July 31, 2015

Ms. Kimberly Sager
Alaska Department of Natural Resources
550 West 7th Avenue, Suite 1070
Anchorage, AK 99501

Via email to kimberly.sager@alaska.gov

Re: Instream Flow Reservation Applications - Mulchatna River (Reach A -LAS 27309, Reach B - 27516, Reach A2 - 30075, Reach B2 - 30076, Reach C - 30077) and Stuyahok River (Reach A - LAS 27310, Reach A2 - 30073, Reach B - 30074)

Dear Ms. Sager:

The Resource Development Council for Alaska, Inc. (RDC) is writing in response to the Alaska Department of Natural Resources (DNR) public notice for eight Instream Flow Reservation (IFR) applications for reaches of the Stuyahok and Mulchatna rivers.

RDC is a statewide business association comprised of individuals and companies from Alaska’s oil and gas, mining, forest products, tourism and fisheries industries. RDC’s membership includes Alaska Native Corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.

RDC writes to request the Stuyahok and Mulchatna IFR applications be rejected at this time. RDC believes the applications lack technical information, and the DNR process for IFR certificates needs further clarification and a defined process.

One of RDC’s primary concerns is that approval of the IFRs would undermine existing regulatory processes and set a dangerous precedent for community and resource development projects across Alaska. Investment in Alaska should not be jeopardized by preemptive actions to stop community and responsible resource development. The permitting process examines extensive scientific data needed to make decisions on water flows and other uses, and only at that time, with the appropriate, sufficient information, should IFRs be evaluated.

Currently Flawed Program

The IFR applications also bring up a number of questions and uncertainty. For example, it is unclear who will hold the IFR certificates. In this case, the applicants include a private group and the Alaska Department of Fish and Game (ADF&G). The process currently does not identify which entity will hold the certificate.

Moreover, if there is an issue with the IFR, it is unclear who is responsible for mitigating it. RDC urges DNR to revise its process to allow only state or federal agencies to hold IFRs. RDC believes DNR should not grant IFRS to non-government applicants. The right to protect fish habitat should be managed by ADF&G – not by an individual or private entity.

Status of Applicants

RDC is concerned the private applicant, the Southwest Alaska Salmon Habitat Partnership (Partnership), is not an entity with the legal authority to hold land, an interest in land or water, or a similar property right. This private group is so far determined to be without any corporate, non-profit, or other legal standing.  It is unclear if the Partnership has directors, by-laws, an IRS tax number, or any other legal standing that provides authority to hold land and conduct commerce.  If it is not a legal entity, it cannot legally hold a reservation of water. As this is the case, the application was not legally submitted and must be rejected at this time. Any revised application should be resubmitted from a legally qualified applicant. This would then be a new application with a new priority date, and would require a new public notice. Currently, RDC believes there is only one legal applicant for these instream flow reservations, ADF&G. 

Utilize Existing Process

Every project, no matter the size or location, should have an opportunity to go through the existing, extensive permitting processes. In the case of mining, there are more than 60 major permits and many more from local, state, and federal agencies that must be successfully obtained prior to a full mine operation. The process will determine the best use of water and will address and consider mitigation, such as re-routing water away from project areas until reclamation can be done. The process will not permit one industry or resource to advance at the expense of another. These IFR applications are not warranted.

RDC urges DNR to consider all uses of water in the IFR application process. Granting, or even evaluating, an IFR without considering competing water right applications is not in the public interest. Without evaluating both, DNR cannot truly weigh and balance the economic and public interest of the competing applications, nor mitigation measures.

Conclusion

RDC urges DNR to reject the applications, which could potentially undermine the permitting process and set a dangerous precedent for future projects across Alaska’s resource sectors, including oil and gas. At the time DNR is able to clarify the process in which IFRs are to be managed and who IFRs can be issued to, only then should existing and new applications be evaluated. Further, if DNR does not reject the IFR applications, anti-development groups may use this action as a new tool to stop projects, or at a minimum, introduce significant uncertainty and delay, further chilling Alaska's business climate.

Thank you for the opportunity to comment.

Sincerely,

Resource Development Council for Alaska, Inc.