Investors in Northern Dynasty stock got a nasty surprise this weekend as discouraging news about the Pebble Project was leaked to the media.
By the time markets opened on Monday, the NAK stock was taking a beating. By the end of day, it had lost more than a third of its value.
The bad news came in a letter from the U.S. Army Corps of Engineers stating the project in Western Alaska could not proceed as planned without significant mitigation.
The key takeaway is that, as currently proposed, the project could have substantial environmental impacts within the unique Bristol Bay watershed and lacks adequate compensatory mitigation.
But there is a path for the project. The knife may have drawn blood but didn’t quite hit an artery.
POLITICO had it right that there was a difficult letter coming from the U.S. Army Corps of Engineers on Monday,.
But the news organization had it wrong that the USACE office in Alaska was holding a conference call on Monday “with groups connected to the proposed mine discuss the decision.” The news writers said an “administration official confirmed the call with POLITICO.”
POLITICO also had it wrong when it said that the president himself would then follow with a statement opposing the mine. POLITICO quoted “the people” several times, without saying who those sources were. Trump never made a statement on Monday.
Pebble CEO Tom Collier said the letter from the agency fell short of the breathless expectations set by the media, which piled on it this weekend after POLITICO broke the story.
“The letter we received today is a normal letter in the permitting process and we are well into an effort to present a mitigation plan to the USACE that complies with the requirements of their letter. A clear reading of the letter shows it is entirely unrelated to recent tweets about Pebble and one-sided news shows,” he said.
“The letter does not ask for a delay or pause in the permitting process. In fact, it clearly states that the USACE is continuing its work toward a Record of Decision for the project. This is the next step in what has been a comprehensive, exhaustive two-and-a-half-year review of the project. Nothing in the letter is a surprise to us or them,” Collier said.
The letter does not ask for “more” or “additional” mitigation, Collier said. It is in line with what the company expected.
“The USACE has identified the wetlands and stream impacts at the project mine site to include about 3000 acres of wetlands and about 100 miles of streams. The USACE has stated that the mitigation must be “in kind” and “in watershed.”
Pebble intends to include mitigation plan preserving enough land so that multiples of the number of impacted wetlands acres are preserved. Additional mitigation will also be provided for the transportation corridor.
The company has had crews working in the field to survey the wetlands for information to be used in the mitigation plan.
“We were informed about 6 weeks ago of how the USACE was leaning regarding mitigation. We began at that time focusing on a preliminary plan. We built two temporary camps in the watershed housing a total of about 25 people. A number of teams from those camps have been mapping the wetlands in the region for about four weeks now,” he said.
That’s not how the offices of Sens. Lisa Murkowski and Dan Sullivan saw it. They both issued statements immediately.
“I understand, respect, and support this decision. I agree that a permit should not be issued. And I thank the administration for its commitment to the protection of this world-class watershed and salmon fishery,” Murkowski said.
Sullivan, too, said he supports the decision to not move ahead:
“Throughout this process, I have advocated for the Army Corps and other federal regulatory agencies to conduct a rigorous, fair, science-based review – free of politics – that does not trade one resource for another. I have worked hard to ensure that the voices of all Alaskans – both for and against the Pebble Mine – would be heard, considered, and respected at the highest levels of the federal government. This has happened.
“Finally, I have been clear that given the important aquatic system and world-class fishery resources at stake, Pebble, like all resource development projects in Alaska, has to pass a high bar – a bar that the Trump administration has determined Pebble has not met. I support this conclusion – based on the best available science and a rigorous, fair process – that a federal permit cannot be issued,” Sullivan said.
Congressman Don Young was more circumspect in his analysis:
“Today’s announcement by the Army Corps indicates a significant amount of compensatory mitigation is needed to offset the potential environmental impacts of the proposed mine at this present time. While not an outright veto of the project, this is a steep hill for the company to climb,” he said.