A Case Study of the Pebble Exploration Project

Institute of Social and Economic Research • University of Alaska Anchorage • January 2017 From 2002 until 2013, the Pebble Mineral Exploration Project explored a big deposit of mostly copper, but also gold and molybdenum, in the Bristol Bay region of Southwest Alaska, about 17 miles northwest of Illiamna (Figure S-2). That exploration stopped in 2013, when a major project partner withdrew. But before that, developers spent millions of dollars, and in the last years of exploration annually employed more than a hundred residents of Bristol Bay communities. This paper describes jobs and income the residents of 18 communities—in the Lake and Peninsula Borough, the Bristol Bay Borough, and the Dillingham census area—got from 2009 through 2012, the last full year of exploration. Most residents of these communities are Alaska Native, and the communities are small—most with populations considerably smaller than 500— except for Dillingham, where nearly 2,500 people live (Table S-1). How local communities can capture more economic benefits from rural resource projects is an important question in Alaska, and the Pebble exploration project offers a useful case study. But we want to emphasize that we’re neither advocating nor opposing a potential mine at the Pebble site. The proposed mine has been enormously controversial in Alaska and elsewhere, because of its proximity to the world-class Bristol Bay salmon fisheries. We looked only at local jobs and income exploration created, to shed light on the potential for resource development projects to help rural economies. Our analysis is based on data from Pebble Limited Partnership’s exploration-site database, augmented with information from contractors. What did we find? • About 43% of those who worked at the Pebble exploration site anytime from 2009 through 2012 were from the Bristol Bay area. That amounted to about 300 local residents who worked at the site some time during the study period (and may have held more than one job over the years). Another 37% of workers were from elsewhere in Alaska, and the remaining 20% were mainly from other states or Canada (Figure S-1). • The number of workers from Bristol Bay increased over the study period, and so did employee retention. In 2009, 111 local residents worked at the Pebble site, increasing to 157 by 2012. More employees also stayed on the job from one year to the next, with retention at just over half from 2009 to 2010, climbing to two-thirds from 2011 to 2012 (Figure S-3). • Bristol Bay residents worked at 56 kinds of jobs in the study period, almost all seasonal. The most common jobs they held were drill helper, bear guard, and skilled laborer. The average hourly pay was about $19, and most workers earned on average about$15,000 a year from those mostly seasonal jobs. About 65% of workers were men and 35% women (Figure S-3). 2 • Communities closest to the exploration site got several times more jobs and income than those farther away. We grouped the study communities into three regions, based on their proximity to Pebble. Communities closest to the site are mostly around Lake Iliamna, and on average per year about 100 workers came from what we call the Lakes region. About 25 a year were from the 3 Intermediate region and 8 from the Distant. On average, workers from the Lakes region collected a total of nearly $1.5 million a year, compared with$499,000 for those from the Intermediate region and $100,000 among those from the Distant region, where communities are more than 100 miles from the Pebble site (Figures S-2 and S-4). • In the Lakes region, where communities are very small (Table S-1) exploration employment was a large share of total employment: approximately 14% of the total workforce from Lakes communities worked at the site during the study period. The regions farther from the exploration site, which have larger populations, saw much smaller employment effects: 3% of the total workforce from the Intermediate region and barely above 0% from the Distant region. • Even within individual regions, community employment at Pebble varied significantly. Iliamna, where exploration operations were based, and Newhalen (with road access to Iliamna) had the most employees—an annual average of 40 in Newhalen and about 25 in Iliamna, followed by Nondalton with about 16. Outside the Lakes region, the only community with more than an average of 10 workers a year was Koliganek. But even within the Lakes region, not all communities had a significant number of workers—Port Alsworth and Pedro Bay had fewer workers than some places in the Distant region (Figure S-5). 4 • To get a sense of what Pebble income meant to the region, we compared it with income from two important sources: commercial fishing and Permanent Fund dividends. The exploration project brought more income into the Lakes region from 2009 through 2012 than did either commercial salmon fishing or Permanent Fund dividends. But the Intermediate and Distant regions have more people, rely more on salmon fishing, and had fewer residents working at Pebble—so Pebble pay in those regions was a much smaller source of income. As Figure S-6 shows, income from Pebble in the Lakes region from 2009-2012 was several times more than from salmon fishing and two-thirds more than from Permanent Fund dividends. By contrast, in the Intermediate region Pebble pay was significantly less that from either commercial fishing or PFDs—and in the Distant region it was an insignificant amount compared with the other sources. What can the Pebble case study tell us about the potential for rural development projects to benefit local economies? • Residents of Bristol Bay communities and other Alaska places were able to capture a big share of exploration jobs and income. During the study period, 43% of workers were from Bristol Bay communities and another 37% were from elsewhere in Alaska. A number of things contributed to this high local-hire rate, including Pebble’s local hire coordinator; its work with the state government to get training programs and with non-profits to help qualify local residents for jobs; and its contracts with local Native village corporations and other businesses. • Jobs and income going to Bristol Bay residents increased significantly between 2009 and 2012. Partly that’s because the developer was spending more for exploration, creating more jobs. But the number of qualified job applicants from the Bristol Bay region also increased over time. Pebble personnel report that by 2010 or 2011, there were more qualified Bristol Bay residents looking for jobs than there were jobs available. • Proximity made a difference: even though most project employees from all communities were housed at project headquarters in Iliamna, residents from the villages closest to the project site got more jobs. From 2009 through 2012, an average of about 100 residents per year from the Lakes region worked at the project site—about 14% of the total workforce from seven small villages. Prospective workers from places farther away may have taken into account how difficult it would be to travel home for time off workExecutive Summary / Background / Methodology / Community Workforce / Community Effects / Appendice

Assessing juvenile sockeye salmon (Oncorhynchus nerka) energy densities and their habitat quality in the Chignik watershed, Alaska

Thesis (M.S.) University of Alaska Fairbanks, 2004The Chignik watershed, on the southern side of the Alaska Peninsula, supports a large salmon fishery vital to the local economy. Recent morphological changes to the watershed generated concern regarding the sockeye salmon (Oncorhynchus nerka) stock that rears in Black Lake, at the head of the system. Studies of the Chignik watershed to date have not incorporated energy density data to explain the life history strategies of Chignik sockeye salmon. Re-estimated condition factor parameters improved our understanding of the length-weight relationships to fish health that isometric models described in Chignik sockeye salmon. Subsequent comparisons of age, length, weight, location, and temperature data to energy density indicated that Black Lake fish, which were all age 0 fish, were significantly affected by temperature and had energy densities greater than did fish from other areas of the watershed. Sockeye salmon captured in Chignik Lake, Chignik River, and Chignik Lagoon were only energetically different from one another based on age. Observed seasonal trends suggested juvenile sockeye salmon emigrate from Black Lake before the onset of winter due to forage and temperature limitations. A constant downstream migration occurred in the watershed during the summer, which suggested smoltification and osmoregulation processes in Chignik Lagoon fish

Alaska Energy Statistics 1960-2008

Prior to 1985, the federal Alaska Power Administration published the Alaska Electric Power Statistics. Then, the Alaska Energy Authority (formerly the Alaska Power Authority) began gathering statistical data and publishing this annual report. In 1988, the Alaska Electric Power Statistics report became a combined effort between the Alaska Systems Coordinating Council and the Alaska Energy Authority. Beginning in 1993, the report became a joint effort between the Alaska Systems Coordinating Council and the Alaska Department of Community and Regional Affairs, Division of Energy. After the 1995 report, no further reports were published until 2003 when a report was prepared by the Institute of Social and Economic Research (ISER), University of Alaska Anchorage (UAA), with funding provided by the Alaska Energy Authority (AEA), the Regulatory Commission of Alaska (RCA), and the Denali Commission. This twenty-third edition of the Alaska Electric Energy Statistics was prepared by the Institute of Social and Economic Research. Information on utility, industry, and military electricity capacity, generation, and other characteristics was gathered primarily from reports filed with the U.S. Department of Energy (DOE), Energy Information Administration (EIA) and made available on their website. This was supplemented by data collected by the Alaska Energy Authority through the Power Cost Equalization (PCE) program and a limited number of direct contacts with electric power producers in the state. This is a similar methodology used to develop information for the 2003 report.Alaska Energy AuthorityIntroduction / Report Highlights / Electric Power Statistics / Alaska Railbelt / Alaska Renewable Energy / Alaska Energy Balance / Appendice

Effects of marine-derived nutrients on population dynamics of sockeye salmon (Oncorhynchus nerka)

Thesis (M.S.) University of Alaska Fairbanks, 2006The effects of marine-derived nutrients (MDN) on the productivity of sockeye salmon (Oncorhynchus nerka) stocks in Alaska were examined through nitrogen stable isotope analysis of smolts and mathematical models of the sockeye stock-recruit relationship. Smolt 8 [delta]¹⁵N was used to infer the degree to which smolts depend on MDN for their growth. We attempted to identify the characteristics of sockeye nursery lakes and watersheds that affect the availability of MDN to juvenile sockeye using multiple regression. Stock-recruit models incorporating MDN effects were fit to sockeye escapement-return data to test if fluctuations in sockeye stock productivity could be explained by changes in MDN input into nursery lakes. The magnitude of escapement and water residence time were the most important factors affecting the MDN availability to juvenile salmon. Mixing state of lakes and the distance from the coast were also found to significantly affect the MDN availability. We found that regional environmental fluctuations had a large effect on stock productivities in stock-recruit modeling. However, we did not find strong evidence to support our hypothesis that increases in MDN input to nursery lakes will result in increased productivity of sockeye stocks. Stock-recruitment data may be poorly suited to detection of the influence of MDN

The Pygmy Whitefish, Coregonus Coulteri, in Lake Superior

Bottom trawling by the U. S. Fish and Wildlife Service motor vessel Cisco in Lake Superior in 1952–1953 revealed a large population of a tiny whitefish, Coregonus (Prosopium) coulteri, which has been reported previously only from northwestern North America. The hiatus in range, from Lake Superior to the Columbia River basin, is the greatest known for a North American freshwater fish. Although minor structural differences characterize the disjunct populations of the pygmy whitefish, these are not deemed worthy of nomenclatorial recognition. Comparisons with related species indicate that the pygmy whitefish is distinctive in the small size, large scales, few vertebrae, few pyloric caeca, and in other characters.The pygmy whitefish is widely distributed in Lake Superior, especially in semi‐protected bays, such as Keweenaw Bay which yielded about 68 percent of the 1,623 specimens caught. The bathymetric range was 10 to 49 fathoms, with maximum abundance at the 25‐ to 39‐fathom interval. Average length of fish increased progressively with water depth, chiefly because the number of yearlings declined from 100 percent at 10–14 fathoms to none at 45–49 fathoms.The average total length of pygmy whitefish caught by trawling was 3.4 inches (range 1.2 to 5.7). Extraordinarily slow growth was revealed by the examination of scales. Two fish from Keweenaw Bay, both nearing the end of their eighth growing season, were only 5.4 inches long. Compared to Keweenaw Bay, growth rate was about the same near Laughing Fish Point, faster in the Apostle Islands (and in Bull and McDonald Lakes, Montana), and slower in Siskiwit Bay, Isle Royale. Females grew more rapidly than males after the second year and had a longer life span.All male pygmy whitefish were mature at the age of 2 years and a total length of 3.6 or more inches. Most females were mature at 3 years and 4.2 inches; all older females were mature. Mean egg production was 362 (range, 93 to 597) per fish and 26 per gram of total weight for fish from 3.4 to 5.9 inches long. Spawning in 1953 occurred sometime in November or December.Crustacea (principally ostracods and amphipods–copepods in the young) occurred in 106 of 112 pygmy whitefish stomachs and made up 77 percent of the total food volume. When available, fish eggs appear to be important in the diet.Other cold‐water fishes–cottids, ninespine sticklebacks, smelt, and four species of coregonines–were the most frequent associates of the pygmy whitefish. Lake trout and trout‐perch were also taken with it at the same stations or in the same trawl hauls. Its closest relative in Lake Superior, the round whitefish, was not an ecological associate.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/141996/1/tafs0161.pd

All-Alaska Rate Electric Power Pricing Structure

Economists at the Institute of Social and Economic Research, University of Alaska Anchorage were asked to research the potential options and impacts of establishing an All-Alaska Rate as an alternative to the current Power Cost Equalization (PCE) program funding formula. We were asked to provide a history of the PCE program and information on electricity rates and patterns of consumption across regions of Alaska. This report provides the results of this analysis. Alaska is unique in many ways, including its consumption and pricing of electricity. There are large regional differences in consumption and prices that result from proximity to different types and quantities of resources. Differences in remoteness and population size also influence costs. Urban areas in the southern Railbelt benefit from larger economies of scale and access to natural gas and hydroelectric resources; the majority of hydroelectric facilities are located in Southcentral and Southeast Alaska. Most communities in rural Alaska depend on volatile and high price fossil fuels for the generation of electricity. The Alaska statewide weighted average residential rate for electricity (17.6 cents per kilowatt (kWh) in CY2011) is higher than the U.S. average of 11.8 cents per kWh (U.S. EIA, 2012). Alaska now trails behind Hawaii (34.5 cents), New York (18.4 cents) and Connecticut (18.1 cents) based on ranking of average residential price per kWh. Hidden in the Alaska statewide average is considerable variation with some communities paying less than the national average and some paying considerably more.Senate Finance Committee, Alaska State Legislature.Executive Summary / Introduction / Review of Current Residential Consumption and Price of Electricity / Power Cost Equalization History / Electricity Rates and Levels of Consumption / Customer responsiveness to price changes / All-Alaska Rate / References / Appendix A. Price elasticity of demand in PCE communities / Appendix B. PCE funding levels per year / Appendix C. PCe appropriations and disbursements over time / Appendix D. Communities/Locations in the Railbeld region / Appendix E. Residential and effective rates of PCE communities, 2001-2010 / Appendix F. Effective residential rates and consumption of electricity in PCE communities, 2008-2010 / Appendix G. PCE communities characteristics of importance as factors of electricity production and deman

Provenance and diagenesis of the Miocene Bear Lake Formation, Bristol Bay basin, Alaska

Thesis (M.S.) University of Alaska Fairbanks, 2010The Miocene Bear Lake Formation (BLF) is a prospective hydrocarbon reservoir exposed on the southwestern Alaska Peninsula, extending into the subsurface to the northwest (reaching 2,360 m maximum thickness). This study comprehensively characterizes composition of BLF sandstones, and develops important implications for varying reservoir quality. Unique integration of standard petrographic methods, electron microprobe analysis (EMPA), and ⁴⁰Ar/³⁹Ar dating of detrital hornblende strengthens interpretations by providing multiple lines of evidence and a more complete picture of composition, source units and terrane, and diagenetic history than possible with petrography alone. EMPA provides superior classification of volcanic rock fragments and identification of diagenetic minerals. Results indicate a pressure-controlled diagenetic system, and a provenance more complicated than recycling of older strata, as currently interpreted. Simultaneous derivation from the Meshik Volcanics and recycling of Tolstoi, Chignik, and Naknek formations suggests erosion of a structurally-deformed source terrain (e.g. reverse-faulted anticlines). Abundance patterns of pore-filling zeolites, calcite, albite, and kaolinite likely represent variations in Pco₂ caused by variations in burial depth. Optimal reservoir quality is likely present in the subsurface upper BLF along the northwestern coast (and deeper in the basin), where sandstone composition is presumably more quartz-rich, less volcaniclastic, and has experienced higher Pco₂ fluid migration.1. Introduction -- 2. Materials -- 3. Geologic background -- 3.1. Regional stratigraphy -- 3.1.1. Mesozoic -- 3.1.2. Tertiary -- 3.1.3. Bear Lake Formation -- 3.1.3.1. Recent studies of the Bear Lake Formation -- 3.2. Magmatic arcs of the Alaska Peninsula -- 3.3. Regional geologic structure -- 3.3.1. Bristol Bay Basin -- 3.3.2. Bruin Bay Fault and Ugashik Lakes Fault System -- 3.3.3. Ugashik Sub-Basin -- 3.3.4. Structure of the Herendeen Bay-Port Moller area -- 4. Petrography -- 4.1. Introduction -- 4.2. Methods -- 4.3. Results -- 4.3.1. Point Count data -- 4.3.2. Ternary diagrams -- 4.3.2.1. Quartz, feldspar, and lithic grains -- 4.3.2.2. Monocrystalline components -- 4.3.2.3. Composition of lithic grains -- 4.3.2.4. Intergranular components -- 4.3.2.5. Tectonic Provenance diagrams -- 4.4. Discussion -- 4.5. Conclusions -- 5. Electron microphobe analysis -- 5.1. Introduction -- 5.2. Methods -- 5.2.1. Analytical routine and strategy -- 5.2.2. Criteria for naming clays -- 5.2.3. Potential sources of error -- 5.3. Results -- 5.3.1. Diagenetic mineralogy -- 5.3.2. Volcanic rock fragments -- 5.3.2.1. Mineralogy and alteration -- 5.3.2.2. Composition -- 5.3.3. Detrital plagioclase clasts -- 5.4. Discussion -- 5.4.1. Evaluation of petrographic identifications of diagenetic minerals -- 5.4.2. Classification of volcanic rock fragments -- 5.4.2.1. Potential volcanic provenance -- 5.4.3. Detrital plagioclase clast provenance -- 5.5. Conclusions -- 6. Geochronology -- 6.1. Introduction -- 6.2. Methods -- 6.3. Results -- 6.4. Discussion -- 6.4.1. Potential igneous source rocks on the Alaska Peninsula -- 6.4.2. Sources of detrital Hornblende in the Upper Bear Lake Formation -- 6.4.2.1. Jurassic -- 6.4.2.2. Early cretaceous -- 6.4.2.3. Paleocene to early eocene -- 6.4.2.4. Eocene to oligocene -- 6.5. Conclusions -- 7. Provenance -- 8. Diagenesis -- 8.1. Introduction -- 8.2. Thermal maturity -- 8.3. Mineral stability -- 8.3.1. Heulandite-Laumontite-Calcite -- 8.3.2. Kaolinite-Laumontite-Calcite -- 8.4. Summary and conclusions -- 9. Summary and conclusions -- References cited -- Appendicies

Aspects of the Life History of the Pond Smelt (Hypomesus olidus) in the Yukon and Northwest Territories

The pond smelt (Hypomesus olidus) has a limited North American distribution, being restricted to the west coast of Alaska and the drainage of the lower Mackenzie River, N.W.T. This study examined an isolated population in a small tundra lake on the Yukon coastal plain. Otolith interpretation revealed that most adult fish sampled in Lake 100 were age 4+ and 5+ years, but a few individuals lived to age 8+ and 9+. Full maturity was not reached until age 5+ and repeat spawning was common. The sex ratio was skewed in favour of females. Growth was found to be slower in the Yukon population than in Alaskan and Japanese lakes. Some stunting was evident in Lake 100 pond smelt, but otherwise their meristic and morphometric characteristics corresponded with those from elsewhere. The pond smelt were primarily planktivorous in Lake 100 and there appeared to be no significant predation on them, but in the Mackenzie delta and elsewhere they are utilized as a forage species.Key words: pond smelt, life history, food habits, Hypomesus olidus, YukonMots clés: éperian à petite bouche, biologie, alimentation, Hypomesus olidus, Yukon, cycle vita