Any form of economic decision-making–whether to invest in a coal mine or solar power project, to buy this brand of good or product or that–comes replete with trade-offs, particularly when it comes natural resource development. We rely on markets and private sector businesses and investors, working within the context of public sector governance, to guide and approve, or disapprove, of those decisions.
Such trade-offs are clearly in evidence in Alaska’s Bristol Bay watershed, one of the world’s richest, most productive and few remaining wild salmon fisheries. Bristol Bay is also the site of the proposed Pebble Mine, envisioned by project developers as one of the world’s largest open-pit copper mines.
Concerned about Pebble Mine’s impact on the Bristol Bay fishery and watershed–which provides basic ecosystem services, such as water, food and shelter, and sustainable livelihoods for communities throughout the area, the Environmental Protection Agency (EPA) this past week invoked Section 404(c) of the Clean Water Act in initiating a process “to identify appropriate options to protect the world’s largest sockeye salmon fishery in Bristol Bay, Alaska from the potentially destructive impacts of the proposed Pebble Mine.”
The Pebble Mine: A huge copper resource
The EPA’s action temporarily puts a halt to the U.S. Army Corps of Engineers approving a permit that would allow the Pebble Limited Partnership (LP) to move forward with its plans to develop the Pebble Mine. Those plans envisage a five-year construction phase followed by an initial 25 years of production. Three subsequent development phases of 20 years each are also held out as a possibility.
Located in southwestern Alaska on national public land some 230 miles southwest of Anchorage as the crow flies, the Pebble Mine site is remote. Developing a mine there would require building extensive infrastructure–roads, power, water, even a deep-water port. What lies beneath the surface is said to be one of the world’s largest copper porphyry deposits, one that also holds substantial amounts of molybdenum and gold.
The scope and scale of the deposit is humongous, as would be its effect on ecosystems across the area and far beyond. As is typical of such deposits, the actual copper, gold and molybdenum-bearing minerals are disseminated thinly throughout the vast area of bedrock.
As the Pebble Partnership notes on its website, “Ore from this type of deposit typically contains less than 1 percent copper by volume, sprinkled throughout the rock like fine grains of sand. That means miners will dig a very wide, very deep hole–projected to be two miles wide and several thousand feet deep–to extract and then process millions of tons of rock. All the excess rock–estimated at some 10 billion tons–along with allowed discharge chemicals would be stored indefinitely in two artificial lakes behind massive earthen dams. The largest of these dams would be 740 feet (230 m) tall and 4.3 miles (6.9 km) long.
Copper, jobs and state revenues
Imports meet 35 to 40 percent of U.S. copper demand at present. Developing the Pebble Mine would boost U.S. copper production by 20 percent, according to an economic study of the project commissioned by the Pebble Partnership and conducted by IHS Global Insight. Moreover, the Pebble Partnership highlights, exploiting the Pebble copper deposit could boost Alaska state government revenues an estimated $136 billion to $180 billion a year in taxes and royalties, making the Pebble Mine one of the top five contributors to the state treasury. Tax revenue for the local Lake and Peninsula area would increase by an estimated 600 percent.
IHS Insight researchers also project that the copper, gold and molybdenum mine could support more than 16,000 jobs nationwide during construction, including nearly 5,000 jobs in Alaska alone during the construction phase with an average annual wage of $63,500 per year. “Pebble operations could support nearly 15,000 jobs in Alaska and the Lower 48; and potential subsequent development phases could support more than 16,000 jobs nationwide,” according to the report.
As Pebble LP CEO John Shively stated:
“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. 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.”
Copper vs. local communities, fisheries, and a watershed
So, as Shively points out, a pound of copper is worth a lot more than a pound of fish, even wild salmon. But does Pebble LP’s studies and analysis tell the whole story? The EPA, as well as other opponents of the project, believe it doesn’t, not by a long shot.
Explaining the EPA’s decision to invoke Section 404(c) and put a temporary halt to mine development, Administrator Gina McCarthy stated,
“Extensive scientific study has given us ample reason to believe that the Pebble Mine would likely have significant and irreversible negative impacts on the Bristol Bay watershed and its abundant salmon fisheries.
“It’s why EPA is taking this step forward in our effort to ensure protection for the world’s most productive salmon fishery from the risks it faces from what could be one of the largest open pit mines on earth. This process is not something the Agency does very often, but Bristol Bay is an extraordinary and unique resource.”
Regional Administrator for EPA Region 10 Dennis McLerran notified the U.S. Army Corps of Engineers, the Alaska state government and the Pebble Partnership that it has initiated action under Section 404(c) of the Clean Water Act.
McLerran not only highlighted the economic value of Bristol Bay’s sockeye salmon fishery, but the deep, lasting social and ecological value of the Bristol Bay watershed to communities throughout the area.
“Bristol Bay is an extraordinary natural resource, home to some of the most abundant salmon producing rivers in the world. The area provides millions of dollars in jobs and food resources for Alaska Native Villages and commercial fishermen.
He also highlighted the threats and losses–economic, social and ecological–that would result if the Pebble Mine were to be developed as proposed.
“The science EPA reviewed paints a clear picture: Large-scale copper mining of the Pebble deposit would likely result in significant and irreversible harm to the salmon and the people and industries that rely on them.”
The EPA’s decision is based on data gathered as part of its Bristol Bay ecological risk assessment and mine plans Pebble LP submitted to the Securities and Exchange Commission (SEC).
Documenting the findings of scientific investigators, the EPA in January released its “Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska.” According to the EPA:
“The assessment indicates that the proposed Pebble Mine would likely cause irreversible destruction of streams that support salmon and other important fish species, as well as extensive areas of wetlands, ponds and lakes.”
A natural capital approach to resource extraction
What’s more valuable, and to whom, and what are the overall social and ecological, as well as economic, impacts of such economic development projects? Given the profound, long-lasting impacts of any such project on the ecosystems that underlie the fundamental health and well-being of communities and society, these are questions that need to be comprehensively and thoroughly assessed in an open, inclusive and transparent process.
In a bygone era, any disputes over developing a gigantic mine probably would have been settled directly between locals and mine developers. They would likely have involved much money changing hands to influence opinions, as well as a good degree of intimidation, if not outright armed conflict between opposing camps. Ecological considerations, aside from the direct impact on the fishery and possible effects of water toxicity many years in the future, would probably have received little if any consideration.
Times have changed, and technology and society along with them. So even has economic thinking. Today, proponents of natural capital envision a system of economic decision making that entails evaluating the social and ecological costs and benefits to natural resource use and development.
Critically, from a broader societal perspective, the issue of how various costs and benefits would be distributed locally and more broadly across to local communities and fundamental ecosystems and services, as well as business management and investors is a core aspect of the Natural Capital framework. It’s an approach the EPA appears to be taking in its decision to put a halt to the permitting process, and one that needs to be undertaken in any mineral, energy or other natural resource extraction project.
Image of fisherman on Bristol Bay courtesy of Alaska Conservation Foundation
Image of Bristol Bay: Flickr/KatmaiNPS
I love Bristol Bay poster courtesy of Trout Unlimited