Providing coverage of Alaska and Northwest Canada's mineral industry
October 2014

Vol. 19, No. 43 Week of October 26, 2014

Mining News: Pebble Partnership takes fight to EPA

Company hits environmental agency with volley of lawsuits; CEO vows to get Pebble into permitting, stop regulator’s power-grab

Shane Lasley

Mining News

On the surface, the U.S. Environmental Protection Agency’s endeavor to halt the development of the Pebble Mine in Southwest Alaska has the appearance of a federal agency doing its job – protecting the environment. Pebble developers contend that under this thin but durable veneer lies a secretly crafted plan, not only to stop development of a mine at Pebble, but to lay the groundwork for a larger initiative that would broaden EPA’s powers.

“It lets EPA zone America – zone America for where mining should happen or oil and gas exploration should happen before anyone files a permit,” Pebble Partnership CEO Tom Collier explained at a September presentation before Alaska’s Resource Development Council.

“I realize conspiracy theorists often get discounted,” he added.

While Alaska is known to have its share of citizens who see ill intent behind every move the federal government makes in the state, Collier does not belong to this group of rugged individualists. Instead, the Pebble CEO is a 40-year Washington D.C. insider, who has worked alongside some of the juggernauts of the modern environmental movement.

“The dirty little secret is: ‘I have been a Democrat for a long time; I have worked with some of the environmental leaders in American politics, personally’,” Collier confesses.

As chief of staff to U.S. Department of the Interior Secretary Bruce Babbitt, Collier was charged with managing much of the environmental policies being introduced by Vice President Al Gore.

“I got to sit beside two of the giants of environmental protection in American political history,” Collier touted. “I am the guy that managed the spotted owl and timber crisis in the Pacific Northwest; I managed the restoration of the everglades in Florida. So, I have seen these tough environmental issues from both sides.”

What he has never witnessed, according to Collier, is the kind of backroom tactics EPA is employing to stop development of the Pebble Mine.

“I have never in my 40 years seen an agency so clearly obliterate the line between what should be impartial decision-making and the views of stakeholders in respect to an issue,” Collier told the resource development crowd in September.

The Pebble CEO believes that if EPA is allowed to succeed in blocking the mine development, the precedent also will obliterate the bounds of the environmental agency’s regulatory authority.

“We’ve been the subject of the first-ever, in the history of the Clean Water Act, attempt to put a project out of business even before an application for a permit has been filed,” he said.

Whether or not an expansion of regulatory power is part of EPA’s motivation to pre-emptively stop Pebble, success would set a precedent that says the agency has the authority to restrict or ban an endeavor based largely on it location and not on the merits of the project’s permit proposal weighed against the federal and state laws already established to curb environmental impacts.

While the Pebble Partnership’s fight with EPA is about getting a fair shot at permitting a mine at its enormous copper-gold-molybdenum deposit in the Bristol Bay Watershed of Southwest Alaska, the company must first expose what appears to be a plot in which anti-Pebble forces and EPA are working behind closed doors to ensure that a mine is not developed at the massive deposit in the Bristol Bay Watershed of Southwest Alaska.

“They are coming at us with everything they’ve got, and now we have started to fight back,” Collier told Alaska’s resource community.

Volley of lawsuits

In its fight to ensure the Pebble project gets a fair hearing under the established permitting process, the Pebble Partnership is pummeling EPA with a volley of lawsuits.

“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 said when the first suit was filed in May.

In that complaint, filed in the U.S. District Court for Alaska, the Pebble Partnership asserts that EPA’s use of Section 404(c) of the federal Clean Water Act to restrict or prohibit the Pebble Mine prior to permit applications exceeds the agency’s authority and is contrary to the Alaska Statehood Act, the Cook Inlet Exchange legislation, and other federal laws.

The suit was filed after EPA’s February decision to proceed with CWA Section 404(c) action against Pebble but before the agency had made the final decision on exactly what that action would be.

In July, EPA proposed CWA Section 404(c) permit restrictions aimed at limiting the footprint of any mine allowed to be developed at Pebble. Though short of an outright ban, most people believe the constraints are tight enough to kill the economics of the project.

According to CWA Section 404(c) regulations, EPA Region 10 Administrator Dennis McLerran has the choice of withdrawing from the process or sending a recommendation to EPA headquarters in Washington D.C. for a final determination.

The recommended determination could mirror the July proposal or be revised based on review of public comments. McLerran’s decision was scheduled to be handed down by Oct. 19, but in mid-September the agency announced the need for more time, postponing the pending decision until February 2015.

About a week after the postponement was announced, a federal court judge dismissed the Pebble Partnership’s case challenging EPA’s authority to place restrictions on Pebble prior to permit applications being applied for. This set-aside is not a reflection of the merits of the case but is essentially a tabling of a hearing due to the fact that EPA has yet to officially restrict or ban mine development at the enormous copper-gold-molybdenum deposit in Southwest Alaska.

“The ruling today relates to timing of our challenge of this pre-emptive authority and in no way decides the underlying issues,” said Collier. “We remain very confident in the merits of this case. Should EPA finalize its proposed veto restrictions regarding Pebble, we will pursue our claim that EPA lacks statutory authority to do so at that time.”

Anti-mine collaborators

While the legality of EPA’s attempt to pre-emptively restrict Pebble needs to await a final determination by the regulator, the means by which the agency compiled its case against the potential mine in the Bristol Bay region can be vetted.

In mid-September, the Pebble Partnership filed a second suit alleging that the EPA worked by behind the scenes with lawyers, scientists, non-governmental agencies and other activists opposed to development of the Pebble Mine.

“EPA reached out to a number of activists and others in the environmental community and elsewhere, brought them in and treated them as part of the team that was making the decision at EPA with respect to Pebble Mine,” said Collier.

The Pebble Partnership lumps these collaborators into three groups: the “anti-mine coalition”, the “anti-mine scientists” and the “anti-mine assessment team”.

In its lawsuit, the Pebble Partnership provides evidence of a clandestine operation in which the “anti-mine coalition secretly advised EPA on how the agency should develop its strategy under Section 404(c), including making critical recommendations on who EPA officials should recruit, how the agency could best leverage the Alaska Native Tribes, and how to formulate EPA’s messaging in a way that would minimize anti-federal government backlash among Alaskans.”

Once a strategy was developed, the company charged that the anti-mine scientists played an integral role in preparing EPA’s Bristol Bay Assessment, a study aimed at determining the effects developing a mine at Pebble would have on the fish resources near the enormous copper-gold-molybdenum deposit. The conclusions drawn by the scientists formed the basis for which the regulatory agency is making its determinations in regards to Pebble.

The Pebble Partnership charges that the anti-mine assessment team collaborated with the EPA and the other two anti-mine groups to craft the watershed assessment’s anti-mine bias.

“In this case, EPA wanted to kill the Pebble Mine before it ever got off the ground. It thus set out to develop a scheme that would prohibit mining activities before any application had even been filed, rather than to follow normal permitting procedures that would have involved open, objective, and public review by all interested parties. Instrumental to this scheme was EPA’s clandestine use of the de facto advisory committees – made up of individuals and groups who have been vehemently opposed to any mining of the Pebble Deposit – to help the agency plan and then implement unprecedented steps designed to guarantee that no mining of the Pebble Deposit would ever take place.

Relying heavily on substantial input, advice, and recommendations from these unlawfully established advisory committees, EPA prepared a patently biased, anti-mine assessment of hypothetical mining activities in the Bristol Bay Watershed and then used that flawed assessment to commence administrative proceedings under the federal Clean Water Act that, if allowed to stand, will effectively put an end to mining before the permitting process ever gets off the ground,” the Pebble Partnership summarizes in its complaint.

The company claims that each of the anti-mine groups represents a federal advisory committee under the Federal Advisory Committee Act, a federal law that calls on the openness and transparency of federal agencies when involving such advisory committees.

The Pebble Partnership asserts that the behind-the-scenes collaboration between EPA and the anti-mine groups violates advisory committee law and taints the entire process for which the environmental agency is basing its Clean Water Act determination with regards to Pebble.

“This is not based on science. This is based on a predetermined outcome that was manipulated by people in EPA and some activists to reach that outcome,” said Collier.

The Pebble Partnership will get the opportunity to make its case in court, and the EPA will have the chance to defend its actions during a series of hearings scheduled to be wrapped up before Thanksgiving.

FOIA docs paint picture

The sketch of EPA collaborating with anti-Pebble activists outlined in Pebble Partnership’s complaint will be colored by emails and other documents the company has gathered through Freedom of Information Act requests.

These documents include emails in which Phillip North, an EPA ecologist based in Alaska, was advocating for CWA Section 404(c) action with agency colleagues as early as 2008. This intra-agency discussion to use this tact to pre-emptively block Pebble pre-dates the 2010 request by Alaska Native groups that EPA has claimed as its impetus to take such an action.

Other documents uncovered through FOIA requests show that the idea of using CWA Section 404(c) to block Pebble was not only being circulated at lower levels of EPA, but was being discussed at the upper echelons of the agency.

A January 2010 briefing for former EPA Administrator Lisa Jackson shows that EPA was considering a pre-emptive 404(c) veto of Pebble prior to requests for such actions by Bristol Bay Native groups, which has been an impetus for the agency to conduct the study from the start.

Another document, first brought to light by the U.S. House Oversight and Government Reform Committee, is an internal EPA worksheet listing the pros and cons of a proactive 404(c) review of Pebble versus letting the project go into permitting.

The top drawback listed in the con column of this 2010 “discussion matrix” was that a proactive 404(c) determination had “never been done before in the history of the CWA.”

The agency also listed immediate political backlash from Alaska and litigation risks as other potential negative outcomes of attempting to use 404(c) to stop Pebble prior to permitting.

In the pro column of the talking point document, EPA listed a pre-permitting ban or restriction at Pebble as serving “as a model of proactive watershed planning for sustainability” – a statement that seems to support the idea that the agency would embrace the potential “zone America” precedent that a successful bid to stop the Pebble project might set.

Another document produced by the Oversight Committee is a 2010 request for funds to “initiate the process and publish a CWA 404(c) ‘veto’ action for the proposed permit for the Pebble gold mine in Bristol Bay.”

In making the request for 2011 funds, the EPA wrote, “While resorting to exercising EPA’s 404(c) authority is rare (only 12 actions since 1981), the Bristol Bay case represents a clear and important need to do so given the nature and extent of the adverse impacts coupled with the immense quality and vulnerability of the fisheries resource.”

Together, the evidence gathered to date seems to paint a picture of an agency that decided to use the Clean Water Act to stop Pebble prior to permitting and then worked with the project’s staunchest antagonists to build a case that supports the desired outcome.

In addition to providing evidence in its pending court case, the Pebble Partnership has forwarded the information to the EPA Office of Inspector General, calling on the independent watchdog to investigate this alleged wrongdoing.

“The notion this was predetermined, I believe, is soundly established in these documents; and certainly well-enough established for the inspector general to do an investigation,” Collier said.

The EPA Inspector General agrees that the evidence is compelling enough to launch an investigation.

“They get requests like this all of the time; they don’t often open a formal investigation. With respect to the documents we gave them and the request made, they have opened an investigation,” Collier observed.

Tip of the iceberg

While the documents already gathered by the Pebble Partnership paints a picture of potentially illegal collusion between EPA and anti-Pebble groups, Collier says the documents that the environmental agency willingly produced to-date are but the “tip of the iceberg.”

“The troubling stuff is the stuff they haven’t given us yet,” he said.

Collier added that the documents EPA was willing to share are heavily redacted, with significant gaps in the communications and does not include at least 30,000 pages of documents that EPA has admitted that it is withholding.

Among the missing details are several years of emails to and from North, considered to have played an integral role beyond initiating the idea of using CWA Section 404(c) to stop Pebble.

The House Oversight Committee also has been trying to obtain these missing emails.

The EPA, however, has informed both the Pebble Partnership and the watchdog committee that the hard drive on North’s computer has crashed, rendering the missing communications unobtainable.

In July 2013, the House Oversight Committee sent a letter to North asking him to voluntarily testify before the committee. The former EPA employee has yet to testify and since no one knows his whereabouts since embarking on an around-the-world boating trip late last year, compelling him to show up with a subpoena has not been possible.

North’s emails, made difficult to obtain by the timely hard-drive crash and the former EPA employee’s subsequent disappearance, is only one facet of the documentation that the Pebble Partnership has requested and EPA has refused to hand over.

Exhausting its other options, on Oct. 14 the company filed a lawsuit asking the U.S. District Court to require that EPA produce the missing documents. This is the third lawsuit the Pebble Partnership has filed against the EPA this year, and Collier vows to keep coming at the agency until the company is successful in having its world-class copper project vetted under the established environmental permitting regime.

Said Collier: “We have been a punching bag for years but beginning this summer, we started punching back.”

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