Feds scold state on Usibelli permit renewals

WASILLA -- A federal agency that questioned the permits behind a proposed coal mine near Sutton has upheld them after all, even as officials accuse the state of lax enforcement.

Mine opponents had hoped the Office of Surface Mining Reclamation and Enforcement would find the permits invalid and shut down the Usibelli Coal Mine Inc. project at Wishbone Hill.

The proposed mine, located within a half-mile of nearly 900 residents in the Buffalo-Soapstone area, has drawn fire for concerns about industrial noise and the potential for wind-borne coal dust.

The Office of Surface Mining in early November issued a finding that Usibelli was not mining without a permit. But that was only because of significant flaws in the Department of Natural Resources process each time Usibelli and other mine operators needed more time on their permits.

Companies are required to start mining within three years or ask for an extension.

According to the federal agency, the state's coal program failed to document the reasons for extending permits.

The agency noted that it didn't want to shut down Usibelli's operation but directed the state to fix permit oversight problems.

"This situation cannot be allowed to happen again," wrote program support division manager Robert C. Postle.

The state's coal program manager, Russ Kirkham, said this week that he spoke with Postle and the state is moving ahead with the federal directive.

"We're working on an action plan to address that issue so if we do renewals … we do not miss that part again," Kirkham said.

Triggering the federal action, Chickaloon Village Traditional Council, Earthjustice and Trustees for Alaska claimed the mine's original 1991 permit had expired and shouldn't have been renewed by the Alaska Department of Natural Resources. No mining operations took place until site work including clearing for a haul road began in 2010.

Usibelli obtained its long-sought permit renewal last month. The company says it's still weighing overseas markets for the estimated 14 million tons of coal at Wishbone. The soonest operations could begin is spring.

The first 1991 permit at Wishbone Hill was granted to Idemitsu Alaska Inc. It was transferred to North Pacific Mining Corp., a Cook Inlet Region Inc. company, in 1995 and renewed the next year. CIRI transferred the permit to Usibelli in 1997.

Idemitsu, NPMC and Usibelli all failed to start mining within three years of getting a permit, the federal agency says. And Usibelli never asked for an extension as part of permit renewal applications, despite state law requiring it. Instead, the state maintained it "implicitly" renewed the permit.

The Office of Surface Mining in 2011 issued a preliminary notice asking for more information about the possibly invalid permits based on citizen complaints from the three groups claiming the permit was invalid.

The state responded that decisions over the years to renew Wishbone Hill permits included "implicit extensions," so mining regulators never took action against Usibelli.

The only explanation for allowing several permit extensions was a 1996 handwritten note, according to the federal surface mining office. A staffer wrote, "Looks ok to me" on a faxed draft letter from NPMC that requested an extension for poor market conditions and a lawsuit.

Two more renewals and 14 years passed before mining operations commenced despite a 1996 letter from the state that warned if mining didn't commence within the three-year renewal term, no additional renewals would be considered without an extensive review of the original 1991 permit applications.

The Surface Mining Office said the lack of process behind the permit renewals left the public in the dark.

"Although the record indicates there may have been grounds to justify at least some of the extensions, neither we, the public, nor the permittees themselves have any way of ascertaining the rationale behind DNR's decisions," Postle wrote.

The state's coal manager, Kirkham, said most of the issues raised by the federal agency predated his time in the program but that officials took action internally on the permits.

"We had what we thought was a clear record (the permit) was being extended," he said. "We're going to be clear on how it works from now on."

Zaz Hollander

Longtime ADN reporter Zaz Hollander is based in the Mat-Su and is currently focused on coverage of the coronavirus in Alaska. She also covers the Mat-Su region, aviation and general assignments. Contact her at