Wednesday, October 28, 2015

Summary Of The 10 Chuitna Decision Appeals, Plus The Actual Docs, And What's Next?

First, A Brief Overview Of What's Transpired And What's Coming Next 

PacRim is "a Delaware Corporation owned by Dick Bass and William Herbert Hunt"developing a 300 million ton coal mine across the inlet from Anchorage on Alaska Mental Health Trust  (AMHT) land..  Chuitna  Citizens Coalition (CCC)  had applied for three water reservations (actually instream flow reservations or IFRs) to protect the water and salmon from the future coal mine.  They were granted one for the Lower Reach of Middle Creek which is outside the proposed mine area.  The other two requested water reservations  - Upper Reach and Middle Reach - are in the proposed mine area and those applications were denied.  [Note: The PacRim website says nothing about who owns the company, so I had to get that information from the CCC website.]

CCC was given one of the three IFR's they applied for.  PacRim and other development and mining groups who opposed all the IFR's had 20 days to appeal the decision.  The deadline was the day before yesterday - Monday, October 26.

A total of ten appeals were submitted to the Department of Natural Resources (DNR) Commissioner Mark Meyrs Monday,  opposing the decision by DNR's Water Division head to grant one (of three) applications for water reservations on the  Middle Creek (also known as Creek 2003). The commissioner's office emailed me copies yesterday.

I also spoke to David Schade, the head of the Water Division, and the person who made the Oct. 6 decision.  He told me the decision was unique in that the decision will grant a community group a certificate for a reservation of water, something the various resource development organizations strongly protested at the October 6, 2015 hearing.  And it's an argument that is echoed in nearly all their appeal letters.   He also told me that  the DNR Commissioner has at least three options:
  1. Uphold the decision;
  2. Remand it back to the water division in whole or in part; and
  3. Change the decision
There's no specific time limit for the decision and it might take awhile.   Schade also said having so many objectors was unique.

So, while this decision gets appealed, PacRim, presumably will continue the work of getting all the various permits from the different state and federal agencies.  Schade said PacRim had applied for 44 water rights and these were 'substantially complete' but additional information will be required before the Water Section will review them and, at the same time, a Chuitna River Reservation of Water application which was filed by the Alaska Department of Fish and Game.  Before then, there will be other permit decisions coming in from the US Army Corps of Engineers, the Department of Environmental Conservation, the Mining Section of the Alaska Department of Natural Resources, Division of Mining, Land and Water, and from the Alaska Department of Fish and Game.  After these permitting processes are substantially complete, then the water right applications can be adjudicated.

So, I asked, since the two CCC applications were denied because there was not enough information, will they be able to reapply when the competing PacRim applications are complete?
No, he said.  Those are done.  But DNR is required to protect the public interest including all other competing water rights and impacts on the watershed.   CCC will be able to oppose the PacRim applications just as PacRim and others opposed CCC's applications.

Synopsis Of The Arguments Against The Decision And The Full Letters

I've tried to briefly summarize the key arguments each group or person that appealed the water reservation decision.  Some were easier to do than others.  In any case,  each synopsis is followed by the group's appeal letter, so you can check the details yourself.

1.  Alaska Miners
  • Delegation of DNR Regulatory Authority to private group wrong
  • “Need” for awarding water reservation not met
  • Instream flow reservations as a tool to stop resource development wrong
  • Permitting uncertainty

2. Alaska Mental Health Trust - They own the land and stand to earn substantial revenue from a mine which they can use to support mental health in Alaska.
  • The Trust must develop its lands to improve its ability to meet Alaskans’ mental health needs, but its power to do so would be threatened by overly expansive regime of reserved water rights.
  • There is no need for a reservation of water rights in Stream 2003
  • Granting CCC a reservation of water rights in the Lower Reach of Stream 2003 is contrary to public interest
  • If the Commissioner affirms the Division’s decision, he should clarify the scope of the reservation and how it will be administered.
  • The Commissioner should deny the reservation requested for the Lower Reach

3. PacRim  The mining company that wants to develop the mine.
  • “ CCC did not demonstrate that a need existed for a reservation.”
  • “DNR used an approach to determine stream flow that lacked transparency, that has no correlation to the level of water necessary to protect fish and fish habitat, and which could require PacRim to maintain stream levels below the mine area that generally do not naturally exist in the Lower Reach of Streem 2003”
  • “DNR’s public interest analysis was flawed because it did not evaluate fisheries information for the Lower Reach and failed to address the potential impact of the reservation on upstream users such as the proposed Chuitna Mine”
  • “DNR’s decision establishes a troubling precedent that transforms private citizens into regulators of natural resources projects.”

4. Pacific Seafood Processors Association
  • “Water is a public resource and PSPA believes it is in the public’s best interest that reservations be held by public entities that are formally accountable to the public.”
  • “the public interest, through the formal public processes, is best served by balancing the trade-offs of public interests such as conservation impacts, economic benefits, and opportunity costs.”

5. Alaska Oil And Gas Association (AOGA)
  • DNR cannot abandon regulatory supremacy
  • Applicant fails to meet threshold “Need” Requirement
  • Decision represents an invitation for further frustration
  • Decision discourages investment in Alaska

6.  Howard Grey  (Involved in Alaska development, former board member of Alaska Miners)

  • “we should consider whether or not the applicant is qualified to administer water resources management duties”
  • “we should look at the surrounding ownership to determine if such conveyance will affect the upland owner’s future use and enjoyment of the area or will they be stymied by the proposed segregation?
  • “we should consider whether or not the proposed conveyance is in the best interest of the public.”


7.  Council of Alaska Producers (“trade association for large metal mines and major metal development projects in the state”)

  • “It is fundamental that the State should never delegate authority to a private party to manage these resources, because agencies are accountable to the public and elected officials, but private citizens are accountable to no one.”
  • “…DNR must find - that a “need” exists for the reservation.  The applicant failed to do this and DNR’s analysis of the “need” relies of unsupported conclusions about hypothetical impacts where no water from Stream 2003 reaches the Chuit River"


8.  Resource Development Council
  • Creates further uncertainty in Permitting Process
  • Undermine existing regulatory process and set dangerous precedent for community and resource development projects
  • Jeopardize investment
  • Tool for anti-development groups to stop projects
  • Delegation of Public Resources to Private Citizens

9.   Borrel Consulting Services  ("Heart and soul of the Alaska Mining Industry")
  • No need has been demonstrated
  • Robust permitting process already exists, and this reservation process undermines that.
  • This loose application of the statute and regulations will likely result in future infringements on private and Native-owned private lands.
  • Not following proper procedures (not requiring a need) is bad precedent.
  • DNR can’t disregard clear requirement to demonstrate a need

10.  Alaska Chamber
  • “DNR is abdicating its statutory responsibility, not to the whole of Alaska’s citizens, but to specific individuals, some not even residing in our state.  This is a decision that assaults the very foundation of the State’s regulatory process.  It pulls resource management from the public interest and concentrates that authority in the hands and interests of individuals.
  • This striking, precedent-setting reservation is in direct conflict with the department’s published mission to “develop, conserve and maximize the use of Alaska’s natural resources and lawful 
  • processes . . .”

I'll try to analyze the arguments in a future post.  But I have some calls I'll need to make before I can do that. Meanwhile you can look at past posts on the Chuitna mine project here. [Reposting because of Feedburning problems]

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