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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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  • Awareness for REE supply chain issues grows in U.S. Senate

    (AP) Rare earth minerals are already piled up in American throwaway mine tailings.

    In a column for the Washington Examiner, Ron Arnold, executive vice president of the Center for the Defense of Free Enterprise, asks why President Obama won’t “let the Defense Department face the rare earth security risk,” stemming from the severity of our mineral resource dependency on China.

    He cites Congressman Mike Coffman, sponsor of Federal legislation to alleviate our supply risk exposure for REEs, who says it is “unclear whether the Obama administration, which is neglecting proven mining and development strategies that could develop a domestic rare earth supply, is playing to win in the real world.”

    Congressman Coffman’s comment illustrates the contradictory nature of federal policy on critical and strategic metals. While the U.S. EPA unilaterally claims broad powers to stop mining projects which would provide a domestic source of critical metals, the U.S. DoE warns that supply for 5 Rare Earths is “at risk,” and the U.S. DoD recommends — for the first time ever — the acquisition of two Rare Earths for the National Defense Stockpile.

    Perhaps most interestingly from an American Resources perspective, Arnold points to growing momentum on Capitol Hill for Congressional action, this time coming from the Senate side. Says Arnold:

    “The details are fuzzy, but key members of the Armed Forces House and Senate Committees have been bouncing the idea around. U.S. Senator Roy Blunt, R-Mo., isn’t ready to introduce a bill yet, but told me, ‘By encouraging the domestic production and refinement of rare earth minerals, we can reduce our dependency on other countries and encourage economic development here in the U.S.’”

    While Rare Earths pose a serious national security risk for supply disruption, friends of ARPN will appreciate that there are 18 metals and minerals other than the Rare Earths for which the U.S. is 100% import dependent — many of which, like REEs, with known resources in the United States.

    Senate interest in Rare Earths is a good sign that policy-makers are beginning to appreciate the risks of foreign resource dependency. We can and should remove the policy obstacles to domestic resource development – our manufacturing base, our economic well-being, and our national security depend on it.

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  • American Resources Policy Network Invited to Take Part in National Defense Stockpile Report

    U.S. Defense Agencies Look to ARPN Experts for Critical Input on Metals and National Security The American Resources Policy Network has been invited by the U.S. Defense Logistics Agency/Strategic Materials (DLA/SM) and the Institute for Defense Analyses (IDA) to take part in the 2015 National Defense Stockpile (NDS) Requirements Report process, assessing potential shortfalls in [...]
  • The Epoch Times on why the Pentagon wants “to buy rocks”

    The Epoch Times’s Matthew Robertson takes a closer look at the Pentagon’s request to Congress “for over a billion dollars. To buy rocks” – at a time when budget cuts should be the order of the day in Washington. He notes that while in previous years, the Department of Defense merely noted China’s near-total monopoly [...]
  • North of 60 Mining News piece traces DoD “About-Face” on REEs

    In a comprehensive new piece for North of 60, Mining News publisher Shane Lasley zeroes in on the Department of Defense’s apparent course reversal on Rare Earth Elements in which the Pentagon recommended the establishment of strategic stockpiles for seven REEs in the near term. This “about-face,” as Lasley calls it, comes less than a [...]
  • New DoD stockpile report finds mineral shortfalls

    In his latest piece for Real Clear World, American Resources principal Dan McGroarty reviews the Department of Defense’s just-released National Defense Stockpile Report to Congress against the backdrop of our mineral dependencies. According to McGroarty, the report reflects a re-thinking on the part of the Pentagon, where, less than a year ago, researchers downplayed the [...]
  • U.S. Department of Defense Studies Alaska’s Rare Earths Potential

    As the Canadian daily Chronicle Herald reports, the U.S. Department of Defense is conducting a study of Canadian mining company Ucore’s rare earth-rich Bokan Mountain property in southeast Alaska. Under the auspices of the Defense Logistics Agency, the study will “focus on the possible development of Bokan Mountain to meet defence department requirements for an [...]
  • American Resources expert discusses defense implications of rare earth shortages in new policy brief

    Earlier this year, a Department of Defense analysis stunned many with its conclusion that concerns about Rare Earths supply shortages were exaggerated. Jeffery A. Green, founder of the Strategic Material Advisory Council and American Resources expert, explains how the Pentagon misses the mark in its assessment in a new policy brief for the Center for [...]
  • Experts: DoD’s dismissal of rare earths crisis “naïve” and “ill-informed”

    According to a newspaper reports of a (long-overdue) seven-page DoD report titled “Rare Earth Materials in Defense Applications,” sent to Congress last month and which has not yet been made public, “domestic rare earth supplies will meet the U.S. defense industry’s needs by 2013 for the materials that go into military motors and electronics” – [...]
  • Industry analysts criticize DoD rare earths report

    Industry experts have blasted the Pentagon’s latest (unpublished) report which claims that domestic sources will allow the U.S. military to meet its demand for rare earths by next year. “The only way we can get that material right now is from a foreign company in China,” said Jack Lifton, co-founder of Technology Metals Research. American [...]

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