Bristol Bay:

Pebble mine's Shively discusses future of project, EPA's watershed assessment

Is U.S. EPA unfairly using its Bristol Bay watershed assessment to block the Pebble mine? During today's OnPoint, John Shively, CEO of Pebble Limited Partnership, discusses EPA's direction and influence on the Pebble mine permitting process. He weighs in on charges by Senate Republicans that the agency may be unfairly trying to veto the project before Pebble applies for permitting. Shively also discusses the latest on the economics of the mine proposal.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is John Shively, CEO of Pebble Limited Partnership. John, thanks for coming back on the show.

John Shively: Well, thanks for having me.

Monica Trauzzi: John, Senate Republicans have alleged that EPA is fairly using the Bristol Bay Watershed Assessment to block the Pebble Mine. When you were on the show back in June of 2011, you had said that you thought EPA was trying to be fair in the watershed assessment. Is that still how you feel? And are charges that we're seeing Republicans in the Senate EPW Committee making, are they fair?

John Shively: Well, I actually am less confident that it's a fair process now. Even then, I think I expressed concern that the EPA was trying to do the largest watershed assessment they've ever done in the shortest amount of time. And, you know, they, this water, the two watersheds they looked at are the size of New Jersey and Maryland. And they did the whole initial assessment in less than a year. They did no initial science. So I don't think they got it right. And they really never did assess what impacts there might be on fish. I mean, they did an assessment of what a mine might look like, but they never took that and said that could affect, you know, 1,000 fish, 50,000 fish, 10 million fish. They didn't do that. The other thing is they somewhat in secret did a separate peer review, separate from the public peer review that they announced, of seven documents all submitted by known opponents of ours. And they could, we submitted documents. They never peer reviewed any of ours. So I'm beginning to think that there maybe is more of a bias than I thought there was.

Monica Trauzzi: Does the agency have the authority under the Clean Water Act to pre-emptively veto the proposal before it enters into the permitting process?

John Shively: Well, of course, you know, that's the problem. What do they veto? They claim they have the authority for a pre-emptive veto. So is that veto over the whole two watersheds? Just for certain kinds of mines? We think there are some legal questions there. Even if they have the authority to pre-emptively veto, what can they veto, and in what way? And I think the veto was really designed for exactly what you said, a proposal. But they didn't look at a proposal. They looked at, you know, a mine that, or actually three mines that they think might happen. So how do you really veto something that doesn't quite exist?

Monica Trauzzi: Much of what we're talking about happened while Lisa Jackson was heading up EPA. She's no longer there. Do you anticipate a shift from the agency in its actions towards the project? And what influence do you specifically believe she had on this process?

John Shively: Well, I think she had a great influence. I think this was really driven by Lisa Jackson. She would not meet with like some of our supporters, our native supporters, yet she'd certainly meet with our opposition. So will there be a change? You know, I don't know Gina McCarthy. I have heard very good things about her. I really do believe that she will go back and look at things, if she gets confirmed, and I hope she does. I think that the department needs leadership, and from what I understand, she can provide that leadership. And we would intend to meet with her, and I'm assuming she would meet with us. And I think we can make a good case to her.

Monica Trauzzi: So going back to what we see happening in the Senate EPW Committee right now, is that fair? I mean, are they approaching this in a good way?

John Shively: Well, I'm not going to interfere with how the Senate operates. I mean, they are asking legitimate questions. You know, why are you doing this? How are you doing this? How much money did it cost? You know, those are legitimate questions, and I think, you know, as senators, they have the right to ask them and get the answers that they feel they want.

Monica Trauzzi: So we've already seen one delay coming out of the agency in terms of the public comment period. They've said that a final assessment will come this year. Do you believe that we'll in fact see the final assessment this year?

John Shively: Well, I don't know. I mean, I think they're going to try to get it done. An extra 30 days may or may not make any difference. They're going to have a lot of comments to deal with this time. Also, their initial peer reviews are taking another look at their work product. They're going to have to deal with that. So, you know, and we do know that a number of their, or I guess all their employees are taking 13 days of furlough. At least, that was the last I heard. So, you know, how all that affects the timing, I don't know.

Monica Trauzzi: So how does the delay affect you in terms of going through the NEPA process?

John Shively: Well, I mean, of course, all we've ever asked is to go through the NEPA process. Not, don't stop us before we get there. That's, you know, we think that's something that Congress set up and something we'd do, and it's a message that I think resonates well with the people we talk to in Washington. The delay from them doesn't impact us at all. We will have a project, and actually, I hope to have a project to take into permitting this year. And, you know, how those, the finalization of the assessment and our timing for permitting interact is unknown at this time, but ...

Monica Trauzzi: And so you're confident that you'll be able to get through that NEPA process?

John Shively: Well, I'm confident we have a project that we can take, that we believe that can be permitted. I mean, I've been on the job five years now. I didn't know that when I started, and I told the people that, the two owning companies that. But, you know, we've spent a lot of time. We've spent now almost $600 million on our efforts, engineering, environment, over $150 million just on environment alone. So yes, I think we can design a mine that meets the criteria of the permitting process.

Monica Trauzzi: And to that point, when you were last on the show, so this was two years ago, you had indicated that there were still some critical unknowns in terms of the economics of the project. You had also yet to present a final proposal at that time. Where do things stand now, and do the economics make more sense right now?

John Shively: Well, the economics I think are there, particularly over the long run. This is a large project. We haven't done a pre-feasibility study yet, and probably won't till next year, so we haven't finalized that. But if I look at the, you know, sort of supply/demand curve as people have stretched out into the next decade, which was when we'd come on, and what I think it costs now to bring on large copper projects, so I think there'll be a price there that can support this project.

Monica Trauzzi: This is a very, very heated debate in Alaska. Does it break down as simply as salmon versus gold?

John Shively: Well, salmon versus copper, but I, you know, some of it does. I mean, obviously, there are commercial fishermen that have concerns. Some of it is the result of one individual who spent a fairly sizeable amount of money, in the millions of dollars, fighting the project, because he has a lodge near where we would mine, about 30 miles away. And some of it is just, even in Alaska, there are people that don't like to see development, whether it's oil and gas or mining or anything else. And there are groups of people that fight everything. And so it's a combination of all of that.

Monica Trauzzi: All right. We're going to end it right there. Thank you for coming on the show. Nice to see you.

John Shively: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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