ADEQ shows a better way for environmental permitting and protection
In a previous post, “How NEPA crushes productivity,” I wrote about the National Environmental Policy Act (NEPA), a byzantine Federal bureaucratic maze that stifles productivity. The length, complexity and uncertainty of the permitting process of NEPA now takes a mining company about 10 years to obtain the necessary Federal permits for a major project. That puts the U.S. at a competitive disadvantage since other countries are more efficient in this regard. For instance, permitting time in Canada and Australia is typically less than two years.
In contrast to the Federal NEPA process, ADEQ has a process that gets the job done much more efficiently and now ADEQ is striving to make it even better. The ADEQ system should be a model for the Feds.
I asked ADEQ Director Henry Darwin some questions about the philosophy and workings of ADEQ:
Wryheat: 1. What advancements in regulations and permitting time lines has ADEQ made recently?
ADEQ has applied “Lean techniques” to its permitting processes and is now making permitting decisions much faster. Permits that previously required 18 months to process are now being processed in less than a year. Certain interim permitting steps, administrative review for example, previously took up to 60 days and can now be completed in a single meeting.
Wryheat note: “Lean techniques” according to Wikipedia “is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, ‘value’ is defined as any action or process that a customer would be willing to pay for. Essentially, lean is centered on preserving value with less work.”
Wryheat: 2. Do you believe that economic activity, especially mining, can co-exist with good environmental stewardship? If so, how?
I have long believed environmental protection and economic development go hand in hand. It is a little recognized fact that poor countries and countries that are emerging from poverty have the most difficult time protecting the environment. The converse is also true; a strong economy provides society the wherewithal to protect the environment. As a result, the best indicator of a healthy natural environment is often a healthy economic environment.
Wryheat: 3. To some, mining and environmental quality are opposites. How does ADEQ reconcile the apparent conflict?
This is a false choice. Prudent use of natural resources and environmental protection are not at odds. Conflict between the two only arises at the extreme of either activity, and legal protections exist to minimize mining’s adverse impacts. ADEQ doesn’t get to decide whether a mine opens, but through our permitting processes, we ensure mining operations occur in an environmentally responsible way that limits harmful emissions to our air, water and soil. It’s worth noting, as important as the mining industry is to Arizona’s economy, our state leaders recognized the value in protecting our precious natural resources. This is why they passed the Environmental Quality Act in 1986, which not only established ADEQ as a separate, cabinet level agency, but also created the Aquifer Protection Permit program, the first comprehensive groundwater protection program in the nation. As a result, every mine that operates in Arizona must obtain a permit that ensures groundwater is protected.
Wryheat: 4. What do you regard as the minimum time for ADEQ to vet a major project and what does the process consist of?
In the recent past we have permitted several large projects in as little as six months, but timeframes are project-specific and providing a general timeframe would be subject to error. We encourage any party who is planning a major project to visit with us to establish a plan for expeditious permitting. An expeditious process consists of the following major steps:
Pre-Application Meeting: Face to face pre-application meeting
Administrative Review: A real time and face to face administrative review meeting to make sure the applications is complete
Substantive Review: Regular phone contact between the ADEQ permit writer and the applicant’s consultant during substantive review
Applicant Review of Permit Conditions
Public Comment Response
Wryheat: 5. Does ADEQ regard itself, in its role of protecting the environment, a partner of business or a strict watchdog, or both? How is that reconciled?
As I said in my response to Question 2, above, a strong economy and safe, healthy environment are not adversarial. In fact, one of our agency’s strategic goals is to support environmentally responsible economic growth. Companies that do business in Arizona often require our products and services (permits, or example) in order to operate. Such companies are, in fact, our customers, and ADEQ must deliver value as our customers define it. This doesn’t mean we give our customers everything they want, because the customer is not always right. We have shareholders, too, namely taxpayers, who require a solid return on their investment; they want clear skies, clean water and land that is safe to roam, work and play. There must always be a healthy balance between delivering customer value and providing that solid return on investment for Arizona taxpayers.
I asked some representatives of the mining industry about their perception of ADEQ.
From Kathy Arnold, VP Environmental & Regulatory Affairs, Rosemont Copper Company:
ADEQ has made great strides with permitting both in setting specific requirements and in setting specific timeframes. This gives businesses the certainty necessary for determining timeframes. ADEQ has been working on developing processes and rules for programs and their stakeholder system allows people to give input necessary so rules can be fully vetted and understood before implementation. The overall process for permits is fair and can be followed without political interference. The enforcement of the rules and permits is tough but again fair.
From Steve Trussell, Executive Director, Arizona Rock Products Association:
The ADEQ has recently worked on several projects that have been of key interest to citizens of our state in terms of air and water quality, but two that come to mind as of late are efforts to respond to components of Governor Jan Brewer’s Four Cornerstones Document which was presented at the State of the State Address in January of this year.
The ADEQ began the laborious task of process waste reduction regarding the amount of steps it takes to get a permit out the door by reducing licensing time frames. ADEQ hosted events which included stakeholders in order to identify the factors that arise in permitting that could be potentially holding up permit approvals. Permitting can be a challenge depending on the specific project and the current regulatory requirements and is a key factor in business investment in Arizona. ADEQ has employed LEAN process improvements that have and will continue to reduce permitting delays for both air and water permitting and will be implementing the lessons learned across the boards and within all sections of the agency. The agency reports that processing times have been reduced by one-third and have allowed companies to allocate valuable resources elsewhere.
Additionally, the ADEQ will further enjoy expeditious submittals, approvals and reporting compliance as a result of their proposed e-portal which will allow the agency to move in a paperless direction. The portal will enable a permitted source to track, report and submit payment on all of their various permits with the agency, and all in one place. A process that once required a tremendous amount of time and effort from a record keeping and delivery standpoint would now be possible at the project site.
These are merely a few examples of progressive steps the ADEQ has taken to be protective of the environment while addressing time and resource sensitivity of Arizona’s businesses. Governor Brewer had this to say about the initiative, “The completion of this project, with its cost savings, convenience, and compliance assistance, will be a boon to business regulated by the ADEQ and help attract new business to Arizona” and the members of the Arizona Rock Products Association. couldn’t agree more. All business organizations regulated by the ADEQ should encourage the legislature to support this laudable effort.
Mr. Darwin sent me some information on the proposed e-portal Mr. Trussel mentioned. The new site will be called MyDEQ. The program “will funded through existing revenue ($10 million) from the Vehicle Emissions Inspections Fund.”
Here are some highlights of the proposed program:
The Federal government should take notice of ADEQ methods and try to emulate them.
Below is an article and video of Southern Arizona’s brightest GEM. Dr. Mary Poulton is a humble yet passionate advocate of her profession.
Thank you Dr. Poulton for all you do.
Mining the Future
Posted on: February 2, 2011 in Research & Discovery
On December 9, 2010, Mary Poulton, PhD, was officially inducted as a Distinguished Professor, one of the highest honors a UA professor can achieve. But if you ask the head of the UA Department of Mining and Geological Engineering and director of the new Lowell Institute for Mineral Resources what inspired her to this life of achievement, she’ll tell you, straight up: it all started with a simple box of rocks.
Distinguished Professor Mary Poulton shows off a favorite sample, a selection from her collection that still has all the magic of her childhood box of rocks.
The value of mining in Arizona
If we remove metals from the service of man, all methods of protecting and sustaining health and more carefully preserving the course of life are done away with. If there were no metals, men would pass a horrible and wretched existence in the midst of wild beasts… -Georgius Agricola, in De Re Metallica, 1556.
For Arizona, it is not just metals. Arizona produces sand and gravel, limestone for cement production, coal for electrical generation, and a variety of industrial minerals which contribute almost $2 billion to Arizona’s economy (see here).
Arizona has a long history of mining. There is archeological evidence that cinnabar, coal, turquoise, clay, pigments, and other minerals were mined in Arizona beginning at least 3,000 years ago. (See A History of Mining in AZ by the Arizona Mining Association.)
According to the Arizona Mining Association, Arizona currently produces 68% of domestically mined copper. With that copper production comes by-product molybdenum, gold, silver, platinum, and rhenium. Incidentally, The Sierrita Mine south of Tucson is currently the only domestic producer of rhenium, a metal used in high-temperature, super-alloy turbine blades for jet aircraft and other land-based turbines. The Sierrita plant processes output from other mines on a toll basis. It may soon be joined by a second rhenium plant at the Kennecott (Rio Tinto) mine in Utah.
The direct and indirect economic impact of copper mining on Arizona’s economy is about $4.6 billion annually. That includes $3.2 billion in personal income, $500 million in state and local government revenues, and 49,800 high-paying jobs for Arizonans. Average labor income of mining company employees (including benefits) is $108,000 per worker vs. $47,000 for all Arizona workers. If we add in non-metallic, non-fuel, minerals, then Arizona produced about $8 billion worth of mineral products in 2012 according to the U.S. Geological Survey. Arizona ranks second, after Nevada, in value of total mineral production. The U.S. total value of mineral production was about $76 billion which supported more than 1.2 million jobs in 2012.
Arizona is endowed with great mineral resources as shown on the map below prepared by the Arizona Geological Survey.
Currently ASARCO and Freeport-McMoRan Copper & Gold are the two biggest copper producers in the state. ASARCO operates three mines and a smelter. According to the Southern Arizona Business Coalition, in 2012 ASARCO paid wages and benefits of $215.8 million, property, severance, and sales taxes of $47.2 million, and employed 2,198 people in Arizona. Freeport operates mines in Safford, Morenci, Bagdad, Miami, and Sierrita. They paid wages and operational spending of $860 million in 2012, taxes of $274 million while employing 7,600 people directly and indirectly employing an additional 30,000 people.
In addition to past and current mining, there are many projects on the horizon, some in the exploratory stage, others navigating the byzantine regulatory permitting process. (See my posts: Mining and the bureaucracy and How NEPA crushes productivity)
Perhaps the largest project is that of Resolution Copper near the town of Superior just west of the famed Globe-Miami mining district and just north of ASARCO’s Ray mine. This is a bold undertaking because the orebody is 7,000 feet below the surface. Resolution says that at peak production, this mine will be the largest copper mine in North America, producing over one billion pounds of copper per year. Resolution estimates that over the 64-year life of the mine, the project will generate $61.4 billion in economic value, provide $20 billion in tax revenues, and provide 3,700 permanent jobs.
The Rosemont copper mine south of Tucson is nearing the end of its long journey through the regulatory maze, and mine construction may begin early next year. This mine will generate 2,900 Arizona jobs and inject $19 billion into Arizona’s economy and pay $404 million in local taxes over its 20-year projected life. The mine expects to produce 243 million pounds of copper per year.
Curis Resources is developing an in-situ copper mine near Florence, Arizona. In this project, instead of mining rock, Curis Resources “seeks to dissolve copper minerals from an underground deposit by introducing water with a lowered-pH (making it slightly acidic).This low-PH, water-based solution dissolves the copper and allows it to be pumped to the surface through a continuous loop water treatment system.” This deposit, lying 400-to 1200 feet below the surface contains approximately 2.84 billion pounds of copper.
Curis estimates that over the projected 28-year life of the project, it will generate $2.2 billion in economic activity for the state of Arizona, $1.1 billion in economic activity for Pinal County, $325 million in taxes and royalties for Arizona government, and $1.46 billion in increased personal income in Arizona, 170 direct jobs at the project site in Florence, and 681 jobs in the state of Arizona.
The I-10 copper deposit, located along Interstate 10 between Benson and Willcox, Arizona, is being investigated as another in-situ copper leaching project by Excelsior Mining Corporation, a Canadian junior company. They estimate the deposit currently contains an indicated oxide copper resource of 3.21 billion pounds and an additional inferred oxide copper resource of 0.88 billion pounds.
Wildcat Silver Corporation is in the exploration stage of its Hermosa Project which is evaluating the silver-manganese potential in the historic Hardshell mining district near Patagonia in Southern Arizona. Their preliminary economic assessment estimates a measured and indicated resource of 236 million ounces of silver and an inferred silver resource of an additional 79 million ounces. Project life is estimated at 16 years. Wildcat estimates that annual production will be 4.1 million ounces of silver, 233,000 tons of manganese carbonate, 20,187 tons of zinc cathode, and 960 tons of copper.
Copper Creek is an old mining district located on the east bank of the San Pedro River and on the western slope of the Galiuro Mountains about 75 miles northeast of Tucson. The property has been acquired by Redhawk Resources, a Canadian junior mining company that plans to develop an underground mine for copper, molybdenum, and silver. Redhawk estimates a resource of 7.75 billion pounds of copper, 150 million pounds of molybdenum, and 32 million ounces of silver.
The Oracle Ridge mine is a small, underground copper mine in the Santa Catalina Mountains just north of Tucson. The mine was operated intermittently, most recently from 1991-1996. The mine is being developed by a junior Canadian mining company, Oracle Ridge Copper (project website). The company anticipates employing about 200 people to run the mine which has a projected life of 11 years. The mine will produce 140 tons of concentrate (about 30% copper) a day which will be trucked off the mountain and transported to a smelter.
In northern Arizona, near the Grand Canyon are over 1,300 known or suspected breccia pipes many of which contain uranium oxide as well as sulfides of copper, zinc, silver, and other metals. According to the Arizona Geological Survey, “Total breccia-pipe uranium production as of Dec. 31, 2010, has been more than 10,700 metric tons (23.5 million pounds) from nine underground mines, eight of which are north of Grand Canyon near Kanab Creek.” This area is mired in fears of contamination of the Colorado River (see Uranium mining and its potential impact on Colorado River water) and a 20-year, million-acre mineral entry withdrawal by the Department of the Interior.
In northeastern Arizona there is potential for a major potash deposit. American West Potash has recently delineated, a considerable resource estimated at 158 million metric tons of sylvinite (a mixture of sodium and potassium chloride, not to be confused with sylvanite, a gold telluride), with about 16 million metric tonnes of K2O; and inferred resources of 560 million metric tonnes of sylvinite with just over 66 million metric tons of K2O in the Holbrook Basin, about 30 miles east of Holbrook, Arizona.
Arizona currently has three producing gold mines and several other prospects being actively explored for gold (see here).
“In 2011, the state of Arizona led the United States in the production of gemstones. Arizona has long been famous as a producer of turquoise, peridot and petrified wood. Gemstones such as azurite, chrysocolla and malachite are associated with the Arizona’s many copper deposits and have a long history of being produced there. Agate, amethyst, garnet, jade, jasper, obsidian, onyx, and opal have all been found in Arizona and used to make gems.” – Geology.com
As you can see, besides currently producing mines, Arizona holds future potential that will add jobs and economic value to the local, state, and national economy – if they can get through the bureaucratic regulatory maze.
Remember, the value of mining is not just the money, it is in providing the products we need to keep our civilization going. If it can’t be grown, it has to be mined.
Grijalva pushing for fees on mines
Bill would make firms pay royalties, establish hard-rock cleanup fund
U.S. Rep. Raúl Grijalva of Tucson and two others are bringing back an oft-tried bill to overhaul the country’s 142-year-old hard-rock mining law and charge royalties for copper and other non-coal mining operations on public lands.
The bill would also prevent mining on certain kinds of environmentally sensitive public lands and establish an abandoned mine cleanup fund, paid for by a separate fee on mining companies.
The royalty would be set at 12.5 percent on the gross income derived from mining claims on federal land.
Mining companies have long opposed a royalty of that size but have said they’d be willing to support a lesser but as yet undetermined royalty.
If the royalty – the same as paid by oil and gas companies leasing federal lands – were established, the new bill would have it used to pay down the annual federal budget deficit, or to reduce long-term national debt if no annual budget deficit exists.
“This is about improving our financial picture, our environment and our corporate governance practices all at the same time,” Grijalva said in a news release Friday announcing the legislation. “This industry has been enjoying outdated loopholes and keeping billions of dollars that other industries have paid back to the public. We need to start reclaiming land, cleaning up our landscapes and reinvesting in jobs, and this bill is the right way to go.”
Other sponsors of the Abandoned Mine Cleanup and Taxpayer Fairness Act are U.S. Reps. Ed Markey of Massachusetts and Rush Holt of New Jersey. They and Grijalva, who are all Democrats, hold leadership positions on the House Natural Resources Committee. Grijalva is the top Democrat on the committee’s Public Lands Subcommittee.
Mining said to be different
Hard-rock mining companies argue they are different from energy firms and deal with a unique market and development challenges.
That’s why they say a 12.5 percent royalty would be too burdensome.
They also say the proposed rate is higher than in any other country in the world and could cripple future investments.
Oil and natural gas removed from federal lands can be sold immediately, but hard-rock minerals need expensive processing once they’re out of the ground, Luke Popovich, a National Mining Association spokesman, has said in the past.
“Just because oil and gas have been paying royalties on federal lands, it doesn’t mean that therefore hard-rock mining should be paying royalties,” Popovich said last year.
It’s true that no severance exists now, Harold Roberts, an executive with Energy Fuels Inc., a uranium mining firm, said at a recent hearing of the House Energy and Mineral Resources Subcommittee, the environmental news service Greenwire reported.
“But we pay a lot of state taxes, we pay federal taxes, we employ a lot of people with very high-paying jobs,” he said.
Modern law urged
It’s time for a modern mining law that recognizes some places need to be protected from mining, gives taxpayers a fair return, and ensures that companies act responsibly, said Lauren Pagel, policy director for Earthworks, a Washington, D.C.-based environmental group.
“This bill stops million-dollar giveaways to mining companies, gives the public a say in where mining should occur on public land and protects our increasingly scarce drinking water. It says enough is enough,” Pagel said in Grijalva’s news release.
Specifically, besides the royalty provision, the new bill would:
• Protect federal Areas of Critical Environmental Concern, national Wild and Scenic Rivers and federally designated roadless areas, from future mining. Currently, mining is barred in federal wilderness areas. States and tribes could submit proposals to withdraw areas from future mining claims.
• Establish a fund to clean abandoned hard-rock mines, to be paid for by a 7-cent-per-ton fee charged to mining companies on displaced material.
• Direct the Interior secretary to issue federal regulations setting mine reclamation standards. A mining company would be required to restore lands to uses that they could have supported before land disturbance.
• Allow citizens to sue violators, including the U.S. Interior and Agriculture secretaries.
Udall pushed similar bills
Congressional Democrats and environmentalists have pushed unsuccessfully for these and similar measures since the 1970s, when the late Rep. Morris Udall, like Grijalva a Tucson Democrat, had to withdraw a mining reform measure after small miners in the Tucson area led a protest against it.
The issue of mining reform came up during a hearing of the Energy and Mineral Resources Subcommittee earlier this month, Greenwire reported.
Republicans and companies said they could be willing to accept changes but that Democratic legislation could hurt companies and domestic production.
Chairman Doug Lamborn, a Colorado Republican, said, “While many of us support reforming the 1872 law, the question of how and what is subject to great debate and is an area where members aren’t nearly as far apart as the special interests would make it appear,” Greenwire reported.
Last December, Grijalva and U.S. Sen. Tom Udall of New Mexico released a report saying that the dollar value of hard-rock minerals mined on federal land by companies is unknown because royalties aren’t charged on their extraction. The report was written by the Government Accountability Office, Congress’ investigative arm.
“This report points out the obvious – we don’t value minerals extracted from public lands. All because of the 1872 Mining Law, there is no royalty,” said Grijalva at that time, referring to the 140-year-old law passed to encourage mining companies to enter federal land.
Now, in the Senate, Udall says he is also working on a mining reform bill that industry sources hope is closer to a compromise than the House version, Greenwire reported. Senate Majority Leader Harry Reid, a Nevada Democrat, has also expressed support for mining reform as long as it is fair to hard-rock mining companies, a major presence in his state.
Contact reporter Tony Davis at firstname.lastname@example.org or 806-7746.
Grijalva’s anti-jobs bills
The “Southern Arizona Public Lands Protection Act of 2013” H.R. 1183, proposes to ban new mining claims. The Act will, subject to valid existing rights, withdraw “all forms of entry, appropriation, and disposal under the public land laws; location, entry, and patent under the mining laws; and operation of the mineral leasing and geothermal leasing laws, and the mineral materials laws” on all National Forest and Bureau of Land Management lands in Pima and Santa Cruz Counties. Grijalva has introduced similar bills every year since 2007. This will preclude all new mineral exploration in Southern Arizona.
Southern Arizona is mineral rich with several operating mines, soon to be operating mines, and very good country for mineral exploration.
Arizona mining directly employs 11,300 people, who earned $1.22 billion in 2011. Arizona mining companies spent a total of $2.80 billion in 2011 purchasing goods and services from other Arizona businesses which supported an addition 8,700 jobs. In 2011, the mining companies themselves paid $212 million in business taxes to Arizona governments. Employees of mining companies are estimated to have paid $96 million in individual taxes.
Grijalva states concern about our “valuable natural heritage” but seems to ignore the fact that mining is part of that heritage.
Mr. Grijalva notes on his website that he is against a land exchange that Resolution Copper is seeking with the Forest Service to enable Resolution to develop a copper mine near Superior, Arizona. The proposed underground copper mine could supply 30% of America’s copper needs and bring $1 billion per year to the state’s economy for 60 years. In the land exchange, Resolution Copper would get 2,422 acres from the Forest Service in exchange for 5,344 acres of environmentally sensitive land.
Grijalva’s “Grand Canyon Watershed Protection Act” would make permanent the “temporary” withdrawal (for 20 years) of one million acres near the Grand Canyon to prevent uranium mining. Uranium mining on the Colorado Plateau near the Grand Canyon poses no danger to the Colorado River water quality according to several studies. (See: Uranium mining and its potential impact on Colorado River water)
The “Santa Cruz Valley National Heritage Area Act” would establish a 3,325 acre National Heritage Area in Pima and Santa Cruz Counties which could have adverse affects on private property.
For a long time, Mr. Grijalva has been a tool of the environmental industry to the detriment of his constituents, their jobs, their safety, and the Arizona economy. He has supported establishment of wilderness areas along the Mexican border which would interfere with the Border Patrol’s ability to monitor the border.
As one of Mr. Grijalva’s constituents, I urge him to show more concern for people and their economic environment.