The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
America's cumbersome permitting process infects state's ability to be a sustainable supplier of clean energy minerals North of 60 Mining News – June 2, 2023
S&P Global Vice Chairman Daniel Yergin and Alaska Gov. Mike Dunleavy discuss Alaska's role in America's energy transition during the 2023 Alaska Sustainable Energy conference.
North of 60 Mining News analysis has identified 49 out of the 50 U.S. critical minerals in Alaska deposits and prospects. Click on the image for a list and brief description of their uses.
U.S. Geological Survey map showing critical minerals associated with producing mines and advanced exploration projects in Alaska.
A sample of copper-cobalt mineralization from the Bornite deposit at the western end of the proposed Ambler Road.
Alaska's unparalleled potential to be a major domestic supplier of the minerals and metals critical to the clean energy transition attracted some of North America's top commodities investors and analysts to Anchorage for the second annual Alaska Sustainable Energy conference. The 49th State's rich mineral resources, however, may remain on lockdown due to a "permitting pandemic" that plagues not only Alaska but the entire United States.
"Our country is suffering from a permitting pandemic – it leads to paralysis, lack of economic resolve, and a great deal of pain," S&P Global Vice Chairman Daniel Yergin, a highly respected authority on international energy and geoeconomics, said during a keynote address.
Yergin, a Pulitzer Prize-winning author who has written three books on international energy and geopolitics, is not the only one concerned about the U.S.'s long permitting timelines. Executives from renowned investment firms Goldman Sachs and Berkshire Hathaway, mining executives working to unlock Alaska's mineral potential, state regulators, and even high-level members of the Biden administration cited the often decade-long wait for federal authorizations as the single biggest impediment to America's race to be the global leader in clean energy.
"If we are going to be successful in this competition and if we are going to take advantage of these opportunities, the jobs, we need to permit much, much quicker than we do right now," U.S. Deputy Secretary of Energy Dave Turk said during an opening day address to the Alaska Sustainable Energy conference.
Beyond the competitive advantages, the streamlining of America's notoriously cumbersome permitting process would help unlock the ESG benefits of transitioning clean energy supply chains away from countries with much lower regard for the environment and human rights.
The ESG advantages of moving the front end of America's energy transition supply chains to the 49th State are detailed in "The Alaska Standard", an inaugural sustainability report released during the Alaska Sustainable Energy conference.
"From our legacy resource industries that will sustain us for decades to come, to our investments in renewables and emerging energy technologies, we want the world to know that Alaska is the best place on the planet to do business that strikes the right balance between what's best for both people and our environment," said Alaska Gov. Mike Dunleavy.
When you add in the time it takes for federal and state authorizations, inevitable litigation, and then development, it can often take the better part of two decades to go from permit applications to producing the first metal at a mine in the U.S.
"So, if we started today, we are talking about the 2040s to get something done," said Yergin.
This timeline falls outside of the Biden administration's ambitious climate goals that include having EVs make up 50% of all vehicle sales in the U.S. by 2030 and the nation achieving net-zero greenhouse gas emissions by no later than 2050.
And it is not only mining that is feeling the pain of the permitting pandemic in the U.S.
Clean energy power generation facilities, lithium-ion battery factories for electric vehicles, and electrical grid expansion to accommodate an envisioned low-carbon future that trades in pipelines for powerlines are all subjected to the same unwieldy permitting process that mining companies must navigate to provide a domestic supply of copper, lithium, and other clean energy metals.
With the entire clean energy supply chain at risk, the long permitting timeline in the U.S. is a problem that transcends the traditional divide between environment and resource development, according to Cathy Woollums, senior vice president and chief sustainability officer at Berkshire Hathaway Energy.
"Time is our enemy when we think about investment and when we think about climate," she said during an Alaska Sustainable Energy conference panel on investing in the future.
The Berkshire Hathaway senior vice president said quick but responsible action to minimize permitting timelines is needed to fully capitalize on the clean energy transition and the economic opportunities it offers.
"It is so important to ensure that as we are moving forward on a permitting front in a responsible way that takes consideration of the local resources and communities, and doesn't damage those, but at the same time has a limitation on time," she said.
The proposed road to the Ambler Mining District in Northwest Alaska has become the poster child for both America's permitting pandemic and a seemingly internal struggle within the Biden administration when it comes to onshoring low-carbon energy supply chains.
While officials in the U.S. Department of Energy are calling for a more efficient permitting process, the Bureau of Land Management rescinded a previously issued permit to build a 211-mile road to the Ambler District, an area rich in copper, zinc, cobalt, and other metals critical to the clean energy transition.
"In terms of regulatory approvals and permitting, the agencies that are responsible to do that, we think, are not well aligned," said Ramzi Fawaz, president and CEO of Ambler Metals LLC, a company working toward developing a copper-rich mine at the western terminus of the proposed Ambler Road.
Recognizing the need for surface access to unlock the rich mineral potential in the Ambler District, the U.S. Congress included special provisions in the 1980 Alaska National Interest Lands Conservation Act (ANILCA) that guaranteed the approval of a transportation corridor to this metals-rich region of Northwest Alaska.
In 2020, the U.S. Bureau of Land Management and National Park Service, both of which fall under the Interior Department, approved the federal authorizations needed to build a road that would meet the Congressional Ambler Road mandate.
Early last year, however, BLM suspended the authorizations for further review.
This added review to ensure adequate consultation with Alaska Native tribes and evaluation of potential impacts the road might have on subsistence uses was originally slated to be finalized by the end of this year. In May, however, the federal land manager pushed the projected completion date for the supplemental review to mid-2024.
This nearly 2.5-year timeline to review a permit that has already been issued demonstrates how slow and cumbersome federal permitting in the U.S. can be. And this is just for the road – each mine that would be developed in the district would need to go through its own individual permitting process.
The first Ambler District mine expected to enter into the federal permitting process is Arctic, a high-grade deposit that is expected to deliver 1.93 billion pounds of copper, 2.24 billion lb of zinc, 334.8 million lb of lead, 423,000 ounces of gold, and 36 million oz of silver over an initial 13 years of mining.
"We need copper, but you can't get the road to Ambler approved," Yergin said during a chat with Gov. Dunleavy.
The sense of urgency for permit reform that was heard throughout the three-day Alaska Sustainable Energy conference echoes a wider call for policymakers on Capitol Hill to craft legislation that will streamline the federal regulatory framework for large-scale projects in the U.S.
In a report published earlier this year, R Street Institute says America's clean energy ambitions are at risk without matching mining policies.
"Despite political rhetoric and policies promoting the use of domestic critical minerals in clean energy through the Inflation Reduction Act and executive actions, the United States is well short of being able to supply enough minerals to fuel its own clean energy transition, much less to be a major global supplier of minerals needed for clean energy technology as politicians are keen to depict," Philip Rossetti, senior fellow for energy and environment at R Street, penned in the executive summary of the report.
The Washington, D.C.-based think tank calculates that at current domestic production levels, the U.S. would be 74% import-reliant for copper, 99% for cobalt, 98% for nickel, and 100% for the lithium needed for the clean energy transition by 2040.
"If all proposed projects for copper, cobalt, nickel, and lithium entered the market, the potential import-reliance for these minerals for a net-zero emission energy transition would fall to 41%, 99%, 95%, and 51%, respectively," Rossetti wrote.
Getting the energy transition metal import numbers down would require moving forward with large, advanced-stage projects like Northern Dynasty Minerals Ltd.'s proposed Pebble Mine in Alaska, considered to be the world's largest undeveloped deposit of copper.
According to R Street analysis, Pebble alone could meet 12% of the copper needed to meet America's climate goals by 2040. When combined with Resolution, a proposed copper mine in Arizona being advanced by Rio Tinto and BHP, copper production in the U.S. would double.
"The likelihood or timing of major mines entering the market in the United States is uncertain, though, and our own analysis of proposed mines found that practically every major project relevant for clean energy has been delayed over issues of permitting, leasing and litigation," he added. "This is problematic because, absent increased domestic production, the United States will remain reliant on foreign suppliers – a fact that is creating its own potential challenges."
This is why many analysts, investors, policymakers, and members of Biden's administration that attended the Alaska Sustainable Energy conference are joining the mining sector in calling for sensible permitting reform in the U.S.
The "Permitting for Mining Needs Act" introduced by Minnesota Rep. Pete Stauber in January offers the quickest path to streamlining the mine permitting process in the U.S., though few believe that this bill and the larger "Lower Energy Costs Act" it is packaged inside of has a chance of getting past the Senate.
Nicknamed the "PERMIT-MN Act", a nod to Congressman Stauber's home state, this legislation would give federal regulators one year to make a decision for projects that only need environmental assessment under the National Environmental Policy Act (NEPA) and a two-year limit to finish the permitting process for mining projects that require a full environmental impact assessment. The latter would be required for most proposed mines that are large enough to move the dial when it comes to supplying America's mineral needs.
Just as important to reducing the time between permit submittal and the start of production, Stauber's bill would limit the ability to file a lawsuit against permitting decisions to 120 days after a NEPA determination for a mining project. This would prevent opponents of mining projects from waiting until development is about ready to begin before filing a lawsuit.
"By updating the onerous permitting process and limiting frivolous litigation, this permitting legislation will create certainty for domestic energy projects, secure our domestic energy and mineral supply chains, create jobs, and lower costs for Americans," said Stauber.
The Minnesota congressman's Permitting for Mining Needs Act was passed by the House in March and now awaits its fate in the Senate.
Senate Majority Leader Chuck Schumer said Stauber's Lower Energy Costs Act, which includes provisions for expanded oil and gas drilling on public lands, and the mine permitting reform bill included in it are "dead on arrival".
"The only way we will pass a genuine energy package this Congress is through bipartisan cooperation," the New York senator said.
Such cooperation likely goes through Senate Energy and Natural Resources Committee Chairman Joe Manchin, a West Virginia Democrat who has been championing mine-permitting reform in the Senate.
"I would like for all of you and everyone in the room here, if you will, when you leave this room, support bipartisan permitting reform," Manchin said during a May 11 Senate Energy and Natural Resources Committee hearing on mine permitting reform. "Not my bill, not Senator Barrasso's bill, not Senator Capito's bill, not Senator Carper's bill, whoever is putting bills up – we need a little bit of all four of them to make this work. We can get together much quicker if we're all in this, and I think we are."
While getting mine permitting reform past both the House and Senate has been an ongoing effort for more than a decade, proving to be as difficult as the mine permitting process it hopes to streamline, Yergin believes the energy transition adds to the will to get something passed.
"I hope there is, because the permitting pandemic is something that really is causing great injury to our nation," the S&P Global vice chairman said.
If Washington lawmakers can come together and pass sensible permitting reform, the federal government and private financial firms represented at the Alaska Sustainable Energy conference have hundreds of billions of dollars waiting to invest in developing the rich clean energy mineral potential the state has to offer.
This includes some $369 billion of Inflation Reduction Act funding for climate spending and energy security.
Geoffrey Pyatt, assistant secretary for energy resources at the U.S. Department of State, said the IRA funding "is incentivizing a dramatic acceleration in the pace of investment and innovation that is going to ripple across our economies for years to come."
The State Department energy secretary believes Alaska is key to helping diversify clean energy supply chains away from China.
"Alaska plays a critical role in that regard because of your mining resources and the extraordinary growth and demand I think we are going to see for lithium, for cobalt, for graphite, for all of the things which make a renewable energy future possible," he said.
Department of Energy's Turk agrees and told investors at the conference that now is the time to invest in Alaska's natural resources and clean energy potential.
"I think it will reward those who are big, bold, and early in this space," the DOE assistant secretary said.
The world-renowned financial firms attending the conference agree and are already eyeing Alaska as a rich source of the biggest energy transition need in the U.S. – natural resources.
"Being able to source raw materials that are available here in Alaska is vitally important, not only for jobs and wealth creation here, but for national security and being able to deploy that into the businesses of Teslas, GMs, and Fords," said Goldman Sachs Managing Director Michael Sachs. "Right now, the biggest hindrance for these companies is not the capital, wherewithal, or engineering, it is the actual sourcing of lithium, graphite and other things that are so important, and Alaska can really answer."
Dunleavy agrees that America's 49th State can be a leader in the energy transition and the natural resources needed to build the envisioned low-carbon future.
"Alaska has tremendous opportunity – probably more opportunity, more resources, than any other state in the country," the governor said.
The host of the second annual Alaska Sustainable Energy conference also believes that the success of America's energy transition will be measured in no small part to the state's ability to realize those opportunities.
"Alaska is kind of the canary in the mine," he said.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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