Pebble Mine: Top Takeaways from 2019

Top five lessons learned this year about the proposed Pebble Mine

Throughout 2019, the Trump administration has been in a reckless rush to approve the Pebble Mine—a massive, open-pit gold and copper mine proposed at the headwaters of the world’s greatest wild salmon fishery that would threaten the people, the salmon, the wildlife, and the multimillion-dollar economy Bristol Bay supports. Bristol Bay is an American treasure and economic engine. It’s home to the world’s greatest wild salmon fishery, which generates $1.5 billion annually, fuels Alaska’s economy, supports 14,000 jobs, and is the lifeblood of indigenous communities.

The Trump Administration’s rush to permitting completely ignores the overwhelming opposition to the mine from Bristol Bay tribes, village corporations, commercial, subsistence, and recreational fishermen, hunters, lodge owners, businesses, and conservation and environmental groups like NRDC.

Here, in no particular order, are the top five takeaways from 2019:

1. Politics Trumps Science

This year, the Trump administration’s Army Corps of Engineers published a wholly inadequate draft Environmental Impact Statement (EIS). The draft EIS was widely panned, not only by Pebble’s opposition but by other agencies within the Trump administration.

The deficiencies stem from a recklessly rushed permitting process. The Army Corps’ current timeline for the EIS process—from first publishing its Notice of Intent to prepare an EIS in March 2018 to its final Record of Decision estimated in “mid 2020”—expedites the entire review under the National Environmental Policy Act (NEPA) to just over two years. Following this hasty timeline, the Army Corps published its draft EIS after just eleven months. (This expedited pace stands in stark contrast to the Donlin Gold Mine in Southwest Alaska, whose NEPA process lasted more than six years, or the Rosemont Copper Mine in Arizona, whose NEPA process has taken a decade—so far.)

The Army Corps’ breakneck speed to permit the Pebble Mine is wholly inappropriate for a project of this scale and complexity of environmental, social, and economic impacts. The Army Corps’ reckless pace ignores stakeholders and cooperating agencies and results inevitably in flawed documentation and analysis and superficial, misleading consideration of environmental issues and basic science.

The draft EIS is riddled with errors and omissions, lacks critical information and analysis, and fundamentally fails to properly evaluate the risks of Pebble to Bristol Bay’s waters, fisheries, wildlife, communities, and cultures.

Simply stated, Pebble’s permitting process puts “politics over science.”

And it shows. The draft EIS has been widely condemned:

In its comments submitted to the Army Corps, the Environmental Protection Agency (EPA) cited multiple instances where the DEIS failed to use available data to fully evaluate how the Pebble Project would affect Bristol Bay's wetlands, streams and salmon fishery. EPA concluded the DEIS likely "underpredicts" the impacts Pebble could have on water quality, salmon and air quality, and does not "support a reasonable judgment" that the project will comply with the Clean Water Act. EPA found that Pebble may have "substantial and unacceptable adverse impacts" on fisheries in Bristol Bay.

The Department of Interior (DOI) was even more critical:

After thorough review, we believe the DEIS has major outstanding issues related to an overreliance on qualitative, subjective, and unsupported conclusions… Based on these identified deficiencies, the DEIS is so inadequate that it precludes meaningful analysis. . . . In summary, the DEIS does not fully discuss the potential impacts of the proposed mining activity on DOI-managed resources and lacks a number of important analyses that are necessary to adequately assess the project. Therefore, we recommend that the USACE prepare a revised or supplemental DEIS to resolve the significant gaps in the current document.

The U.S. Fish and Wildlife Agency urged the Army Corps to deny the permit:

We believe the project as proposed will have significant adverse impacts on important, fish, wildlife, and aquatic habitats. We are advising the USACE . . . that the proposed work will result in substantial and unacceptable impacts to aquatic resources of national importance. Consequently, we recommend that a permit not be issued for the project as currently proposed. We recommend more robust analysis be conducted to thoroughly identify, analyze, and reduce risks to those resources . . . .

According to the National Marine Fisheries Service:

NMFS acknowledges the applicant's study efforts, but concludes these efforts are limited, sparse, lack scientific rigor, and do not fully assess all salmon life stages. NMFS recommends the project proponent perform standardized, repeatable, year-round studies at specific locations and these studies be made readily available for review. Without more detailed and thoughtfully collected data about the salmon use in the project area, NMFS will continue to find it difficult to assess the potential loss of salmon as a sustainable stock and local resource.

As noted in the comments submitted by former EPA Administrators William D. Ruckelshaus (Presidents Nixon and Reagan), William K. Reilly (President George H.W. Bush), and Christine Todd Whitman (President George W. Bush), as well as former Secretary of the Interior Bruce Babbitt (President William J. Clinton):

We oppose the Trump Administration’s efforts to sweep nearly a decade of science and Clean Water Act review under the rug. The record is clear: The Pebble Mine is fundamentally flawed—it’s the wrong mine in the wrong place. And the choice is simple. Protect the greatest salmon fishery on the planet. Protect Alaskans and the Bristol Bay watershed. For these reasons, we oppose issuance of a permit by the U.S. Army Corps of Engineers for development of the Pebble Mine.

Richard Borden—a 23-year Rio Tinto mining expert, permitting specialist, and former Head of Environment for its copper, diamonds, and coal divisions who has overseen permitting for 50 major mining projects around the world—concluded that the Corps’ draft EIS is “fatally flawed”:

[I]t is my professional opinion that the document and associated analysis is fatally flawed. The DEIS contains an unacceptable number of deficiencies, omissions and errors for such a large, complex project in an extremely sensitive environment. Due to the global significance of the salmon fishery, any EIS within the Bristol Bay watershed should be held to the highest standard, but the Pebble DEIS does not even meet industry standard practice.

Similarly, the American Fisheries Society, on behalf of its 7,500 professional fishery scientists and resource managers, found that the draft EIS “fails to meet basic standards of scientific rigor.”

Despite these expert criticisms that the draft EIS is riddled with errors and inadequacies, the Army Corps continues to rush ahead to finalize it within the next several months—rendering the permitting process an empty exercise.

2. Alaska Governor Dunleavy Is a Puppet for the Pebble Mine

Given the Army Corps’ reckless rush to permit the mine, opponents had hoped that Alaska Governor Mike Dunleavy—who has publicly stated his neutrality on Pebble—would be true to his word..

But a recent CNN exclusive revealed that Governor Dunleavy collaborated directly with the Pebble Mine to aggressively lobby the Trump administration on Pebble’s behalf. Emails obtained by CNN show that Pebble executives gave Dunleavy’s office detailed talking points, ghostwritten letters, and advice on lobbying strategies. “Dunleavy and his office then used that material, sometimes adopting the company's language word for word” in an effort to reverse EPA’s proposed protections for Bristol Bay and to fast track the Army Corps’ permitting process.   

Alaskans immediately reacted. “Bristol Bay’s fishermen were outraged to learn that Alaska’s own Governor has become a puppet for the Pebble Partnership and is willing to betray his fellow Alaskans for Pebble’s benefit, said Bristol Bay resident and Commercial Fishermen for Bristol Bay Director Katherine Carscallen. “We’ve been told for more than a decade to trust the permitting process, but Governor Dunleavy’s close relationship with Pebble makes it clear that we cannot trust the State of Alaska to uphold a fair and science-based permitting process that protects the public interest.”

United Tribes of Bristol Bay’s Executive Director Alannah Hurley said: “We are consistently seeing undeniable evidence surface from investigative reporting that the corrupt politics of Alaska’s Governor Dunleavy and the Trump Administration have guided the Pebble permitting process to date.”

Sadly, CNN’s recent exclusive wasn’t the first inkling that Governor Dunleavy isn’t neutral. Last summer, he wrote a letter encouraging development of the Pebble Mine. Governor Dunleavy encouraged the president and CEO of Wheaton Precious Metals to invest in the Pebble Mine, after the company had received a letter from Pebble opponents opposing investment. “I want to assure you the State will stand by those who invest in Alaska and will actively help defend them from frivolous and scurrilous attacks,” wrote the Governor, specifically citing NRDC. According to CNN, that letter was ghostwritten by Pebble. (See our response here.) Although Wheaton Precious Metals ultimately did not invest in the project, it wasn’t from Governor Dunleavy’s lack of trying.

Governor Dunleavy also appointed Jason Brune—a former lobbyist for Pebble—to head Alaska’s Department of Environmental Conservation.

“[T]he Gov could not possibly have been more supportive of our project," Pebble's CEO Tom Collier wrote in an email to a Dunleavy adviser last July.

3. Pebble’s Mine Plan Is a Scam

Pebble submitted for permitting what it calls a “small” mine plan: a 1.5 billion ton, 20-year mine that would permanently destroy more than 3,500 acres of wetlands and 80 miles of streams. Yet it is clear that this proposal is a scam—just the first step in what the company intends, and its shareholders expect, will be a multi-stage, multi-generational mining project.

Northern Dynasty Minerals’—the sole partner left in the Pebble Limited Partnership—plans for mine expansion are clear based on statements to investors. Northern Dynasty President and CEO Ron Thiessen has repeatedly marketed Pebble’s value to investors as a “multi-generational opportunity” that will last “centuries into the future” once the infrastructure is set in place. Thiessen  also presented the mine as a 10 billion-ton resource that will be developed in multiple phases: a mine focusing on Pebble West for 20 to 25 years followed by further development into Pebble East, the site of the so-called “mother lode.” PLP CEO Tom Collier has also said, “It would be unlikely that in the future someone wouldn’t want to take some portion if not all of the rest of the ore out of the ground.”

The “small” mine plan for which Pebble is currently seeking permit approval is, in the words of mining expert Richard Borden, “almost certainly not economically feasible” in the absence of the kind of significant expansion that Pebble has itself been promoting to potential investors. According to Borden, the project and is “likely to have a strongly negative net present value (NPV)” of -$3 billion.

If a project is not economically feasible, then it shouldn’t be permitted. Yet the Army Corps’ is turning a blind-eye to this reality and continues to fast-track the mine.

4. Northern Dynasty Minerals Is in Financial Difficulty

Northern Dynasty Minerals is the sole remaining member of the Pebble Partnership, which has been abandoned over the past decade by four of the largest mining companies in the world: Mitsubishi Corporation (2011), Anglo American (2013), Rio Tinto (2014), and First Quantum Minerals (2018). Northern Dynasty’s Consolidated Financial Statements for 2018 and 2017, which were filed April 1, 2019 with the Securities and Exchange Commission (SEC), reveal “substantial doubt,” net loss, little cash on hand, and the desperate need for an investor.

Its most recent financials reveal and equally dire situation: a high cash burn rate with little cash on hand and substantial liabilities.

Most recently, Northern Dynasty saw its share value plummet after its latest stock offering in December. This was just the latest in a long list of share offerings by the company over the past two years to raise funds, but it resulted in the company’s shares dropping dramatically in value. Northern Dynasty is currently valued around $.40 per share—one of the lowest share values in more than three years.

Northern Dynasty also entered into a US $3.5 million loan agreement with a syndicate of lenders—a syndicate that most notably includes, among others undisclosed, company executives.

As my colleague Joel Reynolds wrote, “[w]hile it isn’t possible for the rest of us to know the precipitating catalyst for these latest financial maneuvers, it seems likely that they’ve been motivated by continuing financial stress caused by the abandonment of this widely opposed project by its mining partners and by the company’s continuing inability to find another high risk-averse replacement. The company has no existing revenue stream and, ‘for the foreseeable future,’ has a negative-cash flow.”

What is clear is that the financial distress of this company is driving a rushed and fatally flawed permitting process.

5. Congress Cares

Despite the Trump Administration’s rush to permit the mine, Congress has stepped up in defense of Bristol Bay.

In June, the U.S. House of Representatives passed an appropriations package with an amendment barring funding for the Pebble Mine permitting process. The amendment to the Energy and Water Appropriations Act, sponsored by Rep. Jared Huffman (D-Calif.), blocked FY 20 funding to the Army Corps to proceed with its deeply flawed EIS for the Pebble Mine. The Huffman amendment passed on the House floor, 233-201.  

Rep. Huffman’s office also submitted a Dear Colleague letter directed to the Army Corps, stating, among other things, that “[t]he Pebble Mine directly threatens indigenous peoples, our maritime economy, and thousands of American jobs that rely on Bristol Bay. . . . We urge the USACE to listen to the tribes, village corporations, commercial fishermen, hunters, anglers, and those whose lives and livelihoods depend on the integrity of the Bristol Bay watershed, and we urge the USACE to deny the permit for the Pebble Mine.”

In September, Alaska Senator Lisa Murkowski expressed her own doubts about the Pebble Mine and its potential impacts, saying:  "if the science out there that has been raised by these agencies can't demonstrate that you can have a successful mining project in an area that is as sensitive as the Bristol Bay watershed then a permit should not issue."

Days later the Senate Interior, Environment, and Related Agencies Appropriations Subcommittee, which Senator Murkowski chairs, released report language that calls for the Army Corps to address gaps and deficiencies in the draft EIS and encourages other federal agencies (including EPA) to exercise their "discretionary authorities" if they aren't satisfied with the Army Corps' assessment.

Although the Huffman amendment did not make it into the final appropriations package, Murkowski’s report language did. That language doesn’t stop the permitting process, but it sends an important signal to the Army Corps that Congress is watching and is concerned about the quality of Pebble's draft EIS.

In October, the House Transportation and Infrastructure Subcommittee on Water Resources and Environment held a hearing on the proposed project. Chair Peter DeFazio called the Pebble Mine “a bad idea made even worse by the sham review process currently underway.”

In November, Chair DeFazio sent a letter to the Army Corps, expressing his concerns with the Corps’ review of Pebble’s permit application. “I am deeply concerned that your agency’s review of this permit application and the associated review of the project…are so fundamentally flawed and inadequate as to preclude any meaningful review on the likely impacts of this project—in violation of your responsibilities under both the Clean Water Act and NEPA,” DeFazio wrote.

Finally, Senator Joe Manchin of West Virginia cited the Pebble Mine as “a perfect example” of a mining project that should not go forward: “There's no way, shape or form that the Pebble Mine should go forward when you are basically going to have the chance at ruining one of the greatest fisheries in the world…That doesn't make any sense to me at all. The reward is just not there. Why would we do it?”

Why indeed?

After a tumultuous 2019, what is clear is that the opposition to the Pebble Mine is stronger than ever.

The people of Bristol Bay don’t want the Pebble Mine, don’t need the Pebble Mine, and will never relent in their fight against it.

In support and solidarity, NRDC is determined to continue our campaign of relentless opposition into 2020—and for however long it takes to win permanent protection for Bristol Bay.