Pebbled: When the government dictates 'advanced prohibition' of any project - Must Read Alaska
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Thursday, September 23, 2021
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Pebbled: When the government dictates ‘advanced prohibition’ of any project

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By MARK HAMILTON

(Editor’s note: This is the fourth in a series by Mark Hamilton about the history of the Pebble Project in Alaska.)

Part of our collective awareness must be the recognition of the opponents to our responsible development.

It is important that Alaskans understand the degree to which preservationists will go to stop development.  The National Environmental Protection Act (NEPA) is already a “guilty until proven innocent” event wherein a planned project must demonstrate compliance with every regulation governing the permits required for a project.

I think that is appropriate. Alaskans want to be certain that any approved development project results in the least environmentally damaging plan. The NEPA process demands that. Later, we can examine in detail the NEPA process, but for now it’s important to understand that preservationists don’t want projects to even enter the permit process.

How can they do that?  The Environmental Protection Agency purports an authority to stop a project prior to any evaluation by the NEPA process.  In the case of Pebble mine, discussions were underway at EPA as early as 2005—that is even before the parent company had secured 100% of the claims in the area.

In true government fashion, EPA wants you to believe this is good for you, that it will facilitate planning by developers and industry.  They claim it “will eliminate the frustrating situations in which someone spends time and money developing a project for an inappropriate site and learns at an advanced stage that he must start over.”  

Who do you think would be the authority to determine “inappropriate” sites?  Exactly how would that be determined?

Get ready for the next promise.  “…in addition, advance prohibition will facilitate comprehensive rather than piecemeal protection of wetlands.”

Let’s digest this one for a moment. The phrase “advance prohibition” should make you take a breath. Advance of what? In this case, any science, even the pathetic Bristol Bay Watershed Assessment, pseudo-science at best, had not yet begun.  Advance of public input?  Advance of a development plan?

Concerned yet?  How about “comprehensive rather than piecemeal protection.”  That way no one needs to deal with a single development project, we can skip site specific assessment, size of development, environmental baseline assessments, the whole array of environmental safeguards that might apply to a “piecemeal” evaluation.

With this claimed authority, EPA can zone massive regions with advance prohibition. Indeed, the conclusion of Bristol Bay Watershed Assessment was “no mine of any size” should be allowed in Bristol Bay.  They had hoped to have the effort serve as a model for a new wave that they termed “proactive watershed planning.”  There you have it 
Alaska, prohibitive zoning of a piece of land as large as the state of Ohio.

With the end game revealed, you can start to see the reason and the purpose of the massive narrative of fear campaign carried out by EPA and its host of environmental activists.

But EPA had a problem. Years after their initial discussions about the prospect of a preemptive veto (in bureaucratic terms “preliminary determination”), EPA had no case, no science, in short no reason for the veto they so desperately wanted as a model.  

And worse, the developers were getting closer and closer to submitting their permit application. Once in the NEPA process, EPA would have to depend on careful and scientific assessment, not exactly what they had in mind.  

That’s not a guess; later the developers sued EPA (to be discussed in more detail in future columns) and, as you probably know, with that legal action, Freedom of Information Act allowed access to their emails. 

There is no need to conjecture about the intent and the mood of EPA; it’s all there in their emails.  

EPA announced the plan to conduct the Bristol Bay Watershed Assessment with the statement that it would not be used for a regulatory decision.

EPA’s cover story was so convincing that Alaska’s senior Sen. Lisa Murkowski stated that no veto decision would occur until all the science had been evaluated.  

Reacting to her statement, a senior EPA official said in an email, “an interesting spin of EPA’s announcement/decision,… her statement would suggest that no [“veto”] would be done until all the science is in …Obviously, that’s not what we have in mind…”

So, don’t beat yourself up if you were fooled. Our own senator with tons more access than you or I have, bought it hook, line, and sinker.

In the end, Murkowski was hopelessly pebbled.

The “Pebbled” series at Must Read Alaska is authored by Mark Hamilton. After 31 years of service to this nation, Hamilton retired as a Major General with the U. S. Army in July of 1998. He served for 12 years as President of University of Alaska, and is now President Emeritus. He worked for the Pebble Partnership for three years before retiring.

[Read: Pebbled: The secret history of ANWR and the human hand that shaped it]

[Read: Pebbled: Environmentalists have fear mongering down to an art]

[Read: Pebbled: Virtue signaling blocked the project of the century for Alaska]

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  • Risk = Hazard + Outrage.
    The risk to your project is a function of the public’s perception of any associated risk, and the ability of activists to generate outrage. (psandman.com)
    Large mining and development endeavors do not know how to operate in today’s environment. They can figure it out, or go extinct, preserving an Alaska with vast landscapes of poverty and a permanent underclass.
    Small miners, the canaries in the coal mine, have a better understanding because they are hands on aware of every little demand and can point out the absurdity of each straw they must carry on their backs.
    We have known since the late 1980’s that large concerns compartmentalize the environmental work, isolating CEO’s and senior staff from the ugly burden. And from the daily negotiation with agencies over potential controversy and other minutia, vastly increasing their risk.
    Alaska doesn’t even need public outrage to sink a project. A single agency staffer is all a member of the Alaska media needs to launch against an endeavor. The actual facts can be insignificant, the risks all but non existant. But the media knows the public can’t balance a stoichiometric equation, nor understand what or why a mine won’t produce acid runnoff. The media (“Look Ma: I got a 4-year degree and no math!”) doesn’t even know such exists, let alone what meaning it might convey.
    Alaska’s lost opportunity, is a cost we all bear. Few know how great it is.

  • Mark Hamilton!! Highly unsuccessful former President of Umiversity of Alaska system !! Good match for the poorly regarded ( by Alaskans) Pebble Project.

  • Not to worry, the way things are going I’m sure Uncle Joe will let the next landlord develop Pebble with utmost caution, something like they do in Nigeria or Russia. Maybe with Hunter in charge.

  • The world’s largest earthen dam on top of thounsands of feet of essentially “sponge”, at the headwaters of the largest (and one of the few remaining) wild salmon spawning regions, hardly qualifies as “responsible development”.
    .
    Especially by outside interests with little incentive to not cut-and-run when the fecal pellets hit the rotary blades.

  • P.S. Don’t fool yourself into thinking I’m a fan of the EPA. 😉

  • Rio Tinto and Freeport McMoRan are exploring copper prospects in Eastern Alaska, which may prove to be even bigger than Pebble. Maybe 20 years from now they may begin the permitting process. Meanwhile, they’re working mines in 3rd world countries with little or no environmental protections.
    It’s looking like the windfall that Bristol Bay could have had, is becoming a fading memory. Let the BBNC relish their “victory” of having stopped Pebble. May they sing and dance in celebration forever. Seemingly forever because Pebble was the best looking prospect, until it wasn’t.
    They would be wise to pray that nothing happens to their fish, because no major mining company will mine near Bristol Bay for many decades. Not even if all the fish die yesterday. They will keep on exploring and filing claims, and eventually mining … but this generation won’t see it.
    Their friends, The EnviroNazis, have gone on to other causes elsewhere, that promise more lucrative DONATIONS. The Pebble issue having been fairly tapped out.

  • We already have our parks, federal lands and Native lands. Now the feds want to take the remaining State land and mark areas of it off limits? I guess the entire State could be considered wetlands. The State better put the stop to this or we will all be learning how to weave baskets or drive a tour bus.

  • Bruce Campbell: The problem with stupid, is that if you tell a stupid person they’re being stupid, they won’t get it, because that’s what stupid is all about.
    They will read your words, and not realize that you’re speaking to them.

  • KenaiMike: It’s over. Your side won. You can stop with the victory laps anytime. How many times do you need to spike the ball? In the big picture it’s doubtful if your input had any effect at all. It would have happened without you anyway.

  • KM, I’m not sure what sponge you’re talking about. Having lived on the tundra for almost two decades, I can tell you that the sponginess of the surface doesn’t go down that far. Usually to bedrock or permafrost. You sound like an idiot with a 8th grade education.

  • What happened with Pebble Mine was a criminal act by the federal government against the State of Alaska and should have resulted in a lawsuit by the state against the federal government for violating the rights of the state.

  • I don’t get the sponge comment either. This area was largely covered in glacial ice during the Pleistocene with the glaciers having only receded recently at around 10,000 years ago. Glaciers have a nasty habit of removing everything down to bedrock. What’s left in the proposed mining area is only covered in the thinnest layer of volcanic ash, silt, and whatever miniscule amount of organic material has been able to accumulate over the last 10,000 years. Add to that the fact that permafrost in the area has been found in places only 1 foot deep and the sponge comment makes little sense. But then the anti-mine folks haven’t always relied upon sense to push their agenda.

  • Rio Tinto gave away their partial ownership of the Pebble prospect because they could see the writing on the wall. Keep in mind this is a company renowned world-wide for their lack of “sensitivity” for environmental and indigenous concerns.

    google “rio tinto australia aboriginal”

    Perhaps the leadership and messaging at northern dynasty was at play?

  • I’m going to the scale back my estimation on the education comment. I’m going to go with fifth grade was the last grade that he completed.

  • JEFF: Rio Tinto gave their earned 19% of Pebble to Native non-profits because that allowed a 100% deduction of Pebble expenditures from their tax liability. Otherwise, that 19% was worth only about 54k on the market.
    Rio Tinto’s entire venture with Pebble was designed as a write-off because of excessive profits from Grasberg and other mines. Those excessive profits were the cause of Indonesia forcing Rio and Freeport to divest from Grasberg, for 3.5 billion, in 2018.
    In other words, Rio just did a “drive-by” at Pebble. All planned beforehand, no writing on the wall.

  • The real motive of opponents is not concern for the environment, climate, salmon, or ocean. What drives them is their deep-seated jealousy of producers of wealth. At their core, they are Marxists who resent anyone building wealth by means of production. They see the world as a zero-sum game in which everyone must share their accomplishments for equal outcomes. If they don’t get their free share they want you to have nothing as well; mass poverty fine as long as we all suffer equally. This ideological kool-aid flows from the father of all lies.

    • What a crock Wayne.

  • Your telling me Rio Tinto gave away $38 billion in mineral reserves for a tiny tax right off in the millions?

    sure

  • “Otherwise, that 19% was worth only about 54k on the market.”

    they gave away around $16 million in shares…where is the 54k number coming from?

    April 6, 2014
    London-based mining company Rio Tinto announced plans to give its $16 million worth of shares in Northern Dynasty Minerals Ltd. to the Alaska.

    Regardless if they gave away $14 million or $18 million of shares at the time of transfer, you don’t give away >$38 billion in mineral reserves for bupkes unless you see the writing on the wall…

    Now if Northern Dynasty was willing to bond the fisheries to the 20 year average and give the state of Alaska 3% of the mineral stream royalties and local native cooperations a combined 3% of the mineral stream royalties, am sure we could find away to get behind the mine. We need $ more than Seattle needs jobs.

  • Rio had the option to buy half of Pebble for around 2 billion, minus the 19% earned … so they walked away from at least 500 billion, minus 2. They came in fully aware of the EPA activists, Oliver North, the Sierra Club, Trout Unlimited, and all the rest. They came in prepared to walk, knowing that at worst, they would break even. They really wanted the mine, but events half way around the globe compelled them to take the break-even.

    The divestment announcement came in Sept 2013, when NAK was 2.02 per share.
    April 2014 – Rio announces donation of 19% to Alaska charities.
    At that time Northern Dynasty Minerals (NAK-NYSE) shares were at .56 per share.
    NAK float was 470.67m shares outstanding, 19% market value about $49m, at that time.
    NDM owns PLP, so 19% of Pebble is actually 19% of NDM, minus NDM liabilities to it’s parent,
    Hunter/Dickensen.
    This brings 19% of Pebble’s (PLP’s) actual value to over 57m on April 2014.
    I could have used the 2013 numbers, which would have better than tripled the 54k figure.

    54m at the time was a very conservative estimate. The 16m value came after the New York City and California State controllers, who oversee the pension fund investments of those government entities and are substantial shareholders in Rio Tinto, formally asked Rio Tinto to divest itself of the shares of Northern Dynasty Minerals. The controllers cited the risks to Rio Tinto’s reputation for being associated with the Pebble Project – a project with “significant environmental and social impacts.”
    I think the 16m value came from a number reflecting NDM’s cash holdings, and not the fair market value of the stock. Actually, NDM had 24m cash reserves at the time.

    It’s even more complex than that, but I did simplify it for readability. Had Pebble been given the go-ahead, that 19% would have instantly soared to over a half billion. Once the mine was shipping concentrates in quantity, that 19% would have been worth something in the billions.

    My numbers were to give BBNC a hint at what they actually threw away for 8m, when they sold their 19% back to NDM … not to be a professional filing.

  • I will assume the 54 k is a typo.

    Ok now am confused. Did Rio Tinto give up >40 Billion in mineral reserves for a small tax break
    or
    Did they walk away from Billions because of pension pressure?
    or
    Did they walk away because they were not confident Northern Dynasty leadership could avoid getting caught on tape?

    regardless

    Clearly Pebble is in a class of its own as a prospect. There is enough potential profit for the owners to
    bound the fishery to the 20 year average, and do profit sharing (3% stream) with the state and with the local native stakeholders (3% stream). Without real buy-in/fiscal motivation by local stake holders and the state, its hard to see it moving fwd. any time soon. but its a zombie mine :)….eventually it will be developed

  • WAYNE COOGAN, absolutely!
    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
    This is known as “bad luck.” Robert Heinlein

  • Jeff: You’re starting to get the picture of hard it is to simplify the Pebble issue.
    My 54k wasn’t a typo. It was just fair market value at a particular point in time … sometimes more, and sometimes less. NAK has gone down to .37, and up to 2.57, and back down to .56 or so since then.

    If BBNC had held on to the 19% for a little while longer, they could have sold it for over 200m, fair market value. If they had held it until a few days later, they would have lost out because it went down to a quarter of that, virtually overnight.

    Institutional investors and insiders list their Pebble holdings as a long term asset, based on mineral reserves and not daily market value. This gives Pebble some price stability. The short sellers and day traders cause most of the price fluctuations. The 2.57 happened when short sellers had to cover when favorable news caused an unexpected spike.

    General consensus is that Pebble holds anywhere between 500 billion to over a trillion in reserves … if the deeper East Graben deposit is factored in … over a period of 60 to 80 years.
    You’re correct in that Pebble will be mines someday, and that concessions to gain social license should be made.

    However, if you read my prior postings, you will see that I had developed an unfavorable view of H/D, NDM, PLP management, long before any of them got caught bragging. They will be fortunate to get 500 million for all of Pebble now, unless they find that much to pour into it for the next 20 years or so.

  • It was clear over a decade ago that ND needed to bond the fishery-the recent tapes are just the most recent example. Those silly tv ads of a person fake walking from pebble to the coast-oy vey.

    Unlike ANWR where it has never been clear of its a whale or not, Pebble is.

    Mark if you reading- have ND bond the fishery and give 3% royalty streams to the state of Alaska and local native stakeholders and am sure we can find away to get behind the mine.

  • Jeff: I spotted my error – where I put 54k, I meant 54m (million). My bad … and you spotted it. Good eye!
    My apologies to all the readers for the confusion.

  • No issue. Am dyslexic, which is pretty much the biggest joke cause it’s a hard-to-spell word for a disorder that makes it hard to spell.

    We actually are pretty much in agreement. Bad management and poor public relation approaches has hampered the development of one of Alaska’s great economic geology deposits.

    Bonding the fisheries and sharing profits with the State and regional native stakeholders is not a rocket science idea, but greed rules the day-so no one wins but the lawyers.

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