Pebble mine must now clear an unusually high hurdle before it can be developed, experts say

The U.S. Army Corps of Engineers on Monday left a narrow path toward construction of the proposed Pebble mine in Southwest Alaska, setting stricter requirements for its development than for other big projects in Alaska, according to people familiar with permitting laws.

Whether mine developer Pebble Limited Partnership can meet the requirement will determine whether the controversial project can be built.

Following statements from prominent supporters of President Donald Trump expressing opposition to the mine proposal, including Donald Trump Jr., the Trump administration this week announced Pebble can’t be permitted “as currently proposed” under the federal Clean Water Act.

The copper and gold prospect could be worth tens of billions of dollars over its life, but critics say its location in the Bristol Bay region poses a risk to the valuable salmon fishery there.

[Pebble mine would cause ‘significant degradation’ in Bristol Bay region and can’t be permitted as proposed, Trump administration says]

To earn its permit from the Corps, Pebble Limited now must show that it will compensate for wetlands the mine will destroy by protecting similar wetlands in the same area where the mine will be built, the Koktuli River watershed. The requirement was detailed in an Aug. 20 Army Corps letter to Pebble.

It’s an unusual requirement for a project in rural Alaska, according to consultant Bob Loeffler, former director of Alaska’s Division of Mining, Land and Water under Govs. Tony Knowles and Frank Murkowski.

Rural projects are often allowed to protect wetlands in other parts of the state, because commonly there are few nearby lands in need of help, he wrote in a letter to his client in the region, the Lake and Peninsula Borough Assembly, explaining the Corps’ requirement.

Loeffler said the Donlin gold project in Western Alaska, permitted by the Corps in 2018, was allowed to protect lands about 200 miles to the east, near Tyonek along Cook Inlet, to compensate for its future damage.

Tyonek is “nowhere near” the Donlin project, Loeffler said.

The Corps early this week said the Pebble mine would cause “significant degradation” in the Bristol Bay region, leading to the demand for mitigation.

A month earlier, the Corps had found that the mine under normal operations should not have a measurable effect on Bristol Bay fish numbers.

[Environmental groups sue to block drilling in National Petroleum Reserve-Alaska]

John Budnik, a spokesman for the Corps in Alaska, provided a statement Tuesday saying that with the project under review, it’s inappropriate for the agency to discuss Pebble’s options to meet mitigation requirements.

In part because of the pristine nature of the Koktuli watershed and almost no private land ownership there, it appears Pebble must acquire large amounts of state land, or the development rights to that land, so the land can be locked away from any future development, Loeffler wrote.

The land or easements would be turned over to a land preservation group or state agency for protection, but they could still be used by the public for such purposes as hunting and fishing, Loeffler said.

A state-created refuge also might be one option Pebble could pursue, he wrote.

Setting aside large chunks of state land might require an unprecedented, controversial process that would require public input at the state level, Loeffler wrote.

Tom Collier, Pebble Limited’s chief executive, said Wednesday that the company is well on its way to meeting the Corps’ “stringent” standard.

“We’ll have a report to the Corps in about two to three weeks, and I’m confident it will satisfy the requirements the Corps has set out,” Collier said.

Collier would not say if Pebble is communicating with state officials on a proposal involving large amounts of state land.

“I’m not in a position to answer that question,” he said.

Dan Saddler, a spokesman with the Alaska Department of Natural Resources, said the state is not involved in the development of the compensatory mitigation plan that Pebble must submit to the Corps.

Saddler said the state agency is not aware of any discussions involving Pebble seeking to purchase state lands to meet the Corps’ mitigation requirements.

“However, DNR has responded to (Pebble) inquiries regarding existing state laws or processes that could allow for state land to play a part in the mitigation, and we are providing information to (Pebble) in response to those inquires,” Saddler said in a prepared statement.

Gov. Mike Dunleavy has not issued a formal position on the mine, though Pebble’s critics say he has taken steps that helped its progress.

To meet mitigation requirements, developers can often restore damaged wetlands, streams and habitats, Loeffler wrote. They can also create new ones, or enhance struggling areas.

In some cases, they can preserve the resources.

But Loeffler said the lack of development in the Koktuli watershed means it will be difficult to restore areas there.

“There are few wetland or aquatic resources which are degraded and need fixing,” he wrote. “Similarly, it is probably impossible to find enough poorly functioning areas or to establish enough new wetlands in the undeveloped Koktuli landscape.”

“That narrows Pebble’s options to solely preservation,” Loeffler wrote.

Based on past requirements by the Corps, Pebble would have to acquire far more state lands, or the development rights to those lands, than it will damage, Loeffler said.

The Corps could require that more than 20,000 acres be preserved, he wrote. (That’s about 15,000 football fields.)

“The state has never used its land as preservation land for large-scale wetland compensation,” Loeffler wrote.

“Possibly, Pebble could propose that the Legislature establish a wildlife refuge,” he wrote. “Or that the state sell land or a conservation easement to Pebble which could give it to the Nature Conservancy. Or perhaps some other method might work. We do not know what Pebble will propose.”

Richard Borden, a former executive with mining company Rio Tinto and now a consultant working for industry and conservation groups, said he does not see how Pebble Limited will meet the requirement.

He said one challenge is that the Corps may not allow Pebble to set aside wetlands for protection if the lands are not already targeted for development.

“I’m not aware of any other development in that watershed that’s planned even in the long-term foreseeable future,” Borden said.

Rio Tinto had been an investor in the Pebble project but left in 2014. Borden in January criticized the Corps’ draft environmental review of the Pebble project.

Borden worked for Rio Tinto’s copper and diamonds group when he considered permitting risks for the Pebble project, before Rio Tinto pulled out of Pebble, he said.

“I said, ‘Boy, if they require offsets in the same watershed, I don’t know how you get there,’ ” he said.

“In a lot of respects, I see this (requirement) as a dead end for the project,” Borden said. “Perhaps (Pebble) will find a way to navigate this. But it will be extraordinarily challenging and I don’t envy them.”

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