Since the Pebble project began hitting the headlines, Bob Loeffler has been asked some strange questions. People accost the mild-mannered director of the Alaska Department of Natural Resources' Division of Mining, Land and Water and demand to know why he issued permits for the Pebble project and when it is going to break ground. Loeffler is puzzled, because he hasn't issued any permits for the Pebble project. The developer, Northern Dynasty, won't even submit its permit applications until next year.

Loeffler spoke to the Newhalen conference in April in place of DNR Commissioner Tom Irwin, who was called away to gas line negotiations. So were Gov. Frank Murkowski and his special assistant Mike Menge, who had also planned to participate in the conference. Menge told Mining News afterwards that he "expects significant national and international environmental opposition to the Pebble project."

"It's difficult because I'm speaking about a mine for which we don't have critical environmental data yet, for which I don't have a mine plan," Loeffler said. He began by giving an overview of the taxes that the mining industry pays to the state and local communities, but added that the environment also counts: "It's clear to all of us who love Alaska that unless we can protect the fish, wildlife, it's not a return to the community."

The water discharge permit from the U.S. Environmental Protection Agency is critical, Loeffler said. "If you don't meet water quality standards, you don't get a permit; that's the way it works. So until we can say whether this mine will meet water quality standards, we can't say whether it'll get a permit, until we get the data and go through it. ... And then from our operating permit, it's more of a balancing, how do we ensure that they appropriately protect public resources and get access to the minerals." A great deal hinges on the content of the federal EIS, Loeffler added.

Changes during evaluation for Pogo

During the evaluation process for the Pogo mine near Fairbanks, the location of the road and the mine design changed so that permitting standards could be met. The facilities and the shaft were relocated. The state agencies also picked a water quality system alternative which was not the one preferred by the mining company, Teck Cominco. "The moral that I hope you take away from that is that things change," Loeffler said. "You don't quite know what you get until you get to the end of it. Just because you say yes, doesn't mean there's not a lot of changes."

Loeffler's message to the communities in the Pebble area was straightforward: "There are a lot of ways to design a mine that are friendly to the environment, protect the water quality, that protect public resources. I think you can design a mine that way, but you can't tell whether you've designed an individual mine that way until you get there, and we're not there yet."

Large mines require 40-50 permits

Ed Fogels, coordinator of the state's large mine permitting team, provided further confirmation that Northern Dynasty faces a long haul. A typical large mine may take 40 or 50 state and federal permits. "It is illegal to pollute," he said. "If a mine discharges dirty water, they're breaking the law and we're not doing our job. ... A lot of the mines where failures have happened in the Lower 48 are older mines. ... In Alaska we have some of the most modern mines in the nation right now, and just in the last five years, science has changed dramatically, in mining and geochemistry. We've learned a lot."

Mines must be reclaimed and the state requires financial assurance, Fogels continued. "The company's got to put up money to make sure that if they leave, go bankrupt, they can't do the reclamation - then we can do it." Most financial assurance comes in the form of letters of credit from large banks. A law passed last year also allows the state to set up a trust fund so that mining companies can put real money in, which would be especially relevant to mines with long-term obligations such as Pebble, Fogels said. The financial assurance requirements apply to U.S. and foreign companies alike.

The recently permitted Pogo mine, which is expected to produce an average of 400,000 ounces of gold annually over a 10-year mine life, has a financial assurance bond of $27 million. Fogels and his team also worked with the Fort Knox mine on its reclamation plan. "Ultimately what their reclamation plan wound up being was a community recreation facility for the community of Fairbanks, once that mine is done," he said. "It's going to be a real pretty valley."

More lessons are learned with each new mine that is built

Tailings disposal is probably the single most important issue that regulators have to deal with, Fogels said. "What we don't know, and we don't have a clue about yet, is the geochemistry. ... Without that information, we don't have a lot to do." A water treatment plant at Red Dog mine in northwest Alaska will have to be funded forever, according to Fogels. "We have no choice up at Red Dog. Other mines, we have to look at that issue, and decide, is it worth it? Are the risks worth it? Are the economic benefits going to be worth that? And whether that has to happen here or not, we don't know."

The dam for the Pebble tailings pond will have to meet seismic standards for the "maximum credible earthquake," Fogels told the conference. Such a dam has already been permitted for the proposed Kensington gold mine near Juneau. "Every mine that's permitted in Alaska, or anywhere in the nation, is better than the last mine that was permitted," Fogels said. "I'm sure something at every mine will go wrong, you hear about mistakes made at Greens Creek, at Red Dog, but, you know, all in all, those mistakes were fixed, the environment has been protected. I think we have a really good record in Alaska of regulating mines."

One of the people who will help Northern Dynasty with the environmental side of its permit applications is Dr. Jim Buell, a fisheries biologist who works as a consultant for the company. Buell insists that he is independent and not a "hired gun," as Bristol Bay Native Corp.'s CEO, Hjalmar Olson, suggested from the audience. Buell has been doing baseline studies in the area since the early 1990s, when he worked with Teck Cominco.

Northern Dynasty's "no net loss" policy for the Pebble project means that it should not cause reduction of any subsistence, commercial or sport fisheries, Buell said. There are significant natural increases and declines in fish stock, so it is an immensely complex matter to calculate. Nevertheless, each fishery in the region must suffer no net loss as a result of the project. It is not enough for losses to be compensated for in some other part of the state, such as southeast Alaska.

"There is no project without an effect and there is going to have to be mitigation, there is going to have to be compensation, everybody understands that," Buell said: "Same species, same stock. Nobody's going to be trading out chinook for chum." The way to achieve no net loss is to steer the project so that problems are avoided, rather than having to solve them once they occur, he added. "The mining plan is going to have to incorporate response plans for unforeseen circumstances and it must be a quick, targeted response."