Opinion ID: 1287569
Heading Depth: 2
Heading Rank: 1

Heading: Did the Commission Err by Granting a Large Mine Permit Which Excluded the Tailings Dam and Impoundment and Wastewater Discharge?

Text: In this case, CC & BJ 49.65.135(a)(2) requires that water quality be maintained in accordance with federal, state, and city and borough laws, rules and regulations. In its findings concerning the AJ Mine, the Commission stated that it could not conclusively determine at this time with current information that the proposed treatment system will maintain water quality in accordance with federal, state and local laws, rules and regulations. The Commission further found that [t]he available data shows that the federal limit for total suspended solids (TSS) will not be met by the marine water discharge. CC & BJ 49.65.135(a)(4) provides that a mine operator must conduct all mining operations ... so as to minimize to the extent reasonably practicable safety hazards. The staff had various concerns about the safety of the AJ Mine's proposed tailings dam. The Commission responded to these problems by withholding approval of the tailings dam and impoundment and the marine wastewater discharge components of the project. The Commission decided that it would determine whether to approve the tailings dam and impoundment and the marine wastewater discharge after the receipt of further information. While the Juneau code does have provisions allowing the Commission to put conditions on a permit, see CC & BJ 49.15.330(g), 49.65.130(f), there is nothing in the code to support granting the permit for a project as a whole, while excepting one part of a project. Past decisions of this court make clear that phasing a project by permitting it in stages is disfavored. Three of our recent cases provide considerable guidance as to what sorts of permit approval phasing techniques are appropriate and what kinds are not: Trustees for Alaska v. Gorsuch, 835 P.2d 1239 (Alaska 1992); Trustees for Alaska v. State, Department of Natural Resources, 851 P.2d 1340 (Alaska 1993); and Kuitsarak Corp. v. Swope, 870 P.2d 387 (Alaska 1994). In Gorsuch, we held that in granting mining permits, [Department of Natural Resources (DNR)] may not ignore cumulative effects of mining and related support facilities ... by permitting facilities separately. 835 P.2d at 1246. We ruled that when DNR reviews a mining permit application, it must consider the probable cumulative impact of all anticipated activities which will be a part of a `surface coal mining operation,' whether or not the activities are part of the permit under review. Id. If DNR determines that the cumulative impact is problematic, we stated, the problems must be resolved before the initial permit is approved. Id. We explained that [t]his type of `concept approval' is necessary to avoid a situation where, because of industry investment and reliance upon a past mining permit approval, DNR might feel compelled to approve a subsequent permit for a related but environmentally unsound facility. Id. at 1246 n. 6. We added that [i]n some cases, this may require concurrent, as opposed to serial, review of separate, related permit applications, while [i]n other cases, anticipated problems resulting from cumulative impacts may require that approval of an initial permit be conditioned upon satisfactory resolution of the problems anticipated in subsequent permits. Id. This court split in Gorsuch on whether an access/haul road for the mining operation could be permitted under a separate mining permit. The majority determined that a specific regulation implied that separate permitting was allowed and that cumulative impacts could be adequately considered under separate permitting in that instance. Id. at 1245-46. Justice Rabinowitz, joined by Justice Matthews, dissented, arguing that the applicable regulations prohibited separate permitting, and that a single permit was necessary to ensure that the cumulative effects of the mining operation would be adequately considered. Id. at 1250-51. Justice Rabinowitz contended that [c]ourts have disallowed segmentation of a proposed project ... to assure that the cumulative effects of the project are adequately considered.... Id. at 1251. Justice Rabinowitz cited Thomas v. Peterson, 753 F.2d 754, 760 (9th Cir.1985), for the proposition that allowing consideration of cumulative impacts after a portion of [a] project is already approved swings the balance in favor of project approval even if the project would have been disapproved had all components of the project been considered in the initial permit application. Gorsuch, 835 P.2d at 1251. In Trustees for Alaska v. State, Department of Natural Resources, 851 P.2d 1340, 1341 (Alaska 1993) ( Camden Bay II ), DNR's approval of a sale of oil and gas leases was challenged. A regulation required DNR to identify known geophysical hazard areas, and prohibited approval of development in such areas until measures to minimize geophysical hazards were provided. Id. at 1343. DNR identified the entire sale area as a geophysical hazard area. Id. DNR intended to consider particular geophysical hazards on a lease-site-by-lease-site basis, requiring lessees to submit plans to mitigate potential geophysical hazards before approval to develop a specific lease site would be given. Id. at 1343-44 & n. 7. We disapproved DNR's approach. We held that DNR was required to identify known or substantially possible hazard areas before approving the lease sale as a whole. Id. at 1344-45. We explained that deferring a careful and detailed look at particularized geophysical hazards to later stages of the development process ... entails certain practical risks. Id. at 1344. Such deferral may tend to mask appreciation of any cumulative environmental threat that would otherwise be apparent if DNR began with a detailed and comprehensive identification of [the] hazards. Id. We again noted that the more segmented an assessment of environmental hazards [is], the greater the risk that prior permits will compel DNR to approve later, environmentally unsound permits. Id. Another regulation at issue in Camden Bay II required DNR to identify important historic sites. Id. at 1345. DNR purportedly attempted to comply with this regulation by requiring the lessees to report on such sites and to try to preserve such sites, arguing that the regulation did not state when historic sites had to be identified. Id. at 1345 & n. 9. We held that DNR had not complied with the regulation, and that DNR was required to identify known historic sites before approving the initial sale. Id. at 1346. We explained that evaluation of historic sites on a lease-site-by-lease-site basis ran the risk of undervaluing the cumulative cultural significance of the region as a whole, and that the lessees would have an incentive to underreport historic sites. Id. We added that our holding that the regulation at issue required identification of historic sites before approval of the initial sale did not mean that more intensive duties are not required by this regulation at later stages of development. Id. We also ruled in Camden Bay II, however, that DNR did not have to examine transportation routes and utility sites before approving the initial sale because [u]ntil exploration is proposed and, in all likelihood, until and unless a commercially exploitable discovery is made, there will be no occasion for siting, designing or constructing transportation and utility routes. Id. We further decided that DNR was not required to evaluate the effectiveness of [environmental harm mitigation] measures before even receiving detailed development proposals, since DNR would not be able to assess detailed mitigation measures even before knowing which activities it needs to mitigate. Id. at 1347. In Kuitsarak Corp. v. Swope, 870 P.2d 387 (Alaska 1994), DNR approved offshore prospecting permits in a region without conducting an in-depth analysis of the effects of mining in the region. Id. at 391 n. 13, 394 & n. 21. DNR contended that it lacked sufficient information to conduct such an analysis and that it would be easier to do the analysis when specific mining activities were performed. Id. at 391 n. 13, 394 n. 21. We rejected this procedure. We found that DNR had not adequately considered the potential and cumulative impacts of mining in the region. Id. at 395-96. We noted that DNR's argument that it was difficult to obtain the information necessary to perform a proper evaluation of the impacts of mining in the region was undermined by evidence of federal studies similar to the studies which DNR needed to do. Id. at 396. We stated that [o]nce the initial impact of mining on the region has been assessed, any unforeseen occurrences or conditions that are revealed during exploration can be dealt with by DNR through use of stipulations and conditions imposed on mining. Id. (emphasis added). We disapproved of DNR's use of conditions to require the development of plans to minimize potential dangers as a substitute for a complete analysis of the potential dangers. See id. at 396 n. 27. We can draw three general, guiding principles concerning when and in what manner phasing or segmentation is permissible from Gorsuch, Camden Bay II, and Kuitsarak. First, unless a specific statute or regulation allows phasing, phasing is disfavored. Compare Gorsuch, 835 P.2d at 1245-46 (regulation interpreted as permitting phasing) with Gorsuch, 835 P.2d at 1250-51 (Rabinowitz, J., dissenting) (regulation interpreted as prohibiting phasing). Where a statute is silent or ambiguous, phasing should generally not be allowed. See Camden Bay II, 851 P.2d at 1345-46 (regulation silent on when historic sites must be identified, but best interpreted as requiring identification of known sites at initial permitting stage). Second, phasing is prohibited if it can result in disregard of the cumulative potential environmental impacts of a project. See Kuitsarak, 870 P.2d at 396 n. 30; Camden Bay II, 851 P.2d at 1344, 1346; Gorsuch, 835 P.2d at 1246. The more interlinked the components of a project are and the greater the danger that phasing will lead to insufficient consideration of cumulative impacts, the greater the need to bar phasing. Compare Gorsuch, 835 P.2d at 1245-46 (separate permitting permissible so long as DNR determines that cumulative impacts will not be problematic) with Gorsuch, 835 P.2d at 1250-51 (Rabinowitz, J., dissenting) (unified permitting process necessary to ensure adequate consideration of cumulative effects). Third, conditions and stipulations may be used to address unforeseen occurrences or unforeseen situations that may arise during exploration or development, but permit conditions may not serve as a substitute for an initial pre-permitting analysis that can be conducted with reasonably obtainable information. See Kuitsarak, 870 P.2d at 395-96 & n. 27 (approving possible use of conditions to deal with unforeseen events but disapproving use of conditions as substitute for feasible, complete analysis). Thus, phasing through the use of conditions is prohibited where it is feasible to obtain the information necessary to determine whether environmental standards will be satisfied before granting an initial permit, but allowed where it is impractical or impossible to create detailed development plans without conducting additional physical exploration. See Camden Bay II, 851 P.2d at 1343-47 (geophysical hazards and historic sites can be investigated during initial permitting stage but transportation routes and mitigation measures cannot be analyzed without further exploration and planning). Based on these principles the Commission should not have granted the AJ Mine permit while excepting major portions of the project. The tailings dam and impoundment and the marine wastewater discharge system are integral components of the mining project; they are significantly interlinked to other parts of the project. If extensive redesigns to these components become necessary, the mining project could have a significantly greater environmental impact. Phasing the approval of those components could therefore cause the cumulative impacts of the mining project to be inadequately considered. After the Commission granted Echo Bay the large mine permit for the project as a whole, the United States Environmental Protection Agency (EPA) disapproved the proposal for the dam at Sheep Creek, and Echo Bay abandoned the plan to build the dam there. The EPA's action will undoubtedly force major redesigns in the mine project. This sequence of events illustrates the dangers of CBJ's improper use of phasing  the initial approval for most components of the AJ Mine may cause CBJ to fail to take into account the cumulative impacts of the redesigns made necessary by the change in the location of the tailings dam. For these reasons we conclude that the Commission erred in granting permit approval of the project while deferring consideration of important portions of the project.