03/27/1996 03:37 PM Senate RES

                                                                               
     CSHJR 59(RES) NPDES PERMIT FOR COOK INLET OIL & GAS                     
                                                                               
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at 3:37 p.m. and brought CSHJR 59(RES) before the committee             
 as the first order of business.                                               
                                                                               
  REPRESENTATIVE JOE GREEN , prime sponsor of HJR 59, said for over 30         
 years there has been discharge of salt water that's produced with             
 oil.  After it goes through cleaning facilities, it's put back in             
 the inlet, and the process has had no adverse effect to the                   
 environment.  Recently the Environmental Protection Agency came out           
 with a draft set of regulations which increase both the amount of             
 testing required and the frequency of testing.  He said this is               
 just another attempt of government to harass an industry that for             
 over 30 years has been providing the state with revenue and has               
 been an environmentally satisfactory operation.                               
                                                                               
  CHAIRMAN LEMAN  opened the hearing to public testimony and stated            
 testimony would be taken from witnesses waiting to testify in                 
 Kenai.                                                                        
                                                                               
  JIM EVANS , representing the Alliance in Kenai, echoing                      
 Representative Green's comments, agreed the oil companies have done           
 an outstanding job in taking care of the environment for the past             
 30 years.  He voiced the Alliance's support for HJR 59.                       
                                                                               
  BILL STAMPS , representing the Alliance in Kenai and testifying in           
 support of HJR 59, pointed out that Cook Inlet did not make the 303           
 D list, which is a section of the Federal Clean Water Act that                
 requires states to identify to the EPA polluted water bodies that             
 may need additional control measures to meet state water quality              
 standards.  The list approved by the EPA last August lists 56                 
 Alaska water bodies identified as impaired by the EPA and DEC.  The           
 EPA and DEC evaluated 130 bodies and chose 56 they felt needed the            
 most attention and Cook Inlet was not among them.  He said even               
 with the favorable results of these studies, there are special                
 interest groups that will shut down the oil industry in Cook Inlet            
 if they are allowed to.  If they are successful, they will also               
 succeed in devastating the economy of the Kenai Peninsula Borough.            
                                                                               
  CHAIRMAN LEMAN  questioned the last time there was any substantial           
 spill in Cook Inlet that resulted in either the killing or the                
 harming of wildlife or any property or fishery.   MR. STAMPS                  
 responded that he didn't know, but he pointed out that the industry           
 this relates to is production and the drilling industry, not the              
 industry of transporting the oil.                                             
  DENNIS RANDA , representing Trout Unlimited as the statewide                 
 chairman and testifying from Kenai, said that while Cook Inlet is             
 a real dynamic resource, the chronic impact on a long-term industry           
 such as the oil industry hasn't been researched and the data hasn't           
 been looked at, especially considering some of the new scientific             
 methodology.  He has concern with dumping toxins and hydrocarbons             
 into the Inlet and into the mixing zone.  He said he would like the           
 committee members making the decisions in the Legislature to                  
 understand and not just blindly rubber stamp legislation because              
 it's from the oil industry, which the state of Alaska is certainly            
 dependent upon.                                                               
                                                                               
 Number 300                                                                    
                                                                               
  MARILYN CROCKETT , Assistant Executive Director, Alaska Oil & Gas            
 Association and a member of the Board of Directors for the Resource           
 Development Council, voiced their appreciation for EPA's efforts              
 in compiling the conflict permit, but they are very concerned about           
 the draft permit's proposed increase in the amount of monitoring              
 and reporting.  These additional requirements will not result in              
 any benefit in the environment, and will, in fact, add a tremendous           
 cost and administrative burden not only to the operators of these             
 facilities but to EPA as well.  It is estimated that the cost to              
 comply with the additional monitoring and sampling requirements               
 will be in excess of $1 million annually.                                     
                                                                               
 Number 329                                                                    
                                                                               
  LARRY LITTLE , an employee of Shell Western E&P in Kenai, stated his         
 support for the position expressed by Bill Stamps in his testimony.           
                                                                               
  LEONARD VERRELLI , Director, Division of Air & Water Quality,                
 Department of Environmental Conservation, directed attention to a             
 whereas clause on page 2, line 12, and clarified that DEC is not              
 involved in EPA's NPDES process.  DEC has its own 401 certification           
 process which comments on the permit and provides the state                   
 criteria which is then rolled into the NPDES permit.  He said DEC             
 has sent a letter to EPA which basically mirrors the intent of the            
 resolution and states that the monitoring is excessive and it lays            
 out several suggestions on how to correct that, as well as                    
 suggesting what other things can be done to assure compliance with            
 the permits.                                                                  
                                                                               
  CHAIRMAN LEMAN  asked if the resolution would be more accurate if            
 that conjunctive phrase were eliminated.   MR. VERRELLI  acknowledged         
 that it would.   REPRESENTATIVE GREEN  agreed that the conjunction            
 was probably misleading, and he said he had no objection to its               
 removal.                                                                      
                                                                               
  CHAIRMAN LEMAN  also suggested adding a new whereas clause saying            
 that DEC has supported many of these recommendations to minimize              
 the costs and reduce the unnecessary burden, which he thinks would            
 lend more support to the intent of the resolution.   SENATOR TAYLOR           
 then moved a conceptual amendment for a new whereas clause, and to            
 delete the conjunctive phrase on page 2, line 12.  Hearing no                 
 objection, the Chairman stated the amendment was adopted.                     
                                                                               
  NORMA CALVERT , representing Marathon Oil Company and testifying in          
 Juneau, said Marathon has been involved in the operations in the              
 Inlet for approximately 30 years, and the additional monitoring and           
 sampling that is called for under the proposed permit adds                    
 additional costs to the operations without any offsetting benefit             
 to the environment.  She said these maturing fields are very                  
 sensitive to increased costs, and she noted Marathon has made a lot           
 of changes in its operations to try to reduce costs, and they are             
 not in favor of increasing them for something that really has no              
 benefit.                                                                      
                                                                               
 There being no further testimony on CSHJR 59(RES),  CHAIRMAN LEMAN            
 asked for the pleasure of the committee.                                      
                                                                               
  SENATOR TAYLOR  moved CSHJR 59(RES), as amended, be passed out of            
 committee with individual recommendations.  Hearing no objection,             
 it was so ordered.