Pebble prospect: Balancing 2 resources

Diana Blass,Marina Cracchiolo
The Port of Anchorage, Alaska, is a lifeline for the state that relies heavily on imports. The vast majority of consumer goods for Alaska come through the port. (Marina Cracchiolo/Medill News Service/MCT)
Marina Cracchiolo/Medill
Anchorage-based Pebble Limited Partnership LLC is seeking new investors to develop the largest open-pit copper mine in North America. Pebble estimates 55 billion pounds of cooper, 3 billion pounds of molybdenum and 67 million pounds of gold lie below the frozen tundra in the Bristol Bay region of southwest Alaska. (Marina Cracchiolo/Medill News Service/MCT)
Marina Cracchiolo/Medill
Smokehouses and shanty homes in the village of Newhalen line the coast of Lake Iliamna, the largest freshwater lake in Alaska. Newhalen has less than 200 residents, mostly Native Alaskans, and neighbors Iliamna, which is the site of the Pebble Mine testing and development center. (Marina Cracchiolo/Medill News Service/MCT)
Marina Cracchiolo/Medill
Many Native Alaskans in the Bristol Bay region live a subsistence lifestyle, hunting, fishing and gathering their food for the year. Smokehouses in the village of Newhalen help the natives preserve salmon for the winter. (Marina Cracchiolo/Medill News Service/MCT)
Marina Cracchiolo/Medill

ILIAMNA -- It was another subfreezing day in Alaska as Glen Alsworth prepared for a 200-mile flight to a remote southwestern region of the state. Oreos, diapers and milk were among the items he stored in the back of his plane.

Before long, the single-engine aircraft glided past Redoubt Volcano and through the ravines of glacier-runoff water. Wonder and satisfaction crossed Alsworth's face.

"I look out the window -- that's my office," he exclaimed.

Alsworth is known as the "flying mayor" in the Lake and Peninsula Borough, balancing his time between running his small airline and volunteering as the mayor of a region that's caught in a debate over how international trade will shape Alaska's future.

This isolated place is home to the proposed site of North America's largest open-pit copper mine. Pebble Limited Partnership suspects that more than $300 billion worth of minerals lie below the ground.

But it also sits at the headwaters of the Bristol Bay fishery, home of the world's largest population of wild salmon and a major piece of Alaska's multibillion-dollar seafood export business.

"If you were to pick the world's worst place to put the world's largest open-pit mine, this is an ideal spot," commercial fisherman Mark Niver said, slamming a finger onto a map of Alaska at the anti-Pebble Mine headquarters, set up in one of Anchorage's oldest homes.

He's one of many who fear that mine pollution might leach into fishing waters and change the ecosystem where the salmon return upstream to spawn.

Fishing is Alaska's top export business, making up 13 percent of America's seafood exports. It generated roughly $20 billion in the last decade, and grew 58 percent during that time. It was worth $2.2 billion in 2012.

The Bristol Bay fishery, the most profitable in Alaska, brings in about $280 million annually and supports 5,000 jobs in the state. It's largely known for its brilliant-orange sockeye salmon, a prized fish that sells for a pretty penny.

During the 2013 season, Bristol Bay fishermen caught more than 15 million sockeye, at a value of $138 million. The fish is traded for an average of $1.50 per pound, compared with 30 cents per pound for pink or chum salmon.

But Alaska also has a storied mining tradition. And that sector has exhibited tremendous growth and success as well, becoming the state's second largest export industry. It produced $10 billion in the last decade, growing 270 percent. In 2012, it generated $1.5 billion and made up 30 percent of America's mining exports. The Pebble Limited Partnership said its mine could expand U.S. copper production by 20 percent.

Oil and gas largely drive revenue in Alaska, but those resources mainly stay in the U.S. -- and they're dwindling. Over the last decade, the Alaska Oil and Gas Association reported a 39 percent drop in production.

State Rep. Mia Costello, a Republican from Anchorage, thinks the Pebble Mine could be a way for Alaska to diversify its economy.

"Pebble is like a second Prudhoe Bay," she said.

Sitting in the living room of her Anchorage home, Costello remembered the excitement that surrounded the discovery in the 1970s of Prudhoe Bay, the largest oil field in North America.

Right now, fishing and mining are the titans in Alaska's export game. Might the dramatic expansion of one industry decimate the other?

"I think we ought to have both," said Alsworth, the mayor.

Pebble Limited Partnership entered the fray in 2006, when it was formed by two foreign shareholders: Anglo American and Northern Dynasty Minerals Ltd. Anglo American pulled out of the project in September, leaving Canada-based Northern Dynasty the sole investor in Pebble Mine. Just two weeks ago, Rio Tinto Group, the second largest mining company in the world and a 19 percent shareholder in Northern Dynasty, announced that it's considering selling its stake in Pebble Mine.

Northern Dynasty estimates that the site, just west of the Aleutian Range, holds 55 billion pounds of copper, 3 billion pounds of molybdenum, which is used in steel production, and 67 million ounces -- 4.2 million pounds -- of gold. The mine would be 2 miles long and 1,700 feet deep, according to the partnership's 2006 plan.

A major point of contention is Pebble's plan to set up tailing ponds to hold tons of toxins that critics say could seep into the porous tundra.

Pebble has drawn permits to conduct environmental and water testing, but it hasn't submitted building plans to the state. And recently, its plans stalled after Anglo American pulled out of the project to focus on other interests. Pebble had aimed to file building plans in 2013 but it's now seeking new investors.

Pebble CEO John Shively has every intention of seeing the project through, and he said the jobs would be there. The Pebble partnership promises to create more than 10,000 of them over the next 30 years. Salaries would be double the state average, according to a study commissioned by the partnership, as high as $109,500.

Jobs are scarce across the Lake and Peninsula Borough, which is home to 1,600 people over 24,000 square miles. The Alaska Department of Labor and Workforce Development said 48 percent of the population had incomes below the poverty line.

For many Alaska Natives, the threat to their traditional lifestyle outweighs job concerns. Salmon have been a linchpin of life here for the past 3,000 years or more.

"That's who we are; it's how we grew up," said David Askoak, a Yupik Eskimo in Newhalen, a small village that borders Pebble Mine's Bristol Bay headquarters.

Shively said the mine wouldn't wipe out that tradition.

"We're at the top of a watershed near three small streams out of literally hundreds of hundreds of streams that feed the eight watersheds in the Bristol Bay region," he said. "The idea that we can destroy the whole fishery isn't even possible."

Deciding which industry will shape Alaska's economy won't be in the hands of the state or the private sector, but of the federal government.

The Environmental Protection Agency is set to release a study soon that will shape whether the agency evokes its veto authority under the Clean Water Act. Such an action would mark only the 14th time the EPA has used its veto power, and it would put a permanent stop to the mine. The EPA's preliminary assessment, released in 2012, said a mine in the Bristol Bay region could cause irreversible damage to the ecosystem and affect the fishing industry.

"When we're ready with our plans, we'll go into the permitting process," Shively said. "That's when the project should be judged."

 


By DIANA BLASS and MARINA CRACCHIOLO
Medill News Service