Thursday, December 11, 2008

Guest editorial: All industries not the same

As I often do, I was spouting off about just how shortsighted, how downright insane it was to consider building North America’s largest open pit mine in Bristol Bay. My neighbor, a thoughtful man, an avid hunter and fisherman, who often indulges my rants, was polite and waited until I was done.

“You are probably right,” he admitted before reminding me that he worked for the oil industry, as if that somehow precluded him from taking a stand on this issue.

His is a common response from friends who work in the “industry,” as if all industries are cut from the same cloth. Yet comparing the oil and gas industry to hard rock mining is like comparing eagles to penguins: while both are birds, that’s where the similarities end.

Likewise, with oil and hard rock mining you could not have two more distinct entities, conducting business in such a completely different manner and treated so differently by both state and federal governments. First, there is a large chasm in how they are regulated and taxed, one benefiting the state and paying for infrastructure and schools, the other actually burdening the government with massive oversight and cleanup costs that fall on the backs of taxpayers.

Second, there is a huge difference in how these resources are extracted. Oil extraction on land, with innovations like directional drilling, is relatively benign, while large-scale hard rock mining causes a massive upheaval of all land and water around it, with toxic byproducts that must be stored on-site forever.

The complete inequity with which we treat these two industries is quite frankly unfair. The mining industry has the luxury of still being regulated under the Mining Law of 1872, an antiquated piece of legislation signed by Ulysses S. Grant, which allows them access to public lands for only a few dollars an acre.

Furthermore, they often conduct business on lands where oil companies would never be allowed to set foot, despite oil’s “footprint” being dwarfed by that of the other industry. When it comes to taxes, the disparity widens further. Alaska collects over 20 percent of market value of oil produced here, compared to a meager 1 percent of mineral production by large-scale mines. So, despite mining’s claim of adding millions to state coffers, if you do the math and include all oversight and subsidies, such as the Red Dog haul road, we actually pay out more than we take in.

Compound this by examining the track record of the two industries. Oil companies’ problems have been mainly with transporting oil, not with extraction. Mining, on the other hand, has seen repeated catastrophes, evident from the fact that 62 hard rock mines are now Super Fund cleanup sites, costing taxpayers a whopping $2.5 billion since 1997.

That’s not including the 93 other mining operations that would qualify for inclusion if the Super Fund was indeed super and had enough funds. These aren’t just old mines that are having problems. Anglo American, the second largest mining conglomerate in the world and the company that will be mining Pebble, had two dam failures in 2005, and the Lisheen mine, in Ireland, where permitting is as stringent as here, has been a disaster.

This state-of-the-art mine, opened in 2006, has in no way lived up to its promises, with streams below the mine now closed to fishing.

Oil and gas companies are also required to cap wells and clean up after themselves. Studies show that existing bonds for mines, however, are woefully underestimated, typically only covering 25 percent to 80 percent of cleanup costs, leaving taxpayers once again holding the bag. And this does not even take into account remediation for people who live in the area and risk losing their livelihoods and way of life.

So, whether you agree or disagree with projects like Pebble, before they are allowed to precede these large foreign conglomerates should at least be held accountable and be held to the same standards as other industries, because right now it’s evident — not all industries are treated the same.

Dave Atcheson is the executive director of the Renewable Resources Foundation, the educational arm of the Renewable Resources Coalition. He also is a freelance writer and author of the guidebook, “Fishing Alaska’s Kenai Peninsula.”

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