North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Though the U.S. Environmental Protection Agency emphatically denies it has predetermined whether to exercise its authority under Section 404(c) of the Clean Water Act to prohibit or restrict large-scale mining in the Bristol Bay watershed, a draft assessment published by the regulatory agency surmises that development of Pebble and other promising copper deposits in this vast expanse of state-owned land in Southwest Alaska may pose a threat to a world-class salmon fishery found there.

"The report concludes that there is potential for certain activities associated with large-scale mining to have an adverse effect on the productivity and sustainability of the salmon fishery, but the agency has made no judgments about the use of its regulatory authority under the Clean Water Act," EPA Region 10 Administrator Dennis McLerran said upon the May 18 release of a 338-page report outlining a year-long accumulation of information about the Bristol Bay watershed.

The federal agency said the nearly 13 million acres of wildlife refuge or federal park lands that cover much of the Bristol Bay watershed was not included in its study; instead the regulatory body focused on the Nushagak and Kvichak watersheds, a 15-million-acre region roughly the size of Vermont and New Hampshire combined that is open to mining. Rather than federal lands, the area is blanketed primarily by state-owned acreage.

"The Nushagak and Kvichak River watersheds produce about half of all Bristol Bay salmon and are open to mining development under Alaska law," said the EPA Region 10 administrator.

The assessment addresses the cumulative risks if multiple mines were established at various copper prospects in the Bristol Bay region, suggesting that if the EPA chooses to exercise Clean Water Act veto authority, or some other regulatory action, such a decision could have implications beyond Pebble.

The federal environmental agency initiated the Bristol Bay Watershed Assessment in response to concerns from Alaska Native groups, fishing organizations and others who petitioned the environmental agency to exercise its authority under Section 404 of the Clean Water Act to pre-emptively deny the Pebble Limited Partnership discharge permits that would be needed to build a mine at the world-class Pebble copper-gold-molybdenum deposit located in the study area.

The Pebble Partnership - owned equally by Vancouver B.C.-based Northern Dynasty Minerals Ltd. and London-based Anglo American plc - was quick to respond to the release of the assessment.

"We have taken several years and expended considerable resources to study the ecosystem in a small area around the Pebble deposit, while the EPA has, in only one year and with limited resources, completed a draft assessment in relation to an area of approximately 20,000 square miles," said Pebble Partnership CEO John Shively. "Furthermore, we are concerned that the EPA may use this rushed process as the basis for an unprecedented regulatory action against the Pebble Project."

In February, the Pebble Partnership released an environmental baseline document for the Pebble project, which compiles US$120 million of scientific data collected over five years into a 27,000-page tome.

Beyond Pebble

While it was a petition to pre-emptively ban the development of Pebble that instigated the Bristol Bay Watershed Assessment, EPA stresses that its study is not solely focused on the controversial project.

"We want to be clear that this assessment is not about a single mine or a single development activity in the watershed. It is focused on a hypothetical mining scenario that was developed using our knowledge of publicly available documents about potential for mining activity in the watershed," McLerran said. "Of course, there is the Pebble deposit, but there are at least seven other mining claims (exploration projects) in the advanced stages of exploration and development."

Though EPA maintains that the study is not about Pebble, the hypothetical mining scenario that EPA used as a basis for its assessment was modeled after a Pebble mine plan included in a preliminary economic assessment completed for Northern Dynasty in 2011.

"Known information about the Pebble deposit is very relevant, because it is likely representative of any potential near-future mine development in the area," EPA explains in the assessment. "Thus, the assessment largely analyzes a mine scenario that reflects the expected characteristics of mining operations at the Pebble deposit. However, the analysis is intended to provide a baseline for understanding the potential impacts of mining development throughout the Nushagak River and Kvichak River watersheds."

The agency said the footprint of its hypothetical mine and supporting infrastructure would disturb at least 2,512 acres of wetlands but could be as much as 4,286 acres if the entire theoretical copper deposit was developed.

Extrapolating information gleaned from the hypothetical mine, the assessment concludes the development of additional mines at other potentially large copper deposits - Big Chunk, Groundhog Mountain, and Humble claims - located across the 15-million-acre study area would have a cumulative effect.

"The potential mining of other existing copper deposits in the region would likely reflect the same type of mining activities and facilities analyzed for the Pebble deposit scenario (open pit mining, waste rock piles, tailing storage facilities) and, therefore, would present potential risks similar to those outlined in this assessment," EPA penned in the executive summary.

Beyond mining

Sen. Lisa Murkowski, R-Alaska, worries that if EPA decides to exercise its CWA 404(c) authority to limit mining in the Bristol Bay watershed, such a decision could set a precedent that would risk all types of development in the region.

"Given the EPA's apparent comfort with consideration of hypothetical scenarios, and for purposes of more definitively answering my previously submitted questions, I ask that you do so again," Murkowski wrote in an April 18 letter to EPA Administrator Lisa Jackson.

"Specifically, please assume that EPA goes ahead with a pre-emptive veto of mineral development in the Bristol Bay area.

Having done so, please consider the possibility of a subsequent proposal to develop an airfield - one that would generate, and require disposal of, dredge or fill material in the same area.

If a third-party litigant sued to prevent construction of this hypothetical airfield, please describe the legal grounds upon which that challenge might be reliably defeated and the airfield development allowed to move forward."

In a May 17 response, the EPA administrator assured Murkowski that the EPA has the ability to narrow the use of its veto pen to projects it finds unacceptable, such as mining.

"While your question is hypothetical, and EPA has no plans to use 404(c) authority unless justified by the full technical assessment, let me also assure you that we have a broad range of discretion in our use of the 404(c) authority. A final 404(c) action in Bristol Bay prohibiting or restricting large-scale mining activities would not affect other development in the watershed," Jackson explained.

"CWA section 404(c) authorizes the EPA to prohibit or restrict discharges in a defined area of the waters of the United States when those discharges are determined to have unacceptable adverse environmental or water quality impacts," continued the administrator.

Murkowski was hoping for more.

"While the agency has offered assurances that its assessment of the potential impact of a large-scale mining operation on the watershed should not be used to oppose future development activities in the region, they failed to provide a written legal opinion to support their argument," the senator said in a May 18 statement.

Murkowski has been vocal in her concerns about the legality and appropriateness of EPA exercising its CWA 404(c) pre-emptive veto authority.

"While I'm pleased this draft assessment does not contain a pre-emptive veto, I'm concerned that it did not make clear the appropriate time for Section 404 evaluation and action is only in response to an application for permit. I do not believe a pre-emptive veto is within the agency's statutory authorities, and I have made that clear to Administrator Jackson," the senator wrote in response to the release of the Bristol Bay assessment.

Sen. Mark Begich, D-Alaska, too has been outspoken in his opposition to a premature decision by the regulatory agency.

"I remain opposed to any pre-emptive decision on the Pebble mine. While the project needs to meet a high hurdle - protecting the world's largest and most valuable salmon run - developers should be allowed to present their project, and it should succeed or fail on its merits," the senator wrote in response to the assessment.

No surprises

Largely an accumulation of widely published information, the draft Bristol Bay watershed assessment held few surprises.

Key findings in EPA's draft assessment include:

• All five species of North American Pacific salmon are found in Bristol Bay.

• The Bristol Bay watershed supports the largest sockeye salmon fishery in the world.

• Bristol Bay's wild salmon fishery is valued at about $480 million annually.

• The average annual run of sockeye salmon is about 37.5 million fish.

• Bristol Bay provides habitat for numerous animal species, including 35 fish species, more than 190 bird species and 40 animal species.

• Salmon makes up an average of 52 percent of the subsistence harvest of the 4,337 Alaska Native residence of the Nushagak and Kvichak River watershed.

Establishing that Bristol Bay is a world-class salmon region, the report goes on to describe potential risks that large-scale mining may pose to the fishery.

The EPA downplayed the likelihood of a catastrophic event, putting the odds of a modern state-of-the-art tailings dam failing at 1:1 million per year. The agency said it is more concerned about the loss of fish habitat in the immediate mine area.

"I want to emphasize that things like tailings dams failure are identified, but they are relatively low risk," McLerran said. "What is more likely is the direct loss of habitat from the mining activities themselves."

"Where there is a mine footprint, you would be losing streams, wetlands and habitat areas," he added.

EPA will take public comment on the draft assessment until July 23. The agency is plans a series of public meetings in Alaska - Anchorage, June 4, Dillingham, June 5, Newhalen, June 6 and Nondalton, June 7. The draft assessment is also being submitted for independent scientific peer review.

The final Bristol Bay Watershed Assessment is expected to be completed by the end of the year, at which point the EPA will decide what to do with the document.

"Our goal is the finalization of a robust, technically sound assessment. Only upon its completion will the agency examine regulatory options, including application of 404(c), if appropriate," Jackson wrote in her letter to Murkowski.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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