On Feb. 16, 2017, President Donald Trump signed a Congressional resolution to disapprove the Stream Protection Rule, finalized by the Office of Surface Mining, Reclamation and Enforcement. The rule, in development since 2008, was to provide mine operators with a regulatory framework to avoid water pollution and costs associated with water treatment.
According to the Cordova Times, undoing the rule could have continued potential impacts on salmon fisheries in the Prince William Sound area of Alaska. The Bering River District produces sockeye and coho salmon for commercial harvesters, as well as supports sport and other uses.
But an agreement reached by the Chugach Alaska Corp. with environmental groups (called the CAC/New Forests deal) will conserve 62,000 acres, protecting the region’s sustainable fish, wildlife and wilderness.
“Local residents recognized the need for comprehensive conservation of the region over 20 years ago, and began approaching parties involved at that time, including Korean Alaska Development Corporation (KADCO), CAC, the Alaska delegation and other potentially interested parties,” said Rick Steiner, a former University of Alaska marine adviser for the Prince William Sound/North Gulf coast region from 1983-1997, who first proposed the deal in 1997.
The Deal that Gets Around Undone Law
While a January 2017 report by the Congressional Research Service identified environmental and health benefits of the Stream Protection Rule -- including stream restoration requirements aimed at reducing human exposure to contaminants in drinking water -- opponents, including Alaska’s Congressional delegation, cited it as a coal industry and jobs killer.
The CAC/New Forests deal is the first carbon sequestration deal by an Alaska Native corporation, and the first time an Alaskan hydrocarbon resource will be left in the ground -- for profit.
It’s a profitable way to avoid the environmental impacts of the coal industry.
Under the agreement, CAC will receive payment from New Forests, a sustainable real assets investment manager, at less than what is considered fair market value for the forests and coal on the land. CAC can then write off the loss on federal taxes.
The coal rights will then be transferred to The Nature Conservancy and the local Native Conservancy land trust, in order to generate revenue through the California cap-and-trade carbon market. CAC will manage and maintain the land, retaining high carbon stocks in the forests, in exchange for the ability to sell carbon credits to businesses regulated under California’s greenhouse gas pollution reduction program.
A coal sale and carbon offset project is a unique opportunity to deliver long-term, sustainable economic and financial value for our shareholders and region,” said Josie Hickel, Chugach shareholder and senior vice president of energy and resources in a prepared statement.
“The agreement shows that efforts to address climate change will continue despite the new administration’s dangerous indifference to the issue,” said Steiner, noting that the hope is that it will be a model for future carbon deals in Alaska and elsewhere.
He also said the deal is just the the first part of the puzzle in the region.
CAC sold the largest portion of the Bering River/Carbon Mountain coal deposit (Kushtaka Mountain and Cunningham Ridge) to KADCO when it filed for bankruptcy in 1991, so the CAC/New Forest deal does not include that area.
It remains available to be sold or mined. In 2001, EcoTrust of Portland, Ore., offered a deal to retire the patent, but KADCO declined.
