Federal regulators question permits for Mat-Su coal mine

Becky BohrerAssociated Press

A federal agency has questioned the validity of permits for the proposed Wishbone Hill coal mine in the Sutton area.

An official with the federal Office of Surface Mining told the state Department of Natural Resources, in a letter dated last week, that information it has received regarding permitting for the Wishbone Hill Mine has "significant gaps." Kenneth Walker, manager of the Denver Field Division for OSM, asked the department, or DNR, to review its permit file and to let the office know if additional information is available.

Any extra information DNR can provide surrounding the renewals and extensions "is necessary to provide clarity with regard to the validity of the Wishbone Hill permits," he wrote.

OSM was responding to citizen complaints and concerns about the mine project near Sutton. Its preliminary finding, based on information it has received from the state so far, is that DNR's assertions the permits are valid "is not supported by the facts or applicable law."

Russell Kirkham, the coal program manager within the department, said by email Tuesday that DNR is reviewing the office's evaluation and has until Aug. 2 to respond.

Kirkham said Usibelli Coal Mine Inc., the company behind the project, has reached an agreement in a separate federal lawsuit to not do any additional work on the project until issues concerning permit renewal have been resolved.

Lorali Simon, vice president of external affairs for Usibelli, confirmed the company had nothing planned by way of development for this summer at Wishbone Hills but said it intends to move forward at some point.

She said in a news release that the Obama administration, through OSM's preliminary action, is "trying to bully the State of Alaska by second-guessing permitting decisions that were made 16 years ago."

Critics of the project, who argued that permits expired in the 1990s, praised OSM's preliminary finding. Tim Leach, conservation director for the group Friends of Mat-Su, called it "clear affirmation" that the state and Usibelli "have not been doing their due diligence to protect the health of our communities."

The Wishbone Hill deposit has about 14 million tons of identified reserves, which Usibelli called a relatively small deposit. However, the company, on its website, said the deposit is particularly valuable because it is the only bituminous coal deposit on the road system in Alaska.

Jeremiah Millen, executive director of Friends of Mat-Su, said hundreds of people live within three miles of the proposed mine, and there are concerns about water quality and other potential impacts.

Beginning in June 2010, Usibelli conducted surface mining operations by building a road and parking area in connection with the mine, according to Walker's letter. DNR said it had good cause not to take corrective action because the permits were valid. But Walker said documents provided by DNR so far show that permits held by North Pacific Mining Corp. expired in September 1996, when it failed to start mining.

Northern Pacific Mining Corp.'s permits were transferred to Usibelli in 1997, according to Walker's letter.

DNR's determination "that it lawfully granted an extension and lawfully renewed the permits in its decision of October 23, 1996 is not supported by the documentation in the record forwarded to OSM or by Alaska law," he said.

Even if one assumed the 1996 permit renewal and extension had been valid, subsequent renewals in 2002 and 2006 appear not to have been valid because neither Usibelli nor the state appear to have made the showings or findings required by the law to justify an extension of time to begin mining, Walker said.

Associated Press