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Vol. 19, No. 21 Week of May 25, 2014
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Watchdog, court eyes alleged misconduct

EPA Inspector General will probe legality of ‘Bristol Bay Assessment;’ developer files suit to overturn pre-emptive veto of Pebble

Shane Lasley

Mining News

The U.S. Environmental Protection Agency is drawing fire from lawmakers, business groups, project developers and the state of Alaska over its handling of the Bristol Bay Assessment and associated attempt to prevent the Pebble Mine project from getting the opportunity to have a fair hearing under established permitting regulations in the United States.

Mounting pressure from various parties has persuaded the EPA Office of Inspector General to launch an investigation of the agency’s alleged misconduct while completing “An Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska,” more widely referred to as the Bristol Bay Assessment.

EPA claims that results of this study justify a review process under Section 404(c) of the federal Clean Water Act that may result in banning the permits needed to build a mine at the enormous Pebble copper-gold-molybdenum deposit in the Bristol Bay Region of Southwest Alaska.

“Extensive existing data, including information that was collected as part of EPA’s three-year scientific assessment, provided ample reasons for EPA to believe that a mine of the size and scope of the Pebble Mine would have significant and irreversible negative impacts on the Bristol Bay Watershed and its salmon-bearing waters,” EPA Administrator Gina McCarthy told reporters during a briefing that announced the 404(c) review process.

The Pebble Partnership, State of Alaska and U.S. House Oversight and Government Reform Committee have turned up evidence that at least some individuals within EPA were advocating for a pre-emptive Section 404(c) ban of permits for Pebble as early as 2008 and suggests that the Bristol Bay Assessment may have been carried out in a manner to support that goal.

One such bit of evidence is a 2010 internal EPA worksheet that lists the pros and cons of a proactive 404(c) ban of Pebble versus letting the project go into permitting. This discussion matrix lists “never been done before in the history of the CWA;” “immediate political backlash;” and “litigation” as downsides to vetoing permits.

These anticipated complications of the 404(c) review are coming to fruition. Aside from drawing fire from a group of predominantly Republican U.S. lawmakers, EPA’s unprecedented attempt to shut the doors on Pebble before its would-be developers have even submitted permit applications has landed the regulatory agency in court.

On May 21, the Pebble Partnership filed suit in the U.S. District Court for Alaska, seeking an injunction to stop EPA’s process to pre-emptively veto the Pebble Project.

Explaining the decision to take EPA to court, Pebble Partnership CEO Tom Collier explained: “Simply put, EPA has repeatedly ignored detailed comments that we, the State of Alaska and others have made about this massive federal overreach and continues to advance an unprecedented pre-emptive regulatory action against the Pebble Project that vastly exceeds its Clean Water Act authority.”

The company says the outcome of this fight to allow Pebble to have a fair hearing in the permitting process will determine the breadth of EPA’s already vast powers.

EPA discussed this potential expansion of its regulatory reach in the 2010 discussion matrix on blocking Pebble, saying a proactive veto of Pebble permits would “serve as a model of proactive watershed planning” in the United States and listing this assertion in the pro column of the dialogue document.

“If EPA ultimately vetoes Pebble before a development plan is proposed or evaluated through the comprehensive federal and state permitting processes, the precedent established will have significant long-term effects on business investment in this state and throughout the country,” Collier said.

“While Pebble must defend itself, this precedent-setting overreach is of great concern to the entire development community. There are some 60,000 404(c) permits sought under the CWA every year in the United States, representing hundreds of billions of dollars in project investment and impacting hundreds of thousands of jobs,” he added.

Cease and desist

In separate responses to EPA’s 404(c) review, the state of Alaska and Pebble Partnership called on the EPA to back away from its attempt to proactively quash key permits needed to develop Pebble and allow the world-class copper project to be evaluated under the rigors of the National Environmental Policy Act and a plethora of other relevant federal and state permitting processes established to allow resource development while protecting the environment.

“It is time to stop the madness. NEPA is among the most admired and emulated environmental protection and regulatory process in the world. EPA should stand down, and let that process work for Pebble,” Collier said.

Pebble Partnership asserts that EPA’s attempt to proactively stop Pebble is an unprecedented overreach based on a flawed assessment with a predetermined outcome that aims to expand its own regulatory reach, while denying Alaska and other regulatory agencies the opportunity to have their voices heard.

“What is absolutely clear is that EPA’s intent to undertake pre-emptive action under Section 404(c) to restrict development of the Pebble Project goes well beyond its statutory authority as established by Congress, and would have the effect of undermining the legitimate regulatory authority of the State of Alaska and the U.S. Army Corps of Engineers,” Collier said in a statement announcing Pebble Partnership’s response to the EPA action.

The State of Alaska, which owns the land where the massive Pebble copper-gold-molybdenum project is located, characterized the EPA’s assessment as “premature, speculative, without precedent, illegal in terms of both process and substance, and unnecessary.”

In answer to EPA’s initiation of the CWA 404(c) process, Alaska Attorney General Michael Geraghty said the state, Pebble Partnership and U.S. Army Corps of Engineers are in the unenviable position of compounding speculation by further speculating on the hypothetical mining scenario in the environmental agency’s Bristol Bay Assessment.

Alaska’s top attorney said there is no risk to the environment in allowing the Pebble Partnership to have permit applications reviewed under NEPA, the Clean Water Act, and other relevant federal and state statutes.

“Until those reviews occur, it is not possible to know, much less recommend, corrective action that would negate unacceptable adverse effects that EPA may now anticipate. Until then, the Section 404(c) review process is premature.”

In the most concise of the responses to EPA, the U.S. Army Corps of Engineers said it “has not received a permit application for this project, and is therefore unable to evaluate the impacts of potential discharges associated with the Pebble deposit.”

The State of Alaska agrees that a scientifically valid review of the potential impacts of Pebble can only be carried out once a mine plan is available to judge in the context of pertinent regulations.

“Until then, EPA should refrain from attempting to exercise its Section 404(c) authority in the absence of a Section 404 permit application, and allow the Corps and the State to exercise their regulatory rights and responsibilities in the event applications for a mining project are ever submitted,” Geraghty concluded.

The Pebble Partnership questions the accuracy and legitimacy of the Bristol Bay Assessment, which serves as the basis of EPA’s potential proactive ban of key Pebble permits.

“Despite three years of study, EPA has not quantified any impact of any of its speculative mine scenarios on any fishery in Bristol Bay. On that basis alone, EPA simply has not demonstrated that mineral development at Pebble will necessarily cause an unacceptable adverse effect on the region’s fisheries, and so does not have the regulatory authority to veto future development,” said Collier.

The company argues that a tangible mine plan submitted for NEPA review would outline an accurate layout of facilities, discharges and mitigation measures – providing a scientific basis for discussing the impacts of developing a mine at Pebble.

“We are calling on the EPA to suspend its Section 404(c) process, to wait for the submission of a proposed development plan for Pebble and to participate fully in the NEPA permitting process. Not only will this result in a more comprehensive, transparent, inclusive and definitive project review, EPA will retain its authority to veto the Pebble Project in future if it fails to demonstrate it will adequately protect regional fisheries,” said Collier.

Watchdog begins investigation

Trout Unlimited, a cold water fisheries conservation organization that has been at the forefront of the anti-Pebble movement, characterizes the Pebble Partnership’s response to EPA as dishonest rhetoric.

“The EPA initiated the 404(c) process in the face of overwhelming and peer-reviewed scientific evidence – evidence based on PLP’s own plans and documents- and in response to a request for action from Alaskans faced with a very real threat to their jobs, livelihoods and salmon-based culture,” said Tim Bristol, director of Trout Unlimited’s Alaska program. “The EPA has the legal, policy and scientific backing to protect Bristol Bay and its economy from the Pebble Mine. The agency should work to complete the 404(c) process as quickly as possible and apply much needed Clean Water Act Protections to the headwaters of Bristol Bay.”

Evidence is emerging that Trout Unlimited and other anti-Pebble advocates worked behind the scenes to help EPA craft the Bristol Bay Assessment and prepare for the 404(c) process.

In a July 2010 email to EPA Aquatic Resources Manager Michael Szerlog, Shoren Brown, Bristol Bay campaign director, Trout Unlimited wrote, “There are some negative rumors circulating within the tribes and other interest groups working on Pebble about the upcoming EPA trip to Alaska. I am happy to help out and circulate the correct information for you to these stakeholders if you would like. Quite frankly – I am worried that some people may go public and damage TU’s (Trout Unlimited) ongoing efforts and the productive relationships that have been established to date.”

This is an excerpt from some 300 pages of documents that the Pebble Partnership obtained through a Freedom of Information Act request that demonstrates an apparent hand-in-hand relationship between anti-Pebble advocates and EPA staffers during a period leading up to and during the Bristol Bay Assessment.

“While the documents we’ve received to date through Freedom of Information Act (FOIA) requests are sparse and heavily redacted, they paint the picture of an agency launching a watershed assessment to justify a pre-determined outcome,” said Northern Dynasty Minerals Ltd. President and CEO Ron Thiessen.

The Pebble Partnership, currently owned solely by Northern Dynasty, turned these FOIA documents over to the EPA Inspector General as evidence of EPA wrongdoing in its handling of the Bristol Bay Assessment.

In response to the Pebble Partnership, State of Alaska and members of the U.S. Congress, the EPA watchdog said it will “begin preliminary research to determine whether EPA adhered to laws, regulations, policies and procedures in developing its assessment of potential mining impacts in the Bristol Bay region.”

“We are thankful that the IG’s office has initiated this action, and hopeful that EPA’s failure to conduct an objective, transparent and defensible scientific investigation will ultimately come to light,” said Thiessen.

Lawsuit filed

While grateful that the watchdog is probing the legality of EPA’s Bristol Bay Assessment, the Pebble developer is still taking the federal environmental agency to court.

“Litigation is necessary in order to get the agency’s attention and bring some rational perspective back to the U.S. permitting process. While we would prefer to avoid this lawsuit, we are fully prepared to defend ourselves against the precedent-setting, unlawful actions of this agency,” Collier explained.

In its complaint, the Pebble Partnership asserts that, in the absence of a permit application, EPA’s action exceeds its authority under the CWA and is contrary to the Alaska Statehood Act, the Cook Inlet Exchange legislation, and other federal laws.

“We are urging EPA to immediately stop its pre-emptive action against Pebble and the State of Alaska,” pressed the Pebble CEO.

The Pebble Partnership points out that a pre-emptive veto does nothing to safeguard the environment, as no site development would occur unless permits are issued at the end of the NEPA process.

“Our legal action does not in any way seek to diminish EPA’s legitimate role under the CWA, or its right to participate as a regulatory agency within the Clean Water Act permitting process- including a comprehensive review under the National Environmental Policy Act,” Collier explained.

“The correct, legal, and defensible way forward is for EPA to suspend its pre-emptive 404(c) process and allow us the full opportunity to have our project reviewed by federal and state regulatory agencies, including EPA, under NEPA. Until that happens we must defend ourselves against actions by EPA that are contrary to the law. Unless EPA suspends its action, these matters must now be resolved by the court system,” he added.



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