A federal agency is pushing back in a court fight over the stalled Pebble mine, suggesting that the project's troubles stem from falling gold and copper prices, not government actions.
With development on hold, Pebble Limited Partnership's effort has shifted from field work to U.S. District Court in Anchorage, where Pebble at last count has nine lawyers trying to erase years of review by the Environmental Protection Agency.
EPA says it has turned over more than 100,000 pages of records to Pebble through the court process where each side must provide relevant documents to the other. Government lawyers are reviewing additional records subpoenaed by Pebble from the former EPA scientist who is central to the case, Phillip North. Both sides are holding onto records that the other side wants.
Pebble is going back years in its search of EPA records for signs the agency was involved in behind-the-scenes maneuvering to stop the mine. A judge ruled earlier this month in a separate public records case that EPA improperly withheld at least parts of dozens of other documents requested by Pebble. U.S. District Judge Russel Holland wrote that he had "no confidence" in EPA's assessment of which government records should be made public.
Now EPA is pushing for records from Pebble. The agency is asking Holland to force Pebble to provide company documents on its mining plan, finances, lost investors and payments to select Pebble advocates and groups connected to the Bristol Bay region. The agency said in a recent court filing that it needs the financial records to examine what role its actions actually played.
EPA says it is trying to determine "if Pebble's asserted financial troubles can be attributed to EPA, or whether, as EPA suspects, they are caused by other factors such as falling mineral prices and mine viability more generally."
Irrelevant, says Pebble. The lawsuit is over whether EPA improperly worked with an outside group in violation of the federal Advisory Committee Act, not whether Pebble is reeling over the price of gold, says Tom Collier, Pebble's chief executive officer.
"It is about process. It is not about harm," he said.
Question of closeness
The mine site in Southwestern Alaska holds the largest undeveloped copper and gold deposits in the world, according to Pebble. But EPA says development at the headwaters of Bristol Bay salmon streams threatens another world-class resource, the enormous runs of wild sockeye salmon that not only fill freezers and jars but also generate fishing income.
Pebble contends that EPA was too chummy with mine opponents, forming an illegal backroom advisory committee that guided an unprecedented early EPA evaluation of the risk of a large mine in the Bristol Bay watershed.
Mine developers are trying to stop EPA from vetoing Pebble through that process. In 2014, Pebble convinced Holland that it already suffered economically and probably would be destroyed if the EPA were allowed to block a giant mine through the Clean Water Act. The judge put EPA's work on hold while the court case sorts out.
Pebble says the question of harm only mattered back when Holland was being asked to take swift action. EPA disagrees. Once Pebble raised the issue of financial harm, EPA said, the government should be able to explore the causes.
At any rate, the mine project that once employed more than 1,400 people is down to a skeletal team of 14. The price of gold has dropped from more than $1,800 an ounce in September 2011 to just over $1,200 an ounce in late March.
EPA wants records on:
• Investors. Pebble says that because of EPA, it lost mining giants Rio Tinto and Anglo American and Japan's Mitsubishi Corp. as outside investors. It can't move ahead without new partners, Pebble says, and because of uncertainty over EPA, no one will sign on.
EPA is challenging that it's to blame. It wants Pebble communications related to each of the investor's forecasts on Pebble, and on why they got out.
• Payments to others. EPA is looking for specifics on how much Pebble paid to supportive individuals and groups connected to Bristol Bay, including Lisa Reimers, chief executive of Iliamna Development Corp., a Pebble contractor owned by the Iliamna village corporation, and Trefon Angasan Jr., board chairman of Alaska Peninsula Corp., a consortium of Bristol Bay village corporations. How much Pebble paid Reimers and Angasan — as well as their corporations — matters because it could show they were acting on Pebble's behalf when they took part in the EPA's study of the Bristol Bay watershed, EPA says. That would mean Pebble wasn't shut out, EPA says.
Angasan, for instance, reportedly worked as a Pebble consultant, yet submitted a statement in court that said Alaska Peninsula Corp. hadn't taken a position on Pebble. Reimers was part of EPA's intergovernmental technical team, the agency said.
"It matters if these individuals were compensated with a few hundred dollars or with the equivalent of a large annual salary or a similar in-kind payment," EPA says in the court filing.
• Business operations. EPA is seeking audited financial statements, reports to the board of directors, and documents showing the value of the assets and liabilities of Pebble's parent company, Northern Dynasty Minerals Ltd. Ron Thiessen, Northern Dynasty chief executive officer, described Pebble's business condition in 2014 as "being in dire straits." Its stock price had plummeted since EPA announced its strategy Feb. 7, 2011, he said. Its peak price, before that announcement, was $21 a share. It's now below 50 cents.
• The mine plan. EPA wants preliminary mine plans, documents that discuss why no plan has yet been submitted to the Army Corps of Engineers, and the schedule for doing so. EPA says nothing prevents Pebble from seeking a Corps permit to dredge and fill wetlands and streams after many years of study and field work. It suggests the lack of a submitted plan might be "due to an inability to create a plan for an economically viable mine."
Pebble has argued that EPA has disrupted normal permitting. Even if it filed a mine plan, the Corps of Engineers has already said it won't act on the application because EPA has claimed jurisdiction through the Clean Water Act, according to Collier, Pebble's chief executive. It must move carefully to put forward the best design and plan, Thiessen said in a 2014 court filing.
"A rushed analysis is a poor analysis, and is the antithesis of what the Army Corps of Engineers, and the State of Alaska has to date recommended," his statement said.
Pebble: Make EPA re-start
Business records can be provided confidentially, EPA notes.
EPA officials declined to be interviewed.
Pebble hasn't yet responded in court to EPA's demand for the records.
Pebble's Collier said he's well familiar with the federal law at issue after serving as chief of staff for then-Interior Secretary Bruce Babbitt during the Clinton administration.
The 1972 federal Advisory Committee Act was intended to prevent industry from figuratively sleeping with government regulators, he said.
"Now what we're seeing is that the regulator is sleeping with environmental activists and nobody seems to care," Collier said.
Pebble is trying to throw out the years-long process and research that EPA used in deciding to evaluating the risks of a mine like Pebble, forcing the agency to start anew.
Pebble has documented more than 1,000 individual contacts between EPA and environmental activists, he said. Activists were meeting with EPA before anyone else knew the agency planned to study Bristol Bay's watershed, he said.
Phil North, the central EPA figure in the controversy, has been living in Australia but is expected to return to the United States soon to give testimony in the case under a subpoena from Pebble, Collier said.
The lawsuit on whether EPA did anything improper will take months more to resolve, he said. By then, the country will have elected a new president and there will be new administrators at EPA.
Both Hillary Clinton and Bernie Sanders, the two major Democratic candidates, have come out against Pebble. None of the Republican candidates have announced positions on Pebble.