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Pipeline proposed to power Donlin mine could have impacts from Y-K Delta to Cook Inlet

The proposed Donlin Gold mine site on August 19, 2017.
Katie Basile
/
KYUK
The proposed Donlin Gold mine site on August 19, 2017.

If it’s built, the Donlin Gold mine project on the Yukon-Kuskokwim Delta would be one of the largest open-pit gold mines in the world, powered by a gas pipeline that would stretch hundreds of miles across the state to Cook Inlet.

KYUK’s Sage Smiley and KDLL’s Riley Board teamed up from both ends of that potential pipeline to tell this story.

Mile 315 - Crooked Creek

There’s gold in the hills outside of the middle-Kuskokwim River village of Crooked Creek – an estimated 34 million oz of gold, the weight of five large blue whales.

It’ll take a lot of work to get it out of the ground.

Kristina Woolston is Vice President of External Affairs for Donlin Gold, which is trying to develop the mine. She explained the mining process during an Alaska State Senate Resources Committee meeting in early April.

“Donlin Gold is a refractory ore, meaning that microscopic particles are held within – arsenopyrite and some pyrite. And so it requires a very energy-intensive process to extract the gold," Woolston explained. “We will be milling roughly 59,000 tons per day – requires an awful lot of power.”

The Donlin Gold project site sits on land owned by Alaska Native corporations formed under the 1971 Alaska Native Claims Settlement Act (ANCSA). The surface rights are held by The Kuskokwim Corporation, and the subsurface rights are held by the regional Calista Corporation.

Thom Leonard is Vice President of Corporate Affairs for Calista. He said the project has gone through a few different ideas of how to power such a hard-to-access site.

“One of the early ideas for the project being so remote – obviously Donlin would have to ship everything in barges, not just materials for buildings, but also fuel, diesel fuel for all the equipment and power and heat,” Leonard said.

Krysti Shallenberger
/
KYUK

But concerns over that potential increase in barge traffic caused pushback from communities on the Kuskokwim.

“We heard from shareholders and residents up and down the Kusko, ‘Hey, that's a lot of barges were concerned about that.’ So we reminded Donlin of those comments,” Leonard said. “They went back to the drawing board and said, ‘Hey, we can look at building a natural gas pipeline. And that'll cut the number of barges on the river by half.’ So we've taken in, we've learned from the comments of people who have concerns or are opposed to the project.”

The project is backed by many in the village of Crooked Creek, less than a dozen miles from the proposed mine site, as well as Calista Corporation.

But plenty of other people on the Y-K Delta are still not entirely happy with the plan, even with the proposed barge traffic reduced. Over recent years, many traditional Native councils and organizations have rescinded support for the project over a variety of environmental concerns.

“It's skewing our traditional values to fit a mold of corporate infrastructure,” said Sophie Swope, the executive director for Mother Kuskokwim, a nonprofit tribal consortium formed in 2022 in opposition to the Donlin project.

“The fact that there's going to be a [315]-mile pipeline from Cook Inlet all the way to Crooked Creek, it's going to be passing so many streams and of those many streams, we don't know how many actually are bearing fish,” Swope said. “And I think that is heavily lacking.”

Alaska Division Of Oil And Gas
The proposed path of the natural gas pipeline that would power Donlin Gold mine, as submitted to the State of Alaska in late 2013.

Mile 0 - Cook Inlet

In the Cook Inlet region, more of the conversation revolves around the price of natural gas. Specifically, what happens to residential utility costs if Donlin starts buying up the gas.

Donlin says its pipeline will use about 20 billion cubic feet of natural gas every year. To put that number into perspective, it’s about equal to the amount of gas consumed by every single residential user in the state combined in a year.

Energy consultant Mark Foster is worried about that demand. Foster wrote a report for the Homer-based environmental nonprofit Cook Inletkeeper about Donlin’s potential impact on utility rates.

His conclusion? Donlin’s proposed energy use could increase rates for Southcentral customers by $265 a year.

That’s because Donlin would be buying gas from Cook Inlet, already a hot topic as utilities warn of their gas contracts ending, and lawmakers scramble to propose policy solutions.

“The Donlin Mine has a large natural gas demand, based on the documentation it’s provided to prospective investors, and that demand, if it came from local Cook Inlet gas, would be a significant block of demand,” Foster said. “Given the limited reserves we see on the horizon, you can see where their demand would push the price up significantly.”

Now, not everyone agrees with Foster’s report. Department of Natural Resources (DNR) Commissioner John Boyle said it’s premature to worry about Donlin’s demand when utilities can’t fill contracts in the short term.

“The fact that the existing demand is forecasted to not be met by future supply — absent new investment, new drilling, and new production — it’s fanciful, or I guess illogical, to think that somehow Donlin Mine is going to be able to come in, contract out for somewhere north of 20 billion cubic feet worth of gas and just exacerbate the overall energy supply imbalance.”

Boyle agrees Donlin would use a lot of gas. But, he actually thinks it would drive prices down. He said industrial customers like mines tend to provide stability for local utilities.

“The more demand they have from industrial — as well as residential — consumers it enables them to defray those costs out, to spread the cost out,” Boyle said. “So the more cost these industrial consumers bear, the lower the cost, then, for each individual consumer.”

DNR said in Fairbanks, Golden Valley Electric Association members saw a 7% reduction in bills after the Fort Knox Mine came online. And it said ratepayers in Juneau have saved $70 million since 2009 thanks to Hecla Greens Creek Mine’s investment in hydropower. Those numbers come from the Alaska Miners Association.

During the April Senate Resources Committee, Woolston with Donlin said she thinks the mine would have a positive impact on the gas market, but said Donlin has the same worries about Cook Inlet gas as utilities and the state.

“So we're anxiously watching everybody else, like everyone else, the supply in Cook Inlet and what the solution will be,” Woolston said.

The Cook Inlet Natural Gas Storage facility in Kenai, operated by Enstar, in March 2024.
Riley Board
/
KDLL
The Cook Inlet Natural Gas Storage Facility in Kenai, operated by Enstar, in March 2024.

The lawsuit

The pipeline is not a done deal – its permit is challenged in a civil lawsuit that’s currently before the Alaska Supreme Court.

The state approved a right-of-way permit for the pipeline in 2021, which crosses around 200 miles of state lands.

But four tribes from the Yukon-Kuskokwim Delta region – Orutsararmiut Native Council, Chevak Native Village, Native Village of Eek, and Native Village of Kwigillingok – and conservation group Cook Inletkeeper are legally pushing back.

“Unless you look at the whole project, you're not actually going to understand the impacts on the public interest,” said Olivia Glasscock, an attorney for Earthjustice, which represents the four tribes and environmental nonprofit.

The basic argument of the suit is that the state only considered the pipeline itself, not the impact of the whole project when it permitted the pipeline. Glasscock said the two are inextricably linked.

“What they missed is the fact that the pipeline – the use of state lands – is for this big project at the end,” Glasscock said. “The pipeline doesn't have any other planned uses. It's only planned to be maintained for the life of the mine. It would not be built unless the mine was happening. There's no other planned projects related to that pipeline, even though it does have additional capacity.”

Oral argument for the case before the Alaska Supreme Court is scheduled for the end of July.

Riley Board is a Report For America participant and senior reporter at KDLL covering rural communities on the central Kenai Peninsula.
Sage Smiley is KYUK's news director.