Energy & Mining

A roadmap for Southeast Alaska energy development is meeting some resistance from the Southeast Conference.

The regional organization’s Energy Committee passed a resolution Tuesday supporting parts of the state-funded Southeast Alaska Integrated Resource Plan. But it called for continued work toward a regional electrical grid, which the draft plan calls too expensive.

Committee Chairman Merrill Sanford of Juneau said the Alaska Energy Authority plan lacks some important elements.

“This is not a fix-all by any means. But I think we’re at a crossroads here and we have to do something. We have to move forward with something,” Sandford said.

The resolution calls for construction of five hydropower plants – Sitka’s Blue Lake, Ketchikan’s Whitman Lake, Hydaburg’s Reynolds Creek, Angoon’s Thayer Lake and Hoonah’s Gartina Creek.

It also supports two new powerlines – one from Petersburg to Kake, the other from Metlakatla to Ketchikan.

But many at the meeting objected to its emphasis on wood-powered space heaters as a way to reduce electrical demand.

Angoon Mayor Albert Howard said biomass energy should not replace long-planned, much-needed powerlines and plants.

“You talk about a Johnny-come-lately project, biomass is it. Where did that come from? Southeast Conference has talked about interties for years and all of a sudden, we’ve got biomass,” Howard said.

The resolution supports wood-powered energy, especially as part of Southeast’s timber industry.

But it makes other projects a higher priority.

It also calls for full funding for studies of other hydroprojects. And it emphasizes the need to build regionwide electrical interties, including a cross-border link to Canada’s power grid.

The Southeast Conference is holding its mid-session summit in Juneau. Its board of directors will take up the resolution before the plan’s March 19th comment deadline. The draft plan was developed by an Alaska Energy Authority contractor.

Hear a report on the SEIRP.

The public comment period on the AJ Mine Water Study ends March 28th.

The report is an overview of Juneau’s water system, and identifies several scenarios and management concepts, with and without a nearby operating gold mine.

For the past year, the CBJ Assembly has been investigating whether to pursue re-opening the old AJ Mine near downtown. The ore body is partially owned by the city and is in Last Chance Basin – the main source of Juneau’s water.

A mine advisory task force in May urged the city to conduct a comprehensive analysis of the water supply – hence the report. Released late last month, CBJ Engineering Director Rorie Watt has been holding a series of meetings around Juneau on the draft report. Wednesday night he told about 25 gathered at city hall that public comments are important.

“What we’re looking for is comments about the substance of the report,” he said. “We’re not really interested at this time in opinions about whether mining is a good or bad idea. The task at hand really is to thoroughly vet the water issue.”

The water study offers several scenarios, ranging from no action to leasing the AJ property to a mining company.

“Upgrading Salmon Creek or abandoning Gold Creek, or finding a new water supply or diverting the drain tunnel, or improving the mine draining system or reducing the water that flows into the mine drainage system,” Watt said.

Watt says public comments on the draft will be submitted to the Assembly with the final report.

The AJ Mine Water Study and a comment form are available on the city’s website.

The Assembly set $250,000 aside for various tasks associated with the feasibility of re-opening the AJ Mine, including the water study. Watt told the Assembly recently that about $80,000 has been spent on the project so far.

Assembly members are expected to discuss the issue on April 9th at a Committee of the Whole meeting.

The U.S. Forest Service has approved a plan to allow Greens Creek Mine to drill 11 sites across one and a quarter acres in a roadless area within Admiralty Island National Monument.

It’s an extension of work done each summer to find additional mineral deposits.

Greens Creek General Manager Scott Hartman says in the past the company has simply had to file its annual plan with the Forest Service. But with recent court decisions on the so-called Roadless Rule, the Secretary of Agriculture now has to consent.

Earlier this week, the decision was delegated to the Alaska Regional Forester, and quickly granted.

Juneau Ranger District spokesman Ray Massey says the drilling is all within the Greens Creek Inventoried Roadless Area.

“It’s still within the 1872 Mining Laws, you know, certain kinds of projects can be done and inventoried roadless of mine claims is one of them,” Massey says. “They won’t have to put any roads in to do this work, they’ll just have to put in a pad. And they’re allowed to take down whatever few trees that they have to, to build the helicopter pad.”

Massey says the approval requires the site to be reclaimed after drilling is done. He says an environmental analysis will likely be completed by mid-March.

Greens Creek manager Hartman says helicopters transport the drilling rigs and other equipment, and the work is weather dependent.

“All of our surface exploration out here is helicopter supported if it can’t be done from an existing road,” he says.

Greens Creek is owned by Hecla Mining Company based in Idaho. Hartman say the company’s exploration plan extends out for a number of years.

“In this business you spend a lot of time, you spend a lot of money exploring, hopefully expanding the resource and the reserve base so that you can continue on. And you know, it’s been part of the Greens Creek story, ‘we’ve been a ten-year mine for the last 20 years’ and we’re hoping we can say the same thing many years from now,” he says.

The Greens Creek silver, gold, lead and zinc mine is about 20 miles southwest of Juneau on Admiralty Island. The mine is Juneau’s largest private employer, with about 370 employees.

Kensington Mine owner Coeur Alaska is contesting a report by the Mine Safety and Health Administration that says management policies, procedures, and controls were inadequate at the time Joseph Tagaban was killed last September.

The MSHA investigation began at the mine almost immediately after the September 7, 2011 incident, which was the first fatality at the gold mine 45 miles northwest of Juneau. The Kensington had been in production about 13 months when the accident happened.

The four inspectors involved in the investigation issued their report Wednesday.

It indicates the area had not been adequately examined before setting off a blast and a diamond drill hole intersecting the blast site had not been properly identified. Tagaban was killed when he was struck by rock and flying debris that shot through the three-inch hole.

According to the report, Tagaban was standing in line with the drill hole and about 200 feet away from the blast site, at the 1,290-foot level underground.

Coeur Alaska community relations manager Jan Trigg says nothing is more important than worker safety. But she says the company disagrees with the report’s conclusions.

“Coeur had blasting and workplace examination policies and procedures in place at the time of the incident that were in full compliance with MSHA regulations,” Trigg says. “And an examination to check the area for hazards or to identify the diamond drill hole was conducted prior to initiating the blast.”

The 30-year-old Tagaban was a blaster’s helper. The MSHA investigation indicates that the mineworker initiating the blast and Tagaban had not been provided a safe area away from flying material or gases.

Trigg says the company has identified a shelter to protect the crew working in areas where blasting is scheduled. She says Coeur also has increased workplace examination training.

Tagaban, of Juneau, had worked for the company for about a year and a half at the time of the fatal accident. The investigators’ review indicates that training records were up to date, but training did not specifically address all the hazards associated with blasting.

The federal mining agency says Coeur Alaska can request a conference to discuss disagreements with the investigation’s findings.

So far, no monetary sanctions have been assessed against the company. MSHA spokeswoman Amy Louviere says a separate division within MSHA will determine the penalty. She says several factors are considered, including the seriousness of the violation, any history of previous violations, and efforts to promptly correct the violation.

A day after he urged them to do so, supporters of Governor Sean Parnell’s plan to cut oil taxes took to the phone lines and showed up in person tonight (Tuesday) for a public hearing on a competing Senate proposal.

The Senate Majority coalition introduced its own tax reform measure this session, after work stalled on the governor’s bill, which cleared the House last year.

Senate Bill 192 is a work in progress, and leading Senators have discussed various options to lower the overall tax rate paid by producers. But most of those who testified last night, like Michael Jesperson of Anchorage, said the Senate bill doesn’t go far enough.

“I think you ought to scrap it, go back to House Bill 110, and give it a couple years to work, increase the production, take more money from the oil companies over the long term instead of the short term, and provide a future for my children,” Jesperson said. “What we do now doesn’t affect me too much, but it will affect my children and they’re much more important.”

Tonight’s public hearing – the first of two scheduled for SB 192 – came a day after the governor’s office, state Chamber of Commerce and Alaska Oil and Gas Association sent “Action Alert” emails to in-boxes across the state, urging residents to testify, and calling the Senate bill a “tax increase.”

Earlier Tuesday, members of the Senate’s bipartisan Majority fired back at that claim. Resources Committee Chairman and Fairbanks Democrat Joe Paskvan says the Department of Revenue’s projections for the latest version of the bill show it resulting in a tax decrease of about $250-million per year for oil companies.

“To say that it is a tax increase, I think casts considerable doubt on the Department of Revenue forecasts, and undermines the validity of the Department of Revenue forecasts,” Paskvan said.

Parnell’s email also says the Senate bill “does nothing to stem the decline of oil production.” The Governor says his tax cut proposal, House Bill 110, is the only measure to get promises of new investment from producers.

Paskvan says declining production can’t be blamed on the state’s tax regime.

“Where the Governor says ‘for more than two years, I’ve heard Alaskans talk about declining oil throughput,’ I think it’s important of the public to consider, that as part of Alaska’s history, there’s been a decline in throughput since 1989,” said Paskvan.

Senate President Gary Stevens – a Kodiak Republican – says the goal of SB 192 has always been to cut taxes, and to suggest otherwise is “deceptive.”

“It never was an intention, no one’s intention in the Senate ever to have a tax increase. So I hope we can put that issue to bed,” Stevens said.

A Parnell spokeswoman says the governor was referring to the original Senate bill in his “Action Alert” email, even though the latest version of the legislation had been out since last Friday. Senators argue the original bill kept the status quo, and thus did not represent a tax increase.

The Senate Resources Committee will hear more public comment on SB 192 tonight (Wednesday) at 6 p.m. The committee also has nearly 20 amendments to consider before passing the measure on to the Finance Committee for more scrutiny.

Oil and gas taxes make up about 90 percent of the state’s annual revenue.

The Assembly last night (Monday) received a draft study on the city’s water system related to the city’s ongoing work on the AJ Mine.

For more than a year, the Assembly has been investigating whether to pursue re-opening the old mine near downtown, which is partially owned by the city. The AJ ore body is in Last Chance Basin – the city’s main source of drinking water – thus the need for the water study.

CBJ Engineering Director Rorie Watt said the study will see significant changes once public comment is taken on the draft version.

“I’ve contacted neighborhood associations that have been previously involved, as well as advocacy groups, and I would expect that we’ll get a lot of input on this topic,” said Watt.

The public comment period is open for one month, through March 28th. A comment form is available on the city’s website, and Watt will hold a public meeting next Wednesday, March 7th, in Assembly Chambers.

The issue will next be before the Assembly on April 9th at a Committee of the Whole meeting.

Copies of the report are available at the city’s website as well as at the Engineering Department office.

You can also read the report by clicking here.