The company promoting the controversial and beleaguered Pebble mine project lost a legal battle Friday when a federal judge threw out one of its lawsuits against the Environmental Protection Agency.
U.S. District Court Judge H. Russel Holland ruled, after listening to brief oral arguments in his Anchorage courtroom, that the Pebble Limited Partnership does not have valid legal basis for its lawsuit seeking to stop the EPA's deliberations about whether it should block development of large-scale mining in the region.
Holland said the Pebble partnership is premature in its challenge to EPA's current process of considering invocation of a Clean Water Act provision to prevent the U.S. Army Corps of Engineers from issuing a wetlands-fill permit critical to construction of the mine.
For a legal challenge to be valid, Holland said, "there must be a final agency decision, final agency action." The EPA's deliberation of the question, formally launched in February, "does not represent the consummation" of the process, he said. "Rather, it is the commencement of the agency's decision-making process," he said.
Pebble's lawsuit, filed in May, also fails the legal test because there are not yet any specific losses of rights or imposition of obligations, such as assessed fines, that have occurred because of EPA's ongoing Clean Water Act deliberations, Holland said.
Mike Heatwole, vice president of public affairs at Pebble, said the company will be back in court challenging the EPA once the agency makes what the company expects to be a final decision to prevent issuance of a wetlands-fill permit.
"We'll be back to argue the merits," Heatwole said after the hearing. "We know what the EPA's going to do."
The Pebble lawsuit also sought to overturn a 1979 EPA regulation explicitly giving the agency power to use the Clean Water Act to prevent approval of wetlands-fill permits even before applications for such permits have been filed.
Pebble and its supporters -- including the state of Alaska and a corporation representing five small Native villages, both co-plaintiffs in the lawsuit -- have blasted EPA for what they claim is an unfair preemptive veto of a yet-undetermined mine project. Those complaints started when the EPA started a broad Bristol Bay Watershed Assessment in 2011.
That assessment concluded that a Pebble-like mine in the region would cause widespread damage to habitat used by salmon and wildlife.
But EPA's actions to date have done nothing to prevent Pebble from continuing its past activities, U.S. Department of Justice attorney Mark Nitczynski told Holland at the hearing. Since Pebble has not even applied for a wetlands-fill permit, the company cannot complain that it is experiencing hardship from a permit denial, Nitczynski said.
The Pebble project, which hopes to tap into a massive deposit of low-grade copper, gold and other minerals, is in a near-moribund state. The moneyed partner, mining giant Anglo American, pulled out a year ago, leaving Canadian junior Northern Dynasty Ltd. as the sole Pebble Limited Partnership owner. Rio Tinto, another mining giant, divested its 19 percent share of Northern Dynasty in April.
Heatwole, speaking after the hearing, said EPA has cost Pebble dearly. Hundreds of jobs have been lost, he said. At the mine site, there are only three people now working, in caretaker positions, instead of the 150 who used to be employed there, Heatwole said. In Anchorage, there are only eight to 10 people working instead of the approximately 75 people who used to be employed in the office, he said.
"We're down to a skeleton staff," he said.
Attorneys for the village group, Alaska Peninsula Corp., and for the state of Alaska also blamed EPA for economic losses suffered by their clients.
Sam Fortier, representing Alaska Peninsula Corp., said loss of contractor jobs was contributing to a "diaspora" of residents leaving their rural villages. The villagers needed money from the mine activities and get very little from commercial fishing, he told Holland.
"Commercial fishing doesn't keep the lights on. It doesn't keep the stoves warm in Kokhanok and Newhalen," he said.
Senior Assistant Alaska Attorney General Ruth Hamilton Heese blamed EPA for scaring away the two major corporations that had invested in Pebble. EPA has chilled the mining-investment climate in Alaska, while upsetting the regulatory process, Heese told Holland.
Most of the layoffs occurred when Anglo American pulled out of the project, months before EPA launched its review.
Attorneys representing Native groups that oppose the mine said the balance of economic hardship has fallen on their clients.
Commercial fishing, a capital-intense business that is the region's economic backbone, has been disrupted by Pebble's plans and actions to date, said Daniel Cheyette, an attorney for the Bristol Bay Native Corp., an opponent of the mine.
"Your life is up in the air because you have a mining company that says it's going to build the largest open-pit mine in North America in the headwaters of your fishing grounds," he said.
Pebble's long delays in applying for a permit have also created hardships in the region, Cheyette said. "They started saying they would apply for a permit back in 2004, 2005," he said. "If they'd actually done that, we would have been down this road a long time ago."
Contact Yereth Rosen at email@example.com.