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American Resources Policy Network
Promoting the development of American mineral resources.
  • EPA’s Bristol Bay Watershed Assessment: A Factual Review of a Hypothetical Scenario

    Testimony presented by Daniel McGroarty – Oversight Hearing of the U.S. House of Representatives Committee on Science, Space & Technology Subcommittee, August 1, 2013

    Chairman Broun, Ranking Member Maffei, Members of the Committee: Thank you for the opportunity to testify today. My name is Daniel McGroarty, and I am president of the American Resources Policy Network, an experts-led organization dedicated to exploring and informing the American public and American policy-makers of the importance of U.S. resource development – and the dangers of unnecessary foreign resource dependence.

    The Pebble deposit, the subject of the EPA assessment, is the largest potential copper mine in the United States. America’s lack of this critical metal has most notably been acknowledged in a recent Defense Department report as causing “a significant weapon system production delay for DoD.” Pebble is also potentially a multi-metal mine, with prospects beyond copper for the recovery of Molybdenum — used in alloy form in gun-barrels of many types, Rhenium — used in high-performance jet fighters, and Selenium and Tellurium, both of which are used in photovoltaic solar panels that could not only lead the Green Revolution – but provide a portable power source for U.S. troops in the field.

    As a matter of sound public policy, Pebble should be treated no differently than any other potential mineral resources project under the well-established environmental permitting process. But even before the permitting process has begun, Pebble has been subject to inconsistent and unprecedented treatment by the EPA — creating a troubling trend in public policy that has strategic implications. Given these factors, this Committee is right to examine the EPA’s actions in greater detail.

    American permitting needs to be predictable — not as to outcome, but in terms of process — in order to encourage investment in American resources. The hallmark of that process – in terms of environmental permitting and public participation — is the National Environmental Policy Act (NEPA).

    Yet, the very act of EPA conducting the Bristol Bay Watershed Study (hereinafter, the “Watershed Study”) — prior to Pebble submitting a mine plan or seeking a single permit — creates a chilling effect on investment in U.S. resource extraction. The likelihood that mine opponents are gearing up to use the Watershed Study as a reason to trigger a pre-emptive permit denial (before NEPA even begins) could deprive the U.S. of reliable sources of critical metals, responsibly extracted under American regulations.

    Every issue raised to justify the Watershed Study could easily and amply be raised and reviewed within the existing permitting process, with input from experts and the community. Put another way, there is no issue I see that requires the construction of a wholly new “pre-permitting process,” with the power to prevent a proposed project from even having the opportunity to be judged within the NEPA process.

    An unprecedented watershed assessment of a hypothetical mine — and even the minor contemplation of a preemptive permit veto — warrants an extremely high bar for the scientific method, the validity of source material, and the impartiality that must be met by this study.

    On all those counts, Mr. Chairman, we believe this assessment fails and falls short.

    At this point, two caveats: I am a policy analyst, not a scientist. The substantive points I will raise are detailed by experts, but should give all non-scientists reason for pause.

    So far, the most substantive review of one of the key studies in the Watershed Assessment – the EARTHWORKS-funded study, “Kuipers Maest, 2006, “Comparison of Predicted and Actual Water Quality at Hardrock Mines” led by Dr. Ann Maest (hereinafter, the “Kuipers Maest 2006 report”) — is an analysis conducted by global water and environmental management firm Schlumberger, on behalf of the Northwest Mining Association, and submitted to the EPA as part of NWMA’s Watershed Study comments. As the Schlumberger reports says, one of the fundamental tenets of scientific research is that its findings can be replicated by others, provided they have access to the data set. Schlumberger states that it cannot replicate the hydrological data presented in the Kuipers Maest 2006 report relied on by EPA.

    Second, Schlumberger finds what I have elsewhere noted as “backward bias” inherent in any hypothetical construct. Schlumberger notes that the Kuipers Maest 2006 report draws on a “preponderance” of case studies taken from mines that operated before the modern regulatory era.

    If the “data set” consists of a preponderance of mines permitted and operated before the modern era of regulatory limits – is it any surprise that these mines fell short of the modern limits?

    What does the failure of past mines have to do with a proposed mine –using current and perhaps even cutting-edge processes – and whether it will meet modern requirements?

    And how does it constitute “sound science” to argue against a proposed mine based on what happened at other mines operated to other standards 20, 30 or 40 years ago?

    Would we use such a backwards-biased yardstick to judge the safety of a new airplane? A new car? A new medicine?

    Is it “sound science” to say that poor performance in the past proves that we cannot achieve superior performance now and in the future?
    Now I will turn from the substance to sourcing — serious questions concerning the impartiality of experts relied upon by the EPA.

    My organization expressed these concerns in a letter sent to members of the House, Senate and administrators at EPA, which I include in my written testimony but will summarize here.

    Once again, the subject of concern is work done by Dr. Ann Maest and Stratus Consulting.

    Many of us saw the coverage of the Chevron environmental case in Ecuador, where plaintiffs were awarded an $18 billion dollar judgment against the oil company. This judgment has been the subject of extensive federal litigation in U.S. courts, where, among other charges, Chevron brought racketeering claims against members of the plaintiff’s team – including against Dr. Maest and Stratus. At the heart of these suits were claims that the plaintiff’s litigation team manipulated data to show contamination where no data existed and created a report written by the plaintiff’s team, including Maest and Stratus, that was then passed off as being written by a court-appointed independent consultant.

    How do we know this? For what must have been public relations reasons, the plaintiff’s team actually invited a film crew to document the behind-the-scenes events in a major environmental lawsuit for a favorable documentary. This documentary also generated hours of tape on the cutting-room floor that was uncovered during Chevron’s discovery process.

    Here is one such clip:

    [VIDEO]

    “Facts do not exist. Facts are created.” That’s the lawyer who directed the supposedly independent research. The woman chuckling in the seat next to him is Dr. Ann Maest: the scientist who conducted the Ecuador study, and later disavowed its findings…

    …The very same scientist whose work is cited multiple times in the Bristol Bay Watershed Study.

    And while the Chevron litigation is still ongoing, Maest and Stratus settled claims against them by submitting sworn statements that “renounced all of the scientific findings” in their report.

    Stratus and Maest have numerous contracts with EPA and Maest’s work is cited 11 times in the Watershed Study – seven of those in reference to the Stratus consulting firm.

    EPA — apparently understanding the controversy surrounding this work — ordered a quasi-peer review of the Kuipers Maest 2006 report as part of addendum to the second draft of the Watershed Study. I call it a “quasi-peer review” because EPA’s last-minute effort falls seriously short of basic peer review standards.

    Case in point: the review relied on one scientist who was a former colleague at the Stratus firm who had coauthored studies with Dr. Maest. The Committee can consider for itself whether this constitutes the kind of independent assessment that defines peer review.

    So, to sum up: in the Ecuador incident, the scientist has disavowed her work.

    Her firm has cut its ties to her.

    And yet EPA builds its Watershed Study on her work.

    I want to be clear on this point: I do not know whether the work used in the Watershed Study will prove to show issues similar to the Ecuador studies that the author disavowed. My point is that this question needs to be examined – impartially, independently – and that absent that, EPA’s reliance on work done by this scientist or her firm in the Watershed Study puts the entire study under a cloud.

    In closing, there’s a quote I’d like to share with the Committee:
    “NEPA is democratic at its core. In many cases, NEPA gives citizens their only opportunity to voice concerns about a project’s impact on their community… And because informed public engagement often produces ideas, information, and even solutions that the government might otherwise overlook, NEPA leads to better decisions — and better outcomes — for everyone. The NEPA process has saved money, time, lives, historical sites, endangered species, and public lands while encouraging compromise and cultivating better projects with more public support.
    …because of NEPA — …we are guaranteed a voice.”

    That quote is from the website of the Natural Resources Defense Council (NRDC). They love NEPA — just not this time, for this project.

    That’s a dangerous departure from the law. This time, the mine is Pebble and the metal is copper. But if we allow this precedent, there will be many mines and projects that don’t get built – and many metals we’ll be forced to import, many times from nations that wish us harm.

    We have a process in place to determine whether a mine should or shouldn’t be built. We should follow that process – to lead us to a policy based on science, and projects made better by the even-handed scrutiny they receive.

    Thank you.

    # # #

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  • American Resources Principal Daniel McGroarty testifies before House Committee on Natural Resources Subcommittee

    Last week, American Resources principal Daniel McGroarty testified before the U.S. House of Representatives Committee on Natural Resources Sub-Committee on Energy and Mineral Resources on the issue of “America’s Mineral Resources: Creating Mining & Manufacturing Jobs and Securing America.”

    Commenting specifically on one of the bills pending in the committee, the ‘‘National Strategic and Critical Minerals Policy Act of 2013’’ (HR 1063), introduced by Congressman Doug Lamborn (R, Colo.), McGroarty stressed the importance of aligning the United States’ public policy with the goal of strengthening America’s resource sector against the backdrop of our – unnecessary – over-reliance on foreign mineral resources.

    In his testimony, McGroarty highlighted three steps Chairman Lamborn’s bill would take to reduce our mineral dependencies, which include strengthening our assessment capabilities, eliminating duplication in the permitting process, and the requirement for a “National Mineral Assessment.”

    Here’s an excerpt:

    “The second key section in the Lamborn legislation concerns eliminating needless duplication in the mine permitting process – a process that today, in the leading independent study, earns the U.S. worst-in-the-world ranking, tied for last with Papua New Guinea, with the average mine permitting process in the U.S. taking 7-10 years. And this metric is getting worse, not better: Just 4 years ago, in 2009, the same study found the U.S. process took an average of 5 to 7 years.

    And little wonder why. One day, the DoD releases a study showing 23 metals and minerals in potential shortfall, while the DoE declares a dozen minerals critical to the green-tech and clean-energy transition. But at the very same time the U.S. EPA moves to stop a proposed American copper mine – a metal whose short supply, DoD tells us, has already caused “a significant weapon system production delay” – before the permitting process has even begun.

    So with so many mixed signals coming from the federal government, let’s ask ourselves: If you were an American manufacturer, dependent on metals and minerals engineered into your products, could you risk waiting for a reliable source of American supply? Or would you build your new facility where the metals are – in China, perhaps – exporting jobs and Intellectual Property, sacrificing GDP and feeding a negative balance of trade as we buy back products that could have been, should have been, made here in America?”

    McGroarty’s conclusion:

    “The Lamborn bill is a solid test of our seriousness on this issue. If enacted, it would provide the fact-base for a data-driven assessment of our domestic resource potential, our vulnerability to foreign supply, and the obstacles that stand between us and a greater degree of resource independence.”

    To read the full testimony, click here.

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  • “Can we keep U.S.-mined minerals for exclusive use in this nation?” – A question that misses the mark

    In a letter to the editor of the Wall Street Journal, a reader from Arizona responds to American Resources Principal Daniel McGroarty’s op-ed “America’s Growing Minerals Deficit.” Citing Canada-based Augusta Resources’ Rosemont copper mine project in southern Arizona as an example, the reader alleges McGroarty “overlooks one very important consideration. There isn’t any assurance that [...]
  • American Resources experts to speak at international graphite conference

    American Resources Principal Daniel McGroarty will speak alongside fellow American Resources expert and Manager for Industrial Minerals Data, Simon Moores, at Industrial Minerals’ 2nd Graphite Conference 2012 in early December. In light of its traditional uses, its importance for the new Li-ion technology, and the ostensibly endless potential applications for the “new super material graphene,” [...]
  • Mark your calendars – Strategic Minerals Conference 2012

    If you haven’t lived under a rock lately (pun intended), you are probably aware of the fact that there is growing concern regarding the supply of mineral resources. While American Resources has consistently argued that the U.S. has subjected itself to a troubling degree of non-fuel mineral import dependency, which is often greater than our [...]
  • “Not even the likes of Jason Bourne can save us”

    In his latest RealClear World column, American Resources principal Daniel McGroarty takes on the latest book in the “Jason Bourne series” – the “Bourne Dominion.” No, you’re not on the wrong blog – this is not a book club. The plot of the book actually involves a group of terrorists set on destroying the only [...]
  • Marcus Evans Military Energy Alternatives Conference

    American Resources leader Dan McGroarty will be attending the 7th Annual Military Energy Alernatives Conference in Tysons Corner, VA on March 6-8. The conference will discuss how the Department of Defense is implementing renewable technology to achieve energy efficiency and security at the operational level, as well as how renewable energy can be applied more [...]
  • From rare earths to rare metals: Molymet takes a stake in Molycorp

    American Resources followers know their Rare Earths from their rare metals, and that distinction is key to understanding a strategic investment that’s getting a lot of attention right now: Molymet of Chile’s $390 million investment in Molycorp, the U.S. Rare Earths miner. But while most analysts are looking for the commercial synergies in the deal, [...]
  • Supply, Demand, and the March of Science

    Just when American Resources has read its thousandth story on companies substituting around scare metals like the Rare Earths to reduce usage, along comes this Platts report on a new discovery in Russia’s RUSAL research labs, working in conjunction with a team from the Siberian Federal University.  Scientists there have fabricated a new aluminum alloy [...]
  • Our Looming Metals Deficiency

    BusinessWeek today reports the findings of a new study by PwC predicting chronic shortages of 14 metals and minerals critical to major industrial sectors ranging from chemicals and  aviation to renewable energy sources like wind and solar power.  Lithium, American Resources’ metal of the month, makes the list.  The report, based on a survey of [...]

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