APPLE-NC - Alliance for a Post-Petroleum Local Economy, Nevada County CA

Statement for the Idaho-Maryland Mine EIR public scoping meeting, Sept. 20 2007

Alliance for a Post-Petroleum Local Economy is a grassroots group concerned about the repercussions of higher priced or less available oil and natural gas in Nevada County.

In August 2007, APPLE released a public information sheet summarizing the energy consumption plans of the mine and ceramics projects. As background, here are a few highlights from that document:

• The proposed ceramics plant, if located here, would either double or triple Nevada County's total yearly natural gas consumption.

• The proposed mining operation yearly electric consumption is more than one third of the 2006 PG&E total supplied to all of Nevada County.

• These numbers do not include energy consumption for construction, set-up, end-of-life tear-down, or any environmental clean-up that may be needed.

• No natural gas service exists to the old mine site, and Nevada County may not have enough total pipeline capacity to supply the plant. It's unclear who would pay for a new large long-distance pipeline.

• Natural gas prices change seasonally and have roughly tripled in the last decade. PG&E forecasts Large Commercial gas prices to rise 12.3% from 2006 to 2007, and 10.6% from 2007 to 2008.

• Changes in energy prices or availability could lead the company to abandon the project at any stage.

The full document with graphs and footnotes is available online: http://www.apple-nc.org/emgold.html

Stemming from these highlights, APPLE's board of directors feels that the following questions should be specifically addressed in the EIR:

1. What electricity and/or natural gas infrastructure projects would be required for the IMMC project? What are the costs of these infrastructure projects, who will pay for them (IMMC, or the local taxpayers), and what is their projected usefulness to the city and county after IMMC closes in the projected 20 years, or less, or more? Specifically, the MEA states that no natural gas service exists to the proposed project area. To meet the estimated 1100 Mcft/yr natural gas demand at the project site (doubling the county's consumption with just one user), how much pipeline will need to be constructed? Is a new larger long-distance pipeline from the Sacramento valley required? If so, does this pipeline project require its own EIR process? If a new pipeline from the valley is required, does the cross-jurisdictional nature of the project (Nevada and Yuba counties at least) add complexity or delay to the process? APPLE believes that facts and figures should be published addressing all of these questions.

2. What are the effects of such large energy consumption on neighboring consumers? Will such large loads at one site affect level of service or pose danger to adjacent consumers? To the city? To the county? Do these high loads increase the possibility of service outages due to supply issues, maintenance issues, equipment failure, CAL-ISO decisions during periods of high electric load such as Stage 1/2/3 Power Emergencies, or any other reasons?

3. APPLE questions the economic viability of the project as a whole, and feels that a second economic viability study should be a part of the review process, either as a separate document or as a part of the EIR.

Except for any required rehabilitation, IMMC would be free to close operations and leave the area at any time; APPLE is concerned about the economic void, environmental mess, and abandoned workforce that will be left after IMMC closes operations at their proposed 2.1 million square foot project. While the IS lists post-project rehabilitation tasks that IMMC should carry out, it is unclear if this rehabilitation will be prepaid or bonded by IMMC before the start of the project; whether inflation estimates between now and rehabilitation time have been taken into account; and how effective the rehabilitation can be.

BAE, the consultants for the July 2005 economic viability study, plainly state that the information they received was limited, and that information on the ceramics portion of the project was too vague to make a guess as to its economic viability.

Following are some of the factors that cause APPLE to question the project's economics:

Emgold, the Canadian parent company of IMMC (which is not mentioned in the IS), has seen its stock fall from 58 cents (Canadian) to its current 52-week low of 11 cents at a steady pace over the course of the last year. On August 1 2007, Emgold made a press release regarding their recent restructuring. The press release states that Emgold will no longer be funding Ceramext process development, and that Golden Bear Ceramics (also not mentioned in the IS) is now 'on its own' to find outside funding sources to continue process development. If these funding sources are not found, then the Ceramext process will remain commercially unproven even as the 191,800-square-foot ceramics plant is being built. This statement, combined with the recent layoffs of nearly half of the local Golden Bear Ceramics employees (The Union, 'Mine lays off ceramics workers', August 2, 2007), places the long-term commercial, technical, and economic feasibility of the Ceramext process in serious doubt. The timeline of a local ceramics plant is also in question and would need to be addressed in the EIR. To quote briefly from the article:

"Golden Bear is looking for independent funding, and the six people may get their jobs back in one or two months if the funding is landed [said David Watkinson, IMMC president]. The restructuring also means the first commercial ceramics plant, generated from rock waste from the mine, will open in another area where environmental reviews are not on the table, Watkinson said. 'The plan is to build a production plant here, but Golden Bear can start elsewhere right away.'"

In addition, energy availability and price variations will affect the overall project economics. While the PG&E natural gas price projections (12.3% increase from '06 to '07, and 10.6% increase from '07 to '08) hugely outpace inflation, recent history shows that energy price projections are increasingly inaccurate and typically too low. Also, the recent nation-wide legislative trends and future suggestions of increasing penalties and abatement fees on non-renewable energy consumption and carbon dioxide emissions further jeopardize the long-term economics of the IMMC project.

APPLE questions the economic practicality of any business that relies so heavily on abundant natural gas and electricity. APPLE would like to see published independent analysis of all of these economic factors.