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Pebble-funded report questions 'fairness' of EPA's mine veto

  • Author:
  • Updated: September 28, 2016
  • Published October 6, 2015

WASHINGTON -- A report released Tuesday questions the fairness of the U.S. Environmental Protection Agency's process that led to its preemptive decision to block a water discharge permit for the proposed Pebble mine project in Alaska.

The report -- produced independently by the Cohen Group but paid for by Pebble Limited Partnership -- does not make claims on the legality of EPA's decision, nor about whether Pebble should be allowed to mine in the Bristol Bay watershed.

Former senator and Defense Secretary William S. Cohen insisted Tuesday the report is an independent look at the issue despite being commissioned by Pebble.

Cohen said he took on the project with the agreement his review was not "contingent upon an outcome," saying he values his "reputation for independence and fairness." He told Pebble CEO Tom Collier, "You'll get the report whether you like what I say or not," he said.

The overall takeaway is there are "serious concerns as to whether EPA orchestrated the process to reach a predetermined outcome; had inappropriately close relationships with anti-mine advocates; and was candid about its decision-making process," the report says.

The fight between the EPA and Pebble pits a variety of competing interests against each other: federal and state governments, environmentalists, Native groups and developers. At the core of the fight is the potential for one of the world's largest undeveloped copper deposits and the health of one of the world's most prolific salmon runs.

Pebble has spent hundreds of millions of dollars since 2007 in pursuit of developing the mine claims about 200 miles southwest of Anchorage, according to financial statements. Test drilling has been underway at the site since 1988, revealing hundreds of billions of dollars' worth of gold, copper and molybdenum underground.

Central to Cohen's review is whether the EPA was fair in the process that led to its decision to preemptively "veto" a federal permit for the project. The Clean Water Act grants the EPA veto authority over permits issued by the U.S. Army Corps of Engineers -- a move the agency has used only 13 times in more than 40 years, twice during the Obama administration.

But the agency's decision to issue the decision before Pebble even applied for a permit is unprecedented.

"It would have been fairer to go through the normal process" of having Pebble apply for permits before ruling that the project was a nonstarter, Cohen said.

"In this particular case I would say that EPA obviously has the ability to override" a state or Army Corps of Engineers decision about issuing a permit. "But it shouldn't ride roughshod over a state," Cohen said.

The EPA should have gone through the permit process, the report said.

"An environmental impact assessment is bound to provide more accurate information if it assumes that the mine will be built in accordance with the developer's plans, rather than a hypothetical mine plan," the report said.

And "there is some evidence in the report that indicates that this process might be used as a model for watershed planning," Cohen said, expanding the EPA's authority over a watershed protection process that is usually state-led.

The report is the culmination of a review of thousands of documents from the EPA and other federal agencies, the state of Alaska, congressional committees and the Pebble Limited Partnership.

It comes amid ongoing proceedings in the U.S. District Court in Anchorage. Pebble is arguing the agency formed "de facto" federal advisory committees to advise it on the mine, without soliciting balanced viewpoints or following requirements for public and transparent meetings.

And the EPA's own inspector general is investigating the agency's process.

Cohen pointed to the same factor that has irked Pebble since the beginning of its legal fight: a "key witness who is missing."

Former EPA employee Phil North, lead scientist on the project, retired in 2013 and has since been largely unreachable -- sailing around the world with his family before landing in New Zealand and then Australia.

In August, the court ordered North to return to Anchorage Nov. 12 to provide sworn testimony and access to missing documents: personal emails he never forwarded to his government account, information missing from a hard drive that crashed and the password for an encrypted thumb drive found by the EPA.

"I don't want to prejudge," Cohen said. "These documents may be entirely benign. They may be favorable to EPA." But they aren't available, he said.

Several emails Cohen found indicate suspect timing on the part of EPA -- an agency working as hard as the business to game the system by holding decisions around the time of the 2010 elections, and discussing plans to finish a watershed assessment before Pebble could file its permit application.

Pebble says documents unearthed in the investigation show EPA was considering a Section 404(c) veto two years before it received a petition to do so in 2010 from Alaska Native tribes.

"I don't know how much gaming is going on, but it's not up to EPA" to say when a permit should be filed, Cohen said.

Cohen said he had little input from the EPA, aside from available documents, since the agency is in the middle of a legal fight over the decision. He spoke with several former agency administrators but didn't find much in the way of opinion on the matter, he said.

The real outcome of the report is unclear. "I hope it will be helpful to the (EPA inspector general), to members of Congress," Cohen said.

"The best thing to do is have a congressional hearing and explore these issues," Cohen said.

Alaska groups opposed to the mine responded to the report with scoffs and derision, charging Pebble with spending cash on lawyers and "Washington, D.C. insiders" while never actually applying for an Army Corps permit.

Nelli Williams, director of Trout Unlimited's Alaska Program, said Alaskans "have every right to be disgusted" with the report and attempts to discredit efforts to protect the Bristol Bay watershed.

The United Tribes of Bristol Bay charged the Cohen Group produced a one-sided review and ignored "a decade of waiting" for the Pebble Limited Partnership to apply for a permit, leaving residents and fishermen "held hostage for years … in uncertainty," the group said in a statement.

Trout Unlimited and the United Tribes of Bristol Bay pointed to comments from Alaska Sen. Lisa Murkowski that were included in the report, while a letter she sent to the company in 2013, urging more transparency and a clear timeline for the project, was omitted.

"When Pebble came to Bristol Bay over a decade ago, it promised to be a good neighbor. It also promised that the company would not stay if it was unwelcome. Now, years later, Pebble has broken every promise made to the local residents and other concerned Alaskans," the United Tribes of Bristol Bay said in a statement.

The Commercial Fishermen for Bristol Bay called the report a "smear tactic" meant to distract from Alaska opposition to the mine.

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