Study sees Pebble Mine bonanza, but opponents still determined to block project

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Photo - MOTHER LODE: The Nushagak River flows into Bristol Bay, a region said to contain some $400 billion in copper, gold and other metals. A new report notes the proposed Pebble Mine could generate billions of dollars in economic impact.
MOTHER LODE: The Nushagak River flows into Bristol Bay, a region said to contain some $400 billion in copper, gold and other metals. A new report notes the proposed Pebble Mine could generate billions of dollars in economic impact.
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Alaska's proposed Pebble Mine, caught between a fish and the U.S. Environmental Protection Agency, would create thousands of jobs and a 600-percent increase in tax revenue for an economically depressed region, according to a study commissioned by the partnership backing the development.

Will the findings be enough to change the minds of environmentalists, backed by an EPA study under fire? Probably not.

Still, the Pebble Limited Partnership, the development initiative of London-based Anglo American and British Columbia's Northern Dynasty Minerals, says the analysis makes a pretty compelling case about the economics involved in a project proponents say can co-exist peacefully with the region's land, lakes and streams.

The study, conducted by IHS Global Insight, the same economics analysis firm that does projections for state and federal governments, estimates the copper, gold and molybdenum mine could support more than 16,000 jobs nationally during construction, including nearly 5,000 jobs in Alaska -- with an average annual wage of $63,500.

Pebble operations, located about 200 miles southwest of Anchorage, could create nearly 15,000 jobs in Alaska and the Lower 48, according to the report.

IHS estimates $136 million to $180 million in annual taxes and royalties, "annual expenditures that could place the operation among the top tier companies in the state." For the site of the mine, the Lake & Peninsula Borough, IHS estimates a 600 percent increase in new tax revenue.

At a potential $1 billion in annual operating costs, PLP says the mine could "define a new economic engine for Alaska."

"Pebble is a substantial multi-billion dollar state asset as shown by this report, which provides great insight regarding the long-term positive economic impacts the project could have for the region, state and the Lower 48," said Pebble CEO John Shively.

"For perspective, the report indicates Pebble development alone would pay more in annual taxes to the state than the entire fishing industry combined. This clearly shows Pebble development could be an important economic driver for Alaska's future."

Environmentalists, many involved in the Save Bristol Bay campaign, have railed against the proposal. They fear the short-term and long-term damage the mine could create around Bristol Bay, home to more than half of the world's sockeye salmon population.

Shoren Brown, an environmentalist with Save Bristol Bay, points to an economic report by researchers at the University of Alaska that found the Bristol Bay salmon fishery is worth $1.5 billion in annual value, "making it the most valuable wild salmon fishery in the world."

Alaska's salmon industry, no fan of the mine proposal, supports about 12,000 seasonal jobs and about 7,800 additional jobs nationally, based on multiplier effects, the study notes. Many of those jobs, however, would pay much less than full-time mining jobs.

"The report was lauded by seafood executives, fishermen and elected officials," Brown said in a release.

Mine opponents have turned up around the world, in a cause that extends well beyond this rugged region's borders.

About 70 commercial fishermen, business leaders and environmental activists gathered earlier this week at the Portland, Oregon, headquarters for Ecotrust, an environmental organization focused on conservation-based development, to voice their opposition to the Bristol Bay mine.

Opponents signed comment cards asking the EPA to deny the mining permit. The comment period ends today, May 31, 2013.

As they sipped wine and beer and ate wild Alaskan salmon, the activists voiced concerns about the future of Bristol Bay and the potential impact on commercial fishing.

Chef Lisa Schroeder, of Mother's Bistro in downtown Portland, said she buys sockeye salmon from Bristol Bay because it's affordable and caught wild.

"This is the last pristine environment for the sockeye population on the planet," she said. "We have to stop the pebble mine."

John Copp, of Portland, who had fished in Bristol Bay since 1988 until retiring last year, spoke to the beauty of the area and his concern on mining's impact.

"It's like seeing something beautiful go under the knife," he said. "The place gets inside of you. It speaks to you. You become connected to the creatures. It's not just mine. It's much bigger than that."

But opponents of the mine base many of their arguments on an EPA review that mine supporters and some research peer reviewers find seriously flawed.

"... (I)t seems the EPA has not changed its deeply flawed approach of creating and evaluating a completely hypothetical mine plan, instead of waiting until a real, detailed mine plan is submitted to regulators as part of a complete permit application," Shively said in a statement earlier this month.

Because PLP has yet to submit to the Army Corps of Engineers a formal mine plan for more than 60 permits, the EPA projected how the mine might look and how it could affect the environment, including the ecologically sensitive Nushagak and Kvichak watersheds.

The agency released the report's first draft in May 2012. In August, the EPA gathered 12 independent scientists to review the study and provide feedback, largely negative from many reviewers.

"Unfortunately, because of the hypothetical nature of the approach employed, the uncertainty associated with the assessment ... the utility of the assessment, is questionable," William Stubblefield, a professor in Oregon State University's Department of Molecular and Environmental Toxicology, told Watchdog.org's Dustin Hurst.

The U.S. Chamber of Commerce has chimed in on the EPA's second review, saying the hypothetical mine created in the agency's report wouldn't pass the permit process.

"EPA's decision to choose a poor performing hypothetical mine plan to base their study on is problematic and is stacking the deck against the project before it has even been proposed.

"At a minimum, this exercise by EPA prejudices the fair and unbiased consideration of a mine proposal that would actually provide much needed jobs -- thousands of them -- for America's economy," the chamber told EPA this week.

Shively has said he doesn't believe the mine and the environment have to be at odds.

"If the choice has to be between fish and mining," Shively told PBS Frontline recently, "we choose the fish. Our challenge is to prove that the two can coexist."

IHS projects a sizable and sustained economic impact for Alaska.

Construction of the mine would require a capital investment of more than $1.2 billion annually in direct spending over five years, the report states.

Construction could generate an additional 2,500 jobs related to the mine site and nearly 1,000 jobs with suppliers and other industries. Spending from mine workers during the construction phase could support another 1,275 ancillary jobs in Alaska, according to the report.

Once the mine is constructed, it could provide approximately 2,900 operating jobs, of which 915 will be at the mine, according to a PLP statement.

Pebble workers on-site could earn approximately $109,500 per year on average, according to the report, with about 75 percent of the workers expected to be Alaska residents.

Pebble operations could contribute $1.1 billion to $1.4 billion annually in gross state product (GSP) during the 25-year operation evaluated by IHS Global Insight.

"At the local level, Pebble could provide a dramatic increase in potential revenues to the borough," Shively said in the statement. "This sort of project can create an economic transformation in a region that currently faces economic challenges, due largely to a serious lack of year-round jobs."

M.D. Kettle and Shelby Segens are reporters for Watchdog.org, which is associated with the Franklin Center for Government and Public Integrity.

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