Legislature(1995 - 1996)
03/01/1995 08:10 AM House RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HRES - 03/01/95 HB 128 - WASTE DISPOSAL PERMIT EXEMPTION CO-CHAIRMAN WILLIAMS told committee members they have a proposed committee substitute, version R, dated February 23, 1995, in their packets. REPRESENTATIVE PETE KOTT made a MOTION to ADOPT CSSSHB 128(RES). CO-CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. Number 030 JACK PHELPS, AIDE, REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR, stated CSSSHB 128(RES) represents the changes discussed at the last hearing on HB 128. He requested committee members to look at page 2, lines 13-16. He said the previous draft of HB 128 had a definition of hazardous waste drawn from Title 46. The problem identified at that time was that the Alaska Oil and Gas Conservation Commission (AOGCC) utilized the federal definition for hazardous waste found in 40 C.F.R., Part 261, in regulating activities in the oil patch. He noted the definition of hazardous waste in the Department of Environment Conservation's (DEC) statutes is a short paragraph. The definition under the Environmental Protection Agency (EPA) is 80 plus pages. Therefore, it was deemed appropriate by all concerned to use the federal definition of hazardous waste in CSSSHB 128(RES). He pointed out there is a precedent in statute for using the federal definition in Alaska statutes for hazardous waste. MR. PHELPS stated the other change in the committee substitute is on page 3, line 17. He noted this part of the bill was added at the request of DEC to allow them to continue to regulate excavation dewatering activities. He said this section was added prior to the previous draft but groundwater had not been included. This committee substitute includes the term groundwater. MR. PHELPS identified another change which was suggested and that change is reflected in the amendment R.1 in committee member's folders. He said when it was decided to transfer the annular disposal authority from DEC to AOGCC, the bill was drafted to deal with oil or gas wells on the oil patch. It was recently pointed out that in the production facilities there are water producing wells and water reinjection wells as part of the Enhanced Oil Recovery Program. He stated it did not seem appropriate to leave those out of the loop. Therefore, it was suggested that amendment R.1 add those as well so it would be certain that AOGCC would have the authority to regulate all of the annular pumping on the slope. He explained amendment R.l adds those water wells which are associated with oil well activity in the oil patch. Number 140 REPRESENTATIVE JOE GREEN made a MOTION to ADOPT AMENDMENT R.1. Page 2, lines 11-12: Delete "the disposal, in the annular space of an oil or gas well, of drilling mud, cuttings, and nonhazardous drilling operation wastes;" and insert "the disposal of drilling mud, cuttings, and nonhazardous drilling operation wastes in the annular space of an oil or gas well or in the annular space of a water well associated with oil or gas exploration and production;" Page 2, line 19: Delete "an oil or gas" and insert "a." CO-CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. MR. PHELPS stated there has been interest raised in how the excavation dewatering portion might affect certain activities. He said it might be appropriate to question DEC on how those might affect certain activities, particularly reserve pits on the North Slope. Number 173 DEENA HENKINS, SECTION CHIEF, DRINKING WATER & WASTEWATER SECTION, DEC, stated she would be happy to answer questions. CO-CHAIRMAN WILLIAMS asked if CSSSHB 128(RES) were to pass into law as it currently reads, would the draft general permit regarding drilling wastes, currently out for public comment, no longer be necessary. MS. HENKINS replied yes, that would be her interpretation. CO-CHAIRMAN WILLIAMS questioned if this bill were to pass in its current form, does she know of any human health risks, or specific, quantifiable environmental pollution problems that would go unregulated. MS. HENKINS stated she is not aware of complaints or problems with the type of activities the bill describes. She felt the department would have other recourses to deal with these kind of wastes if a problem was discovered. For example, if wastes were causing a health hazard, that would presumably meet the definition of pollution which is prohibited in statute. CO-CHAIRMAN WILLIAMS noted the department might not be able to take an official position for or against HB 128, but asked Ms. Henkins to tell the committee, given the current state of knowledge about the activities covered under this exemption, if the bill would pose any significant difficulties in carrying out the department's legal responsibility to protect the environment. MS. HENKINS replied no. Number 221 CO-CHAIRMAN WILLIAMS referred to Section 3 of CSSSHB 128(RES) and noted at the department's request, the language regarding excavation dewatering was included. He said in the oil patch, there are reserve pits which were formerly used to contain drilling wastes and are permitted under federal National Pollutant Discharge Elimination System (NPDES) provisions, which DEC certifies. He stated those drilling wastes are now ground and reinjected into the formation and the industry's practice is to empty and clean the pits and re-vegetate them. He noted they do leave a hollow in the ground and sometimes accumulate runoff. He asked how DEC would treat post grind and inject abandoned reserve pits in light of the excavation dewatering provisions of CSSSHB 128(RES). He wondered if DEC would require new permits if these pits had to be dewatered. MS. HENKINS said she is not familiar with dewatering reserve pits but felt if there were any contaminants in the water in the reserve pit and the water was being discharged to land or surface waters, the department would want to permit that activity. She stated that what the department is most commonly dealing with is muddy water from an excavation. CO-CHAIRMAN WILLIAMS noted for the record that Representatives MACLEAN and OGAN had joined the committee. Number 262 REPRESENTATIVE IRENE NICHOLIA asked if CSSSHB 128(RES) would have a negative impact on fish spawning streams. MS. HENKINS replied it will not. She said point source discharges to any surface water would still require a permit. If a non-point source discharge was causing a violation of DEC's water quality standards, the department could take action. She noted the Alaska Department of Fish and Game (ADF&G) could also require a Title 16 permit if an activity was affecting anadromous waters in their jurisdiction. Number 284 DAVE JOHNSTON, CHAIRMAN, AOGCC, expressed support of CSSSHB 128(RES). He stated AOGCC has authority, in its statutes AS 31.05.030, to regulate the disposal of oil field wastes. He said CSSSHB 128(RES) would remove the dual jurisdiction and permitting authority over this activity currently existing between the DEC and the AOGCC. The activity is similar to the Underground Injection Control (UIC) Program which is mandated under the federal Safe Drinking Water Act that AOGCC administers. He noted the state, through AOGCC, acquired primacy for the UIC Program in 1986. The UIC Program differs from the Annular Disposal Program in that the UIC Program was set up to control the injection of production wastes on a large scale, and the Annualar Disposal Program was originally conceived as an exemption to the UIC Program to allow the disposal of wastes associated with the drilling of one well only. MR. JOHNSTON stated those who set up the UIC Program originally did not feel it would make sense to require a dedicated injection well to be drilled solely to take wastes from one exploratory well. Therefore, it was decided that the Annular Disposal Program was not something subject to UIC jurisdiction. He noted because of AOGCC's statutory authority, that does remove the commission from the regulation of the disposal of oil field wastes in the annular space of the well. MR. JOHNSTON said the Interstate Oil and Gas Compact Commission in 1992, made the recommendation that the Annular Disposal Program be turned over to AOGCC. That recommendation was made because in the wisdom of the people reviewing the program, who were from various other states, saw that the AOGCC had the expertise and knowledge to properly manage this program. The annular disposal of mud and cuttings, etc., is an activity which takes place many thousands of feet below ground. He stressed AOGCC understands that environment, whereas DEC does not have nearly the expertise when it comes to understanding things like confining zones, receiving zones, well construction, etc. He stated CSSSHB 128(RES) will not significantly add to AOGCC's existing burden it has under the UIC Program. The AOGCC encourages the legislature of pass CSSSHB 128(RES). Number 351 REPRESENTATIVE EILEEN MACLEAN asked what is done with mud drillings when wastes are disposed. MR. JOHNSTON replied currently the mud and cuttings can be disposed of in two ways which reflects a change within the past two years. He said these mud and cuttings previously went to reserve pits where they sat for quite a long time. He stated AOGCC is in the process of closing out those reserve pits. He stressed the preferred alternative is below ground injection. The injection zones on the North Slope are 3,000 to 5,000 feet below the surface. The confinement of those injection materials are ensured by enuring that proper confining zones exist above where the oil field wastes are placed so they cannot migrate to the surface again. He noted when looking at confining zones, AOGCC looks for thick layers of shale or some impermeable barrier to flow. REPRESENTATIVE MACLEAN asked what CSSSHB 128(RES) would do. MR. JOHNSTON stated this bill would remove dual jurisdiction currently existing between the AOGCC and DEC. Both agencies currently have a piece of this annular disposal issue. AOGCC has looked at it as an issue associated with drilling safety, protecting the integrity of the well, etc. DEC has looked at it more from the standpoint of what the waste material is. He noted there is no argument between the two agencies over the process. The process of annular disposal has proven to be a very good process to dispose of the wastes permanently in a manner that protects the environment. He stressed he could not think of any better alternative than the underground injection of this waste. Number 393 REPRESENTATIVE SCOTT OGAN asked what is the annular space of an oil or gas well. MR. JOHNSTON replied the annular space is the space between the earth and the casing put into that boring or it is the space between two strings of casing. For example, when a well is drilled there will be a surface casing string in the area of 13 and five- eighths inches in diameter. A smaller production string of about nine and five eighths inches in diameter runs down inside that surface string. The space between the two is the annular space. Fluid is put down that space until it reaches a receiving zone that is below the bottom of the surface string. He explained the surface string goes down between 2,000 and 4,000 feet and is cemented in place. The annular space between the surface string and the rock formation is cemented to the surface. Wastes are put down the annular space between the production casing and the surface casing. The wastes travel down the annular space and go out into the receiving formation at the base of the bottom of the surface casing. REPRESENTATIVE OGAN clarified the disposal zone is a porous rock formation. MR. JOHNSTON stated porous sandstone is involved and gravity and pressure is used. He said mud and cuttings involve a lot of weight which tend to push the wastes out into the formation but pressure is also added. Number 430 CO-CHAIRMAN WILLIAMS said in light of the discussion with Ms. Henkins regarding reserve pits in the oil patch, he asked Mr. Johnston to make comments on reserve pits that might help the committee understand the permits and safeguards that govern this activity. MR. JOHNSTON stated the AOGCC has always looked at reserve pits more as the prerogative of the DEC since it is an activity associated with the surface. AOGCC's focus is more on the subsurface environment. He said AOGCC's regulations briefly talk to reserve pits. He noted there are people who believe the AOGCC should take a larger role in reserve pits but there is a point reached where it does not make sense to have this dual jurisdiction all the time. He stressed AOGCC has backed off the reserve pit issue and has allowed DEC more of a say in that issue. Again, it is something the commission could step into and direct additional attention. Number 457 REPRESENTATIVE ALAN AUSTERMAN asked Mr. Johnston to explain the reserve pits. He wondered if the pits are capped off. MR. JOHNSTON responded there are a number of generations of reserve pits which have existed over a number of years. More recently, as people became more knowledgeable about wastes, the construction has reflected that wisdom with permeability barriers, etc. He noted that some of the reserve pits, particularly those on the Kenai Peninsula, are difficult to find. Generally, reserve pits were covered over and forgotten. Today, those old reserve pits are being reopened and the mud and cuttings are being disposed of through an injection type program. He noted that wells on the North Slope are being drilled without reserve pits and stressed this is where the Annular Disposal Program has become much more important. Number 497 REPRESENTATIVE JOHN DAVIES noted on page 2, line 30 and page 3, line 11, there is the phrase "established industry procedures". He wondered if Mr. Johnston, as a regulator, is comfortable with such a phrase. He asked if there are established industry procedures. MR. JOHNSTON stated AOGCC refers quite often to good engineering practices, good oil field practices, etc. He said established industry procedures may be different to different companies. He felt good engineering practices, or recognized engineering practices might be better. He felt if engineers are talked to, there would be a consensus on what these things are. He noted it is similar to the phrase, "a good citizen." He pointed out the phrase is an intangible and is subject to debate. Number 530 GERON BRUCE, LEGISLATIVE LIAISON, ADF&G, told committee members they have a fiscal note which was prepared by the department for the first version of the bill. He said the department was not aware, until recently, of the work being done to modify the bill. He stated he did receive a copy of CSSSHB 128(RES) the day before and had faxed it to the department staff in Fairbanks. Based on their review, the department believes the fiscal note should be revised to reflect a zero fiscal note. REPRESENTATIVE DAVIES asked Mr. Bruce to highlight the changes between the original bill and the committee substitute which resulted in less activity on the part of the department. MR. BRUCE stated the changes clarify that the intent of the bill is to address the question of the duplication of efforts between the AOGCC and DEC on the specific matter of the disposal of wastes associated with oil drillings. He noted that DEC's other responsibilities on water quality will not be affected and will continue to do the things that the department depends on them to do. He explained the original fiscal note was based on the assumption that DEC would not do some of the things they are currently doing in regard to ensuring that water quality standards are adequate for the protection of fish and wildlife. REPRESENTATIVE DAVIES clarified that ADF&G is comfortable that DEC is going to continue to do those things related to habitat protection, which allows the department to have a zero fiscal note. MR. BRUCE stated that is correct. DEC will continue to do things that ensure water quality which are important for fish and wildlife habitat. He noted CSSSHB 128(RES) does not affect ADF&G's responsibilities regarding the protection of fish and wildlife habitat. Number 572 NEIL MACKINNON, REPRESENTATIVE, ALASKA MINERALS COMMISSION (AMC), stated AMC supports CSSSHB 128(RES). He said this law was applied for the first time last year, specifically in the case of the Echo Bay Mine drilling project. He told committee members about delays in several projects. He pointed out there is no other place where it is required to permit the discharge from a mining drill hole in the exploration stage. REPRESENTATIVE MACLEAN wondered what is currently done with wastes. MR. MACKINNON said the drilling waste is mostly water, which is used to cool the bits, and rock cuttings. The water flows out into a return tank which is recirculated and put back down the hole. He stated last year a sand centrifuge was used to pull the sand out which is put on the ground. Number 606 PATRICIA BERG, REPRESENTATIVE, ARCO ALASKA, stated ARCO Alaska supports HB 128, supports using the federal definition of hazardous waste, and supports the amendment just adopted. Previously, ARCO Alaska had concerns about Section 3 (B) to unintentionally include reserve pits which had been excavated with the drilling wastes ground and injected back down into the hole. She said what remains is an empty reserve pit. She stated based on Ms. Henkins' testimony, ARCO Alaska has no further concerns. She explained the intent of that section is for construction sites not for cleaned and abandoned reserve pits. MOLLY SHERMAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL), stated AEL is always in support of things which streamline government efficiency and costs less. She said she has been involved in exploration drilling with reconnaissance crews as a field cook and many of the places she has been they firmly believe in conscientious business and environmental practices. She noted they fulfill their contracts with vigor and as economically viable as possible. They are conscientious people who love to work outside, relish the risk and extreme conditions, and love Alaska. MS. SHERMAN said AEL's intent is not to shut down drilling operations or to objectively oppose the bill. She stressed AEL's concerns regard safeguards and abuses where practices are not established. AEL feels there is a critical flaw in the last half of CSSSHB 128(RES) as there is not a cohesive set of standards. She stressed that issue needs to be addressed. She noted often the drilling sites are in remote areas and in many places there are pits involved. She expressed concern about clean up and reclamation. If not mandated, she felt there should be established reclamation standards set up. She stressed it is not difficult to rake an area and reseed it. Number 660 TROY REINHART, EMPLOYEE RELATIONS & PUBLIC AFFAIRS MANAGER, KETCHIKAN PULP COMPANY (KPC), stated KPC supports CSSSHB 128(RES). KPC does considerable drilling to develop rock pits and to build roads under best management practices. He noted that currently there are not any regulatory incentives in place which also protect the environment. He stressed if a permitting process is started, it would impact KPC's operations. He pointed out currently there is not a chance for an exemption for minimal activities that involve drilling to place charges or drilling to build logging roads and develop rock pits. He stressed KPC takes all the safeguards in place to ensure that water used in drilling operations do not get discharged in streams. TAPE 95-26, SIDE B Number 000 REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 128(RES) on page 2, lines 29 and 30, and page 3, line 11, eliminating the words "established industry procedures" and substituting the words "recognized engineering practice." CO-CHAIRMAN WILLIAMS OBJECTED for the purpose of discussion. REPRESENTATIVE DAVIES felt the amendment provides a middle ground. He said the other option is to require state guidelines. He expressed concern the notion of established industry procedures is perhaps vague. He stated the phrase "recognized engineering practice" would be more focused and a less elusive concept for something which is intangible. CO-CHAIRMAN GREEN wondered if the amendment would require an established definition of what "recognized engineering practices" are. He expressed concern about leaving something vague where there is not a track record. He said recognized engineering practices could come from various sources that could compete with one another. Number 073 REPRESENTATIVE AUSTERMAN asked if established industry procedures or recognized engineering practices are written. REPRESENTATIVE DAVIES stated he is not an expert. He stressed the whole concept being dealt with is intangible and there are no written procedures and that concerns him. He said there probably is no singular volume that can be used to find established industry procedures or recognized engineering practices. On the other hand, he felt the engineering practice is a professional area which is somewhat removed from a particular industry. He noted in most engineering fields, there are many publications which do not exist in the same way for industry procedures. He pointed out his amendment is still an intangible concept but would take it one step less removed from intangible. CO-CHAIRMAN WILLIAMS suggested the committee pass out the bill as it is and then he and Representative Davies can discuss his concerns. He noted if they agree one way or the other, perhaps Representative Davies can offer an amendment on the floor. REPRESENTATIVE DAVIES WITHDREW his MOTION. REPRESENTATIVE AUSTERMAN made a MOTION to MOVE CSSSHB 128(RES), with accompanying zero fiscal notes, out of committee with individual recommendations. CO-CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED.
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