Just north of Iliamna Lake in southwestern Alaska is an empty expanse of marsh and shrub that conceals one of the world's great buried fortunes: A mile-thick layer of virgin ore said to contain at least 6.7 million pounds -- or $120 billion worth -- of gold.
As fate would have it, a second treasure sits precisely atop the first: Spawning ground for the planet's biggest runs of sockeye salmon, the lifeline of a fishery that generates $500 million a year.
Between the two is the Obama administration, which has all but decided that only one of the treasures can be brought to market. How the White House came to side with fish over gold is a complex tale that involves millionaire activists, Alaska Natives, lawsuits and one politically explosive question: Can the federal government say no to a property owner before he has a chance to explain what he wants to do?
As early as this spring, the Environmental Protection Agency is expected to invoke a rarely used legal authority to bar a Canadian company, Northern Dynasty Minerals Ltd., from beginning work on its proposed Pebble Mine, citing risks to salmon and to Alaska's pristine Bristol Bay, 150 miles downstream. The EPA's position is supported by a broad coalition of conservationists, fishermen and tribal groups -- and, most opinion polls show, a majority of Alaskans. National environmental groups, Hollywood celebrities and wealthy activists have made the defeat of the mine a top priority, raising millions of dollars to campaign against it.
But the more consequential fight may be over how the mine is being blocked. By employing a rare preemptive "veto" -- a tactic used only once in this manner in 40 years -- the EPA has made itself the target of congressional Republicans who say the agency has stepped far outside the boundaries lawmakers envisioned with the adoption of the Clean Water Act in the 1970s.
The agency's handling of the case has prompted two lawsuits, one of which accuses the EPA of violating the 1972 Federal Advisory Committee Act, or FACA, intended to prevent unfair outside influence in government decisions. The EPA's inspector general recently expanded a monthslong investigation into the agency's handling of the case.
Adding to the uproar are thousands of pages of internal EPA documents obtained by Northern Dynasty and released publicly to bolster its claims of improper collusion between the agency and mining opponents. The documents have spurred allegations that the EPA coordinated local opposition to the mine, coaching indigenous Alaskan groups in preparing petitions that would serve as the basis for a preemptive veto of the company's mining permit.
Company officials say the documents show an intent to kill the project in its early stages, rather than risking a formal permitting process that the agency might not be able to control.
"The EPA doesn't gain any additional authority by using a preemptive veto, and there's no increase in environmental protection," said Tom Collier, the chief executive of Pebble Partnership, the Northern Dynasty subsidiary responsible for developing the mine. "They're doing it so they can avoid the rigor and intensity of a proper review."
EPA officials say they were prompted to take unusual steps to preserve a rare national resource: A pristine habitat that sustains one of world's most important fisheries, including half of the global supply of wild sockeye salmon.
"This really is one of the last best places," said Dennis McLerran, who heads the EPA's regional district that includes Alaska and the Pacific Northwest. "This is an undisturbed watershed and an incredible economic powerhouse that supports both a large commercial industry and a subsistence fishery" relied upon by generations of native Alaskans.
EPA officials rejected claims of unfair influence, saying the documents released by Dynasty fail to show the scores of meetings the agency held with supporters of the mine, from Dynasty executives to Alaskan politicians to a South African diplomat who weighed in on Dynasty's behalf.
"EPA does business with an open door," McLerran said. "This has been one of the most open and transparent processes that could have been designed."
Other administration officials defended the EPA's move as sparing both the company and taxpayers a protracted and costly permitting process that would have, in any conceivable scenario, ended with a denial. But one senior official, who spoke on the condition of anonymity because of ongoing litigation, acknowledged that the agency's actions carried more than the usual amount of political risk.
"In doing the right thing, environmentally, the EPA is acting on the edge of its authority," the official said.
The proposed future site of the Pebble Mine is a desolate stretch of Alaska's southwestern coastal plain, just north of Bristol Bay and 200 miles southwest of Anchorage. The region's marshy lowlands are dotted with kettle lakes and crisscrossed by countless streams. In the spawning season, icy rivers turn into roiling torrents of red fish as tens of millions of Pacific salmon make their way inland to spawn.
Gold was discovered in the region nearly 30 years ago. After years of exploration, developers began to focus on an unpopulated stretch about 200 miles southeast of Anchorage. There, just beneath the surface, is a layer of silt and rock that contains the raw ores for gold as well as copper and molybdenum, a costly metal used in high-strength alloys.
The gold exists not in nuggets or flakes but in fine particles that must be extracted through an industrial process that involves pulverizing the ore and using cyanide and other chemicals to separate the valuable metals.
To extract the gold profitably requires excavating huge amounts of soil and rock from an open-pit mine that could, according to preliminary design plans, eventually cover a seven-square-mile area, making it one of the world's largest. The project would create mountains of rocky spoils, while the wastewater from extracting the ore would be kept in large containment ponds.
The sheer size of the mine means that miles of streams would be excavated or buried under waste rock. A 627-page scientific assessment issued by the EPA last year concluded that up to 94 miles "of salmon-supporting streams" and up to 5,350 acres of wetlands and ponds would be displaced by the mine.
The study -- based on preliminary design details from Northern Dynasty's filings to financial regulators -- also warned of the possibility of a dam failure that could send wastewater surging into nearby streams and possibly Bristol Bay, damaging or destroying the salmon fishery.
The report echoed warnings that opponents of the mine have been voicing for years. Native groups have recently sponsored radio ads in Alaska pointing to last summer's breach of a similar gold-mine tailings pond in British Columbia.
"Pebble Mine would put a three-mile-wide hole and 9 billion tons of waste right in the heart of Bristol Bay," said one ad sponsored by Nunamta Aulukestai, a coalition of 10 tribal groups. "Even a small leak could kill the fish, devastate native tribes and wildlife and put thousands of Alaska jobs at risk."
Pebble officials acknowledge that miles of streams will probably be lost or covered up if the mine project moves forward. But they point to millions of dollars' worth of design work on redundant systems to guard against spills. Collier, the Pebble CEO and a high-ranking Interior Department official during the Clinton administration, said the company was committed to enhancing the health of the salmon population in the surrounding region by removing natural barriers to salmon migration and ensuring a steady flow of water during dry months.
"This isn't toxic sludge that we'd put into our tailings ponds. It's sand, with a thin layer of water on top," Collier said. "But the point is, the EPA has no idea what we're going to propose because we haven't put our designs on the table. They've gone ahead and said we can't build this mine based on their assumptions about what we're going to do."
Trefon Angasan, who heads an association representing tribes along Alaska's southwest coast, said the EPA was preempting not just a mine, but a hoped-for future for many in an impoverished region where jobs are scarce.
"Congress gave us these lands when they took away our aboriginal hunting and fishing rights, and they said we had to maximize our economic opportunities," said Angasan, who like others in his tribe has sometimes taken work from Northern Dynasty contractors preparing the site for mining. While acknowledging that Alaska Natives have mixed views about the mine, he said an EPA veto "defies the American way."
"We want the process to work itself out so we can see if they can do this mine in a sustainable way," he said. "If they can't, so be it. If they can, more power to them. We certainly need the work."
When EPA officials announced last year that regulators were considering a preemptive move against the mine, EPA Administrator Gina McCarthy described the approach as "not something the agency does very often."
It was an understatement. Each year, thousands of permit applications are reviewed by the U.S. Army Corps of Engineers, the federal agency with jurisdiction over the discharge of dredging and filling into rivers and wetlands. Since the Clean Water Act was passed in the 1970s, the EPA has invoked the law's 404-C veto provision 13 times. In only one of those instances -- a case involving a small agricultural project -- was the veto issued before a permit application was filed.
The use of the 404-c provision allows the EPA to permanently bar the Army from issuing a permit for any activity that is deemed to have an "unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas." McCarthy said the action was justified because of the "extraordinary and unique resource" that is Bristol Bay.
But the rare step to preemptively block a proposed industrial project has drawn condemnations from many Republican lawmakers, and even from some Democrats who oppose the mine. Former Alaska Sen. Mark Begich, a Democrat, last year called the Pebble project "the wrong mine for the wrong place," even as he lashed out against the Obama administration for circumventing normal reviews. "I am skeptical of federal overreach from an administration that has already demonstrated it does not understand Alaska's unique needs."
Sen. Lisa Murkowski, the Alaska Republican who last month took over the chairmanship of the Senate Energy and Natural Resources Committee, said the move sets a precedent that "strips Alaska and all Alaskans of the ability to make decisions on how to develop a healthy economy on their lands."
Republicans have seized on the newly released EPA documents in challenging the agency's explanation for why it decided that the mine deserved special scrutiny. EPA officials have said publicly that the agency's intervention was prompted by a May 2010 petition from six Alaskan tribes formally asking for the preemptive veto on the Pebble Mine.
But the internal documents, obtained through a Freedom of Information Act request, show agency officials advocating a veto as early as 2008, encouraged by outside groups opposed to the mine.
In one newly released email provided to The Washington Post, a key anti-mine group sought the EPA's advice in preparing the petition that would become the basis for using the 404-C clause against Pebble. The email, written by a lawyer for anti-mine Alaskan tribes, is dated Jan. 8, 2010, five months before the EPA was formally asked to intervene in the case. The note is addressed to a private email account of the EPA's leading attorney in the Pebble fight, and it solicits "suggestions, revisions or edits" on a draft of a petition asking the EPA to stop the mine.
Similar documents have been leaked to news organizations during the past six months. One memo, also dated January 2010, was part of a presentation to then-EPA Administrator Lisa Jackson explaining the pros and cons of using the Clean Water Act's veto authority. A trail of records covering a six-year period shows extensive interaction with anti-mine activists in Washington and Alaska. Documents obtained by the mining company show more than 500 individual contacts between agency employees and activists.
In other records, environmental groups supply their own scientific assessments and studies for incorporation into the EPA's environmental review of the proposed mining project, and even help plan trip itineraries for EPA officials visiting the Bristol Bay area.
Collier said the documents raise questions, at least about improper influence.
"It's a man-bites-dog story," he said. "We're conditioned to be so vigilant against the possibility that industry officials are sleeping with the regulators and influencing their decisions in a way that doesn't protect the public interest. Clearly, this can happen both ways."
EPA officials said the documents provide a one-sided view of a deliberative process that also included extensive contacts and large quantities of data from pro-mining groups. "We meet with people on all sides," said McLerran, the EPA regional administrator.
In the end, McLerran said, the most persuasive arguments came not from petitions or advocacy groups but from the agency's scientific review. Although the agency may have lacked some of the fine detail about the size and shape of a future Pebble Mine, the choice the agency faced became sufficiently clear, McLerran said.
"We found enough of a basis to determine what mining in that watershed would look like," he said.
Alaska Dispatch Publishing