Request for appeal of water reservation decision DEPARTMENT o= NATURAL RESOURCES October 26, 2015 oct 2 6205 Commissioner Mark Myers Department of Natural Resources COMMISSIONER'S OFFICE ANCHORAGE '550 West 7th Avenue, Suite 1400, ‘Anchorage, Alaska 99501 Dear Commissioner Myers, ‘The Council of Alaska Producers (CAP) is writing to request an appeal ofthe decision by the Chief of the Water Resources Section of the Department of Natural Resources (DNR) to grant a water reservation to the Chultna Citizens Coalition (CCC) in the lower reach of Middle CreekiStream 2003. The Council raised concerns about the CCC's water reservations applications ina letter to DNR on April 9, 2015 and also participated in the public hearing on Augus: 22, 2015, CAP isa non-profit trade association formed in 1992 and serves asa spokesperson forthe large ‘metal mines and major metal developmental projects in the state. Bringing together mining ‘companies with interest in Alaska, the Council represents and informs members on legislative ‘and regulatory issues, supports and advances the mining industry, educates members, the ‘media, and the general public on mining related issues, and promotes economic opportunity {and ervironmentally sound mining practices. ‘The Council has grave concerns about the negative consequences ofthe decision to grant 2 water reservation in the lower reach of Midalle Creek/Stream 2003. The State of Alaska has @ constitutional mandate to manage our water for the maximum benefit of Alaska’s people. itis fundamental thatthe State should never delegate authority to a private party to manage these resources, because agencies are accountable to the public and elected officials, but private citizens are accountable tono one. Private citizens can use reservations for the inappropriate objective of stopping or severely hindering a projec, rather than the legitimate objective of protecting fish and wildlife habitat. Not only does this increase operational risk forthe PacRim Coal project, it sets an extremely negative precedent that could be used to disrupt other community and resource development projects in Alaska, In adeltion to these far reaching, negative consequences, the decision itself seritically flawed. Current statute and regulation require thatthe applicant must demonstrate ~and ONR must 3 nchrage, Aska 99522 » 907-301-102 ev anor.find-that a “need!” exists forthe reservation. The applicant filed to do this and DNR's analysis ‘of the “need” relies on unsupported conclusions about hypotvetical impacts where no water from Stream 2003 reaches the Chuit River. Tis ignores the fact that PacRim Coal would return all the water it diverts from Stream 2003 in the mine area back into Stream 2003 below the mine area Furthermore, DNR should have determined that there is not: “need for a reservation under Circumstances where there is a major permitting process underway or reasonably foreseeable. Todo otherwise suggests that the State and Federal agenciesthat are required to consider these issues in the permitting process cannot be trusted todo their jobs. Commissioner, you have an opportunity to defend the rigor and stability ofthe existing permitting system, maintain authority for resource management and send a positive message to the investment community. We urge you to overturn the decision to grant this water reservation to the CCC and undertake a thorough examination of the potential consequences of Privately held water reservations. Finally, DNR should estabih a clear policy that it will not {rant reservations to private parties under circumstances where permitting for a major project {is underway or reasonably foreseeable. Sincerely, +hiante-— Karen Matthias ‘Managing Consultant 20f2