By Liz O’Connell
Tim Bradner’s story in last week’s Anchorage Press article headlined “Alaska Mining Paid $715M in Payroll in 2018” makes it sound like mining is good for Alaska, doesn’t it?
No, it is not, and here’s why.
Bradner regurgitates a new PR report compiled by McDowell group, paid for by the mining industry, and designed to make mining sound beneficial to you and I. But is mining really beneficial to us Alaskans? NO, not when you take into account the irreversible damage to the environment and the tax breaks these foreign companies take advantage of at our expense.
The Alaskan Seafood industry, according to a 2017 McDowell Group report, employs more workers than any other industry in Alaska. The McDowell report describes total jobs and income this way “Seafood—36,800 jobs, $2.0 Billion income; Mining—8,600 jobs, $675 million income. The Alaska Seafood industry is the “economic foundation of many rural communities.” Not included in Alaska Seafood industry report are the jobs and economic impacts from recreational, charter or subsistence uses of Alaska’s resources. Worth remembering, Alaska Seafood industry is a sustainable industry.
Pristine Alaska an Industrial Zone — Forever.
Most mining areas become industrial zones. The acreage needed to operate is substantial and sprawling. Roads are needed to truck ore, people, equipment, in and out. Buildings to house operations are needed. A power source is needed to extract minerals and conduct operations. A dam is necessary to hold residues from mining. Chemical toxins are used to separate ore from rock. Toxins may be diluted to comply with regulations, but the diluted materials are stored in ponds, pits, behind dams, at the surface, or discharged back into the ground. Where toxins leach is NOT predictable, nor is the damage to the environment immediately evident. The land, wildlife and people close-by or downstream will be impacted directly or by gradual accumulation. High salaries and jobs seem to be a pacifier for naive public who don’t grasp that benefits these foreign companies reap are at Alaskan’s expense.
The Pebble mine limited partnership (PLP) draft impact statement claims they will only permanently impact 3524.27 acres. Visualize each acre as a football field. The Pebble mine will permanently occupy 3,524 football fields.
PLP admits impact from fill discharges will affect aquatic resources in these watershed areas from Kvichek-Port Heiden including the Newhalen River, Iliamna Lake, Gibralter Lake, Upper Talarik Creek, and then Western Cook Inlet including Paint River and Amakdedori Creek-Frontal Kamishak Bay Watersheds. PLP cavalierly claims because the watershed is “abundant and in a natural state” they will only impact a small percentage of natural resources.
In their watershed analysis area of 571 miles and 684,616 acres of anadromous stream and water bodies, 97% of the lakes provide habitat to Pacific salmon. The streams and rivulets leading to lakes and the ocean are nurseries to small fry of maturing salmon and other fishes. As described, the watershed is huge and necessary for a reason, because it supports wild salmon runs in Bristol Bay and wild and hatchery-fed salmon runs in Cook Inlet and supports other fishes development, too.
It is well known the abundant salmon runs on the Columbia River, the Klamath River, and the Sacramento River were destroyed by dams, urbanization, habitat loss and industrial activities like mining. We should understand if we allow the Pebble Mine development it will be the beginning of the end of the salmon fishery in Alaska. It will take away more jobs and income than PLP will deposit into Alaska.
PLP proposes 9 bridges and 86 culverts for the Iliamna lake crossing infrastructure. PLP says on the 78 mile road to the Ferry, the trucks will be making up to 78 round trip moves per day on each side Iliamna Lake. That’s a lot of disturbance.
PLP needs energy to run their operations. PLP says the gas pipeline they will place across the Inlet for the power they need will be temporary. However that is not the current practice.
According to Elizabeth Earl at the Alaska Journal of Commerce, Cook Inlet pipeline infrastructure was built in the 1960’s during an oil boom. It’s estimated more than 350 miles of Cook Inlet pipelines still exist. In 2017 a gas leak pumping methane at a rate of 200,000 cubic feet per day into the Inlet lasted three months until it could be repaired. There is currently a five-member panel studying what to do about the 50 year old Cook Inlet pipeline infrastructure.
Additionally there may not be enough natural gas to satisfy the needs of Anchorage and the additional Pebble and Donlin mine demand, according to Kerry Williams testifying at the Anchorage Pebble Mine hearings. Williams points to a 2018 study by the Department of Natural Resources showing the Cook Inlet gas field is already 80% depleted. Since the cumulative effect of Pebble and other mines consumption would exceed the total gas consumption of all Railbelt utilities, the utilities only option would be to import LNG for 100% of our needs.
The average cost for utility natural gas for an Anchorage homeowner is currently $1,800 per year. If we are now paying today’s LNG import cost instead of current Cook Inlet gas prices, our average fuel cost would be half again higher. At recent prices for imported LNG we’d be paying double, and at recent peak prices our annual cost would be triple.
The incredible tax breaks to Miners
WARNING: This information might make you angry
In 2009 Alaska’s mineral industry was worth about $3 Billion but paid less than 2% to state and local governments, counting all forms of taxes, fees and royalties. The fishing industry paid around 5%.
New mines are exempt from the mining license tax for a period of 3 ½ years after production begins. [The PLP proposal is for five years.]
The 1995 legislature authorized the Minerals Exploration Incentive credit. The credit is limited to $20 million and taxpayers may apply the credit against 50% of the mining license liabilities over a 15 year period.
The Fraser Institute in 2009/2010 ranked Alaska the 19th most favorable “tax regime” in the world among all countries and US states. This is good for the mining industry but once mined, unlike fishing, the mineral resources of Alaska will be gone forever and will no longer provide jobs or the 2% tax revenue to Alaska.
The “best interest clause” of the Alaska state constitution is often cited as a reason to develop mines.
“The legislature shall provide for the utilization, development and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.” (Article 8, Section 2)
However, the State of Alaska is not correctly using the “best interest standard” if under such a low tax regime, a business like fishing which is a sustainable business, paying much more in taxes, and recognized as an economic foundation in rural areas is destroyed, while the miners reap big bucks and pay little taxes for the permanent habitat damage they do. It does not make economic sense.
WHY destroy Alaska’s healthy salmon fishery? Eating Fish is good for your brain. You cannot eat gold.