Legislature(1995 - 1996)

03/22/1995 03:50 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 SRES - 3/22/95                                                                
            HB 128 WASTE DISPOSAL PERMIT EXEMPTION                            
                                                                              
 JACK PHELPS, staff to Representative Williams, prime sponsor of HB
 128, gave the following testimony.  HB 128 was introduced as a                
 result of a recommendation from the Alaska Minerals Commission.               
 Recently the Department of Environmental Conservation (DEC) began             
 a general permitting process for incidental discharges associated             
 with mineral drilling and well drilling.  For years, those                    
 discharges were treated as minimal and inconsequential under AS               
 46.03.100.  That statute is extremely broad and states any                    
 discharge to any waters, surface or land, to the state, requires a            
 permit.   The mineral and well drilling industries feel the process           
 presents unnecessary compliance problems.  HB 128 exempts the                 
 industry from the permit process if the operation does not produce            
 a point source discharge into a surface water of the state and is             
 incidental to the general industry activity.  The first two                   
 sections of the bill deal with the transference of current dual               
 jurisdiction, eliminates DEC oversight, and places oversight                  
 authority with the Alaska Oil and Gas Conservation Commission                 
 (AOGCC).  Representative Williams worked with DEC on Section 3 to             
 satisfy DEC's concerns regarding specificity.  The Department of              
 Fish and Game (DF&G) was concerned about affects on habitat                   
 therefore direct surface water discharges were excluded from the              
 exemption.  He noted the Alaska Oil and Gas Association (AOGA) has            
 suggested an amendment to Section 3, to page 2, line 27 and page 3,           
 line 16.                                                                      
                                                                               
 SENATOR LEMAN announced there is a proposed amendment from DEC as             
 well, and that he planned to take testimony and hold action on the            
 amendments until Monday.  MR. PHELPS explained the DEC amendment              
 rearranges Section 3, but does not appear to make any changes.                
                                                                               
 SENATOR TAYLOR asked about the word "annular."   MR. PHELPS replied           
 it refers to the space between the casings in an oil well.                    
                                                                               
 Number 120                                                                    
                                                                               
 SENATOR LEMAN noted some of the mud produced from drilling is                 
 radioactive.  He asked if that material is included under hazardous           
 wastes (EPA 40 C.F.R., Part 261) or if it could be reinjected into            
 the annular space.  MR. PHELPS could not specifically answer, but             
 stated that is the precise reason for the transfer of authority to            
 AOGCC since they are familiar with those activities and are able to           
 make those determinations.  SENATOR LEMAN commented he was                    
 referring to the natural material that is produced.                           
 DAVE JOHNSTON, Chairman of the AOGCC, testified in support of HB
 128, especially in regard to the transfer provision.  The AOGCC               
 believes HB 128 will improve oversight by consolidating authority             
 for annular disposals and streamline permitting requirements.                 
 Currently two agencies have oversight authority, the AOGCC and the            
 DEC.  THE AOGCC has the expertise to evaluate proper casing, proper           
 submitting programs, proper injecting procedures, etc.  This is an            
 outgrowth of the Underground Injection Control Program (UIC)                  
 implemented by the AOGCC since 1986, and mandated by the federal              
 Safe Drinking Water Act.  The annular disposal program is very                
 similar.                                                                      
                                                                               
 The transfer of this authority was recommended by the Interstate              
 Oil and Gas Compact Commission when they conducted a peer review of           
 Alaska's exploration and production waste management program.                 
                                                                               
 Number 177                                                                    
                                                                               
 Regarding Senator Leman's question about radioactive materials, MR.           
 JOHNSTON replied naturally occurring radioactive material (NORM) is           
 a class 2 fluid, and is injected under a UIC program.  The EPA has            
 reviewed UIC procedures for disposal of class 2 fluids.                       
                                                                               
 Number 222                                                                    
                                                                               
 CHRIS PHILLIPS, Operations Engineering Manager for BP Exploration             
 in Alaska, testified as a representative of AOGA.  AOGA supports              
 the intent of Sections 1 and 2 of HB 128, transferring oversight              
 authority to AOGCC as the transfer of jurisdiction will promote               
 regulatory efficiency.  Regarding the exemptions contained in                 
 Section 3, subsection (f)(1)(B), he suggested the following                   
 clarifying amendment.                                                         
                                                                               
 Delete:                                                                      
 (f) Except as to discharges arising out of exploration and                   
 development drilling for oil and gas resources,                               
                                                                               
 Add to page 3, line 16:                                                      
 "otherwise required" after the word "permit."                                
                                                                               
 He explained the first amendment would remove any danger that the             
 language could be construed as creating a new permitting                      
 requirement; the second amendment would prevent expansion of the              
 scope of permitting requirements.                                             
                                                                               
 Number 274                                                                    
                                                                               
 SENATOR TAYLOR questioned the need for the legislation at this time           
 if it merely preserves the status quo in statute.                             
                                                                               
                                                                               
 MR. PHELPS responded that last spring and summer the DEC began a              
 public comment period on a new general permit, as the result of a             
 concern raised by a member of the general public.  That process               
 raised a great deal of reaction among industry members because they           
 saw no reason to create a new permitting process for activities               
 that had gone on for years without causing any problems.  HB 128              
 restores the status quo.                                                      
                                                                               
 Number 300                                                                    
                                                                               
 SENATOR FRANK asked if the public member's concern was aimed at               
 challenging DEC for not enforcing the law.  MR. PHELPS answered               
 affirmatively, and clarified that the current statute is so broad             
 that any discharge without a permit under AS 46.03.100 could                  
 probably be considered a violation.  Section 3 places in statute,             
 provisions that were assumed to have been there.                              
                                                                               
 SENATOR TAYLOR felt it is ludicrous that so much time has to be               
 wasted to pass a bill that has been unnecessary for the past 20               
 years.  He expressed concern about DEC's budget.                              
                                                                               
 Number 320                                                                    
                                                                               
 NEIL MACKINNON, representing the Alaska Minerals Commission (AMC),            
 stated HB 128 is one of the top recommendations of the AMC.  He               
 stated when he attempted to begin drilling on his property at                 
 Jualin, he was notified that he needed a drilling permit.  In                 
 researching AS 31.05.030, he found any discharge into the air, land           
 or water of the state, other than domestic wastewater, must be                
 permitted.  He noted that could be interpreted to mean businesses             
 discharging wastewater into municipal treatment plants would                  
 require permits.  After contacting DEC, he was told DEC received a            
 complaint from a member of the public about Echo Bay's drilling               
 operations, which prompted the enforcement of the statute.  MR.               
 MACKINNON felt the situation raises a serious equal protection                
 issue and enforcement of this statute is a deterrent to mineral               
 exploration.  He added no other state or country requires such                
 permits.                                                                      
                                                                               
 Number 398                                                                    
                                                                               
 STEVE BORELL, Executive Director of the Alaska Miners' Association            
 (AMA), testified in support of HB 128.  He agreed with Mr.                    
 Mackinnon's comments.  The AMA is primarily concerned with Section            
 3, regarding water well drilling and incidental construction.  He             
 believed DEC selectively applied the statute to the proposed permit           
 regulations.  He commented the bill will correct a technicality in            
 statute, to allow the status quo to continue.  Without the passage            
 of HB 128, burdensome requirements will be added to the permitting            
 process which will not provide any benefits.  He believes Governor            
 Knowles supports the measure.                                                 
                                                                               
 SENATOR TAYLOR asked how long Mr. Borell has lived in Alaska.  MR.            
 BORELL replied he has been in Alaska since 1986, but also lived in            
 Alaska in 1970-71.  SENATOR TAYLOR commented on the change of                 
 attitude toward mining and wildlife from 40 years ago.                        
                                                                               
 DAVID ROGERS, representing the Producer's Council, testified in               
 support of HB 128.  He reserved judgement on the proposed amendment           
 until he had time to review it.                                               
                                                                               
 SENATOR LEMAN announced HB 128 and the proposed amendments would be           
 held until Monday.                                                            

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