Pebble CEO said mine's energy need could make gas line, dam viable
by Jeff Richardson / jrichardson@newsminer.com
Jan 14, 2011 | 2512 views | 14 14 comments | 5 5 recommendations | email to a friend | print
FAIRBANKS — The chief executive of the Pebble Partnership said this week that the enormous energy requirements needed to mine the deposit could make a massive dam or natural gas pipeline project in Alaska financially viable.

CEO John Shively, speaking to the Alaska Support Industry Alliance in Fairbanks on Wednesday, said the estimated energy needs of a Pebble mine could reach 350 megawatts. The entire capacity for Golden Valley Electric Association, which is based in Fairbanks but stretches to Cantwell and Delta Junction, is 296 megawatts.

Shively said recent estimates have raised the energy capacity needed at the proposed copper and gold mine near Lake Iliamna. Last fall, the maximum electric requirements of a Pebble power plant was thought to be about 300 megawatts.

Such big energy needs require big plans, he said. If Alaska were to build the Susitna dam or an in-state natural gas pipeline, he said high-volume customers like Pebble and the proposed Donlin Creek mine near the middle Kuskokwim River could make those efforts pencil out.

Shively said he’s talked to planners behind two separate gas line plans to discuss the role Pebble could play as an energy consumer. He hasn’t contacted anyone pushing the Susitna dam yet but said it also could play a role as a potential electricity supplier.

For now, however, he said Pebble is planning on a different power source — a huge generation plant fueled with imported natural gas. Shively said it’s the only possibility that Pebble planners are confident will be available in the future.

“At this point, we’ve got to go with what we can get,” he said.

But complex infrastructure needs are only one of the obstacles facing Pebble. The project has attracted worldwide controversy because of its proximity to two salmon-rich Bristol Bay rivers. Critics said a huge mining operation — and the sulfur-laced tailings it would produce — poses too great a risk to the renewable fishery that fuels the region.

Shively said he figures Pebble will begin applying for permits in 2012 to open the mine, with an optimistic timeline of three years before the process is complete. He emphasized no specific plan for a mine at the deposit site has been finalized.

The latest estimates indicate the total deposit contains 72 billion pounds of copper, 94 million ounces of gold and 4.8 billion pounds of molybdenum.

“If it weren’t for the fact that we have such a volume of ore, we wouldn’t even look at it,” Shively said.

Shively had harsh words for the environmental groups opposed to Pebble, calling efforts to stop mining before the permitting process has begun “absolute foolishness.”

“It’s not about science,” he said. “It’s about stopping us.”

Contact staff writer Jeff Richardson at 459-7518.
Comments
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Invictus
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January 16, 2011
That's possible, but still conjecture. If Fort Knox did not exist, the borough would be out $3-4,000,000 per year in property taxes and the state would be out even more in claim rentals, mining taxes, production royalties, unemployment insurance, and corporate taxes. The Alaska Mental Health Lands Trust would be out their biggest benefactor.
anyoneoutthere
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January 16, 2011
Potentially buying so much that the regular people have to pay a higher price because there is a high demand. If Knox didnea exist we would have surplus power, possibly cheaper.
Invictus
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January 15, 2011
jmacinak -- Miners in Alaska pay up to 7% Mining License Tax, 3% Net Production Royalty, and up to 9% corporate tax on profits. Where did you get the erroneous 2% figure from?

BTW, if Pebble were ever to use power from a Susitna Dam, they would be buying it.
DistantThunder
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January 15, 2011
google: horse manure crisis

72 billion pounds of copper, most will go to make artillery shells to annihilate all who complain about the stupid stuff the idiots are doing with the 94 million ounces of gold

....mental health crisis

jmacinak
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January 15, 2011
..excuse me, a previous comment was meant for another article.. Like the song says.. "oh well".
jmacinak
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January 15, 2011
I`m just an old retired Alaskan, and I will tell you I am a little slow. Is this article saying that Alaskans should spend a fortune to build a dam that will use most of it`s power to make a foreign company rich while threatening our fisheries? And for this Alaska gets two percent in royalty and tax from the precious metal value? For how few jobs? Is that big toxic sulfide dam overlooking the Bristol Bay watershed worth it? I don`t think so. If we build a dam at Susitna, it will be to make the people of Alaska safer when it comes to power supply. Not for a few jobs and to make a foreign company rich at our expense should a copper sulfide release ever enter the watershed.
jmacinak
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January 15, 2011
Sounds like a pretty sound "fiscal" move by these far-seeing legislators. It`s that "far thinking" that will benefit our kids, and begin to payoff very soon. And they will remember us and thank us for saving a large portion of our resource earnings. Having cash to invest, in a growing world market, and a higher interest rate growth scenario, the people of Alaska will be able to soften the economic ups and downs that we all know are coming. When interest rates climb from .45% to 1.00% it doesn`t sound like much.. but your cash just brought you a 100% increase in the rate of return! When your talking billions of dollars, that`s a lot of money back to Alaskans. The oil lobby love that little way of making small numbers look huge when it benefits them. Thank you Mr. Doogan and Ms. Gardner. ACES is in the very least fair, and making up for the billions that were swindled from the people of Alaska under the old "ELF" tax regime crafted under a corrupt legislature. These companies are not going to walk away from a long term hold on three trillion dollars in gas liquids, heavy oil, natural gas, gas hydrates and yes, we are still finding ALASKA LIGHT crude in places in Alaska! This is a big poker game, and Alaska is holding the ACES full. Exxon isn`t going anywhere..and they are investing in THEIR infrastructure. Protect the larger portion of the tax income so we can build the future infrastructure, as needed, for and with our kids. The infrastucture the current federal government policies and the oil companies sitting on gas leases, refuse to allow or assist Alaska to do, and by ill-thought regulation and harassing environmental lawsuits. We have been in a state of war for ten years. Because we only feel it when we lose a loved one, it is easy for us to keep our heads buried in the ground. This country needs Alaska`s conventional natural gas and gas liquids,..and/or, (by exporting it from Valdez) it needs the REDUCTION in the amount of money we spend importing oil, which is in the neighborhood of 700 billion dollars A YEAR. Even if Alaska gas is exported, it will offset directly the outgo that we pay for that Arab oil. Is it true FERC has no jurisdiction over an in-state gasline? What do we need in addition to export it? Good luck Mr Doogan and Ms Gardner.
Invictus
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January 15, 2011
It's not about science, it's about power.

We will have both fish and minerals and natural energy. The fishermen need the minerals to catch their fish.

Alaska needs all three.
blue5011
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January 15, 2011
When plans are made for anything one must take into consideration of everything being "on", probably why the 350 mw figure. Ever wonder why your home has 100 amp, 200 amp, or more capacity even though you are only going to use 20/25 amps? The plan had to be made. Why plan for say 100 mw and then three or four years later find you needed 200 mw? Ever build a one car garage and find a three car version would have been better? Only an idiot plans for minimum capacity, on any project.
Charliebussell
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January 15, 2011
Announcements of continued and solid progress toward the permitting process leading to the start of mining operations at Pebble are great news to the larger majority of Alaskan Citizens. Modern day technology, a fine turned plan of development coupled with proper governmental oversight, will assure years of production of the vast mineral assets at Pebble, as well as other mineral sites across Alaska. All Alaskan citizens will benefit in some way form this massive development.

South-central energy development plans have been in a state of flux since the HCCP project was injected in the mix and remains uncompleted…having spent somewhere north of $450,000,000.00 on this white elephant and countless man hours of wasted time debating its building, and its future, we still continue to dig the hole deeper at HCCP…and I still believe the best solution would be to give the plant to Korea or the Chinese tied to a coal sales contract and move on…with development and construction ,of at least phase one at Susitna and move Chakachumna Hydro project along as well…

I would hope Alaska can continue to reach for greatness in developing our vast non-renewable resources and sell them to an energy hungry world and development our vast renewable resources for instate uses in such a way as to improve the standard of living for every Alaskan…The future is indeed bright for all who choose to get on the same end of the wagon, as we climb the hill.

andora@nushtel.net
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January 15, 2011
Shively needs to calm down. People who are fighting the mine are fighting for their livelihoods, customary and traditional use of salmon, and preventing potential damage to an area that is a personal, regional, state, national, and global treasure.

It does not matter how much mineral potential is the Pebble mine area. This is a project that should be left in the hands of future engineers who will be able to find a way to make mining and the protection of our salmon coincide. That is not possible today.

And to the point, Shively says the Pebble mine helps to make Susitna and a gas line pencil out. That may be true to some extent but Alaska is growing and demand for more power all across the state will grow as more affordable energy is available to our villages. HVDC, I believe, will make it possible to expand the current Railbelt Energy Grid to make low cost energy available to many more communities that are current served now.

So the Pebble mine has to go to sleep for a few more centuries so that we can grow mining engineers and other technicians who will be able mine AND protect our salmon.

In addition, we need to get our water quality standards back up to where they were prior to the Murkowski administration. Mixing zones were not allowed as liberally in the past as they are now.

And finally, we have to find out if mining is paying its fair share for taking out our non-renewable resources. Mining taxes have not been changed for many years and perhaps it is time for an adjustment to make sure Alaska gets what it should from the mining industry.
ourjungle
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January 15, 2011
350 megawatts....WOW! That is really massive.Pebble town is going to be bigger than Fairbanks.Otherwise;there would be so much extra power,they would supply all the outlining villages for next to nothing.Putting in a gas line would mean that in just a skip and hop,all of the villages would also receive gas.

Joe Miller,I smell a legal battle brewing.You still got fire in your gut?
Freespoken
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January 15, 2011
Miners: You are raping and depleting our soils of its true form. You will have to live with yourselves for this kind of livelihood.

Your livelihood should be mindful.
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