Archive for the ‘bristol bay’ Tag

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?


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.

Valentine But

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