Legislature(2003 - 2004)
03/12/2003 01:05 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 113-DISCHARGE PREVENTION & CONTINGENCY PLANS CO-CHAIR FATE announced that the first order of business would be HOUSE BILL NO. 113, "An Act extending the renewal period for oil discharge prevention and contingency plans; and providing for an effective date." [Before the committee was CSHB 113(O&G).] Number 0295 REPRESENTATIVE KERTTULA talked about unannounced [oil spill response] drills and a legislative intent section in the bill that mentions the drills. She asked how unannounced drills are conducted and if many had been done. She also asked if it was the intent to include unannounced [drills] within the generic language of the bill. Number 0370 LARRY DIETRICK, Acting Director, Division of Spill Prevention & Response, Department of Environmental Conservation, testified. Mr. Dietrick said the statute allows the department to conduct either announced or unannounced drills; the department currently conducts both types and would continue to do so under the intent language that was added to [CSHB 113(O&G)]. REPRESENTATIVE KERTTULA asked how many unannounced drills had been performed in Alaska. MR. DIETRICK, in response, told Representative Kerttula that the department maintains a lists of drills that he could provide to her. He said the drills have a wide variety of type and there are some very mega-scale drills that are planned as far as six months in advance. In fact, he noted, there would be one done in Juneau this May. Mr. Dietrick said there are other [drills] that are short term and much more confined tests like a call out, which are typically unannounced, although there are a variety of types and sizes and "unannounced" goes with some and not others. Number 0488 REPRESENTATIVE GATTO asked Mr. Dietrick if drills include actual oil discharge or whether a substitution is used. MR. DIETRICK said oil is not used in drills done in Alaska, and he couldn't think of an instance in the Lower 48. He said [using oil during a drill] is a fairly controversial issue, but Norway has done it on occasion. Number 0531 REPRESENTATIVE GATTO asked if drill participants are subjected to random occurrences such as bad weather or whether drills are canceled in those instances. MR. DIETRICK, in response, said some drills are actually conducted in worst-case situations. For example, he said, a fairly large-scale field deployment drill was conducted in broken ice in the Beaufort Sea a couple of years ago. He said the precise objective was to test equipment in pretty harsh conditions. Mr. Dietrick said safety is a priority and a safety officer is present during the drills. He said if the proposed test objectives put people above a threshold that is deemed safe by the people playing a safety role in the drill, then the drill would not move forward. REPRESENTATIVE GATTO asked if the participants know when an unannounced drill will be conducted. MR. DIETRICK said participants have no prior warning in an unannounced drill. Number 0668 REPRESENTATIVE GUTTENBERG asked about the components of a contingency plan and how it goes through the approval process. MR. DIETRICK said changes were made in the contingency plan in 1990. For example, he said, prevention was added to the traditional oil spill response contingency plan and is one whole part of the plan that deals with prevention measures at the facility; there's a response-action plan and supplemental information about the facility itself. The response-action plan has a variety of parts to it, which is the part of a contingency plan in which response strategies, tactics, equipment, personnel resources, logistics, communications plans, safety issues, and other related items are shown. Number 0744 REPRESENTATIVE GUTTENBERG asked if the approval [of a plan] is a public process. MR. DIETRICK said the formal review and approval of a plan requires a 30-day public review and comment period. REPRESENTATIVE GUTTENBERG asked if the plans can be amended or altered if discoveries are made or other situations come into play before the end of the five-year renewal period. MR. DIETRICK said yes; the statute has an "evergreen process." A number of requirements exist in law that require an operator to immediately notify the department with a notification of nonreadiness if he or she is, at any time, outside of the terms of his or her plan. He explained that anytime the operator changes resources or alters his or her response capability in any way, there is a burden on that person to immediately notify the department, and there are also provisions whereby if it's discovered, the department can also take actions. He said corrections to a change in the plan are managed through an amendment process. Anytime a change comes up during a renewal cycle, it has a change in the nature of the operation that drives a change in the response capability. He said that is dealt with at that time through an amendment process, so it's virtually a continuous process. Mr. Dietrick said if what was originally approved changes in any way, there is a requirement to immediately make the changes to the plan. REPRESENTATIVE GATTO asked if drills are evaluated by an agency outside of the group organizing the drill. MR. DIETRICK explained that drills have a very large range of participants in them. He talked about Alaskan contractors that have experience in this process, and he said these "term contractors" test objectives and do quality control. Term contractors also measure the performance during the drills to see if the objectives are being met. He said because of the cost of the drills, all drills related to oil spills are virtually coordinated ahead of time with the federal requirements; thus the U.S. Coast Guard or the Environmental Protection Agency would be involved. He said the drill conducted in May will involve state agencies such as the Department of Public Safety, the Alaska State Troopers, and the Alaska Department of Fish and Game. He said it can be any one of a number of agencies, so a quality control mechanism is built into the drill and, depending on the drill's design, will have any one of a number of different independent observers recording things. Number 1005 REPRESENTATIVE GATTO remarked, "In this day and age of homeland security, this could lead to ... a worst-case scenario where everything is intentional and coordinated." He asked if the department was prepared to deal with something of that magnitude. MR. DIETRICK said the department is integrating with new efforts to build homeland security response programs for Alaska, which is being led by the Department of Military and Veteran's Affairs. He said in homeland security planning, DEC would deal with the "consequence end of the spectrum." He said the Department of Military and Veteran's Affairs is dealing up front with identifying the critical assets and their vulnerability, and doing an assessment on how to set up security plans; it is very much on the front end with regard to the intelligence to prevent an incident from occurring. He said should that analysis and those systems fail and an oil spill result, then the oil spill plans commence in response to the consequence of that attack. Mr. Dietrick said the department feels it is in good shape to deal with a spill because it builds realistic maximum oil-discharge scenarios. He said regardless of whether it is a terrorist that causes the incident, the department has a lot of systems in place that can be used for homeland response, which is why DEC is working to integrate those things. Number 1135 REPRESENTATIVE GUTTENBERG asked how extensive or encompassing the contingency plans are with respect to a catastrophic loss on the Beaufort Sea ice and how that is planned for. MR. DIETRICK said when the legislature passed HB 567 in 1990, it had a very intense debate about whether spill planning should be designed to [handle] a worst-case spill or something less. He said the resulting statute calls for a realistic maximum oil discharge, which is not a true worst-case scenario and is designed to [handle] something less than that. For example, the Prince William Sound [spill response] has the ability to contain or control 300,000 barrels [of oil] in 72 hours. He said currently, the largest vessel in Prince William Sound hauls roughly 1 million barrels, so it's about a third of that. He indicated that the volume specified in the realistic maximum oil discharge then becomes the size of the event that the response capabilities have to be planned to. Mr. Dietrick said that [determines] how much equipment is required, and the law requires that [operators] have the equipment to meet that volume in-region. He said, for example, in Prince William Sound the equipment has to be [located] in Prince William Sound and is sized to a 300,000-barrel volume response, even though there is the potential for a worst-case [scenario] of a million-barrel [spill]. He said in the case that a spill is worse than that, the statute provides for importing equipment from out-of-region outside Prince William Sound to handle the additional volume spilled. He noted that it is a two-part system with an in- region requirement and out-of-region requirement. REPRESENTATIVE GATTO reported that he heard from a North Slope worker that one of the drill rigs that was being transported over the ice fell through in five feet of water. He asked Mr. Dietrick if he had heard anything about it. MR. DIETRICK said no, and if it did, it apparently would not have spilled any oil or the department should have been notified. Number 1322 MARILYN CROCKETT, Deputy Director, Alaska Oil and Gas Association (AOGA), testified. She suggested that the bill will result in considerable time and resource savings on the part of not only the oil and gas industry, but the agency itself in the amount of time and resources that are needed to review and approve a contingency plan, and also for members of the public and the various "NGOs" [nongovernmental organizations] who review those plans. She said the [plans] are large, complicated documents, and experience has shown that the renewal costs can run from $60,000 to $100,000 per plan in some cases. In cases under the current structure of having the plan renewed every three years, she said, some operators have had to begin that renewal process 180 days in advance of the exploration date and then had the plan held over. She said the end result has been that oftentimes at about the time the renewal is complete, the plan holder is beginning the next renewal cycle. MS. CROCKETT said expanding this timeframe from three to five years brings it in line with the federal government and other West Coast and oil producing states. She said it in no way reduces the requirements for companies to respond to an event, and it serves as the "blueprint" for how a company will respond. She said the proof of the effectiveness of that plan is in the drills and the exercises that Mr. Dietrick discussed. Ms. Crockett said these plans are not prepared and put on a shelf until the next renewal cycle; there are requirements in place, and it is to the operator's advantage to ensure that the plans and the staff listings in them are up to date. She said any amendments to either the operation of the particular company or the response readiness itself has to go through an amendment process through the plan. Ms. Crockett stated that AOGA is in support of the bill. Number 1514 REPRESENTATIVE KERTTULA asked how the department would require the industry to obtain changes in technology that are discovered to be a huge benefit [for spill response] before the end of a renewal period. MR. DIETRICK said the best available technology (BAT) analysis is required to be performed in the plan, which is a theoretical analysis and determination of what the technology that is the best available for that facility should incorporate. He said this allows that capability to be tested, and if the analysis is flawed, then the department can seek correction and updating of that through the amendment process on a real-time basis. Number 1595 TADD OWENS, Executive Director, Resource Development Council for Alaska, Inc. (RDC), testified. He informed members that RDC is a private nonprofit trade association representing individuals and companies from Alaska's oil and gas, mining, timber, tourism, and fisheries industries. Mr. Owen said RDC's members support [CSHB 113(O&G)]. He suggested that a simple change from a three-year to a five-year renewal process on contingency plans is good move in terms of efficiencies for both DEC and for RDC's member organizations. He said based on members' experiences, a three-year renewal cycle often does not result in meaningful improvements in environmental protection or regulatory compliance, and increasing the time between renewals would bring the program's benefits in line with its costs. Mr. Owens said DEC is currently responsible for more than 125 contingency plans in Alaska, and he suggested that allowing agency staff additional time in the field will provide them with a more thorough understanding of and familiarization with industry operations and the contingency plans that they are enforcing. MR. OWENS said by utilizing the information that staff gains in the field, RDC believes subsequent plan renewals will have better oversight, will incorporate more high value improvements, and will be less vulnerable to legal challenges. Mr. Owens suggested that the industry will be able to shift its resources away from the largely administrative exercise of the renewal process itself and will be able to emphasis more prevention specific activities on the ground. He said improved networking and communication between industry and agency staff will further enhance the quality of the plan renewals. He said a five-year renewal cycle mirrors the federal requirement and would allow industry the option of consolidating its review process. MR. OWENS said it is important to note that this bill does not affect the federal requirement for a three-year spill drill or change the annual federal review requirements. Furthermore, he said, it does not change the requirement of contingency plan holders to submit plan amendments to DEC for approval whenever a change to an existing contingency plan is made. Number 1754 REPRESENTATIVE GATTO moved to report CSHB 113(O&G) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 113(O&G) was reported from the House Resources Standing Committee.
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