The Bristol Bay region in southwest Alaska is home to the world’s largest sockeye salmon run, a resource that brings in $1.5 billion annually and provides a vital food source for thousands of Alaska Native residents who live there.
It’s also home to a vast copper and gold deposit worth an estimated $500 billion, known as the Pebble Deposit. A plan to extract that wealth by building a massive open pit mine at the heart of the environmentally sensitive Bristol Bay watershed has become the environmental fight of the century for Alaska.
FRONTLINE told that story in Alaska Gold, broadcast in 2012, when the mine’s opponents seemed to have won the day.
But the Pebble mine got a new lease on life under the Trump administration, and in late 2017, the Pebble Partnership, the company behind the mine, filed for a permit with the U.S. Army Corps of Engineers.
Last spring, the opponents were back. A diverse crowd of Alaska Native groups, commercial fishermen, environmentalists and tour operators gathered outside the Dena’ina Convention Center in Anchorage to protest the mine, before marching inside to testify.
It was their final chance to address the corps face-to-face before the agency decides later this year whether to grant a permit for the controversial project to move forward, an action that looks increasingly likely to occur.
Back from the Dead
Tom Collier is a veteran D.C. lobbyist who was hired by the Pebble Partnership at an annual salary of around $1.5 million, but with a substantial bonus — if he can get the mine permitted within four years, he’ll be paid $12.5 million.
In the 1990s, Collier had been chief of staff for Bruce Babbitt, Interior Secretary for President Clinton. He parlayed that experience into a decades-long career as a lawyer and lobbyist for industry clients in Washington, D.C.
Pebble had over the years spent $11 million on lobbyists, including former congressmen Lamar Smith (R-TX) and Richard Pombo (R-CA), who had previously chaired committees with jurisdiction over the mine. But the Pebble Partnership is betting big on Collier by making him the chief executive of the company.
Collier set out to sue the Environmental Protection Agency over its authority to restrict mining in Bristol Bay. He publicly denounced the EPA assessment (outlined in the above video) as a preemptive “veto” and an egregious abuse of the agency’s Clean Water Act authority. That message was amplified by conservative media outlets and in the Republican-led House, which launched an investigation into the origins of the EPA action.
When the lawsuit was dismissed, Collier sued again, this time targeting the process and science behind the EPA’s watershed assessment: alleging that the EPA had improperly communicated with mining opponents without creating formal advisory committees. A judge in Anchorage issued a preliminary injunction based on the lawsuit that temporarily prevented the EPA from finalizing its proposed restrictions.
The EPA’s Dennis McLerran and his staff had been dealing with all the legal actions.
“I always thought that the litigation was pretty spurious, but it takes time to litigate and the Pebble Partnership was burying the EPA with discovery requests,” McLerran told FRONTLINE. “At one time we probably had more than 20 people responding just to discovery requests.”
A Smaller, Environmentally Friendly Mine?
Collier has a plan to deal with the environmental impact of the proposed mine. “I spent about a year talking to folks and reading what our opponents had published,” he said. “I came forward with a smaller project that wouldn’t have the same impact in Bristol Bay.”
Collier’s proposed plan is to stop mining after just 20 years. He argues that with a smaller footprint, the mine will generate less waste and destroy fewer salmon streams, reducing its impact on the Bristol Bay fishery. The Army Corps of Engineers has so far agreed, and in its draft environmental impact statement said it did not expect the mine to have any long-term impact on the salmon.
But critics of the mine say that its footprint is still massive. “It’s about four times larger than the largest mine the EPA said that it was willing to consider for permitting,” said Joel Reynolds of the Natural Resources Defense Council, or NRDC, a nonprofit environmental advocacy group. “The notion that the contaminants can be contained in any reliable fashion in that kind of environment has never been proven, never been tested, and in the judgment of virtually any independent scientist, simply can’t be done.”
Environmental groups aren’t the only ones skeptical of the corps’ conclusions. The Department of Interior has criticized the corps for relying on “subjective, and unsupported claims” from the Pebble Partnership, saying that the draft statement “is so inadequate that it precludes meaningful analysis.”
Even the EPA has directly contradicted the corps’ preliminary conclusions, saying the proposed mine “may have substantial and unacceptable adverse impacts on fisheries resources in the project area watershed.” And Alaska Senator Lisa Murkowski, a Republican who had been mostly neutral on the Pebble mine, expressed serious concerns, saying the corps’ draft environmental statement “has failed to meet my standard of a robust and rigorous process.”
But the strongest criticism of Collier’s 20-year mine plan is that it is hiding the Pebble Partnership’s true plans for the deposit.
Doubts about the Mine’s Economic Feasibility
Collier claims that the Pebble Partnership does not currently have plans to expand the mine, but critics say that even a cursory look at the economics of the 20-year scenario reveals the company’s ultimate aims. “This mine will not pencil out,” said the NRDC’s Reynolds. “It will make inevitable the need to expand the mine in order to pay for any mining company to make money.”
The Pebble Deposit is located in a remote drainage of Bristol Bay, and will require a massive power plant, natural gas pipeline, hundreds of miles of roads, two ferry terminals, an ice-breaking ferry, and a deepwater port to get the ore to market. Along with tailings dams and water treatment facilities to contain mining waste, that adds up to billions of dollars that must be invested before any profit can be made. The Pebble Partnership estimates the 20-year mine will make just $1 billion in profit. But some mining experts have questioned whether even that amount is possible.
“I would be shocked if it was economically feasible,” said Richard Borden, a former permitting expert at the mining giant Rio Tinto, who spent two decades calculating the capital costs required to build and operate the company’s many mines around the world. He was asked by the NRDC to conduct an analysis of the Pebble Partnership’s draft environmental impact assessment.
Borden told FRONTLINE that his analysis shows the proposed 20-year mine will actually lose $3 billion. He said Pebble is drastically underestimating initial construction costs, assuming billions in infrastructure help from a third party like the state of Alaska, inflating metals prices without also inflating startup capital and operating costs, and low-balling operating and post-closure water treatment costs.
“There are few things more dangerous than a mine that loses money every year,” Borden said. Cost pressures can lead to cutting corners in the construction of tailings dams and water treatment facilities, which Borden said can increase the likelihood of containment failures and contamination of surface and groundwater.
“He’s wrong, and he didn’t look at a single piece of real information,” Collier said in response to Borden’s analysis. “The man made up assumptions and looked at data from years ago. Update the metals to realistic metals prices, and what you find is that it adds seven billion dollars. He made negative assumptions across the board.” Collier said the mine under consideration is “night and day” from the 2011 scenario. He also claimed that Borden had been paid by the Natural Resources Defense Council for his report.
Borden, who said he did the economic analysis at no charge to NRDC, responded that he used the same mining scenario Northern Dynasty did in calculating the value of the 20-year mine, and that the company inflated metals prices without also inflating the costs needed to build it.
“Some metal prices have gone up, and some metal prices have gone down, but there’s also been inflation in the costs,” Borden said. “You can’t have your cake and eat it too. If you’re going to inflate your revenue, you also have to inflate your costs.”
Ultimately, Borden said, there’s an easy way to solve the argument: do what has been standard practice for all companies with large-scale mines in Alaska, and release an independent feasibility study proving the 20-year mine actually will be profitable. “What better way to attract investors than showing they’ve got a really favorable project on their hands?” Borden said. “And secondly, it would help silence critics like me.”
Collier claims that the company doesn’t have the money to pay for a formal feasibility study, but said the company’s internal analyses show a profitable 20-year mine.
Others are not so sure. A Manhattan-based hedge fund, Kerrisdale Capital, says it has information suggesting otherwise.
The Uncertain Future of the Pebble Mine
Northern Dynasty is not a mining company; it is an exploration company. It is still searching for a partner with the billions needed to build and operate the mine.
With few sources of revenue and permitting costs mounting, the company’s finances now are particularly tight. Its most recent quarterly report shows that it has less than $10 million in cash on hand.
But a spokesperson for the Pebble Partnership said that the company has the resources it needs to continue, and remains in discussion with a range of potential partners and investors. “The real question is making sure we’ve got money to go through the process,” said Collier. “And as long as we can raise money to stay in business, we keep moving along.”
An outline of an early, unpublished version of the corps’ final environmental impact statement, which was obtained by FRONTLINE, continues to have a generally positive view of the mine. In an email, spokesman John Budnick said that despite the COVID-19 pandemic, work on the final statement continues remotely. He anticipated that it would be released by mid-summer, with the decision on permitting in the fall.
Even if that happens, the fight against the Pebble mine is far from over. “We are preparing for the likelihood that we will have to challenge this permit in court, and we’re prepared to do that.” said the NRDC’s Reynolds. The EPA retains the authority to limit the scope of or even veto the permit, and the 2020 elections will also have an impact. There is nothing preventing a new administration from reinstating the restrictions proposed during the Obama administration.
Those from Bristol Bay who believe the mine is an existential risk to their livelihood and culture have vowed to continue fighting for however long it takes. “There are some places that really shouldn’t be mined, and a place that has the world’s most prolific sockeye salmon fishery is one of those places,” said Dan Cheyette, a spokesman for the Bristol Bay Native Corporation. “The problem is that the people of Bristol Bay have to live with the consequences of this mine forever.”
UPDATE: On July 24, 2020, the Army Corps of Engineers’ finalized environmental impact statement on the Pebble mine was released, appearing to clear the way for the project to potentially move forward.
—Videos produced, filmed and edited by Aaron Ernst