Legislature(1993 - 1994)
02/07/1994 04:41 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR MILLER announced SB 215 (OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND) to be up for consideration and to receive public testimony. KRISTA ROGERSON, Valdez, opposed SB 215 and supported testimony submitted by the RCAC. BECKY GAY, Executive Director, Resource Development Council, supported a strong emergency fund as stated in the original legislation. It's imperative that the 470 Fund be allowed to accumulate to $50 million level, the original intent, she said. They think the .02/.03 split gives clear direction and a spending cap for addressing noncatastrophic spills. It would allow the Fund to reach the $50 million level slower than the original allocation, but much sooner than the current deficit accumulation practice which will never get there. There is no incentive for state agencies to ever let the Fund get to the $50 million level, because there are so many areas to spend the money. She suggested using general fund monies and oil spill settlement money. She supported SB 215 as written. Number 220 SHERI SCHLOTFELDT, President, Ak. State Chamber of Commerce, testified that they are concerned that the money that has been appropriated to the Fund has been used for purposes other than intended in the original legislation. It is not fair public policy to make the oil industry pay for other industry spills. MS. SCHLOTFELDT recommended capping the Fund and using the money for the original purpose. She supported SB 215. Number 241 NORMA CALVERT, Marathon Oil, supported the position developed by the Alaska Oil and Gas Association (AOGA). They believe SB 215 will reestablish focus on the original intent of the 470 Fund. Number 281 PATTY GINSBERG, Prince William Sound RCAC, strongly opposed SB 215. She said there is money set aside right now at the state and federal level to respond to an emergency spill. We have much to lose, because the public's exposure to oil and gas spill impacts would increase dramatically. SB 215 alarmingly discounts the seriousness of spills defined as less than catastrophic. It is insufficient to support the state's spill prevention and response program. MS. GINSBERG said the catastrophic oil spill reserve is redundant. The federal Oil Pollution Act established a $1 billion fund. She said there are no reserves set aside for the more common huge spills of less than 100,000 barrels or for prevention. Passing SB 215 would cripple DEC's ability to prevent and respond to spills. TOM LAKOSH, Anchorage, resident, opposed SB 215 and said that it would be an imposition on the Department of Law and on Department of Environmental Conservation. An ounce of prevention is worth a pound of cure. This is a demonstrative attempt by the industry to prevent the public from protecting themselves. Number 406 SENATOR PEARCE said she thought the RCAC did a study on tractor tugs and that it was inconclusive. MR. LAKOSH responded that the second part of the study hadn't been concluded, but they are assessing the need for at least two tractor tugs and a salvage tug to respond to open water oil spills. All the vessels might be required for the Alyeska marine terminal lease renewal as well as under the OPA '90 open seas response. SENATOR PEARCE asked if the study is not complete, how can anyone know what equipment is necessary? MR. LAKOSH answered many studies have shown tractor tugs are required for this type of traffic. Salvage tugs are necessary in the open seas. Number 422 KEN FREEMAN, Anchorage resident, supported SB 215. He said it was imperative that the 470 Fund be allowed to accumulate $50 million to assure that funding is available if another spill ever occurs. JUDY BRADY, Executive Director, Alaskan Oil and Gas Association (AOGA), said the 470 Fund currently does not fulfill the purpose for which it was originally created. It is clear that the Fund was never intended to fund one third of the DEC's operating budget. She said there is a lot of confusion about what the balance in the 470 Fund really is and it is necessary to clarify some of the confusion. AOGA strongly supported SB 215. It would provide $50 million for the emergency fund originally envisioned in 1989 undiluted by other environment related expenditures. They think the balance of money in the oil reserve account should be transferred to the new account. They support the permanent .02 per barrel tax that would go into a separate account insuring a permanent source of funding for state prevention and preparedness programs while oil is being produced in Alaska. This would provide some sort of certainty for the industry and for Alaskans. Number 550 WALT PARKER, Chairman, Hazardous Substance Spill Technology Review Council, opposed SB 215. It would not provide the flexibility that is needed over the next few years in working out what remains to be done on a prevention and response program which will serve Alaska for the next several decades. Number 576 MIKE MACY, Co-author of the Alaska Master Plan for Oil and Hazardous Substance Spills, testified on behalf of the Alaska Wave Riders. TAPE 94-6, SIDE B Number 580 MR. MACY pointed out that the state of Alaska is facing huge revenue short falls and the oil companies still make tens of millions of dollars. SB 215 would give them yet another tax break. He asked why was the legislature so determined to gut the DEC. Legislature has already given control of catastrophic spill response to the Department of Military and Veterans Affairs, an agency with little spill response experience and no interest in the responsibility for protecting Alaska's environment. He pointed out that spill volume is only one factor in determining the seriousness of a spill. The legislature created the 470 Fund in the belief that paying for spill response preparedness is part of the cost of doing oil business in Alaska. SUE LIBENSON, Anchorage resident, said it is hard to grasp why the legislature is considering reducing a tax that has been working and which is not hampering the oil industry when the state is facing an enormous budget crisis. She pointed out that the legislature failed to adopt most of the recommendations of the Oil Spill Commission due to pressure from the oil industry. The 470 Fund is one of the few actions the legislature decided to take. She said prevention is the only real key. Money is much better spent on prevention and contingency planning, rather than worrying about how much money you have on hand for a response. Number 512 PAUL HEADLEE, Tanana Chief's Conference, opposed SB 215 as well as putting 2/5 of the 470 Fund money into a release, prevention, and response account. He said the vast majority of spills are 1,000 gallons or less. 470 Funds help rural villages meet their contingency plan responsibilities. SB 215 appears to be a tax relief to oil companies while shifting the cost to Alaska communities and the general fund. Protecting the environment would be taking a step backwards from the original intent of the 470 Fund. Number 498 GAIL PARSONS, Homer resident, opposed SB 215. DEC's ability to clean up spills needs to continue to be supported by the 470 Fund. Prevention is the name of the game. Number 484 MIKE O'MEARA, Homer resident, opposed SB 215. He supported the testimony presented by Sue Libenson and Patty Ginsberg. Number 450 MARY MCBURNEY, Executive Director, Cordova District Fishermen United, supported the position of the Prince William Sound RCAC and opposed SB 215. SB 215 does a great job of addressing catastrophic spills. OPA '90 and SB 215 basically insures that catastrophic spills will be covered. The .02 that is left over to address the problems that need to be taken care of. About 94% of all spills are much less than 100,000 barrels. She asked that the amount be raised to .05 to insure there is enough money to support the state's ongoing programs for prevention and response. Number 424 WALT FURNACE, General Manager, Alaska Support Industry Alliance, supported SB 215. He said the commitment in 1989 when the 470 Fund was established was to set aside a fund equal to $50 million as an emergency response key that could be drawn upon in case the state of Alaska experienced a situation similar to the Exxon Valdez. Alaska Statute 26 includes language that says the industry would agree to pay a tax equal to .05 per barrel and that that tax would be collected until the fund reached $50 million at which time it would be suspended. Number 344 TIM ROBERTSON, Seldovia Alaska, opposed SB 215. He owns a lodge and his business depends on having clean coastal waters. He is in favored continued use of the .05 barrel tax to pay for, most importantly, prevention; second, to monitor production and transportation of oil products; and third, to establish a reserve to respond to the needs of spills and contaminated spots.
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