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

Miners see mountains of federal regulations standing between them and the development of Alaska’s unparalleled mineral wealth.

In the recently published Fraser Institute Survey of Mining Companies, 449 global mining executives ranked Alaska 59th, right below Zimbabwe, when it comes to uncertainty concerning environmental regulations. This perception is not just that of those observing Alaska from afar, but also one shared by the miners who are trying to develop and operate mines amid a shifting regulatory landscape.

During a March 28 field hearing in Fairbanks, U.S. Sen. Lisa Murkowski, R-Alaska, and chair of the U.S. Senate Energy and Natural Resources Committee, asked a panel representing Alaska’s mining sector what she and her colleagues in Washington, D.C. could do to help them access the 49th state’s world-class mineral potential.

While individual members of the panel had specific areas of concerns, the ever-growing tomes of environmental regulations compounded by re-interpretations of those rules by federal agencies is a worry shared by all.

“Truly, it’s a mess out there,” Lorali Simon, vice president, external affairs, Usibelli Coal Mine Inc. told the senator.

“In order for any of us to do our jobs, we need a stable regulatory environment,” she added. “We just want to know what the rules are so that we can play by the rules,” she added.

Rewriting coal regs

Usibelli Coal Mine believes the Stream Protection Rule being proposed by the federal Office of Surface Mining and Reclamation Enforcement could knock all of Alaska’s coal players out of the game.

“If this proposed rule becomes final, it will likely kill all coal development in Alaska,” Simon testified.

The Usibelli spokeswoman said the new regulation represents a complete rewrite of the Surface Coal Mine Control and Reclamation Act, a comprehensive set of rules that have regulated coal mining and reclamation since 1977.

SMCRA, as the coal regulation act is best known, put individual states in control of their coal regulatory programs, an arrangement that has proven successful in Alaska, according to Simon.

The new stream protection rule, however, aims to take away state primacy over coal regulations and make federal agencies administrators of new rules outlined in more than 3,000 pages of documents supporting the proposal.

While coal miners and state regulators are still trying to evaluate everything in the massive tome, Simon said, “This proposed rule is meant to be a one-size-fits-all approach to coal mining from the eastern United States all the way across the country,” and does not consider the diversity of every region, especially in a state as unique as Alaska.

“I believe the entire proposed rule should be thrown out, and the agency should begin again – this time in proper consultation with the states,” Simon advised.

Alaska’s uniqueness

The need to consider Alaska’s uniqueness is not relegated to coal. The idea that Alaska’s extraordinary resource wealth, unparalleled climate and topography, and distinct demographic profile should be measured by federal agencies attempting to regulate mining and other activities in the Far North State has gained traction recently.

“Because of the vast differences between Alaska and other states, federal programs often do not adapt to Alaska even though some of those programs may very well meet the needs of other states,” Alaska Miners Association Vice President Bill Jeffress testified.

Alaska’s distinctive attributes was front and center during “Sturgeon v. Frost,” a case recently heard before the U.S. Supreme Court that centers on whether state or federal agencies have jurisdiction over a river running through a national preserve.

While passing through the Yukon-Charley National Preserve in route to his hunting spot in 2007, John Sturgeon pulled his hovercraft on a sand bar of the Nation River. During this maintenance stop, U.S. Park Service officers informed him that hovercrafts were not allowed in federal parks.

While the longtime Alaskan felt that according to the Alaska National Interest Lands Conservation Act (ANILCA) his hovercraft was parked on navigable waters that belonged to Alaska, he complied with the officers and hauled his craft out of the park with a conventional boat.

Sturgeon sued the National Park Service and the case ultimately made its way to the Supreme Court.

After a failed attempt to work directly with the Park Service, Sturgeon took the federal land manager to court over his right to use Alaska-owned waterways as a highway to his moose hunting area.

U.S. District Judge H. Russel Holland in Anchorage ruled in favor of the National Park Service and in 2014 the San Francisco-based 9th U.S. Circuit Court of Appeals affirmed the lower court ruling.

With the district and appeals court ruling in tandem, it looked as if this would be the final word on the Sturgeon case. The Supreme Court justices, however, felt this case deserved further review.

In a surprising unanimous decision, the high court found the lower courts’ reasoning for ruling against Sturgeon “surprising” and “topsy-turvy,” and remanded the case back to the lower courts to reconsider.

While not fully resolving whether Sturgeon is allowed to drive his hovercraft on a state-owned river through a federally-held preserve, the high court found that the 9th Circuit’s decision didn’t take into account the unique provisions afforded to Alaska under ANILCA.

“ANILCA repeatedly recognizes that Alaska is different —from its ‘unrivaled scenic and geological values,’ to the ‘unique’ situation of its ‘rural residents dependent on subsistence uses,’ to ‘the need for development and use of Arctic resources with appropriate recognition and consideration given to the unique nature of the Arctic environment,’” Chief Justice John Roberts wrote.

1,000 cuts

During the March 28 hearing before Sen. Murkowski, J.P. Tangen, an attorney that specializes in Alaska Mining Law, said ANILCA, along with the Statehood Act and the Alaska Native Claims Settlement Act (ANCSA), provide a framework for regulators to follow when considering access and development of Alaska’s rich natural resources that is distinctive from the Lower 48.

“No one can seriously argue that Alaska is not unique in many ways, not the least of which is the abundance and diversity of mineral resources that are found from one end of the state to the other,” Tangen testified. “The ‘Alaska Statutory Trilogy’ repeatedly has recognized that abundance.”

The Statehood Act provided Alaska with the choice of 104 million acres so that the state could develop its resource-rich lands to support its residents spread across a vast area; ANCSA, likewise, provided the state’s indigenous people 44 million acres of lands for traditional and commercial use as they see fit; and ANILCA set aside 106 million acres of federal lands in Alaska in conservation units.

Together, this statutory trilogy, was designed to outline which parts of Alaska were to be conserved and which areas were open for mineral resource and other development.

Tangen, along with his fellow panel members, contend that onerous federal regulations and agency re-interpretations of those rules are eroding the special rights given to Alaska.

They contend that one of the many ways regulators are circumventing the trilogy of Alaska land laws is to establish Areas of Critical Environmental Concern that prohibit development.

For Alaska miners, the most concerning example of this is the U.S. Bureau of Land Management’s ongoing attempt to designate 685,000 acres of the historic Fortymile mining district in eastern Alaska as an ACEC, a move that would put this area in a conservation unit that is off-limits to mining.

“The BLM’s use of Areas of Critical Environmental Concern will close off access and lock up over 700,000 federal acres and essentially land-lock thousands more acres owned by Doyon (Ltd.) and the State of Alaska in the Fortymile alone,” testified Bronk Jorgensen, who represented the Fortymile Mining District.

Alaska miners contend that this is a direct violation of the “no more” clause of ANILCA, which promises that the federal government will not withdraw more than 5,000 acres of Alaska public lands without an act of Congress.

Simon said the use of ACECs is symptomatic of the bigger problem facing miners and others who want to use and develop Alaska lands.

“You have Congress, who enacts legislation and then you have these agencies who are in essence rewriting the rules of the game in our opinion, unlawfully,” she testified.

The piles of new laws and massive tomes of agency-driven policies threaten to bury Alaska’s mining sector.

Added Simon: “It makes it very difficult for our industry to survive when there is so much uncertainty. It is really becoming death by 1,000 cuts.”

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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