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Week of October 31, 2010
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Lawmakers cram for Pebble mine study

Legislative Council subcommittee discusses how to advance state-funded analysis; integrity of independent consultants questioned

Shane Lasley

Mining News

Alaska legislators are at odds on how to proceed with a state-funded study of the Pebble Project and what effect building a mine at the enormous copper-gold-molybdenum deposit will have on the people and environment of the Bristol Bay region of Southwest Alaska.

With US$750,000 appropriated in the fiscal 2011 Alaska state budget to advance such a study, the Alaska Legislative Council formed a subcommittee to move the review forward.

Chaired by Alaska House Speaker Mike Chenault, R-Kenai, the subcommittee includes Senate President Gary Stevens, R-Kodiak, Sen. Dennis Egan, D-Juneau and Sen. Lyman Hoffman, D-Bethel, Rep. David Guttenberg, D-Fairbanks, Rep. Bill Stoltze, R-Chugiak.

The subcommittee convened Sept. 28, but after an hour of discussing the best way to procure an objective and independent firm to conduct the study, the group had moved no closer to a consensus on how to proceed.

NAS comes under fire

Though the scope of the study is still ambiguous, the first question the Legislative Council subcommittee must answer is whether to sole-source the contract to the National Academy of Sciences or put the study out to bid in the form of a request for proposals.

This is an important issue for lawmakers because the National Academy of Sciences does not bid on contracts; therefore, it would not be a candidate if RFPs to study the effects of large-scale mining on Bristol Bay are put out to bid.

Though RFPs are required by the state for solicitations valued at more than US$25,000, the council could seek an exemption for a sole-source contract if its members felt that was the best option.

Legislative Affairs Executive Director Pam Varni said such an exemption would require the support of at least eight Legislative Council members. The rule applies even though the council is currently one member short of its normal 14-person membership.

Rep. Alan Austerman, R-Kodiak, who was instrumental in getting the money appropriated for the study, urged fellow lawmakers to sole source the study to the National Academy of Sciences, an organization established by the U.S. Congress in 1863.

Austerman sponsored House Concurrent Resolution 15 during the 2009 legislative session, which requested “the Legislative Council to contract with the National Research Council of the National Academy of Sciences for an independent assessment of the environmental and socioeconomic consequences of large-scale mineral extraction in the Bristol Bay area watershed.”

Austerman asserts that the National Academy of Sciences would provide an objective, non-biased assessment of the impacts of the proposed Pebble Mine. Egan is not so certain.

The representative from Juneau asked Austerman, “How do I answer some of my constituents who say the National Academies are an arm to the environmental groups?”

Rep. Mike Kelly, R-Fairbanks, was more direct in his criticism of the scientific agency.

“I think the National Academy is very much, in my opinion, suspect as to whether they are loaded with anti-development people,” Kelly told Austerman and others attending the Sept. 28 meeting. “I believe that when we decided to do this, unwisely in my opinion, the wrong people were cheering in the streets to make me happy about this study.“

Keystone’s integrity questioned

If RFPs are sent out by the Legislative Council, the Keystone Center is one organization that may participate. This Colorado-based consultant was hired by the Pebble Limited Partnership, a 50-50 alliance of the project’s owners, Northern Dynasty Minerals Ltd. and global miner Anglo American plc, in 2008 to conduct an independent review of the controversial project.

Pebble opponents were proactive in informing Alaska lawmakers of their opposition to the Keystone Center as a candidate to conduct the study. Purchasing a full-page advertisement in the Sept. 27 edition of the Anchorage Daily News, the Renewable Resources Coalition submitted “an open letter to the Alaska Legislative Council” questioning the Keystone Center’s integrity and neutrality.

“When thousands of livelihoods are at stake, our policymakers cannot be swayed by Pebble propaganda, masked by the Keystone Center mirage. Whether it is a question of (the) Center’s funding or who sits on the board of trustees, we can be clear that there are significant conflicts of interests,” the environmental group wrote.

Keystone was quick to respond to the accusations made by the coalition.

“The Keystone Center stakes its 35-year reputation on its independence and takes seriously any challenges to its integrity,” Keystone spokesman Todd Bryan wrote Sept. 29. “Interestingly, when we began the process, opponents who were familiar with us reminded us of our stellar reputation and wondered why we were working with Pebble. Our response is always the same – if our clients acknowledge our independence and allow us to fully develop impartial and objective processes, we will work with them. When we began, we were skeptical that a large mining company would agree to those terms. Thus far, Pebble has walked its talk, at least with us. We are hopeful that other mining and resource development industries will adopt the approach.”

Austerman indirectly addressed the potential impartiality of Keystone’s study, during the subcommittee hearing.

“They (the Pebble partnership) are paying a third party to go through their information and look at it for them,” he said. “That raises the same basic questions everyone else has: Who is doing the third-party studies and who is paying for them? The study we’re proposing has nothing to do with profitability for anybody on either side of the issue.”

Middle of the road

A third option being discussed by lawmakers is to solicit requests for information. This middle-of-the-road approach would not preclude the National Academy of Sciences from participating and would provide the members with additional information to base their decision.

Varni said this avenue also could provide the lawmakers with a larger pool of qualified applicants.

Chenault questioned whether the study is an unnecessary redundancy and sets a bad precedence for other projects that might seek permits in Alaska.

“At what point do we stop the studying process? Through NEPA (National Environmental Policy Act) and through the permitting process – we already require third-party studies. We already require a lot of the things we are asking for in this proposal,” the subcommittee chairman said. “Do we put another layer on this, and once we do it on one project whether it’s Pebble or any of them, aren’t we going to end up requiring it on any project, whether it’s a gold mine or a coal field or a bridge across the inlet or a pipeline?”

“I am not familiar enough with the NEPA process to provide you with enough information about what kind of information NEPA provides,” Austerman admitted.

A second meeting of the subcommittee is schedule for Oct. 28. The subcommittee hopes to have representatives from the Alaska Department of Natural Resources and the National Academy of Sciences available at the meeting.



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