Mining News: What a difference eight years can make!

Reflections and projections on changes in Washington, D.C. and Juneau and implications for the future of the mining industry

J. P. Tangen

For Mining News

2008 is 90 percent over. As we approach the calendar change and the other mid-winter holidays, it is reasonable to reflect and prognosticate. Eight short years ago, we were on the dawn of a new era. Republicans controlled the White House, both houses of Congress, Alaska’s governor’s mansion and both houses of our state Legislature. The stars were perfectly aligned. It was a time for celebration because the dark decade was past and resource development in Alaska, most specifically mining, could finally gain some traction.

Unfortunately, the millennium “Stargate” did not work as we hoped. Republican politicians cannibalized the country from one end to the other. Economic bust followed boom-bubble, again and again. Real estate prices around the country reached record highs on false premises and promises. Commodity prices, including Alaska crude, reached undreamed of levels. After decades of effort, the Red Dog zinc mine near Kotzebue was able to pay a handsome royalty to Nana Corp., as required under the Alaska Native Claims Settlement Act’s sharing provisions. This meant that benefits from that one mine made their way into the hands of shopkeepers in every corner of the state.

If 2000 was the epitome of hope, 2008 must be regarded as the nadir of change. Presumably pro-development politicos have been driven from the towers of power. Our president-elect is on record as having mumbled a single sentence in support of the domestic mining industry. The transition team charged with overseeing the selection of a Secretary of the Interior includes former Interior Solicitor John Leshy, the Darth Vader of mining on federal public land.

The global economy has been driven into the ground, arguably as the result of a paucity of leadership from Washington and an analogous paucity of responsibility from the private sector. One is inspired to again pull down Plato’s Republic and reflect on the desirability of a “Benevolent Dictator.” The state is being led into a descending spiral by a governor who brings to mind former Alaska Senator Mike Gravel in terms of competence and political insight.

In a Grecian tragedy, Senator Stevens has been found guilty of meaningless gaps in clerical trivia, and the edifice that took four decades to build has crumbled at a our feet. The Republican giant has been slain by a Republican Department of (little) Justice. Stevens, who guided us through ANCSA, the Trans-Alaska Pipeline Act and ANILCA has been dealt a death blow by the people who wouldn’t have the gas to drive to work but for him.

The dead and dying are all around us. The Canadian dollar has slipped in value from US $1.10 to 78 cents. Millions of dollars spent on mining every year in Alaska come through Canadian corporations who are now going to have to work 20 percent harder to spend the same number of dollars next year, which, foreseeably, is not going to happen. Even the nature of the legal practice for those of us working with resource developers has changed focus from putting agreements together to holding agreements together.

We have this to look forward to: Conservative Republicans are splintered and consigned to an insignificant role, both in Juneau and in Washington; a senator-elect, conceding every ambiguity, who knows little about developing anything bigger than an apartment building and who will be tied for last place in the great seniority race that characterizes the august body of the U.S. Senate; and a congressman for life who will be heard, literally, as a voice from the wilderness. In addition, with Alaska crude in the $40 range, the economic contingencies that made a gas pipeline a marginal proposal are again a vicious reality.

The delicious irony is that Democrats are no less prone to eating their young than Republicans. The liberal community has long bridged over an unspoken schism which may fairly manifest itself in the upcoming administration. Conservation and environmental protection have never been rightfully under the tent of a humanitarian Democratic party. In the past, America could redirect large quantities of its domestic resources from health and social services programs to support parks and pounds of environmental impact statements because we had unlimited affluence. No one, except those directly involved, noticed that regulatory burdens that drove industrial jobs off shore drove industrial jobs off shore.

With the dawn of a new era, perhaps it will occur to someone in command that we would rather have good jobs than a pristine universe. That difference undoubtedly will fester. A resurrected Republican Party will be forced to embrace a new green standard. Liberal federal judges will be torn in half, and in eight short years all the stars in the heavens will obtain a new alignment. Or maybe they won’t.