Archive for the ‘Mining’ Category

Pebble Economic Analysis   1 comment

The proposed Pebble copper/gold mine near Iliamna is very controversial and is emblematic of what Alaska faces in trying to develop our resources and a grown-up economy like the rest of the states. There’s plenty of fear-mongering about the watershed and some of it is valid. It’s a seismically active area, but Fort Knox – an active gold mine in the Fairbanks area – is also in a seismically active area. The containment dam there held up just fine during the 7.9 magnitude Denali Quake in 2002. The engineering exists to overcome the seismic risks. The Pebble Partnership continues to conduct actual scientific studies in advance of filing an environmental impact statement, but the EPA has already issued a ruling, based on a historical analysis of mining history around the world rather than the real-life current proposed project, that indicates Pebble hasn’t got a snow ball’s chance in hell of even getting a fair hearing before permitting.

If built, Pebble would generate substantial employment in Alaska and revenues to the local, state and federal governments, according to an economic analysis of the proposed mine by IHS Global Insight, an Englewood, Colo. consulting firm.

The study was done by IHS for the Pebble Limited Partnership, the consortium of Anglo American and Northern Dynasty Minerals working on development of the mine, so of course, the environmentalists and NIMBY/BANANAs will insist that it’s not a valid study.

IHS estimated that the mine would pay between $136 million and $180 million in annual state taxes and mining royalties, or $3.4 – 4.5 billion over the first 25 years of its operating life. Clearly, the State of Alaska cannot be trusted to permit the mine because their loyalty can be bought.

In addition, $29 – 33 million in annual revenues, or $725 – 825 million over 25 years, would be paid to the Lake and Peninsula Borough, the regional municipal government that includes the area proposed for the mine. Obviously, they’re bias by the money in favor of the mine too – well, actually …

Payments to the federal government are estimated to $340 – 395 million per year, or $8.5 – 9.9 billion over 25 years. I’m not sure why the federal government is able to resist the bribery of tax dollars, but apparently the EPA is.

Expected employment impacts were also estimated in the IHS report.

Construction will generate about 4,700 direct and indirect jobs in the state, and the 25-year initial production phase would employ about 2,900. That’s significantly larger than what the Pebble Partnership has been advertising.

Direct jobs at the mine would total about 700 in the first four years of production and would increase each year to 1,000 by the 15th year of production. The indirect jobs, mainly with suppliers, would total about 650 in the first four years and increase to 875 by the 15th year. Jobs at the mine will be high-paying, averaging about $109,500.

The study estimates that 75 percent of the workforce would be Alaska resident, a number typical of other major resource extraction projects in the state.

Mining activity would boost the economy of the Lake and Peninsula Borough and help sustain small villages in the region. Ventura Samaniego, CEO of Kijik Corp., the village corporation of Nondalton, told the authors of the report that the lack of a regional economy is resulting in severe losses of population.

“The Nondalton population declined by 26 percent between 2000 and 2010. Approximately half of Kijik Corp’s shareholders now live in Anchorage,” Samaniego told the report authors.

Existing jobs across all of southwest Alaska are mostly provided by government. The IHS report referenced the Alaska Department of Labor and Workforce Development’s study, “Workforce Analysis for Southwest Alaska’s Large Mines” reported that school districts and local city, borough and tribal now provide 40% of the jobs in the region,” the labor department report said.

And yet the Kijik Corporation has taken a stand against Pebble as has the Bristol Bay Native Corporation. They don’t see a reason to employ people at the mine because they already have jobs in government as well as highly-lucrative jobs as setnetters in the Iliamna watershed and they fear the loss of the setnetting if the containment dam leaks, but they also have no will for employment because the government pays for a great deal of their support through Bureau of Indian Affairs monies and State of Alaska programs.

Moreover, like all of our Native corporations, Kijik and Bristol Bay Native Corps have become business entities. That’s fine. That’s what they were intended to do so that eventually the Native peoples of Alaska would become self-supporting. We’re still waiting. These corporations compete with non-Native companies for projects all of the state. Pebble is on state land, so Anglo American and Northern Dynasty Minerals got the contract for the exploration, but you can bet Kijik and Bristol are wishing they did. Red Dog has been very lucrative for NANA Corp. If the Pebble Partnership comes to a point where they cannot get permitting, they will drop the lease and I expect Kijik, Bristol, and possibly NANA and CIRI to go for the lease after a decent period of time. Suddenly the Natives of Bristol Bay will be all for gold and lead mines in the watershed and absolutely certain it can be done without any risk to the salmon. Why do I think that? That’s the history of Red Dog. It never would have been developed if NANA hadn’t been able to profit from it.

But, of course, we’re not supposed to talk about how the Native corporations use their stakeholders to racket up the price of projects, drive the non-Natives out, and then they come in and joint venture or wholly own and make a mint … with the full support of the Native community. We’re supposed to not notice what is right before our eyes.

Ultimately, this decision should not be made emotionally, but scientifically and with application of a cost-benefit analysis. We have got to get away from this idea that we can do absolutely nothing without absolute assurance that nothing bad will happen. The world is not a perfect place. In this imperfect world, we make progress through risk. We don’t carelessly dump poisonous chemicals into the watershed of the richest salmon fishery in the world, but we cautiously engineer so that won’t happen, knowing that there may be a small chance of failure.

Why is this such a difficult concept?


21st Century Boogey Man   1 comment

Coal is the 21st century boogey man. Environmentalists are convinced that coal is the most horrible pollutant possible and have convinced communities that they even need to be terrified of shipping coal through their towns, stifling development, sometimes costing those towns many jobs, even their economic vitality.

In Oregon and other Northwest ports, communities are killing projects simply because they fear global warming or have been convinced that they’ll all develop black lung from trains carrying coal on train cars.

The Precautionary Principle insists that if there is any risk whatsoever to a venture it is better not to do it. The miners in Montana and Wyoming should just find jobs at McDonalds: the rail cars can run empty (since we can’t layoff unneeded rail workers), the port workers will never miss the jobs that weren’t created, and Asia should run its factories on solar power because American environmentalists know more about these things than any of them do.

Again, our betters will do our thinking for us. We don’t need no stinking jobs!


Two Sides to Pebble   1 comment

If you post a balanced review of the Pebble Mine project, you are going to get some attention. The following is from some folks claiming to be Alaskans who oppose Pebble Mine. Pebble Mine is not without controversy and there are many Alaskans who oppose it — some of them quite irrationally.

“In poll after poll going back several years right up to the present, a majority of ALASKANS oppose this foreign-based Pebble Partnership and their proposed mine. Forget about all your boogeymen – the EPA, liberals, environmentalists, tree-huggers, anti-growth groups, etc. ALASKANS oppose this project, and we oppose it for a long list of reasons. Only someone who just plain doesn’t understand Alaska would compare our land mass with that of anything in the lower 48. A lot of this land is Native-owned, for starters. Also, the way our watersheds work – and the sheer acreage they cover and the anadromous fish runs they support, are not even remotely comparable to the water systems in the states referred to in the above article. You just plain can’t compare the situation up here with Texas.
Rather than post these pro-Pebble talking points, you might want to educate yourself as to why so many Alaskans oppose this mine. In many cases, we’re the very same Alaskans who are fine with Red Dog and other ventures. You might also want to study up on why the highest percentage of those opposed to Pebble is right in the very region this mine will be located. The lack of balance in your article is startling. We find it amazing that anyone is buying the Pebble talking points so thoroughly hook, line and sinker. An easy Google search will support the polling data we refer to.”

I was born here, raised here by parents who have been here a very long time, and my children plan to make their lives here as well. My folks came and stayed when services were few and far between, back when Anchorage was smaller than Fairbanks. Is that Alaskan enough for you?

Polls are all over the place with Pebble, but most show opposition by at least a bare majority. Of course, most of those polls have been conducted in Anchorage by media consultant Michael Dubke using a pool so small that the results are not trustworthy — seriously, one of the polls only spoke to 130 respondants. It was later revealed that Michael Dubke was far from neutral on the Pebble Project. In 2008, environemntal groups and some big-money highrollers who own private lodges on Lake Illiamna bankrolled an initiative on the August ballot. The Alaska Clean Water, Measure 4 received most of its funding from Bob Gillam, one of the wealthiest men in Alaska, who was strangely also invested in one of the Pebble Partnership’s subsidiaries. Of course, that makes me wonder. What possible reason could a very wealthy man like Mr. Gillam have for playing both ends against the middle? And can you really trust poll results from Michael Dubke, who was a funder of the initiative? Major funding in opposition to the initiative — which was clearly written to target Pebble, but would have affected mining throughout the state — was provided by NANA — a Native Corporation, which sort of makes you wonder about the claim that the Natives oppose Pebble. Actually, I don’t wonder because 10 of the 12 regional Native Corporations have filed protests against the EPA’s attempt to stall the exploration of the Pebble Prospect. Maybe only Natives who have been propagandized oppose Pebble. The initiative was defeated 57% to 43% in the largest August election turnout since Statehood. It will be back, though, I’m sure.

So, I re-read John Shively’s article to figure out what states the posters were speaking of as being significantly different from Alaska with its “anadromous streams (which just means that fish spawn in them). Maybe actually reading the post “Truth About Pebble” instead of just scanning it would help. The only time Shively mentions Texas or any other state is to give comparisons for visualizing acreage. Nowhere does he talk about mining in other states. He was strictly focused on correcting the widely held errors about Pebble and the science that has gone into the project so far.

The third article “Not Your Grandfather’s Mining Regulation” might also help factually challenged readers.

I first heard about the Pebble Prospect in the mid-to-late 1980s when I was working as a reporter. Given the crowd I ran with, I quickly became convinced that it was a bad idea. I had the impression that it was right on the shores of Lake Illiamna, the spawning grounds for Bristol Bay salmon. And that was the opinion I held for about 20 years.

Yes, 20 years! I had other things to do and there was no Internet back then, so unless a news story headed me in that direction — which it didn’t — I had no reason to do independent research. Like a lot of other people, I chose to believe the rhetoric rather than research the facts.

In the mid-2000s my daughter made friends with a girl down the street and I met the girl’s mother — who was a mining engineer for the Ft. Knox mine. I grew up playing in the tailings of the Fox dredge, so my opinion of mining wasn’t great. But Rebecca talked about rocks with passion, so I listened. She invited me to Ft. Knox for a tour and I got to see that this mine was not the Fox dredging at all. Our families visited Kennicott together — the men stayed in Chitina to fish for salmon while we ladies hiked the old copper mining town. Rebecca showed me the difference between that mine and Ft. Knox. Kennicott was built without a containment dam and there was no attempt at reclamation, while Ft. Knox was built with the best in modern technology.

And, then, Pebble came on my view screen again during the fight over the initiative. Of course, I asked someone I knew would  give me straight answers and Rebecca gave me quite an education. I learned that the Pebble deposit is — geographically speaking — not really near Lake Illiamna at all. It’s closest edge is 15 miles from the lake’s watershed, further than Ft. Knox is from some Interior rivers.

I also learned the most important part of this — Pebble was merely an idea in 2008. A few shovel loads of dirt had been analyzed. At that time no environmental studies had been done, no core drilling, no engineering. So, why, Rebecca asked, was the opposition so strong?

Since 2007, we’ve had the EPA announce without any corroboration that it thought Pebble was a danger to the environment. It then produced a report that was based on a study of opinion literature surveying the outcome of mining techniques from 50 years ago that are no longer applicable to the mining industry of Alaska or just about anywhere in the developed world. It has completely ignored the scientific date produced by the PLP.

PLP has yet to file a permit application with the State of Alaska, let alone the Army Corp of Engineers or the EPA, yet the EPA is seeking to prevent an application being filed. Why? As the third article in this series shows, Alaska has the most rigorous mining regulations in the 50 states and Pebble’s exploration has been monitored by those state regulators. Red Dog, Ft. Knox, and Pogo mines have been producing minerals for years without incident. The containment dam at Ft. Knox held up fine during the Denali Quake of 2002, which rattled Fairbanks at 7.9 magnitude. A thorough seismic analysis of the area around Lake Illiamna has yet to be done, but is required as part of the permitting process. No, that doesn’t mean that a meteor might not drop out of the sky and take out the containment dam at Pebble sometime in the future, but what are odds of that?

I’m not saying Pebble SHOULD be built. I’m saying Pebble should be studied and if PLP can show that it can be done safely, within a reasonable margin of risk, then the State of Alaska should decide to grant the permit. And the EPA — which has discredited itself on this issue by trying to impede the legal and lawful process — should step out because they’ve shown themselves highly biased and without regard to facts..

As for the Alaskans who don’t want Pebble — well, 57% of us seem not to want to stop Pebble’s preliminary studies.

Rather than buying the talking points of the Renewable Resources Coalition, how about taking a BALANCED approach and actually looking at the facts.

In fact, there are a number of independent science panels set to study the issue May 6-7 at University of Alaska Anchorage.

Since the readers who posted most likely live in Anchorage, it might be a worthwhile educational opportunity.

Not Your Grandfather’s Mining Regulation   Leave a comment

Part 3 of 3

This is a reprint of another article in the Alaska Contractor magazine. Similar to the last one, I’ve added graphics


by Bob Loeffler

Americans have become much more sensitive about the environment than they were a generation ago, and laws to protect our air, water and land have improved dramatically. The practices and results that were common in previous generations would be a matter of criminal penalty today. There has been a regulatory and cultural shift since the advent of Earth Day and enactments of the National Environmental Protection Act in 1970.

These changes have dramatically affected today’s mining operations. In fact, there has been a much-needed, steady improvement in mine regulation and practices in the past 40 years – and you can see it in the positive environmental record of Alaska’s miners.

Changes began in the 1970s. Congress passed the National Environmental Policy Act (which requires Environmental Impact Statements for proposed projects), the Clean Air Act, and the Clean Water Act. It also established the Environmental Protection Agency and passed comprehensive regulation for the coal industry.

Despite the laws of the 1970s, it took some time before the regulators, industry and science caught up with the new environmental sensitivity. In 1985, the EPA reported that “Date on management methods at mining facilities indicate that only a small percentage of mines currently monitor their ground water, use run-on/run-off controls or liner, or employ leachate collection, detection and removal systems.” The regulations, science and required protection measures we not take for granted were just being implemented in the 1980s and 1990s. But by 1999, a National Academy of Sciences study prepared for Congress concluded that the “laws and regulations that provide mining-related environmental protection is complicated but generally effective.”

Because of the obvious differences between new and old mines, regulators and industry generally refer to old mines as legacy mines. Legacy mines were generally designed and constructed with inferior environmental standards and practices, compared with mines of today, and statistics bear that out.

One recent study looked at hard-rock mines the EPA has placed on its National Priority List as superfund clean-up sites. The study found that there were 53 hard-rock mines on the EPA’s list: 47 were permitted in the pre-regulatory era (before 1970), six were authorized in the transition era (before 1989) and none was permitted after 1990. The study confirmed what those in the industry know – that changing regulations and practices have clearly improved mining’s environmental performance.

The changes in regulatory standards are reflected in the history of Alaska’s mining laws. Our first hard-rock mines since World War II began operation in 1989. At that time, Alaska had no requirement that mine operators reclaim land they had disturbed and no requirement for operators to provide financial assurance that mining sites would be reclaimed. Alaska allowed mining companies to disturb the land and leave it disturbed.

In 1990, the Alaska Legislature passed a mine reclamation requirement for state, federal and private land in Alaska. The law became effective October 1991. It also required that mines put up funds for reclamation (a reclamation bond) before they began operation. But the reclamation bond required in the new law was designed for placer mines, which were then the dominant part of the industry. The maximum amount of the required bond was less than the amount needed to reclaim hard-rock mine sites.

Between 1991 and 2004, four hard-rock mines were authorized on state land. Each of these operations voluntarily agreed to submit financial assurance for the entire mine disturbance, even thought it was greater than the law required.

In 2004, the Alaska Legislature with the support of state agencies, the mining industry and some environmental groups changed the law to require full reclamation bonding for hard-rock mining. Beginning in July 2004, the state required all mines to put up a bond to cover the full reclamation cost before the mine begins operating. All mines in Alaska have updated their bonds since the law was passed.

Alaska has a unique requirement as part of its mine permitting, a requirement no other state has. All states require mines to monitor their performance to make sure they live up to permit requirements. Agencies also monitor and inspect the performance. But Alaska has an innovative requirement that goes one step further. We hire someone to monitor the agencies.

Every hard-rock mine regulated by the state requires a third-party audit every five years. A consultation firm is hired to audit both the mine’s compliance with permit requirements and the state agencies’ inspection and administration of those requirements. The auditing firm makes recommendations for improving operations and regulation, and the subsequent audit investigates whether the previous recommendations were implemented.

These changes – as well as the fact that Alaska’s hard-rock industry is young, with no legacy mines, have resulted in an Alaska mining industry with an excellent record of protecting the environment, particularly water quality and fish. Agency monitoring tells us that fish downstream of all Alaska’s hard-rock mines are as populous and healthy as they were before the mines existed.

Today, Alaska has a strict and realistic “set of requirements to regulate mining, and our mining industry has an enviable environmental record. That’s not to say that the laws and regulations are perfect. The future will no doubt bring challenges and make it clear that we can make even more improvements. But with the regulatory requirements currently in place, there is no excuse to permit a mine that would degrade the environment, especially water quality or fish habitat. And that almost certainly would not have been true of mines developed in your grandfather’s time.

Bob Loeffer is a part-time Visiting Professor at the Institute of Social and Economic Research, University of Alaska Anchorage, and the partner in the consulting firm, Jade North LLC. For seven years, he was director of the Division of Mining, Land and Water within the Alaska Department of Natural Resources.

Posted May 3, 2013 by aurorawatcherak in Alaska, Conservation, History, Mining

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Truth about Pebble   5 comments

Part 2 of 3

This is a reprint from Alaska Contractor magazine of an editorial written by John Shively, CEO of the Pebble Partnership. I added links to articles and some of the graphics.


The Pebble Limited Partnership is in advanced exploration and pre-feasibility efforts related to development of the world-class Pebble Deposit, located in southwest Alaska. Located on State of Alaska land designated for mineral exploration and development, Pebble is predominantly a copper deposit, with substantial amounts of gold and molybdenum. The level of copper estimated within the deposit could potentially supply about 35 percent of the US copper needs in the future.

To date, several hundred million dollars has been invested in exploration, environment studies and engineering planning for this significant state asset, with more than $120 million relating to environmental research specifically.

The project will include an initial construction phase that is anticipated to take several years to complete with 3,000 to 4,000 construction jobs. The multibillion dollar investment will include building mill processing facilities, an anticipated 80-mile transportation system, a major port and power plant. During operations, the mine itself will employ 1,000 full-time workers in a wide range of jobs from drilling operators to administrative positions, engineers and more, as well as spark multiple supply-and-service-type contracts and businesses.

Development projects throughout Alaska share challenges that are literally part of the landscape. Remote settings, extreme temperatures and rough terrain are common elements that are necessary planning components. But developing a project like Pebble requires a level of complexity that connects the four key components above that under other circumstances would individually be considered large undertakings. A common thread throughout each of these areas is environmental research.

In January 2012, while not required to do so, PLP publically released its Environmental Baseline Document, a compilation of extensive scientific research conducted at the Pebble study area between 2004 and 2008. The body of work represents a rigorous environmental studies program that historically is one of the most robust for a mining project in Alaska. Documenting five years of data collection, the research was conducted by more than 40 globally recognized independent scientific firms – representing more than 100 environmental field experts.

Covering a wide range of scientific disciplines, from fish, surface and groundwater, hydrology and water quality to seismic activity and wildlife, the EBD documents the physiology, biology and socio-economic conditions in a study area encompassing several hundred square miles. About half of the EBD research is dedicated to fish and water studies. The nearly 30,000-page compilation of date offers a previously unrecorded breadth of scientific study that will be a legacy for the region whether or not the Pebble project moves forward.

View from within the Pebble claimsPebble Prospect area photo

Work associated with the EBD took place year-round. Winter temperatures, which regularly drop below minus 10, presented particular challenges for researchers. Hydrology data collected on a monthly basis at streams, for example, often required digging through 5 feet of snow and auguring through several feet of ice to collect samples. Likewise, summer challenges included field work conducted in densely vegetated areas supporting a significant brown bear population. Consequently, PLP established a bear guard program that moves people away from bears, rather than the more standard practice of using noise to move bears away from people. This program, along with transporting all equipment and crews to and from the study areas as well as throughout the deposit, via helicopter, are just two examples of PLP’s commitment to environmental stewardship.

Information gathered from the EBD and continuing scientific programs is being incorporated into ongoing engineering designs and will help shape a potential future mine plan. Mitigation, closure and reclamation are also key to the mine plan that will ultimately be submitted for permitting. How Pebble plans to operate and manage its facilities based on modern 21st century mining practices and technologies will set it apart.

Alaska mining laws also require a reclamation bond from developers that is held in security by the State of Alaska, along with more than 50 permits, certifications and authorizations that Pebble will need for permitting.

With all that in mind, one might ask what the purpose is behind the Environmental Protection Agency’s recent actions relating to the draft Bristol Bay Watershed Assessment. Frankly, those in support of due process wonder as well.

The EPA’s decision to prematurely insert itself into the Pebble process and activities occurring on state-owned and –managed land designated for mineral exploration should sound economic alarm bells to any individual or company looking to conduct responsible resource development in Alaska. This assertion could signal yet another federal overreach in Alaska where federal agencies current management some 61 percent of the state. To put this in perspective, one-third of all federal lands in the United States are in Alaska, larger alone than Texas or bigger than the combination of 15 eastern states stretching from Maine to South Carolina.

The EPA’s action is a response to petitions submitted in 2010 by Southwest Alaska tribal organizations and a host of other anti-Pebble groups for the agency to preemptively stop the project using an action under the Clean Water Acts Section 404c – something the agency has never done before on a resource development project. Currently, the EPA reviews about 60,000 404 permits annually associated with nearly $220 billion in projects. What is unusual about the decision is that the EPA is asserting itself prior to any permit applications being filed.

The EPA’s Regional Administrator says it makes sense to gather public comment before development occurs. But exactly what did the public comment on in absence of a permit application development plan and why now?

It is no wonder that Gov. Sean Parnell’s administration questioned early on whether the exercise would “add value” to the Pebble discussion and Alaska’s Attorney General called the EPA’s actions “unlawfully preemptive, premature, arbitrary, capricious and vague.” Likewise, Sen. Lisa Murkowski expressed concern that the “assessment must not be a check-the-box exercise that merely provides cover for the EPA to veto future permit applications”. Ten of the 12 Alaska Native regional corporations as well as Alaska businesses and average citizens also wrote the EPA expressing their concerns over their actions.

No Alaskan would support harming Bristol Bay’s tremendous salmon resource. Nor should we side with one industry at the expense of another. The question before us as Alaskans is whether these two industries can coexist in the Bristol Bay region as they currently do throughout Alaska.

I believe the question is emphatically yes. Alaska has demonstrated repeatedly that mining and fishing can indeed coexist. One need look no further than the Fort Knox Mine, Greens Creek and Red Dog.  Operations at these mining facilities represent the best in mining practices, including highly successful relationships with corresponding fisheries.

Furthermore, Alaska sets the standard with recognized programs in fish and wildlife management. Instead of looking around the world for failed projects, are we not better served by looking at how Alaska’s environmental standards have served us well in all areas of resource development? They are world-class, like the very fisheries they are intended to protect.

This returns the conversation to science. The Pebble Partnership has spent years intently studying the hydrology, geology and wildlife at its proposed development site. It has undoubtedly amassed the most comprehensive set of data available for the Iliamna region. The very data that Pebble must provide state and federal regulators as part of the permit application process.

Ironically, the EPA felt no need to fully evaluate this exhaustive data in its DBBWA. Instead, they have conducted a literature review with no on-the-ground science and created a mine that was doomed to fail with outmoded mining practices from third-world countries and in some cases not utilized for the past 50 years or more. Even the EPA’s own peer reviewers called the DBBWA incomplete, criticizing its lack of 21st century mining practices, its complete omission of mitigation and the absence of Alaska’s unique and stringent regulatory system.

The EPA has within its power the ability to stop development in its tracks at any stage. It can cost investors hundreds of millions of dollars when the EPA invokes its authority. Just ask Shell or ConocoPhillips. If enforcement is necessary to protect Alaskans and the environment, it is justified. However, if it’s exercised as part of a political agenda instead of a scientific process, it is not. And at this time, it is too early to determine the EPA’s agenda when it comes to Alaska in general and the Pebble project in particular.

What is known is that mining projects like Fort Knox and Red Dog, developed during this era of environmental regulation, have proven that Alaska mines and healthy fisheries can coexist. Considered a global leader in the management of its natural resources, Alaska has a unique understanding of protecting the environment while maximizing its economic  engines to the benefit of its residents as directed by the state constitution. Modern technology plays a critical role in advancing these tandem goals that allow multiple natural resource industries to thrive side by side. Equally as important is due process and a dependable regulatory system that is above political agenda.


John Shively first came to Alaska in 1965 as a VISTA volunteer. What started as a one-year assignment turned into a career involved in the issues that have shaped Alaska – both in the private and public sectors. Shively worked with NANA Regional Corporation on the development of the Red Dog Mine and served most recently as Holland America Line’s executive in Alaska. He has served two governors and is a former commissioner of the Department of Natural Resources. Shively has been a trustee for Alaska Permanent Fund, regent at the University of Alaska and served on numerous boards including the Resource Development Council where he served as president for five years. In 2009, Shively received the Bill Egan award from the Alaska State Chamber of Commerce as their outstanding Alaskan of the year. Shively has also been recognized with the prestigious Denali Award from the Alaska Federation of Natives. He currently leads the Anchorage-based Pebble Partnership as CEO.

Yes, the primary investors in the Pebble Limited Partnership are based in foreign countries. This is because American mining companies have mostly been driven overseas by American regulatory red tape and high corporate taxes. However, the Pebble Limited Partnership is based in Anchorage, Alaska’s largest city, and has committed to hiring Alaskans.

Pebble Mine – Part 1 of 3   Leave a comment

If you listen to the media, you would think Alaskans are the biggest danger to the environment since that meteor that landed off the Yucatan 65 million years ago. We’re always violating the Clean Water Act, the Clean Air Act and wanting to bomb the glaciers. Most recently, we’ve been in the news for wanting to destroy the Bristol Bay Fishery with this little mining project called Pebble.

Most of what I’m writing here comes from the attached article by a group started out opposed to Pebble Mine and has now changed its mind and is trying to sort through the rhetoric to get to the truth. There’s a lot of rhetoric.

The Pebble Mine Project, located in the Bristol Bay Watershed is a major point of ongoing controversy throughout Alaska, the United States and many other countries. Right now, it’s just an idea on paper and a few shovel-loads of dirt moved and examined. If developed, it would be the largest gold mine in the world. It is also the largest known undeveloped copper ore deposit in the world. It’s estimated to contain $300 BILLION in recoverable minerals. The location of the purposed Pebble Project could not be more disturbing to some of the people of Bristol Bay and to a number of residents in Alaska, but it is a major blood-pressure raiser for environmentalists.

Situated near Lake Illiamna on Alaska’s Katmai Peninsula, Pebble Mine would sit at the headwaters of Alaska’s largest salmon-rearing habitat. Alaska being the tectonically active zone that it is, environmentalists and fisherfolk in Bristol Bay fear that an earthquake might take out the containment dams on the tailings and pollute the watershed, irretrievably destroying the Bristol Bay fishery.

The mine would be located on lands owned by the State of Alaska, which is constitutionally required to operate mineral prospects for the benefit of everyone in the state, not just the residents of one area or one industry. There have been huge amounts of site-specific data collected on potential environmental and social effects of the Pebble development, but so far, it is just an idea.

The mine is expected to provide significant tax revenue to the State of Alaska. Approximate 2000 jobs will be created during construction and 1000 long-term jobs during the 30- to 60-year expected lifespan of the mine. Although mining has a less than stellar environmental history, improved technologies and regulations have largely eliminated that concern. The State of Alaska has an exacting environmental permitting process to assure that the Pebble Partnership protects the environment.

There have been several political attempts to block the development, but voters have soundly rejected all of them because they would not just affect Pebble, but all mining throughout the state.

Alaska has a long history of mining. Some of it has been done badly. I grew up playing in the tailings of the Goldstream and Chatanika dredges.

However, I also fish every summer for Copper River red salmon just miles away from the decommissioned Kennicott Copper Mine. Closed in the 1930s, it used no containment dams or other modern technologies. Yet the Copper River remains largely unpolluted and the salmon return year after year.  On the way to our cabin site, we drive past Fort Knox gold mine – a huge open pit mine that is similar to what is proposed at Pebble. It’s not pretty – but you can’t see it from the road and when they’re done mining, they will reclaim the land and in 30 years, we won’t be able to tell that a mine was ever there.

How do I know? I also live 90 miles away from Usibelli Coal Mine.

Usibelli is a strip mine and strip mining is ugly. Started in the 1940s by a man who didn’t really love the environment (Austin “Cap” Lathrop), the old Suntrana mine was pretty ugly when Emil Usibelli bought it the 1950s. He looked at the area where the coal had already been mined and told his workers to push the overburden back in place and plant trees. In the 1970s, the EPA and National Forest Service ordered his son to begin reclaiming the land. Joe Usibelli had to take them to court to show that he had already done what they wanted him to do, just without their edicts making him do it. He saw no reason to cut down a 20-year-old forest to plant the one they were requiring. I’ve toured that now 50-year-old forest and cannot discern a difference between it and the surrounding forests. It’s great moose-hunting habitat.

There are no guarantees in life and development of natural resources always entails risk. In November 2002, the Denali fault line traveled several feet, producing a 7.9 magnitude earthquake. It ranks as the only time in my adult life that I ever dove under a table when the ground started shaking. Like most Alaskans, earthquakes don’t impress me much. This one did! In some places, the TransAlaska Pipeline moved 15 feet. It shut itself down, but it did not leak. Engineers had planned for the potential of such an earthquake. The TAPS held up fine – the Richardson and Taylor Highways required major repair. So, there is no way I could say that there are no risks associated with mining in the Bristol Bay watershed.

I can say that mining in the Copper River watershed has posed no discernible harm to the salmon returns there (Copper River being the second-largest salmon spawning ground in Alaska). Of course, the Pebble Partnership should demonstrate their project is safe and able to withstand earthquakes of a magnitude likely to occur in the Lake Iliamna area. If they can do that to State of Alaska standards, environmental groups should stop complaining because people need jobs. We can’t all work for environmental harassment squads. Some of us have to drill for the oil and mine the minerals that support the lifestyle of environmental harassment squads.

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