or supportive of Pebble. He emphasized the burden was on us to prove the project can be done without a risk to the fish in that area. He went on to say it is a high burden that we have not yet met.

“And he is correct,” Collier said in a prepared statement.

“The next step is for Pebble to file a comprehensive plan with the state and federal regulatory agencies and for them to do their work. This agency review should be done without prejudging our work either in support or in opposition. As the head of Alaska’s executive branch in charge of these reviews, Gov. Walker’s position is well stated.”

And then Collier put the knife in:

“Alaska Public Radio portrayed this appropriate skepticism by the governor as doubling down on his opposition to Pebble, a misleading and incorrect portrayal of his position that remains uncorrected.”

“The Alaska mining community knows Gov. Walker supports mining. We also know he supports fishing. And above all we know he supports a fair process for projects that could contribute to growing Alaska’s economy, providing new jobs, and contributing to local and state government revenue.”

Recessionary forces

Collier, in releasing the public statement, did not put the last line in boldface type to emphasize it, but he might as well have done so.

Walker has called the Legislature back into special session for the fourth time this year. Lawmakers are to start meeting in Juneau on Oct. 23 to once again to discuss revenue in a state with a big, fat savings account, but a serious cashflow problem.

Walker now wants the Legislature to approve a 1.5 percent payroll taxes on wages that would be capped at $2,200 or twice the previous year’s permanent fund dividend (PFD), whichever is bigger.  The PFD is an annual payment to Alaska residents based on a percentage of the earnings of the oil-revenue-fueled Permanent Fund.

Walker says that under his plan, low-paid Alaskans would get to keep most of their PFD. The break even point – where earnings would zero out the PFD – is around $65,000 per year.

With the dividend set at $1,100, the Walker administration calculates someone making $25,000 per year would net $725 after paying $375 in taxes; someone making $50,000 would net $350; and someone making $75,000 would lose their PFD and be required to pay the state another $25.

Above $75,000, the payments to the state progressively increase to the $200,000 per year level where the payroll tax is now capped at $1,100, the current dividend amount.

“The proposal is expected to generate between $300 million and $325 million—about 15 percent of which is projected to come from non-resident workers, who in 2015 earned more than $2.7 billion (in Alaska),” according to the Walker administration.

Trying to squeeze revenue out of non-resident workers and tourists in Alaska is hugely popular on the political front at a time when low oil prices have put a state with a budget built around oil taxes in a tough spot. Spending is now almost $3 billion higher than revenue

Walker’s plan doesn’t do much to change that. The non-partisan, citizen’s group Common Ground calculates that every man, woman and child in Alaska would need to pony up approximately $3,900 to balance the budget. 

The state is now covering that deficit with savings. Without an increase in oil revenues – either because oil prices go up or more oil starts flowing through the transAlsaka oil pipeline – the state could soon reach a point where it has little choice but to tap into the now nearly $62 billion Permanent Fund. 

Pebble has suggested that if its mine came online it could help be paying the state $49- to $66-million per year under the current tax scheme with another $19- to $21-million going to the Lake & Peninsula Borough.

Whether that – or the promise of a smaller, cleaner mine – will sway any mine opponents remains to be seen.








7 replies »

  1. Hard to imagine even Trump hiring someone who lives in the state of Washington on an Ellensburg ranch to run EPA in Alaska. Of course, Rick is not so inclined to admit that he really lives down south, and not up north. But, as his radio show clearly states, his work is entertainment, and it would be entertaining to watch him get the job. I imagine all sorts of stones will be turned over at that point, looking for misdeeds in the past. It will be different for Rydell as the EPA position does not come with a handy 7 second delay for dumping difficult phone calls.

  2. FYI — I’m a reporter based in Anchorage with Alaska Public Media and Alaska’s Energy Desk. Tx!

  3. Pebble is a long, slow game for big mining. That translates into big money. With the population turnover in Alaska, widespread dysfunctional alcohol and related issues, and downturn in local economies, Alaska is ripe for the picking. Big mining. Big oil. Big fish/timber/(insert big money here). It is crucial to continue the wild salmon stocks with clean water. Pebble would destroy those stocks. But it’s more than that. We must continue to be faithful to guarding our beautiful and pristine environment, one of the last great refuges in the world. Plants. Mega-fauna. Water. And water is a supercritical element to all Alaskans and all of Alaska.
    This is not a new idea or need. Like the long term view of big money (almost entirely outside Alaska) we must all band together to preserve the future for our families and communities. Two special notes: one, water is the core here and people are already working to take advantage of it. So we must review and double our guard. And two, as water moves to the poles, and it is, we must prepare for Climatic Refugees.
    Alaska may well be an ark. Let’s work hard to be aware of what our state and federal government is doing and demand clarity and quality of living for all. It’s not just our right, it’s our responsibility.

    • Unlike the Kennicott mine, the Pebble prospects mineral separation will be done locally as where kennicott transported ore via railway, steamship to Tacoma smelters. So with the amount of rain Brsitol Bay receives, there will be multiple dam breaches releasing toxic and acid water, fugitive minerals from holding ponds, a recipe for disaster.
      The State would only get a measly 3% of revenues which won’t even cover state oversight. Win, Win for Canada, loose, loose for Alaska.

  4. Pretty objective writing. So I thought you might like to know the stock price (NAK-NYSE) has been artificially suppressed by short sellers since February 14,2017. The downward trend has seen a reversal, despite short seller’s domination. Ongoing short selling has amassed an estimated 35 million shares since the 52 week high of $3.45. Today’s price closed @$1.94. Previous trading day saw shorts sellers buy up a whopping 95% of just under 6m shares.Despite that effort,the stock rose 11%. Today shorts are estimated at 79% of sales and the stock held it’s ground on 4m volume. An announcement of partner or investors is expected anytime this quarter and would validate a stock value that some investors believe to be treble today’s price,or higher.

    I offer this information as a thanks for that piece of writing. I understand that you may see this as self-serving, and understand that you may want to edit this post as advertising. I wouldn’t invest in a toxic company, I’m comfortable with the mine plan. I think an objective person could see a large return on an ethical investment. I hope you receive the information in the spirit it was intended.

    • damn, Tom, you almost convinced me to buy some stock, but i’m broke. and i’m definitely on the fence on this one. i’m not sure the technology is there yet to mine Pebble without any risk of pollution. but i’m also old and thus schooled in the technocratic times of the Space Program and the Kennedy brothers: “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?” it only seems obvious that there will come a day when it will be possible to mine the Pebble deposit with no damage other the aesthetics, and the latter is a moving target. i grew up around the big, open pits of the Minnesota Iron Range. the abounded mines around aptly named Ironton have now been turned into something of a mountain-biking Mecca. the vegetation is lush and green, and the old pits are deep, man-made lakes full of Sky Blue Waters.

  5. When did the burden of proof, philosophically and/or morally, begin to fall on someone simply wanting to do a given legal thing to prove it will not do harm before beginning?

    If it is legal, shouldn’t the moral, legal, and intellectual burden be on those proposing a given precise restriction to prove, with evidence, not supposition, that the given precise legal activity proposed to be regulated -will-, or is overwhelmingly likely to, lead to a given precise negative outcome if not regulated in that precise proposed fashion?

Leave a Reply