The U.S. Army Corps of Engineers gave the Pebble Partnership a very steep final hill to climb to reach federal approval for its mine plan with a short letter establishing strict requirements to offset the project's impacts to area watersheds.
Corps Alaska District Regulatory Chief David Hobbie wrote in a two-page letter on Monday to Pebble Permitting Vice President James Fueg that district officials have determined the copper and gold project, as proposed, would "cause unavoidable adverse impacts to aquatic resources" resulting in significant degradation of those resources.
"Therefore, the District has determined that in-kind compensatory mitigation within the Koktuli River Watershed will be required to compensate for all direct and indirect impacts caused by discharges into aquatic resources at the mine site," Hobbie's letter states.
He wrote additionally that compensatory mitigation will also be required for direct and indirect impacts from the project's transportation corridor that includes a port on West Cook Inlet.
The stringent requirements laid out by Hobbie are in such sharp contrast to Pebble's proposed mitigation plan and guidelines issued by the Trump administration in 2018 that both mine opponents and traditional resource development advocates reacted to as if the project is ostensibly dead.
Under the requirements, Pebble must compensate for impacts to 2,825 acres of wetlands, 132 acres of open water and 129 miles of streams at the mine site, as well as 460 acres of wetlands, 231 acres of open water and 55 miles of streams impacted by the port and 82-mile access road. The company also must submit the new mitigation plan within 90 days.
The Koktuli River drains approximately 290,000 acres and contains more than 36,000 acres of wetlands in its headwaters, according to the final environmental impact statement for the project.
Sen. Dan Sullivan, an emphatic critic of the Obama administration's attempt to preemptively "veto" the mine in 2014 via the Environmental Protection Agency's Clean Water Act Section 404(c) authority, said in a prepared statement that he has always advocated for a "science-based review" of Pebble "that does not trade one resource for another," and that is what has happened.
The Army Corps of Engineers administers Clean Water Act Section 404 wetlands permits nationwide but the EPA has final say over whether a wetlands fill permit is issued.
"I have been clear that given the important aquatic system and world-class fishery resource at stake, Pebble, like all resource development projects in Alaska, has to pass a high bar -- a bar that the Trump administration has determined Pebble has not met," Sullivan said. "I support this conclusion -- based on the best available science and a rigorous, fair process -- that a federal permit cannot be issued."
Sen. Lisa Murkowski said she supports the decision and agrees that "a permit should not be issued."
"After years of extensive process and scientific study, federal officials have determined the Pebble project, as proposed, does not meet the high bar for large-scale development in Bristol Bay," she said.
Sullivan's challenger in the November election, independent Senate candidate Al Gross opposes the Pebble project.
Corps officials released the final Pebble EIS July 24.
A record of decision on the EIS and Pebble's Clean Water Act wetlands fill permit could be issued 30 days after the EIS was published in the Federal Register.
The voluminous final EIS generally maintained the conclusions in the draft EIS and states there would be "no measurable change" in the numbers of salmon returning to the Nushagak and Kvichak rivers or in the long-term health of the commercial fisheries in the region. The Koktuli River is in the upper reaches of the Nushugak watershed.
Murkowski and Sullivan previously expressed concern that the Corps' EIS did not sufficiently analyze the full range of potential impacts of the mine, particularly following highly critical comments from federal and state resource agencies about the scope of the review.
Bristol Bay Native Corp. CEO Jason Metrokin said in an interview that while the mitigation requirements aren't an official death knell for the project, he was happy to learn that, from his perspective, the Army Corps has finally concluded what the BBNC, and a majority of Alaskans have; that Pebble's plan is insufficient.
"They can't produce a quality mitigation plan in three months if they haven't been able to do so for years," Metrokin said, noting Pebble has not backed up the claim that its smaller 20-year mine plan is economic.
BBNC has long opposed the project and has refused to allow Pebble access to its land for development.
Pebble CEO Tom Collier downplayed the significance of the requirements, saying the letter is a normal part of the permitting process and the company is well on its way to developing a mitigation plan to meet them in a prepared statement. The company has had teams totaling about 25 people in the field this summer and a large part of their work has been mapping wetlands in the region over about the past month, according to Collier.
Pebble's new mitigation plan will likely focus on preserving an area multiple times larger than the aquatic areas impacted by the project, which should meet the requirements based on discussions with Corps officials, Collier said.
"Anyone suggesting a different opinion -- i.e. that Pebble will not be able to comply with the letter or that such compliance will significantly delay issuing a (record of decision) -- must be ignorant of the extensive preparation we have undertaken in order to meet the requirements of the letter," he said.
Pebble spokesman Mike Heatwole wrote in an email to follow-up questions that Collier's statement provides the best information the company has on the work right now and more details will be made public when they are available.
Shares in Pebble's parent company, Vancouver-based Northern Dynasty Minerals Ltd., closed Monday trading on the New York Stock Exchange at 90 cents per share, down 38 percent on the day after the letter was made public.
Pebble's initial compensatory mitigation plan released in January relied on a collection of smaller -- and likely less costly -- mitigation efforts outside of the Koktuli watershed.
The company first planned to replace culverts in the Dillingham area to restore salmon access to about nine miles of spawning and rearing habitat; improve water treatment facilities at villages near the mine site; and periodically clean debris from seven miles of beach around the Cook Inlet port site.
All of that potential work is outside of the remote and undeveloped Koktuli watershed.
Pebble's permitting executive Fueg acknowledged when the draft mitigation plan was published that the lack of development in the region beyond the immediate communities made it difficult for the company to identify opportunities to restore damaged wetlands or preserve areas threatened by other development -- the more traditional means of wetlands mitigation now being demanded by the Corps.
A Corps Alaska District spokesman did not immediately respond to additional questions for this story.
Former EPA Administrator Scott Pruitt and Assistant Army Civil Works Secretary R.D. James signed a joint memo in June 2018 that updated guidance from the early 1990s as to how the agencies would handle wetlands mitigation specifically in Alaska. The revised guidance states that Alaska's situation -- more than half of the state is classified as wetlands with relatively little development -- means specific, focused compensatory mitigation requirements traditionally used in the Lower 48 often aren't realistic in Alaska.
When avoiding or compensating for development impacts to wetlands is not practicable, minimizing wetlands impacts will be the main means of complying with Clean Water Act requirements, according to the 2018 memo. It also explains that compensatory mitigation over larger watershed scales could be appropriate for Alaska given that options to offset wetlands losses on a more localized scale are often limited.
The guidance does not lay out quantitative thresholds for determining major versus minor impacts -- that is decided on a case-by-case basis -- but it outlines what should be considered in making that determination, an EPA spokeswoman said at the time.