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Pebble mine: A vote for Southwest Alaska's future?

Amanda CoyneThe New York Times
Eric Adams photo

After Greg Anelon, from Newhalen, squeezed himself into a booth at Spenard Road House in Anchorage Thursday night, he got himself settled and serious, momentarily. "I love spending Pebble's money," he said, pausing before slapping the table and laughing a big, hearty laugh.

It was a gesture Anelon repeated often in the hour or so he spent eating his steak and talking about life and his involvement in helping the Pebble Partnership’s efforts in building the world's biggest gold and copper mine in his back yard. Part of that involvement includes sitting on a board that chooses who will get the millions of dollars Pebble has donated to a community fund. He was in Anchorage for one of those board meetings. “I’ll spend as much as they give us,” he said with a laugh.

Wading into the middle of one of Alaska's most polarizing natural resources fights hasn't sapped Anelon's humor, but it has made him more aware of the delicate, sometimes finicky relationship between Alaskans and the state’s resources. Through it all, Anelon has been educated on how his community, family and even his own pocketbook may benefit by extracting the vast underground riches at the Pebble site in Southwest Alaska.

That’s why he’s working against a local ballot initiative that, if enacted and held up in court, would all but kill Pebble mine. The ballot initiative was organized by a group called Save Our Salmon. Ballots have already been mailed throughout the Lake and Peninsula Borough, an area of about 1600 people spread out over region roughly the size of West Virginia. They must be postmarked by Tuesday, Oct. 4.

The group behind Save Our Salmon has raised more than $400,000 so far in its fight against Pebble. And almost all of the money has come from Bob Gillam, one of Alaska’s wealthiest citizens who runs McKinley Capital Management, an investment firm.

Gilliam’s interest is personal: He owns a nine-bedroom, 14,000-square-foot private lodge on an in-holding of Lake Clark National Park and Preserve, about 20 miles from the proposed mine and just north of the largest salmon-spawning areas in the world. Gillam loves his lodge and he loves to fish. "Only two things matter in life," Gillam was quoted in a 1995 magazine article as saying. "Getting rich and catching fish."

Anelon is not one of Alaska’s wealthiest citizens. But with the Pebble Partnership backing him, he’s taking on Gilliam and Save Our Salmon, chairing a group called “Defend Your Rights: Vote No on the ‘Save our Salmon’ Initiative.” Anelon’s group has raised about $200,000, with the majority coming from Pebble Partnership. Pebble has also provided other contributions, like staff support.

Anelon is 50 years old and has four children. He holds a degree in rural development from the University of Alaska Fairbanks. He, like his ancestors before him, live in Newhalen  a dot of a village in Southwestern Alaska next to Iliamna, its sister village. Both villages are about 15 miles from what prospective Pebble developers -- Canada-based Northern Dynasty Minerals and London-based Anglo American -- believe to be the largest undeveloped gold and copper mine on Earth.

With gold fetching about $1,600 per ounce, the stakes are huge. Pebble holds more than 100 million ounces of gold and more than 80 billion pounds of recoverable copper. For Anelon, that could mean a new future for the hardscrabble region.

Jobs vs. fish

Greg Anelon is a manager for Iliamna Development Corp., which was founded in 2004 and services some of the exploration work at the Pebble deposit.

Iliamna Development employs about 40 people, mostly from the region, Anelon said. It's a good job, he added -- one of the only good jobs in the area.

Prior to joining Iliamna Development, Anelon was doing everything he could to make ends meet: commercial fishing, odd jobs, janitorial work, you name it. Before companies started eyeing Pebble, the villages of Iliamna and Newhalen were in severe decline: no jobs, no money, escalating food and fuel costs, a decline in fish in the area, and a corresponding decline in tourism, he said. Few could afford the fuel and equipment needed to commercial fish the prized sockeye salmon in Bristol Bay. No road lead to the bay. To get there is about a six-hour boat ride or hour-long plane ride.

Because the mine is so close to the headwaters of Bristol Bay --  the site of one of the world’s largest sockeye salmon runs -- the fight against the mine has been cast as a fight to save the salmon.

Bristol Bay Native Corp. has come out against the mine. Jason Metrokin, Bristol Bay’s chief executive, recently said Pebble presents an "unacceptable risk to Bristol Bay salmon, which have supported our communities for thousands of years," while providing an important commercial, food and cultural resource. It’s a sentiment echoed by many others.

Anelon agrees fish are more important than gold, but notes few residents in his area can make ends meet solely through commercial fishing. The 2010 census counted 299 residents in both Iliamna and Newhalen. Out of those, only 26 had commercial fishing permits, and only 22 fished those permits, according to the Alaska’s Commercial Fisheries Entry Commission. The estimated gross earnings for both villages from commercial salmon fishing in Bristol Bay was about $1 million. For the Lake and Peninsula Borough, estimated gross earnings were about $4 million in 2010. More than 86 percent of seafood processing jobs in Bristol Bay go to non-Alaskan residents.  

The state of Alaska shares taxes paid by commercial fishermen and seafood processors with local communities. The entire Bristol Bay region gets about $2 million dollars a year, according to Kevin O’Sullivan from Alaska’s Division of Economic Development.

Washington state's U.S. Sen. Maria Cantwell recently wrote a letter to the Environmental Protection Agency's administrator urging the agency to block permitting if the EPA finds that harm might be done to the salmon. She called the salmon runs “economic lynchpins” for commercial fishermen not just in Alaska but also in Washington. In 2010, 538 Washington residents held drift gillnet and set gillnet commercial salmon fishing licenses in Bristol Bay, off of which they made a total gross estimated earnings of about $60 million.

Anelon wants to raise his children in the area, and he doesn't see a future for his village without the mine and the development that will result from it; namely, electricity siphoned to cheaply help power nearby villages from the massive power plant that Pebble will need to build for the proposed mine. Roads used to transport the gold and copper ore to Cook Inlet tidewater would also benefit the area. Maybe, too, a ferry that would transport goods back and forth from the Kenai Peninsula.

Anelon understands the mine will be owned by a foreign company and that most of the money will not stay in the region. But unlike the other big resource his region depends on -- fish -- at least there will be jobs for residents.

On Thursday, Anelon had just come from a meeting of the Alaska Community Foundation. Pebble has given the foundation a five-year donation commitment of $1 million a year to dole out in grants. Anelon serves on the board for the fund. Five million dollars is a lot of money. Anelon thinks that it can do some good.

Applicants for the money include churches and schools, arts and community development. It’s more, he thinks, than Bob Gillam has ever done for his area.

'I haven't gotten a turkey from him either'

Bob Gillam doesn't like the idea of a massive gold mine near his lodge. And it seems he'll pay as much as he needs to keep it away. His initiative, as well as an earlier one, has resulted in colossal fights in the state, and have involved accusations of Gillam running afoul of Alaska’s election laws.

In the Bristol Bay region of rural Alaska, it's pitted villager against villager, pro-development groups against environmental groups and other "grassroots efforts" funded by Gillam. One of the most powerful churches in rural Alaska, the Orthodox Church, has tumbled into the debate.

All of this has caused headaches for the folks at the Alaska Public Offices Commission, the notoriously underfunded agency that's supposed to keep watch on spending in Alaska politics.

Complaints over alleged campaign violations on the part of Gillam and groups he supported have resulted in $120,000 in settlements paid to APOC. Neither Gillam nor any of the groups he worked with admitted wrongdoing. Another complaint against Gillam and his business is pending, which will likely be decided when APOC commissioners meet in November.

Gillam is president and chief investment officer for McKinley Capital Management, an investment firm that manages about $650 million of the Alaska Permanent Fund's investments, as well as about $750 million of the state employees' retirement fund. Last year, McKinley Capital Management earned $5.3 million for managing those investments. The company's total portfolio is nearly $12 billion.

Anelon said he's never met Gillam. "I haven't gotten a turkey from him, either," he said, wearing a mock frown before slapping the table and laughing. After a few minutes of silence, it was clear he wasn't speaking colloquially.

Turkey? Turns out Gillam sends yearly holiday turkeys to residents of Nondalton, the village in the area that’s closest -- 17 miles away-- to the mine. It's also the village closest to Gillam's private lodge on an inholding within Lake Clark National Park and Preserve. A flyer that's going out in the area is headlined "Bob Gillam's Turkey." The flyer mentions the turkey, and then asks, "What has Bob Gillam done to help the struggling Lake and Pen economy or local families who need jobs and opportunities?"

Nothing but those turkeys, according to the flyer.

Gillam’s spokesman for Save Our Salmon, Art Hackney, didn’t respond to an email requesting comment.

'Save Our Salmon' will likely win this round

Tuesday's vote is likely to go against Pebble. The possibility of Bristol Bay salmon being poisoned by the mine hits too many in fish country in the gut. It's a reaction that anti-Pebble folks hoped for and have capitalized on.

If "Save Our Salmon" does pass, it will be a good public relations tool for the anti-mining folks, but the state will likely challenge it. In fact, the state intervened on behalf of Pebble in a recent case that ended up at the Alaska Supreme Court. The case challenged a lower state court decision, which allowed the initiative on the ballot. The state argued it was unconstitutional to allow a small group of citizens -- about 1,600 in the Lake and Pen Borough -- such power over development and permitting decisions that should be made by the Alaska Department of Natural Resources.  

The Supreme Court stood by the lower court's decision: possible constitutional issues raised by the state and Pebble weren't ignored, but the court postponed dealing with them until after the October vote.

All of this has happened before Pebble has applied for its first federal permit, and before Pebble has determined what kind of mine it will develop. Maybe it's an open rock mine. Maybe it's an underground mine. Maybe it's a combination or hybrid of both. Engineers are still trying to figure out the best way to get at the ore, Pebble geologists say.

In the next two years, Pebble Partnership will wrap up its project design -- plans for a mine and the infrastructure it requires -- and submit it to the Feds when it applies for a wetland permit, the first of 25 to 30 environmental permits necessary to get the go-ahead to mine near Bristol Bay.

Anelon trusts the process. He said if it's between the mine and the fish, he'd of course choose the fish. But he doesn't believe he has enough information yet to make that determination.

For now, what Anelon does see clearly are new jobs and the possibility of a new port, roads and a new power source -- a future for his children.

He thinks that too much attention has been placed on the worst-case scenario: An accident that will poison the waters.

"What other people see is the end, but I see in-between,” he said.

That in-between means enough infrastructure in the area to keep his village alive. Another village in the area, Pedro Bay, lost its school last fall because of too few children attending.

“I’ll do anything to make sure the kids live in the village and stay in school," he said.

Contact Amanda Coyne at amanda(at)alaskadispatch.com.