Legislature(2013 - 2014)BARNES 124
02/01/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Alaska Stand Alone Gas Pipeline Project Update | |
| HB78 | |
| HB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 78 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 77 | ||
HB 78-REGULATION OF DREDGE AND FILL ACTIVITIES
1:37:50 PM
CO-CHAIR FEIGE announced that the next order of business is
HOUSE BILL NO. 78, "An Act establishing authority for the state
to evaluate and seek primacy for administering the regulatory
program for dredge and fill activities allowed to individual
states under federal law and relating to the authority; and
providing for an effective date."
1:38:07 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), on behalf of the governor, co-introduced HB
78 with Dan Sullivan, Commissioner of the Department of Natural
Resources (DNR). Mr. Hartig said HB 78 would allow DEC and DNR
to explore and assess the pros and cons of the state pursuing
primacy of the Section 404, [Clean Water Act], dredge and fill
program. The bill would provide a two-step process: first, an
evaluation phase and, then, authority to the two agencies to
pursue primacy. He clarified, however, that the legislature
would still be the gatekeepers because after the assessment
period the agencies would be back to the legislature at least
once, which would be to get the budget for a program should that
assessment say the state should pursue this. The agencies may
also be back to the legislature prior to that for additional
authorities because, as the assessment explores the pros and
cons of taking on the program, the state would be building its
application - building the state capacity - by identifying any
gaps with existing state law that would have to be filled for
the state to have a complete application.
1:39:36 PM
COMMISSIONER HARTIG said his presentation today will define the
Section 404 program, outline the process for putting together
and filing an application with the Environmental Protection
Agency (EPA), and discuss the anticipated pros and cons of
acquiring primacy of this program. Commissioner Sullivan will
talk about how the administration views primacy in the bigger
context - how it fits in with some of the other objectives that
the state administration and legislature are pursuing - and will
give examples of what happened recently on some 404 permits and
how things might have happened differently had some of the
decision making been made at a local level.
1:40:48 PM
COMMISSIONER HARTIG explained there are two large permitting
programs in the federal Clean Water Act: Section 402, the
wastewater discharge permitting program, and Section 404, the
dredge and fill program. The state received primacy for the 402
program in 2008 and received final authority to run the last
phase of that program in November [2012]. For the 404 program,
the U.S. Army Corps of Engineers issues permits for projects
that want to place fill material into surface waters of the
U.S., which includes lakes, ponds, shorelines, and wetlands. He
pointed out that Alaska has 65 percent of the nation's wetlands,
which partially explains why the state should be one of the
first in line to pursue primacy. Types of projects that would
need 404 permits include large mine or oil and gas projects, as
well as small projects such as home or school foundations.
Anytime construction occurs on a wetland or fill material placed
in surface waters, chances are that a 404 authorization will be
necessary.
1:42:49 PM
COMMISSIONER HARTIG explained that the 404 program is not there
just to issue permits because wetlands have a lot of value.
Therefore, the state should be interested in pursuing primacy on
this program to ensure that those values are protected and
realized in the state. Wetlands provide runoff control, settle
and filter potential contaminants in runoff, and provide
valuable habitat for certain species. Alaska is fortunate in
that it has only lost about 1 percent of its wetlands as
compared to other states that have lost 50 percent or greater.
It is important to protect these wetlands and manage them at a
local level so as to have some decision-making control over this
program.
1:43:35 PM
COMMISSIONER HARTIG also pointed out that the 404 program is a
detailed, science-based program. Some of the analyses that are
performed to determine whether to issue a permit and what terms
under which it might be issued require identifying the least
environmentally damaging practicable alternative (LEDPA), which
he likened to a mini National Environmental Policy Act of 1969
(NEPA) analysis. Under the program a 404(b)(1) analysis is
performed that considers the potential long- and short-term
effects that a proposed discharge or fill material might have in
both the disposal areas and around it. Again, the goal of the
404 permitting program is to review how to avoid or minimize
impacts to these valuable aquatic resources, including wetlands.
Under the existing 404 program in the federal government, the
U.S. Army Corps of Engineers issues the permits with the
aforementioned analysis but the EPA retains oversight and
actually has veto authority over the U.S. Army Corps of
Engineers. The EPA would maintain oversight and have veto
authority with 404 permits that DEC/DNR would issue even with
primacy, which is the same with the permits DEC issues for
wastewater discharge.
1:45:31 PM
COMMISSIONER HARTIG explained that it is a two-stage process
with HB 78. First, there would be review of what a state
program would look like, cost, and take to staff the program and
then evaluate the potential benefits of the program before
seeking additional resources from the legislature to implement
the program. He then turned attention to some of the
requirements that would have to be part of the application,
which is analogous to the application done for the 402 program.
The application is lengthy as it includes a formal request by
the governor, a detailed description of the program as the state
will run it, a statement by the attorney that the state program
as proposed is consistent with the federal program, a negotiated
memorandum of agreement with both the EPA and U.S. Army Corps of
Engineers in terms of how everyone will work together, a
description of staffing and the budget, and copies of all
applicable statutes, regulations, and guidance documents.
Therefore, the entire program has to be built prior to
submitting the application, which means the legislature would
have a clear picture of the entire program including the budget,
personnel, and program details. He anticipated that there would
be a component of permit fees and all the interested parties
would be able to review the program and comment on it prior to
hiring personnel and forwarding the application. Commissioner
Hartig acknowledged the rumors in the capitol building that
HB 77 is Pebble Mine legislation, but refuted those rumors.
1:49:34 PM
REPRESENTATIVE HAWKER surmised then that this is a two-stage
process under which DEC would have the authority to build the
resources within the state in order to administer and operate a
primacy program and then return to the legislature seeking
resources to implement and pursue the official primacy
designation.
COMMISSIONER HARTIG responded that is partially correct. The
fiscal note starts out with five positions at DEC in fiscal year
2014 (FY14) that would perform the study and build the
application. The number of personnel would increase [the next
year] to a total of eight people, which would not be enough
people to run the program. He noted that at DNR the number of
positions would start at three and increase to five. He
predicted that in 2016, DEC would return to the legislature with
the number of people necessary to run the program at which time
DEC would make a fiscal note request and the position control
numbers (PCNs).
REPRESENTATIVE HAWKER remarked that this is just the tip of the
iceberg in terms of growing government and it is a policy call
as to whether it is worth it. He then reviewed his
understanding that for this proposal in DEC there would be five
personnel in FY14 that would increase to eight in FY15 and in
DNR there would be two personnel in FY14 that would increase to
four in FY15.
1:52:11 PM
COMMISSIONER HARTIG informed the committee that during this
assessment period, DEC would review another aspect of primacy.
With regard to taking the entire authority to issue 404 permits
from the U.S. Army Corps of Engineers, there are geographical
limitations such that the U.S. Army Corps of Engineers under the
federal Clean Water Act has to retain authority on certain
wetlands. Those wetlands would be the tidal influenced areas
and the adjacent wetlands as well as interior waterways that are
or may be used in interstate or international commerce.
Therefore, one cannot review the federal government's costs for
the program in Alaska today and equate that to what the state
might pay.
1:53:08 PM
COMMISSIONER HARTIG then related that DEC would pursue at the
same time another aspect of authority that is less than primacy.
There are state programmatic general permits that may be issued
for activities that would happen with enough regularity to issue
a statewide general permit covering multiple parties rather than
individual permits for individual parties. The impact of such
projects would be relatively minimal and the state could take
over the authority to implement and enforce those permits from
the federal government. The assessment phase would include
which types of permits might benefit projects, such as a shale
gas project, that would have multiple projects in the state that
would need 404 permits. Whether the state could work with the
U.S. Army Corps of Engineers jointly to issue those permits and
then take over the management and enforcement of those permits,
which could be accomplished with or without full primacy, is
something the department would assess during the same time as
primacy.
1:54:29 PM
CO-CHAIR FEIGE related his understanding that the U.S. Army
Corps of Engineers, given its 404 authority, already issues
general permits.
COMMISSIONER HARTIG clarified that there are a number of
different types of general permits and these [404 permits] would
be fairly low impact type projects. He noted that [404 permits]
have not been issued in Alaska for the types of projects he just
described. The assessment phase could consider whether more
could be done with general permits, which would save the U.S.
Army Corps of Engineers, the state, and the project proponent
money and time because it is much easier to go through the
general permit process than the entire permitting process for an
individual permit.
1:55:25 PM
REPRESENTATIVE SEATON related that as Homer has worked on
building the natural gas line distribution system it has been
working with the U.S. Army Corps of Engineers on a regional
general permit. Therefore, he opined that the benefit being
discussed is already available when working with the U.S. Army
Corps of Engineers for regional general permits. He asked if
there is any reason why those general permits have not or cannot
be pursued similar to what is occurring in Homer on the
wetlands. He asked whether that can be pursued currently.
COMMISSIONER HARTIG replied no. There is authority for DEC to
work with the U.S. Army Corps of Engineers and others to
determine where there are opportunities in the state to do
general permits like this under federal law. He clarified that
as part of this work, DEC would perform a targeted assessment to
determine what other opportunities there are. He said that the
term permit reform evokes thoughts of efficiencies and
priorities, which he believes will be discussed with [HB 78].
He predicted there will be discussions determining the
priorities for the state in terms of resource development and
how to use the 404 program more efficiently while saving state
and federal funds. Although the department has the authority,
the department has not performed a complete assessment.
Perhaps, a complete assessment should be done, he remarked.
1:57:40 PM
COMMISSIONER HARTIG pointed out that this idea of 404 primacy is
not new and goes back about 15 years. About 10 years ago, 404
primacy was considered, but the decision was to pursue 402
primacy first. It took about five years to put together the
application and about five more years of phase-in to get the
program. That experience will be helpful with the 404 primacy.
Furthermore, the federal government budget is declining and
Alaska has a hard time competing for the available federal
dollars. He emphasized the need to make set priorities and be
timely with the permitting program in Alaska.
1:59:11 PM
COMMISSIONER HARTIG turned to HB 78, stating it will perform an
assessment/evaluation that will provide a very clear picture of
the program. At the same time, the department will evaluate the
programmatic general permits and capacity building. The
advantage of capacity building is that DEC will work with the
U.S. Army Corps of Engineers to write the permits. Even if the
department ultimately does not take the program, it will learn
more about the 404 program. In Alaska, when a project results
in the destruction of wetlands, mitigation has to occur.
Typical mitigation means that wetlands lost are restored or
impacted wetlands are enhanced. That has not really occurred
very much in Alaska, rather there has been preservation of
existing wetlands that might otherwise been developed. Since
there is little private land in Alaska, there is not much
opportunity for mitigation. Therefore, perhaps the department
could work with the U.S. Army Corps of Engineers regarding
mitigation options that make more sense in Alaska. Commissioner
Hartig reiterated that [HB 78] will provide the opportunity to
learn more about the 404 program, inform others about Alaska's
needs, and spotlight the U.S. Army Corps of Engineers program.
2:01:51 PM
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), provided the committee with a copy of his 1/22/13
PowerPoint presentation to the Senate State Affairs Standing
Committee regarding federal overreach into resource development
in Alaska. One of the significant concerns with the state's
relationship with the federal government involves regulatory
activities. For large projects, he highlighted the following
trends related to primacy: delay on significant projects with
regard to federal regulatory activities and permits; a lack of
input from the state despite the fact that the state is the
other sovereign entity [and has some of the best experts in the
world] with respect to these issues. The permitting issues the
federal government takes in Alaska have an enormous impact for
the future of the state's citizens. Referring to slide 8 of the
PowerPoint entitled, "Federal Overreach into Resource
Development in Alaska," he highlighted the mention of primacy as
an approach to address federal overreach. This fits within the
idea of broad-based regulatory reform and modernization for more
timely, efficient, and certain permitting as well as a way in
which to address some of DNR's significant concerns with the
state's relationship with the federal government. As mentioned
by Commissioner Hartig, the CD-5 permit by ConocoPhillips
Alaska, Inc. (ConocoPhillips) was a 404 permit through the U.S.
Army Corps of Engineers to enable ConocoPhillips to move into
National Petroleum Reserve-Alaska (NPR-A) to expand its oil and
gas operations. The aforementioned would be an important and
strategic development for the state and ConocoPhillips. State
agencies, the North Slope Borough, the U.S. Army Corps of
Engineers, and various other stakeholders spent many years
coming together, so almost everyone in Alaska was surprised when
that permit was denied because of a veto by the EPA and the U.S.
Fish & Wildlife Service. Although many, including legislators,
federal agencies, the state, and the governor worked to reverse
the decision, it was time wasted, he said.
2:06:16 PM
CO-CHAIR FEIGE inquired as to how many years that particular
development was delayed.
COMMISSIONER SULLIVAN replied it took two years to get it
reversed, and thus he would say the delay was two years.
CO-CHAIR FEIGE asked whether there is any way to estimate how
much money that has potentially cost the state or deferred to a
later date.
COMMISSIONER SULLIVAN opined that once the project is online the
amount of oil it produces will be known, although he
acknowledged that some of the oil will come from federal lands.
Strategically, this development is important because it is the
first development focused on production in the NPR-A. Although
he could not provide an estimate at this point, he stressed that
a two-year delay on that project was not in the state's best
interest.
2:07:21 PM
REPRESENTATIVE JOHNSON asked whether primacy would have stopped
the EPA and the U.S. Fish & Wildlife Service from vetoing the
permit.
COMMISSIONER SULLIVAN said he could not say, adding that there
is still federal oversight on these even when the state assumes
primacy. However, he emphasized that by assuming primacy the
state has a much better chance of controlling its destiny on
some of these permitting issues while maintaining [the state's]
high standards.
2:08:12 PM
COMMISSIONER SULLIVAN related that on almost every major 404
environmental impact statement (EIS) permitting process that the
U.S. Army Corps of Engineers and others undertake, some state
agency applies for cooperating agency status that is typically
coordinated through Office of Project Management & Permitting
(OPMP). Despite that notion of cooperating agencies, the state
has not been included in the actual participatory role when
decisions are made, such as was the case in CD-5, the Tanana
River bridge, Point Thomson, and the Izembek EIS. Primacy is
not complete disentanglement with the federal government and
oversight, but it makes the state a decision maker. He noted
that the Clean Water Act contemplates primacy for states and two
have obtained primacy. In the last four years, amorphous
administrative executive branch declarations of policy have been
put forth. There have been instances in which those policies in
Washington, D.C., have influenced [decisions], such as with
wildlands. Although there has been about a 20 percent reduction
in the staff of the U.S. Army Corps of Engineers, the department
is hopeful that there will be a number of resource development
projects throughout the state. The pace of the regulatory and
permitting issue can be frustrating because it is a recipe for
delay when the state increases responsible resource development
projects at the same time the U.S. Army Corps of Engineers makes
significant cuts to its staff. The aforementioned is another
important reason for the state to seek primacy. In conclusion,
Commissioner Sullivan opined that the primacy issue and HB 78
are important in terms of the broader perspective of having more
efficient, timely, and certain permitting, and having another
tool to address federal overreach or federal regulatory delay.
As mentioned by Commissioner Hartig, it is a long process, but
it is well worth starting.
2:12:25 PM
REPRESENTATIVE SEATON requested the departments provide the
committee with maps as this moves forward, particularly since he
understands that even if the state obtains primacy, the U.S.
Army Corps of Engineers retains jurisdiction over all tideland
ebb and flow and anything that could be used in interstate
commerce waters, navigable waters, and adjacent wetlands. He
inquired as to where primacy would provide the state authority
versus what is maintained by the federal government.
COMMISSIONER HARTIG pointed out that identifying those areas
would be part of the discussion with the U.S Army Corps of
Engineers. He then pointed out that there is not a geographic
limitation for the programmatic general permits as they could
apply to the navigable waters and adjacent tidelands.
COMMISSIONER SULLIVAN added that it could also have a positive
impact on the state's ability to control its own destiny, such
as promoting shale oil development. He did not believe it would
cover some of the things Representative Seaton mentioned, but
rather would be the territory of the state.
2:14:59 PM
REPRESENTATIVE SEATON requested the departments to provide the
committee with the number of U.S. Army Corps of Engineers
personnel working on 404 permits in Alaska so as to get a handle
on the number of additional personnel the state would need.
COMMISSIONER HARTIG said that he would have to [determine] what
the state would get with primacy. He mentioned that he has
spoken with the two states that have primacy with regard to how
they staffed up. Again, the amount of staff would be dependent
upon the interpretation as to what the state would get and how
much the state would want to pursue.
2:15:52 PM
REPRESENTATIVE HAWKER requested, if the chair desires, an
extended fiscal note that would explain the ultimate, all-in
costs after 2016 of implementing the 404 program. He further
requested, if the chair desires, that an extended fiscal note
reflect necessary inflation in human services costs.
CO-CHAIR FEIGE requested the commissioners follow up on that.
He further requested, acknowledging that it will require a fair
amount of speculation, the impact on the Alaska economy as a
benefit of [obtaining primacy for 404 permits].
[HB 78 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01.17.13 Chenault Wetlands 404 Primacy Transmittal Letter.pdf |
HRES 2/1/2013 1:00:00 PM |
|
| HB 78 (H) RES Hearing Request.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB 78 Sectional Analysis.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-1-3-011813-DEC-Y.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-2-2-011813-DNR-Y.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-3-2-011813-LAW-N.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078A.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HRES AGDC 2.1.13.pdf |
HRES 2/1/2013 1:00:00 PM |