Opinion ID: 1208095
Heading Depth: 3
Heading Rank: 4

Heading: Whether DNR Had Substantial Evidence To Extend the Water Rights Permits?

Text: TNCC asserts that DNR's decision to extend the permits is not supported by the record. Specifically, it argues that (1) DNR lacked any basis to conclude that adequate water would be available for appropriation; (2) DNR did not have substantial evidence to support the amount of water granted for mining operations; (3) DNR did not consider that the method of placer mining had changed; and (4) DNR did not adequately address TNCC's concerns regarding water quality, navigation, or fish and wildlife.
TNCC contends that DNR did not have the necessary data to determine whether TDL should be able to appropriate 5.6 cfs from each of the fifteen streams. TNCC relies on two letters, one from Barry Hecht of Balance Hydrologics, Inc. and one from Lawrence Wise of Entrix, Inc., which express opinions that DNR erred in concluding that there was sufficient water to meet the requirements of TDL's mining operations while also protecting fish habitat. DNR contends that the permit extensions were based upon the best available data, and the information subsequently submitted by TNCC did not contradict DNR's data. DNR asserts that its decision is supported by adequate hydrologic data, relying on the memorandum by its hydrologist, Mark Inghram. DNR also notes that in approving TDL's appropriation of 5.6 cfs it relied on ADF & G's memorandum which stated that it had no objection to the issuance of the water right because the withdrawal will not adversely affect fish or wildlife ... if conducted according to an approved plan of operations. DNR's regulation provides that an application for a water right must include a description of the mean annual flow, or mean monthly flow if available, using the best available data, or, if data are not available, an estimate of mean annual flow using acceptable hydrologic methods. 11 AAC 93.040(c)(14). Thus, TDL's requested water appropriation of 5.6 cfs must be based on the best available data or an estimate using acceptable hydrologic methods to estimate mean annual or monthly flows. Essentially, TNCC wants us to attach more importance to the methodology and conclusions of Hecht and Wise than to the methodology and conclusions of DNR's expert. TNCC's expert, Hecht, used the U.S. Geological Survey's standard procedure for estimating flows in ungauged waterbodies in southwestern Alaska and estimated stream flows based on the Kisaralik basin to the south of the Tuluksak area. Hecht challenged Inghram's use [of] an average flow for the June through October period as the basis for evaluating water availability since flows vary so much over the course of the summer. [19] Hecht suggested that DNR should use a minimum flow instead of a mean flow. TNCC's other expert, Wise, used the Tennant Method for determining instream flow requirements for the maintenance of fish habitat. [20] To maintain excellent fish habitat, Wise recommended that flow diversions not exceed fifty percent of the average annual rainfall of any individual tributary and the sum of the withdrawals should not exceed fifty percent of the average annual flow of the Tuluksak River. Wise opined that, using the Tennant Method and Inghram's flow estimates, TDL could withdraw 5.6 cfs and maintain excellent fish habitat in most of the streams. However, he asserted that Shovel Creek did not contain enough water to withdraw 5.6 cfs, and diverting such an amount on Rocky and Spruce Creeks would result in fair to degrading and poor or minimum habitat, respectively. DNR and its hydrologist considered the information presented by Hecht and Wise in its decision on remand. Based on information provided by Hecht, Inghram revised his original flow estimates in eight tributaries to the Tuluksak River, finding that greater than 5.6 cfs of water existed in all but Shovel and Spruce Creeks. DNR concluded that the differences between Inghram's estimates and those of Hecht are roughly nine percent, which represents corroborating values. As a result of Wise's assertion that there would be inadequate flow in Shovel Creek, TDL agreed to relinquish its permit to appropriate water from Shovel Creek for mining. DNR maintained, however, that Rocky and Spruce Creeks have the water necessary for mining; and, since the water is required to be returned to those creeks, flows necessary for fish habitat would be maintained at a level that would be considered `excellent' to `outstanding' under the Tennant Method. [21] After reviewing the documents submitted by TNCC, DNR adhered to its decision to issue all permit extensions except for Shovel Creek. No recorded data exist for the exact stream flows of the Tuluksak River and its tributaries. Consequently, DNR needed to extrapolate that information to determine how much water was available for appropriation. DNR considered the estimates of its hydrologist, Inghram, and those of Hecht and Wise, provided by TNCC ten months after DNR decided to extend the permits. DNR concluded that an appropriation of 5.6 cfs was justified in all streams except Shovel Creek, for which TDL subsequently relinquished its permit. Although DNR ultimately maintained its decision to extend the permits, it modified its analysis of flow estimates. We conclude that DNR's determination that TDL could appropriate 5.6 cfs based on the estimated stream flows in all streams except Spruce Creek is supported by substantial evidence. Despite its own hydrologist's estimate of only 4.6 cfs stream flow in Spruce Creek, Hecht's estimate of 3.6-4.2 cfs, and Wise's assertion that withdrawal of 5.6 cfs would result in poor or minimum fish habitat, DNR granted TDL the permit extension to appropriate 5.6 cfs in Spruce Creek. Therefore, DNR's extension for Spruce Creek was not supported by substantial evidence.
TNCC also argues the permit extensions are invalid because they allow TDL to take more water than it needs. TNCC argues that since TDL uses settling ponds to recycle 100% of the water, TDL does not need 5.6 cfs of water once the settling ponds are filled. TDL explains that despite its recycling program, it is necessary to divert water from the streams because of water loss (by evaporation and infiltration under normal conditions and when the operation stops for a protracted period) and the potential need to fill settling ponds which may be built when TDL moves the wash plant. TDL notes that while 5.6 cfs is the flow rate to which it requires access in order to guarantee sufficient water for its ongoing operations, TDL will not, in fact, divert 5.6 cfs twenty-four hours a day. The pertinent DNR regulation states that an application for a water right must include a statement of the quantity of water requested, with documentation and calculations justifying the request. [22] 11 AAC 93.040(c)(13). The record contains no documentation and calculations from TDL justifying its request for 5.6 cfs. On December 22, 1986, DNR amended the amount of water to be appropriated to 5.6 cfs (from the previously permitted levels of 6 cfs and 7 cfs) in each of the permits, apparently on its own initiative, without supplying its reasons for doing so. DNR initially granted TDL 6 cfs and 7 cfs for two permits which covered large areas. DNR's initial grant can be fairly interpreted to have permitted TDL a total appropriation of 13 cfs for the two permitted areas, not 6 cfs and 7 cfs for each tributary within the permitted areas. The latter interpretation would potentially result in a cumulative total appropriation much greater than 13 cfs for the initial two permits. Therefore, when DNR split the initial two permits into fifteen permits, allowing 5.6 cfs to be appropriated for each permitted stream, DNR allowed TDL to appropriate a total of approximately 84 cfs. By doing so, DNR improperly amended the permitted appropriation amounts. Additionally, TDL has not supported its claimed need for 5.6 cfs. TDL broadly asserts that [t]he ongoing flow rate necessary to guarantee operation of TDL's mining equipment is 5.6 cfs, explaining that 5.6 cfs is needed to replenish water loss in settling ponds due to evaporation, seepage, cessation of operation, or moving the wash plant. [23] This assertion is not supported by facts in the record. No logical or self-evident reason explains why that amount of water is needed to fill or refill a settling pond; TDL could, for example, fill the pond at a slower rate or pump from the shallow ground water adjacent to ponds. Furthermore, other than asserting that 5.6 cfs is the flow rate to which it requires access, TDL fails to demonstrate why such an amount is necessary. [24] Therefore, DNR's grant of 5.6 cfs lacked a substantial basis in the record.
TNCC claims that the water use has changed, and therefore that the amount of water to be appropriated should reflect this change. TNCC contends that the original permits approved the operation of a bucket line dredge, which required 6 and 7 cfs to operate. In December 1986 DNR amended the appropriation per stream to 5.6 cfs; DNR retained that amended figure through the disputed extensions. However, DNR found that from 1987-90 TDL used wash plants which apparently require more water than bucket line dredges. TNCC argues that this is a substantial change in the way the water was used, and therefore that, DNR should not have extended the 5.6 cfs allocation without further analysis. TDL responds that [t]he fact that ... [it] has gone from a dredge to a wash plant operation does not change the type of beneficial use involved: placer mining. Only the type of equipment used has changed. The DNR Director responded similarly to TNCC's position on this point: While the type of operation for mining has changed from dredging to a wash plant, I find that using water for placer mining has not changed. TNCC counters that the beneficial use is not placer mining, but instead placer mining by wash plant rather than placer mining by dredge. We agree. The issue is not the general purpose of the appropriation, but the requisite amount of water for the specific project involved. DNR requires a water right applicant to describe the nature of the water use. 11 AAC 93.040(c)(9). The nature of the water use changes if a mining company employs a significantly different mining method that requires a different quantity of water. If TNCC was correct in asserting that a wash plant uses different amounts of water than a dredge, TDL should have been required to seek amended permits reflecting an adjusted limit on the amount to be appropriated. If TNCC was correct, TDL also should have been required to provide a statement of the [new] quantity of water requested, with documentation and calculations justifying the request. 11 AAC 93.040(c)(13). DNR did not decide whether TNCC was correct; it only considered that the basic use, placer mining, was unchanged. DNR should have considered whether the two different methods of mining, in fact, require different amounts of water. Not having conducted that analysis or answered TNCC's argument, DNR should not have extended the 5.6 cfs allocation. The record does not appear to contain facts that would have supported a finding the two types of operations use identical amounts of water (had DNR made such a finding) and it certainly does not contain facts that are so convincing that they render harmless DNR's failure to decide that issue.
TNCC argues that DNR did not adequately address TNCC's concerns regarding water quality, navigation, and fish and wildlife. DNR responds that TNCC supports this claim with opinions which are not probative of harm attributable to TDL's permitted activities. [25] DNR may not issue a permit unless doing so is in the public interest. AS 46.15.080(a)(4). In making this determination, DNR shall consider the impacts of water appropriation on fish and game resources, public health, and access to navigable water. AS 46.15.080(b)(3), (4), (8). DNR's regulation provides that [a] permit extension ... will, in the commissioner's discretion, be subject to additional conditions that the commissioner considers necessary to protect prior appropriators and the public interest. 11 AAC 93.120(g). Therefore, DNR must consider the public interest in determining whether to extend permits, specifically considering the impacts on water quality, navigation, and fish and wildlife. AS 46.15.080(b); 11 AAC 93.120(e)(2) & (g).
DNR's decision to extend the permits discussed water quality: The biggest concern expressed in the objections to this project and in the public hearing concerned water quality. This issue is hard to get a handle on due to the fact that there is no baseline data prior to mining, and the water quality work done to date has been geared towards turbidity and sediment. The USF & WS has a draft report out on the impacts of placer mining on the Yukon Delta National Wildlife Refuge. The conclusion states that no evidence was found that mining activities have adversely impacted the Tuluksak River's water quality or fish population.[ [26] ] However, the report goes on to say that river sediment in and below mining operations appear to be accumulating heavy metals. It is hypothesized that alterations in specific water quality parameters, such as PH, could release the heavy metals and trace elements found in sediment to the Tuluksak River. The report does not demonstrate that water quality has been affected by the mining to date, but speculates that the Fog River and Otter Creek significantly influence the lower Tuluksak River's chemical characteristics. Neither of these streams have been mined in the past. The report suggested that the current studies be continued with additional, and more extensive monitoring, on a regular schedule. BLM, in their Environmental Assessment (EA) states that, No impact to the water quality of the Tuluksak River watershed is expected from the mining operation, because there are no planned diversions of surface water or direct discharges of processed water to the Tuluksak River. All surface and ground water intercepted in the mining areas will be collected and recycled into the operational water supply or treated to state and federal standards before discharge. The wash plant used in this mining operation has consistently met state and federal water quality standards during the last six years of operation, according to DEC and BLM. Monitoring by the federal and state agencies has not identified any contaminants in the Tuluksak River system, which might be attributed to the mining or its support activities (BLM's EA). DNR relied on the reports of various agencies in concluding that the Tuluksak River meets state water quality standards. DNR provided conditions regarding water quality on the permit extensions: Per AS 46.030.050, [sic] Any discharge to state waters made subsequent to these water appropriations shall comply with the Alaska Water Quality Standards. This may require the installation and maintenance of settling ponds or similar systems to reduce turbidity and settleable solids in the discharges. ... . All operations will be conducted to prevent degradation of natural water courses or systems. Processed water will be recycled and any overflow will be treated to state and federal standards before discharge. All surface waters within the state of operations will be subject to treatment before discharge. Although DNR could have been more specific in the conditions it imposed regarding water quality, [27] TNCC fails to demonstrate that DNR did not comply with state water quality standards. Thus, DNR did not abuse its discretion.
During the public hearing at Tuluksak, villagers testified that navigability on the river had decreased. DNR's decision found that navigability would not suffer from issuance of the permits because mining did not reduce the overall flow of the river since there would allegedly be no net loss of water. [28] TNCC claims that DNR's decision ignored the villagers' testimony and is, therefore, unfounded. Although we acknowledge the sincerity of the villagers' opinions that mining will necessarily degrade the Tuluksak River, TNCC failed to document how TDL had negatively impacted navigability on the river and its tributaries.
The Tuluksak River provides important habitat for salmon and is relied upon as a subsistence and commercial fishery. The Tuluksak River system contains one of the major salmon spawning streams in the Kuskokwim River drainage. A loss of salmon production in the Tuluksak River will impact the Village of Tuluksak's subsistence fishery. Additionally, the Tuluksak River is a major contributor to the Kuskokwim River commercial fishery. TNCC argues that DNR did not adequately address TNCC's concerns regarding fish and wildlife. Villagers testified that there are fewer fish in the river than before mining began. Additionally, TNCC submitted Wise's report, stating that fish need at least fifty percent of the stream flow to have excellent fish habitat. TNCC also expresses its concern that stream segments may become dewatered when the return point of recycled water is downstream from the appropriation point, thereby significantly depleting fish spawning and rearing habitats and preventing passage of fish upstream or downstream at key life stages. TNCC's concern about the potential for dewatering has merit. A permit applicant must provide a legal description of the point of withdrawal, diversion, or impoundment; the point of water use; and, if water is to be returned to a stream or water body, the point of discharge. 11 AAC 93.040(c)(6). Neither TDL's original applications nor its extension applications indicate precisely the points where the water will be diverted and then returned to the streams. Consequently, it is difficult to determine where a stream may potentially become dewatered. DNR failed to place any conditions on the permits concerning the distance between the point of appropriation and the point of return. See 11 AAC 93.120(e)(2)(A) (providing that DNR may include conditions to maintain a specific quantity of water at a given point to protect fish and wildlife) & 11 AAC 93.120(e)(2)(B) (providing that DNR may include conditions that include the approved location of points of withdrawal and return flow). 11 AAC 93.120(e)(2) gives DNR the authority to include conditions which would have potentially protected fish and wildlife. DNR's decision granting the permit extensions contained one condition regarding fish and wildlife: Operations will be conducted in a manner to minimize wildlife species disruption and habitat destruction. Reclamation will be designed, to the extent practicable, to enhance wildlife habitat diversity and productivity. 11 AAC 93.120(e)(2) gives DNR the authority to include conditions which protect fish and wildlife. Because TDL's extension applications failed to reveal the location of the points of appropriation and return, DNR should have conditioned the permits. DNR might have cured any deficiency in the applications by imposing stringent limitations on dewatering and by requiring that operations cease or be reduced to maintain adequate streamflow for fish and wildlife. The sole condition DNR imposed regarding fish and wildlife is too vague to ensure protection of the salmon habitat from dewatering. Because DNR did not incorporate any specific condition regarding dewatering, it abused its discretion in granting extensions in response to deficient applications. [29]