Legislature(1997 - 1998)
01/23/1997 10:02 AM House O&G
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
January 23, 1997
10:02 a.m.
MEMBERS PRESENT
Representative Mark Hodgins, Chairman
Representative Scott Ogan
Representative Norman Rokeberg
Representative Joe Ryan
Representative Con Bunde
Representative Tom Brice
Representative J. Allen Kemplen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
*HOUSE JOINT RESOLUTION NO. 12
Urging the Secretary of the Interior to conduct competitive oil and
gas lease sales within the National Petroleum Reserve in Alaska.
- MOVED HJR 12 OUT OF COMMITTEE
*HOUSE BILL NO. 51
"An Act relating to the Department of Environmental Conservation."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HJR 12
SHORT TITLE: LEASES IN NATL PETROLEUM RESERVE
SPONSOR(S): REPRESENTATIVE(S) GREEN,Hodgins
JRN-DATE JRN-PAGE ACTION
01/15/97 66 (H) READ THE FIRST TIME - REFERRAL(S)
01/15/97 66 (H) OIL & GAS, RESOURCES
01/23/97 (H) O&G AT 10:00 AM CAPITOL 124
BILL: HB 51
SHORT TITLE: REGULATIONS OF DEPT OF ENV. CONSERVATION
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG, KELLY, Foster
JRN-DATE JRN-PAGE ACTION
01/13/97 41 (H) PREFILE RELEASED 1/10/97
01/13/97 41 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 41 (H) OIL & GAS, FINANCE
01/22/97 125 (H) COSPONSOR(S): FOSTER
01/23/97 (H) O&G AT 10:00 AM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE JOE GREEN
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
Telephone: (907) 465-4931
POSITION STATEMENT: Sponsor of HJR 12.
REPRESENTATIVE NORMAN ROKEBERG
Alaska State Legislature
Capitol Building, Room 24
Juneau, Alaska 99801
Telephone: (907) 465-4954
POSITION STATEMENT: Sponsor of HB 51.
BECKY GAY, Executive Director
Resource Development Council
121 West Fireweed, Suite 250
Anchorage, Alaska 99503
Telephone: (907) 276-0700
POSITION STATEMENT: Testified on HB 51.
MARILYN CROCKETT, Assistant Executive Director
Alaska Oil and Gas Association
121 West Fireweed, Suite 207
Anchorage, Alaska 99503
Telephone: (907) 272-1481
POSITION STATEMENT: Testified on HB 51.
JANICE ADAIR, Director
Division of Environmental Health;
Legislative Liaison
Department of Environmental Conservation
555 Cordova Street
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 51.
MICHAEL CONWAY, Acting Director
Division of Air and Water Quality
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801-1795
Telephone: (907) 465-5337
POSITION STATEMENT: Answered questions regarding HB 51.
ACTION NARRATIVE
TAPE 97-1, SIDE A
Number 001
CHAIRMAN MARK HODGINS called the House Special Committee on Oil and
Gas to order at 10:02 a.m. Members present at the call to order
were Representatives Hodgins, Ogan, Rokeberg, Brice, Ryan and
Kemplen. Representative Bunde arrived at 10:07 p.m.
Number 090
CHAIRMAN HODGINS explained he hopes to use the House Special
Committee on Oil and Gas as a point on lease sales where the
committee gets out and conducts hearings for the lease sales coming
up in Cook Inlet and on the North Slope. This is to give
information and to give citizens an extra opportunity to testify
and to possibly forestall some of the negative reactions we have to
some of our lease sales because of inaccurate information. He said
one thing he would like to do with the committee is to become a
liaison between government and industry. If somebody in government
doesn't understand public policy, it is the intention of the
committee to question them at how they arrived at their public
policy and to make sure government is adhering to good public
policy as prescribed by the Administration and the legislature. He
asked the committee members to consider a vice chairman for the
committee.
Number 259
REPRESENTATIVE SCOTT OGAN said he would nominate Representative
Rokeberg.
CHAIRMAN HODGINS said the issue would be brought up at another
time.
HJR 12 - LEASES IN NATL PETROLEUM RESERVE
Number 291
CHAIRMAN HODGINS announced the committee would address HJR 12,
"Urging the Secretary of the Interior to conduct competitive oil
and gas lease sales within the National Petroleum Reserve in
Alaska."
CHAIRMAN HODGINS called a recess to await the arrival of the
sponsor of HJR 12 at 10:05 a.m. The meeting was called back to
order at 10:07 p.m. Chairman Hodgins noted Representative Bunde
had joined the meeting.
Number 430
REPRESENTATIVE JOE GREEN, sponsor of HJR 12, came before the
committee to explain the resolution. He indicated there is
information in the committee file pertaining to the issue. He
stated, "The NPRA (National Petroleum Reserve Alaska) as it's
called now since the mid 80s was prior, so that there won't be any
confusion, NPR 4 which at that time was established as a Naval
Petroleum Reserve Number 4, by Warren G. Harding, 1923. The others
are in California and Wyoming and they were established originally
as a place to find oil that would supply our naval forces. And so
from early inception, dating clear back to the 1800s with oil seeps
located up near the top if you look at Barrow and then go over
where it says Dease Inlet. Simpson Lagoon is an area there that
actually shows a name Sinclair. Well, it's about in that area and
there is in your packet a xerox copy."
REPRESENTATIVE GREEN informed the committee members there have been
natural seeps in the NPRA. Because of that, there was some
interest exhibited early on. There was a United States Geological
Survey (USGS) made indicating the potential that the source rock
and types of reservoirs, etc., were available and that was part of
the greater study that covered the entire North Slope. What came
from that was the discovery of Prudhoe Bay in 1968. Representative
Green explained that prior to that, there had been two or three
(indisc.) curves of interest in NPRA. He referred to a 1901 study
by Mr. Brooks, published in 1903, which indicated that this was a
geological providence capable containing hydrocarbons. The USGS
published another issue in 1909. He referred to Mr. Leffingwell
and said that name is a cherished name in Alaska because of all the
geological work he did which had to do with the North Slope and the
NPRA.
REPRESENTATIVE GREEN said in the early 1920s, there was renewed
interest in the petroleum reserve. There was a flurry of
excitement for about three years. Some discoveries were made, but
nothing of commercial venture. Then there was kind of a hiatus.
We had abundant oil reserves produced in the Lower 48 and it didn't
appear that would be a necessity as there was plenty of oil for the
Navy as well as the rest of the nation. In 1943, during World War
II, there was a renewed interest because of its strategic location
as well as the fact that some of the supplies of petroleum were
interrupted by the war effort.
Number 728
REPRESENTATIVE GREEN explained that after World War II, there was
continued interest and over the next seven years there were 45
shallow wells drilled. There was discovery in three different
areas of oil as well as three separate areas from that of gas, none
of which appeared to be commercial. He said interest waned. There
was another renewed interest with the discovery of Prudhoe Bay.
Husky Oil Company was commandeered to continue looking. He
continued to explain maps the committee members had in their
committee file. He said there is a dirth (sp.) along the Eastern
boarder of the petroleum reserve which is the Colville River. That
is where the renewed interest currently is because of the Alpine
discovery from Arco and the development program they had discussed
publicly. The potential exists for that discovery or another
discovery because the best place to find oil is near an oil field.
There is a discovery there that will be developed and there will
certainly be, in all likelihood, more oil right across the boundary
from the delta which is the Colville River.
Number 845
REPRESENTATIVE GREEN said there is no requirement for any
environmental studies. There is nothing that has to be done from
a federal government standpoint. The reserve is available for
leasing, it's just that there hasn't been an expressed interest in
it or if the interest has been expressed, the federal government
has not seen fit to renew leasing there. He explained the
resolution would send some support to our federal legislative triad
that we would like to see a renewed interest and perhaps allow for
leasing at least along the eastern boarder of the petroleum
reserve, but there are other areas as well. He said the same
problem occurs in the Arctic National Wildlife Refuge (ANWR) that
if there is leasing from that period to the time of development it
would take considerable time. This would be a little less because
the infrastructure would be preceded in effect by the development
of Alpine. He said things could happen a little faster. He stated
this is not a replacement for ANWR, it is in addition to ANWR.
REPRESENTATIVE GREEN said by agreement, the oil would be shared
50/50 with the federal government. That is a preexisting agreement
to development NPRA as opposed to ANWR where there is still
controversy whether it would be a 90/10.
Number 1032
REPRESENTATIVE NORMAN ROKEBERG indicated he had the opportunity to
work with Husky Oil when they had a contract with the Navy. He
asked Representative Green if he recalls the time period of the
Husky contract and noted they drilled about 15 wells.
REPRESENTATIVE GREEN responded that would have been in the late
1970s, early 1980s.
REPRESENTATIVE ROKEBERG asked if some of the wells were
stratigraphic wells which were intended not to strike oil.
REPRESENTATIVE GREEN explained quite often, the program has been to
drill an information well or a cost well. It is an off structure
attempt to find out the geology, but not necessarily to discover
anything of a hydrocarbon nature preparatory to leasing.
Representative Green said that it just says, "Alright, you've done
your seismic work and this is a truth - ground truth, in the strat
column, that you can then apply whatever you want to do - whatever
your particular company may want to do as far speed of reflections
delineating any kind of structural traps." Representative Green
noted that some of the wells that Husky Oil drilled were not
actually intentionally looking for oil, they were looking for
geological information.
REPRESENTATIVE ROKEBERG asked if some of the earlier wells were
shallow.
REPRESENTATIVE GREEN indicated they were very shallow.
REPRESENTATIVE ROKEBERG asked if it would be a fair statement to
say, "They really weren't wells in the sense that we would be
(indisc.) and exploring for today."
REPRESENTATIVE GREEN said that is true. He noted there had been
earlier non-commercial wells drilled in the Colville Delta. It was
only later when they drilled deeper that they found the Alpine
discovery. That is not an uncommon phenomena both in Alaska and in
the Lower 48 that the early development was too shallow to actually
find the mother load.
Number 1154
REPRESENTATIVE ROKEBERG referred to page 3, line 4, "to take
immediate action to conduct competitive lease sales within the
National Petroleum Reserve in Alaska..." and said he took note in
the Governor's State of the State speech that he had talked to the
President and he felt that we would hopefully be able to open up
the NPR by working very hard within 18 months to get a leasing
program going. Representative Rokeberg stated he had thought the
petroleum reserve was already open for leasing.
REPRESENTATIVE GREEN indicated Representative Rokeberg is right and
to him, that is sub profuse. He said he believes that speaks to
the fact that the Administration does not share the urgency that
most of Alaskans do. It is available for leasing and there isn't
a reason for an 18 month delay. He stated that they may want to
determine which areas they would want to lease and that would
probably take maybe a couple of months.
Number 1274
REPRESENTATIVE CON BUNDE questioned what the time line would be if
there is a lease and if they find commercially viable structures
that includes oil. He noted he heard in the ANWR debate that the
date they granted the lease to when the first revenues go into the
general fund would be about ten years.
REPRESENTATIVE GREEN stated it is his opinion that the time line
could be cut in half and depending on the aggressiveness of their
desire, it could be less. He noted several of the issues that
would confront us in opening ANWR have already been done here. The
area has already been drilled as there are over 80 wells. There
would be infrastructure, especially of they were to lease and
discover adjacent to Alpine. That development will probably be on
stream, under the current schedule, sometime around the turn of the
century. If so, there would be an umbilical cord for development
in the NPRA area to tie into that near the village of Nuiqsut. As
the pipeline, as it is currently envisioned, would come from the
development area, the two drill sights, south and then cut across
and join a Kuparuk drill sight on the west side of that
development. The ability to drill, find the oil and then transport
it to a pipeline is significantly ahead of what would have to
happen from the east side. He noted there would have to be a
pipeline corridor established which would delay to a number of
months or years.
Number 1399
REPRESENTATIVE BUNDE referred to Representative Green saying that
an environmental impact statement would not be required, but there
would be construction of a additional umbilical pipeline. He said
he is sure there would be significant environmental oversight as
that is attempted to be put in place.
REPRESENTATIVE GREEN said he would be a little remise if he lead
the committee to believe there absolutely wouldn't be an
environmental impact statement involved. He said it is quite
doubtful that it would be necessary, more in the line of an
assessment than an evaluation. The time line, instead of three to
five years might be one to two years. He said he thinks that is
what Arco fells about the Alpine development in that there wouldn't
be the need for a full environmental impact statement, but more of
an environmental statement. Representative Green noted that as you
move towards some of the bays, it would take a full environmental
impact statement.
Number 1473
REPRESENTATIVE BUNDE referred to the 50/50 deal with the federal
government and said the oil would be transported by the trans
Alaska pipeline system (TAPS). He asked if this offers any
obstacles - the fact that this is a change in percentage instead of
the 90/10.
REPRESENTATIVE GREEN indicated he wouldn't think so because that
agreement has been struck. This is just another issue where the
state of Alaska is honoring a prior agreement. Representative
Green said it is the federal government who is impacting prior
agreements.
Number 1523
REPRESENTATIVE OGAN asked what the advantages are to keeping oil
flowing through the pipeline in regards to how it affects the
royalty that the state receives.
REPRESENTATIVE GREEN said there is a minimum volume for a pipeline
that is 48 inches in diameter can efficiently transmit. If it gets
down to numbers in the neighborhood of 200,000 to 300,000 barrels
a day, your flow rate is so low that you can't efficiently continue
to operate. He noted we are currently well above that, but there
is a point at which production starts to decline from a field and
Prudhoe is on that skid at about 10 percent to 12 percent per year.
When you talk about a 900,000 barrel a day filed, that is almost an
oil field a year decline. Representative Green referred to the
Alpine development which would be about 60,000 barrels a day and
said that does not off-set the decline from Prudhoe Bay. It helps,
but it doesn't off-set it. He said the more of the small pods that
we can get on, the longer we can continue to produce those areas
that actually return the state more money.
REPRESENTATIVE OGAN asked if it not true that the state's royalty
share is based after transportation costs. The more oil we have
going through, the more royalty we get per barrel because of
transportation costs.
REPRESENTATIVE GREEN explained the amount of royalty is established
by contractual agreement, so when the barrel is produced there is
that subject to royalty. He said, "Now, what I think you may be
referring to is that there is a reduction since we take our oil in
value rather than in kind - we don't actually take ownership of the
oil in more cases. There have been some contracts to where we
have, but right now we're taking our oil in value - so much
dollars. Well, there is a transportation and a cleaning dehi (sp.)
cost that is subtracted before we get our money. So we still get
our full one-eighth or whatever one-fifth at Milne Point, whatever
the agreement has been, but the value that we get then is
diminished by certain costs."
Number 1706
CHAIRMAN HODGINS noted that when the pipeline shuts down, it has to
be removed. It is important to continue finding sources of oil to
keep the pipeline going.
Number 1717
REPRESENTATIVE TOM BRICE asked why there is currently renewed
interest in the NPR.
REPRESENTATIVE GREEN explained the major interest is that there has
been a commercial discovery right next to it. In the past, that
wasn't true. The Kuparuk River development ended, so there wasn't
anything that would necessarily indicate that there was anything of
value in the NPR area across the river. With this discovery in the
delta, it really spurs interest saying that there is a good
likelihood that either the existing Alpine field or an adjacent
field might be found. He said, "Since now you've got the
infrastructure, what would have maybe required a 60,000 to 100,000
barrel a day discovery, a field of magnitude to be able to produce
that now may be a 30,000 barrel discovery over there would be
economic because it has such a short pipeline to go."
REPRESENTATIVE BRICE asked if it is based upon the Alpine
discoveries.
REPRESENTATIVE GREEN answered in the affirmative. He noted there
have been two or three different time periods where there has been
an interest and this is probably about the fourth one.
Number 1791
REPRESENTATIVE ALLEN KEMPLEN asked if the President and the
Governor have already agreed to a leasing program.
REPRESENTATIVE GREEN answered in the affirmative saying that is
what we have been told and there is no reason to doubt that. He
said the thing that was brought up in earlier discussion is that
maybe within 18 months we can do something or perhaps this is a
good idea. He stated those kind of "dodge the bullet type words"
bother him. It seems that the job expands to the time allotted and
if we automatically say it's going to take 18 months and that then
gets extended, it could be two or three years under the agreement
that has been reached between the Governor and President.
Representative Green said his position is that we need to keep the
fires turned up and see if that time frame can be shortened. He
asked why would it take 18 months.
Number 1869
REPRESENTATIVE JOE RYAN said he understands that the pools of oil
don't recognize any particular manmade boundaries. He said he also
understands the oil industry has good abilities to drill diagonally
as well as other methods. He asked if it wouldn't be feasible to
do some claim jumping and drill from our area down into the pool on
a slant and realize some benefits from that sort of exploration.
REPRESENTATIVE GREEN responded it would be possible. He discussed
the history of the East Texas Field where several years ago there
was a rash of well plugging going on. He said there are "no nos"
about going across lease lines with a directional well as you would
actually be in trespass. He noted one of the Conservation
Commission's major functions is the policemen of the oil industry.
They have a duty to protect correlative rights - the boundaries of
their leases as well as prevention of waste from the reservoir
itself, the wasting of hydrocarbon.
Number 1974
CHAIRMAN HODGINS indicated there were no further witnesses to
testify on HJR 12.
REPRESENTATIVE ROKEBERG indicated he will be requesting to be added
as a cosponsor of HJR 12.
Number 2025
REPRESENTATIVE ROKEBERG made a motion to move HJR 12 out of
committee with individual recommendations and with the attached
zero fiscal note. Hearing no objection, HJR 12 moved out of the
House Special Committee on Oil and Gas.
HB 51 - REGULATIONS OF DEPT OF ENV. CONSERVATION
Number 2060
CHAIRMAN HODGINS announced the next order of business would be HB
51, "An Act relating to the Department of Environmental
Conservation."
Number 2213
REPRESENTATIVE ROKEBERG, sponsor of HB 51, thanked Chairman Hodgins
for scheduling the bill in a timely manner. He said it is
unfortunate he has to be before the committee one more time as the
bill had been reviewed last session. House Bill 51 is a
permutation and a slight adjustment from what was HB 342 which was
vetoed by the Governor last session. Hopefully, with some minor
revisions the bill will proceed and gain the support of the
Administration. He said HB 51 is an important piece of economic
development legislation and regulatory reform. Representative
Rokeberg said it was the centerpiece of regulatory reform in the
Nineteenth Legislature and, hopefully, will be the first of several
major pieces of legislation regarding regulatory reform in the
Twentieth Legislature. The intent of HB 51 is to foster resource
development within the state by endeavoring to simplify the
regulatory process. Under the Department of Environmental
Conservation's (DEC) current regulatory system, adoption of federal
changes in regulation can take a considerable length of time.
Representative Rokeberg pointed out that there isn't a mandate in
statutes that requires a repeal of regulations if there is a change
in federal regulations. That is one of the primary intents of the
bill which is to more closely track the Environmental Protection
Agency (EPA) as the baseline because of the primacy of federal law
that the state deals with. Representative Rokeberg stated we may
not need any more stringent restrictive requirements than what is
allowed by federal law which we are required to follow anyway.
However, the bill does make provisions for deviating from federal
EPA standards and placing more restrictive, less restrictive or
other standards within the body of water quality standards within
the state of Alaska. There is substantial flexibility if the
situation requires or warrants the more stringent standards.
REPRESENTATIVE ROKEBERG said during last session there was an
estimate between six and eight regulations that were more stringent
or deviated from the EPA requirements. Hopefully, there will be a
better count on that. He said the bill is supported by the 18
member Alaska Oil and Gas Association, the Resource Development
Council, a number of small placer miners as well as the Alaska
Mining Association.
REPRESENTATIVE ROKEBERG explained the first portion of the bill is
the intent section which is to provide the DEC with a view of the
legislature. One reason he introduced the bill last session was
that the prior Administration had promulgated regulations and had
hoped to have them adopted. When the present Administration came
into office, and on the protest of a environmental legal group,
they stopped the promulgation of those regulations and went into
meeting on various issues on the regulations. Over a period of
approximately 1.5 years there were what he considers closed door
meetings between members of the Resource Development Council, the
Sierra Club Legal Defense Fund and the Administration. They came
up with some changes to those regulations and also agreements to
further examine some regulations. Representative Rokeberg said his
feeling for the proper form for establishing state policy is the
legislature whereas the public has the right and ability to testify
before a committee expressing their views about state policy should
be formulated. He said he thinks decisions should be made with
full public input.
Number 2381
REPRESENTATIVE ROKEBERG informed the committee the bill which lists
a number of water quality standards and measurements the must be
taken into account when proposing, adopting and implying water
quality standards in this state. The bill provides that after
receiving a request from a permit application that the DEC shall,
within 90 days or another mutually agreeable time, change the
regulations in the state to conform with federal legislation or
propose new state regulations which my be more stringent, but they
must go through the procedure as outlined in the bill.
REPRESENTATIVE ROKEBERG said he believes that testimony on HB 342
is evidenced by a letter of testimony which was given to the
committee from the environmental community indicates a lack of
understanding on the part of a number of people as to what the bill
does. Everybody seems to think on first reading of the statutory
language that the DEC must make this change within 90 days and they
only have this very short period of time to do this when a
petitioner comes in and asks for a change. He stated that is not
the case. The 90 day window is for them to take action, but that
action can be either to simply adopt the federal regulation, which
they have statutory authority to do under the bill, or propose a
new regulation. If they do so, they have to go through the
standard Administrative Procedures Act which can be quite lengthy
and provides for maximum public input. If there is a change, they
drop into the process provided under the bill. They would have to
go through the public process, have public hearings, look at the
various criterion and standards set up in the bill to make a more
restrictive standard if it's warranted. Representative Rokeberg
said this could take a period of well over a year. There is a
great misconception of what the 90-day language means.
Number 2381
REPRESENTATIVE ROKEBERG explained that the bill establishes that
water quality criteria and measurements that must be made by the
federal EPA methods or allows for a substantially equivalent
methods to be used by the DEC. The bill also authorizes the
commissioner to establish a discharge standard of sediments and
establishes the volumetric Imhoff Cone method as the measurement
for settleable solids in discharged water. Representative Rokeberg
indicated last session this was a highly controversial item, but a
report that was issued in July, 1996, did adopt the EPA standard
for measurement of settleable solids of the volumetric Imhoff Cone.
He pointed out HB 51 reflects the now adopted standard.
REPRESENTATIVE ROKEBERG said the main element of the bill
establishes a process for the DEC to use when they propose
regulations. It allows the DEC to adopt regulations that are more
restrictive than the federal criteria going through procedures as
outlined in the bill. Secondly, it allows the DEC to establish a
water quality standard for which there is no corresponding federal
standard. In other words, they're authorized if there is a
believed need and a unique situation at stake that they have the
authority to go ahead and do that. Representative Rokeberg stated
the bill also allows the DEC to establish a state water quality
measurement different from the measurement than the EPA recommends.
Lastly, the bill sets up a transitional review of the state water
quality regulations that coincides with the department's triennial
review process. In other words, every three years the department,
by the Federal Water Quality Act, is supposed to review their
existing regulations. Currently, under statute, they are given
four years because they are a little bit behind in that process.
TAPE 97-1, SIDE B
Number 001
REPRESENTATIVE ROKEBERG referred the committee to page 2, Section
3, and said he had understood that the DEC wanted to take over the
task of the permitting process of the National Pollutant Discharge
Elimination System (NPDES) in the state. He said if the committee
would review the fiscal note, apparently the DEC may want to do
this but it would be rather costly and there is $3.2 million
addition to the fiscal note for the undertaking of this process.
Representative Rokeberg noted after public testimony is taken, he
will be bringing forth an amendment to delete that section from the
bill. He also pointed out that Representative Pete Kelly is also
a sponsor of the legislation.
REPRESENTATIVE ROKEBERG noted the proposed committee substitute in
the committee member's file reflects some changes since the
original submitted draft.
Number 133
REPRESENTATIVE BUNDE moved to adopt the referenced committee
substitute, Version (F), as the committee's working document.
Hearing no objection, it was so ordered.
Number 158
REPRESENTATIVE ROKEBERG stated that these changes were the result
of discussions with staff, along with input from DEC. On page 1,
line 13, the following words were added, "the department considers
whether compliance with regulations are economically feasible..."
He explained that they tried to do is lessen the impact, especially
a financial one, by allowing the department to consider this rather
than mandate a specific use. Also, on line 15, the word "science"
replaced the phrase "scientifically measurable criteria," in order
to make a strong point that the regulation is based on science. He
stated that this seemed like a simple notion, but that it had
caused some difficulty in the past.
REPRESENTATIVE ROKEBERG continued, "On page 2, line 16, we've
changed the word (indisc.) "background condition." And there is a
long history (indisc.-paper shuffling) and there is a long history
(indisc.-paper shuffling) believe this more properly serves the
vernacular and terms of art used within water quality standard
criteria language. Mr. Chairman, unfortunately my involvement --
I know more about these things which are very very complex than I
care to know - but - and I still have and I know nothing."
CHAIRMAN HODGINS indicated confusion and asked Representative
Rokeberg if he was referring to line 16.
REPRESENTATIVE ROKEBERG indicated for clarification purposes that
he mistakenly referenced the wrong version of this legislation. He
indicated he should be speaking to the new CS, line 26, Section
46.03.085. Water Quality Standards on page 2, line 21. He
proceeded to outline the specific changes to this section by
referencing the previous version of this legislation instead.
REPRESENTATIVE ROKEBERG noted that on page 2, line 18 of the
original bill that the words "and," and "criteria" were deleted.
Under this same section, subsection 5 the words, "procedures," and
"permitting" were added. An "s" was added to the word "regulation"
to read "regulations," as well. Also, on page 3, line 6 of the
original legislation (indisc.-paper shuffling on the microphone).
Additionally, on page 3, line 13 (indisc.-paper shuffling on the
microphone), he continued to explain the inclusion of the word
"initiate," change was related to the 90 day period allowed under
this section.
Number 321
REPRESENTATIVE ROKEBERG continued that on page 2 of the CS
regarding the language which defines "background condition" a new
subsection was added. He said he would probably bring an amendment
to this section of the legislation as well.
Number 395
REPRESENTATIVE BUNDE asked for clarification about the federal
regulations and whether or not they have supremacy over state
regulations. He said he also thought Representative Rokeberg had
stated that this legislation would allow the state to establish its
standards, the same as, more stringent than or less stringent than
the federal regulations.
REPRESENTATIVE ROKEBERG responded that under this form of the bill
"less" has been taken out, but "historically, there has been
situations, particularly like we're currently having a battle over
arsenic where there's a differential or a difference between the
federal government, the scientific community, the mining community
and the DEC. So there's an on-going controversy.
REPRESENTATIVE BUNDE noted that the purpose of his question was not
that he had all that much confidence in the federal standards, it's
just if the federal government will have supremacy and the
legislature encourages a lower standard. He indicated concern for
more lawsuits.
Number 447
REPRESENTATIVE RYAN referenced the economic feasibility of the
regulations and said the department's fiscal note was $297,600 to
justify the hiring of three economists, two full-time and one part-
time to ascertain economic feasibility. He referred to
Representative Rokeberg's testimony where he mentioned that on page
1, line 15, and said this was a regulation based on science as a
concept for the department. He asked if Representative Rokeberg
had consulted with the department about how much it was going to
cost to hire the scientists necessary to ascertain whether or not
this is reasonable.
REPRESENTATIVE ROKEBERG responded that he had not consulted with
the department concerning this issue. He said that this question
would be better directed to the department.
Number 499
REPRESENTATIVE KEMPLEN referred to the fiscal note and said he had
understood that Representative Rokeberg would be introducing an
amendment to this legislation regarding the substantial costs
identified by the department in relation to the NPDES. He asked
Representative Rokeberg to address some of the other costs
identified by the department, such as legal and regulation costs.
He asked if those are accurate assessments in his mind.
REPRESENTATIVE ROKEBERG answered, "No." He believed that there
would be further discussion on this issue. Representative Rokeberg
felt that the existing department budgets, personnel and so forth,
in a large part can accomplish a substantial (indisc.). There may
be some relatively modest costs to go through the regulatory
procedures which would result under the Administrative Procedures
Act from implementation of the statute. As to the fact, for
example, the need for a full-time attorney, he doesn't agree with
that.
Number 576
REPRESENTATIVE KEMPLEN stated that he attended the Resource
Development Conference held recently in Anchorage. A
representative from the mining community mentioned that the efforts
to reduce the available resources to the DEC could be significantly
detrimental to the mining industry because of their ability to get
permits through the system. This gentleman's suggestion was that
be very careful about reducing the budget of this department. He
noted Representative Rokeberg's statement about these costs
associated with this new legislation could be absorbed by the
department seems to run contrary to the statement which he had
heard early. He said he'd like to be assured that industry will
not be negatively affected because of the governmental
Administration is burdened with too many responsibilities and not
enough resources.
REPRESENTATIVE ROKEBERG responded that he appreciated and shared
these same concerns. It is not the intention of this bill in any
way to have a negative impact on the ability of the department to
meet the needs of the private sector when they come forward for
their permitting process. He continued that the committee members,
Chairman Hodgins and Representative Kemplen, should find after a
longer tenure with the legislature that there seems to be a desire
on the part of bureaucracy to find rationales and abilities to
increase their monetary income which is only a natural function of
any bureaucratic organization. The ability of the department to
act properly is a case to be made before their budget subcommittee.
He said he would like the chair to know that fundamentally the same
bill with the exception of NPDES permitting section left the Senate
Finance Committee or was waived by Senate Resource Committee with
its fiscal of $60,000 last session. This argument about fiscal
impact will go on during the course of this bill.
Number 726
BECKY GAY, Executive Director, Resource Development Council (RDC),
testified by teleconference from Anchorage. She explained that the
RDC is a federally funded, non-profit statewide organization which
works on resource issues of all kinds. Ms. Gay referred to the
position statement which was submitted to the committee and agreed
with Representative Rokeberg that over the interim, since the
former bill HB 342, which was the water quality bill that passed
last year and was vetoed, that they have been working closely
(indisc.) RDC as a regulating community, as well as with other
agencies and other segments of the public to address what perceived
short comings there were in the bill. To the extent that the
parties were able to agree, changes were made.
MS. GAY added that she hoped the legislature understood that much
of the work on this legislation is in response to the decline in
budget revenues and not just to the DEC, but to the whole state.
Although RDC works primarily on the revenue side of the budget,
such as promoting more industry in Alaska, they are not shy in
mentioning where costs can be cut. In the regulatory arena, the
RDC believes that some of this cost cutting can be useful, but also
painful. They are here to help guide the way through these rocky
seas, hopefully with the legislature, the Administration and the
regulating communities being able to come to some agreement. She
said she feels there needs to be more congruence in the state about
what we're going to do with regards to use and protection of water
in particular.
MS. GAY said that this would minimize a lot of wasted effort from
all parties and it will strengthen the agency's internal resolve to
do what is necessary and mandated. This type of congruence will
also show a united front to the EPA and perhaps reduce some of the
lawsuits which are always threatened because of vagueness and
ambiguity in direction from the legislature, from which these
regulations are promulgated. Currently, there is no state
adjustment policy, as Representative Rokeberg pointed out, on
regulations. The legislature needs to decide what this policy will
is. She felt as though a policy is clearly stated in this bill
because the federal requirement is merely to adjust upward if they
become more restrictive. This is a one way street for a state and
if the regulations change at the federal level there is no similar
requirement to somehow adjust downward when the federal government
determines one of their criteria are lacking.
MS. GAY continued she believes that this would become useful if and
when the Clean Water Act is changed. However, this is just an
adjustment policy. They believe that the legislature is the right
place to debate what this policy will be and determine that fact.
Also, HB 51 requires the DEC to set standards which are
scientifically supportable. She said they cannot stress how
important this is in order to be consistent with federal existing
standards in conjunction with what is reasonable for Alaska. Ms.
Gay noted that this is where the background language comes into
play. This is the type of thing which will "Alaskanize" our
regulations, which is what the Clean Water Act has asked each state
to do.
MS. GAY stated that where possible, HB 51 also gives statutory
backing for efforts by the DEC that are already underway. The new
fiscal note on NPDES has not been discussed legislatively enough,
but she understood that it was the DEC's intent to take over NPDES.
Ms. Gay said she knew that it is Region 10's intent to give it to
the state if they want it. She thought this would be a useful
debate. She didn't want them to scrap it too soon and suggested
toning down the language such that they don't have to take it over
for whatever reason. She felt it was useful to have in the bill
for dialogue because the DEC keeps using this as a ultimate goal
for other things.
MS. GAY pointed out that the bill does specifically allow in two
places for the state to have a stricter standard than the federal
government. This is what the opposition seems to make the most
noise about. If the DEC can prove scientifically that there is a
reason to have stricter standards, then indeed they can have them.
She noted that there is a process laid out by which to do so which
is quite clear in her opinion. This also allows the DEC to have a
standard which is not in law and this was their language. The DEC
suggested that there should be such a thing. The council
acquiesced to this last session. She wasn't sure why they were
doing this already, but the council does not have a problem with
them doing this if they can prove that they should. Ms. Gay said
the bill also allows discharge water language to match the quality
of the receiving waters. She said she believes that there has been
a change in the CS, but would like to offer an additional change
which would be a statutory mandate for mixing zones. She said the
state is currently trying to promulgate regulations on mixing
zones, but they don't really have clear statutory backing to do so.
Number 1039
MS. GAY referred to the CS, page 1, Section 2, and said the RDC has
been wishing the DEC would hire an economist. She said the
economic argument is lost many times in the regulatory arena and
that it is a real important aspect. She noted she doesn't think
the department's fiscal note for hiring three economists is unreal.
MS. GAY referred to page 2, Section 2, relating the "background
condition," and said she believes this is good. She indicated she
isn't sure what the last sentence means relating to "you can use a
similar watershed." She noted she thinks it is important to come
up with a definition for "background."
Number 1159
MS. GAY referred to the addition of Section 3 to NPDES and said it
is her understanding that it is the DEC's intent to take over NPDES
at some point in time. She said she doesn't think the fiscal note
is realistic in the sense it is one sided. It doesn't show any
program receipts which they are supposed to get if they take over
the NPDES program and it doesn't show any federal funds that might
be associated with it. She noted she believes it would take
statutory language to take over the program and legislative backing
to give the department the money to do it.
MS. GAY referred to page 2, line 22, "Clean Water Act," and said
that was added because the DEC and (indisc.) made comments that it
wasn't being referred to in that section. Now it's in there.
Number 1233
MS. GAY referred to page 2, line 30 and 31. She said the concept
of receiving water is still not in that message. The committee
might want to add language that says, "receiving water." Ms. Gay
said it is not just the water received by the user.
MS. GAY referred to page 3, and said it includes mixing zones. She
said lines 3, 4 and 5, is an example where the state is going to be
stricter than the federal government. That was requested by the
Alaska Department of Fish and Game (ADF&G) last year. They have
pointed out that they are always stricter on shellfish beds. She
referred to line 9 and said the 90 days was a number presented by
the DEC. They don't necessarily want to defend that number now,
but they did come up with the number themselves. She pointed out
that the Administrative Procedures Act (APA) only has a 30-day time
limit. Ms. Gay referred to wording on line 21 "approved in
writing," and said she has read a letter from the EPA and they
recommended deleting the wording "in writing." The EPA doesn't
like to approve things in writing. She indicated she has a problem
with deleting that wording. It would make more work for the EPA
and they didn't like that. Ms. Gay referred to page 3, line 26,
and said the Imhoff come method has been bought into by the state
and their own studies. That is a moot point, but she wanted to
noted the DEC brought that amendment forward last year.
Number 1369
MS. GAY referred to page 4, and said the reference to being less
restrictive was specifically taken out because the DEC couldn't and
wouldn't defend it at the Governor's level in particular. If the
DEC wants to be less restrictive than the federal government,
they're going to have to come back and seek legislative approval on
their own if they want to. Ms. Gay referred to wording on page 4
regarding transitional review and the triennial review. She said,
"This was the DEC's change last year because when we came in with
this bill we asked for a review of all regulations, historic and
any ones they were in the middle of. DEC complained that would
cost too much money and a long long fight over that during last
session was (indisc.). What happened when we actually asked to
their request to do it within the triennial review process, knowing
full well that a triennial review, although that means three years,
really takes about six years and sometimes maybe longer. So we
feel we gave a lot on that issue already - the triennial review
process. At least there will be (indisc.) in place now." Ms. Gay
thanked the committee for listening to her.
Number 1520
MARILYN CROCKETT, Assistant Executive Director, Alaska Oil and Gas
Association (AOGA), testified via teleconference from Anchorage.
She explained AOGA is a trade association of 18 member companies
who account for the majority of the oil and gas exploration
production transportation of marketing activity in the state of
Alaska. Ms. Crockett noted AOGA worked on the legislation last
session. She stated AOGA continues to support the goal of HB 51 to
establish reasonable and economically achievable and scientifically
based state water quality standards that are no more stringent than
the federal regulations, unless on a case-by-case basis there is
evidence that justifies the more restrictive regulations.
Specifically, they support legislation that would provide for state
regulations and standards to be consistent with the federal
requirements. If circumstances warrant a different standard at the
state level than at the federal level, there should be some process
in place that allows for consideration of science and economics in
the demonstration of that more restrictive requirement. Ms.
Crockett said she would point to the section that talks about the
review that would undertaken for a standard that would be more
restrictive than the federal regulations. She stated that section
was crafted using language from the Alaska statute authorizing
state assumption of the Title 5 Air Program. That legislation was
drafted by a work group, prior to submittal by the Governor to the
legislature, that reached consensus on the point that the
regulations at the state level should be (indisc.) with the federal
level. However, there may be situations where you may want to have
a more restrictive regulation for whatever purpose. In those cases
you have to go through a demonstration process. Ms. Crockett said
there should be an official way to amend state regulations to match
old regulations when they change. She said AOGA supports
regulations that (indisc.) only EPA approved measurements. She
said currently the state is required only to amend its regulations
when changes to the federal regulations result in a more
restrictive standard than we have at the state level. The state
should ensure there is consistency with the federal requirements
and the state should also be required to amend (indisc.) when
changes occur to the federal standards which result in a less
restrictive (indisc.) or when provisions are deleted from the
federal regulations. Ms. Crockett stated federal regulations
should be the basis as well as the boundaries for state
regulations. If there is (indisc.) for more restrictive standards,
then a process should be in place to ensure that (indisc.)
economics are considered a part of that process. Ms. Crockett said
HB 51 provides an appeal process which she believes is important to
effect changes to the state requirements when changes to (indisc.)
requirements are inaccurate.
Number 1755
REPRESENTATIVE ROKEBERG asked Ms. Crockett if she knows of any
debate going on in Washington regarding the revisions of the Clean
Water Act.
MS. CROCKETT said she isn't aware of what congressional activity is
under way today on the Clean Water Act.
Number 1799
REPRESENTATIVE KEMPLEN referred to the economic analysis that is to
be performed and asked Ms. Crockett if she thinks a couple of
courses in economics at the undergraduate level would be sufficient
to provide an accurate assessment of the economic viability of the
regulations. He asked her if she feels a trained economist is
necessary.
MS. CROCKETT said she doesn't feel she is qualified to answer the
question as she isn't an economist herself. She noted at the EPA
level and in other agencies there are requirements for
consideration of economics and the economic impacts from
regulations. Ms. Crockett said she believes guidance documents
could be prepared which would spell specifically what must be
considered as part of the regulatory development process.
Number 1911
JANICE ADAIR, Director, Division of Environmental Health;
Legislative Liaison, Department of Environmental Conservation, came
forward to address HB 51. She said she would like to assure the
committee that the DEC certainly agrees that it is the role of the
legislature to set policy. The DEC sees the bill as being
significantly different than HB 342 in two regards. The first is
Section 2 which sets out the economic feasibility based on science.
She said they agree that science is an important basis for any
environmental regulation and Section 2 does apply to all
regulations of the DEC, not just water quality but drinking water,
pesticides, solid waste, contingency plans, oil transportation,
contaminated sites, the entire gamut of environmental regulations
adopted by the DEC. The primary basis of environmental regulation
is protection of public health and no where in HB 51 is that
concept included. Ms. Adair said when you have a choice between
economic feasibility, particularly in some of the program areas
like drinking water or protecting public health, they read Section
2 as always deferring to the economic feasibilities and that is of
great concern. She said we know that led in drinking water is a
health problem for children and there is the requirement that there
be no led pipes, no led solder. That may not be economically
feasible for the people being regulated, but she thinks it is an
important health protection. She said cripto sporidium (sp.)
exists in our surface sources in the state and we know cripto
sporidium killed 100 in Milwaukee in 1993. The department requires
this for filtration. It is expensive, but they think it is worth
it. Their are choices that society makes about the protections of
their environment and mixing zones is a perfect example. She said
mixing zones are not a scientifically created entity. It is a
societal choice. It is something that we have said, as Alaskans,
we're willing to have a water body, have a single user - the person
discharging into the mixing zone and preclude other uses of that
waterbody for fishing, shellfish growing, swimming, et cetera. Ms.
Adair said those are important concepts for them and things that
they try to balance between when they go out with a regulatory
proposal.
Number 2135
MS. ADAIR referred to the NPDES delegation language in Section 3
and said the DEC thinks that NPDES run by the state would be good
for the state, but because it is expensive they haven't done it.
She said the fiscal note is their honest assessment of what they
think it would take and that is why they don't do it. It is very
expensive. She said the fiscal note doesn't reflect any federal
grants because typically, there are no federal grants for running
the program. The fiscal note also doesn't reflect any program
receipts because the department doesn't have any program receipt
authority for it nor does the legislation propose that, so they had
to go with what was written which would all come from general
funds. She informed the committee members the DEC is going out
with a contract to have a look at what it would really take to have
NPDES. Ms. Adair noted the fiscal note reflects the department's
best estimate, but she thinks it is a few years old as she recalls.
The department needs to get a handle on it because there is a lot
of interest in having the state run NPDES. Ms. Adair said the
fiscal note should not be read as an indication from the department
that they don't want it.
MS. ADAIR explained the bill says that water quality standards
shall protect human health and the propagation of fish, but the
Clean Water Act requires that water be protected for a variety of
other uses. The department doesn't see those uses in the bill and
that is a concern. She questioned that if they were to try to
obtain delegation of the NPDES program, would they actually be able
to do it if HB 51 were to become law. Ms. Adair explained the
Clean Water Act requires that water be protective of wildlife,
recreation, domestic water supplies, drinking water, agricultural,
industrial and navigational uses. She noted those are all the
things that must be considered when adopting water quality
standards. The Act also says that the discharged water can't be of
higher quality than the background condition of the receiving water
and the DEC thinks that is probably okay, but this is something
that needs to be clarified with the EPA and they haven't had the
opportunity to do so yet. Ms. Adair explained that in some cases,
the EPA requires a technology based limitations on the affluent and
without regard to the receiving waters. So that could be a problem
and it is something the DEC would need to look into. Ms. Adair
said it requires that standards be reliably measured. In theory,
that is sound, but we do have narrative standards. They're not a
measurement, it is not a numeric standard. It is color, taste,
it's aesthetics. She pointed out there are some standards that go
to non-detect. Ms. Adair explained personally she thinks you could
reliably measure non-detect, but she isn't sure if the Attorney
General's office would agree with her. She noted they haven't had
the opportunity to their review.
MS. ADAIR explained it is correct that the DEC has adopted within
their regulations the requirement that settleable solids be
measured with the Imhoff Cone method, but one of the reasons the
department likes to have specific requirements in the regulations
is because if somebody comes up with a better mouse trap or for
some reason if somebody wants to do something different, their
hands are tied if it is in statute.
TAPE 97-2, SIDE A
Number 001
MS. ADAIR informed the committee members that there is currently in
the Administrative Procedures Act a methodology for people to come
forward and ask the DEC to change their regulations. She stated it
was through the Administrative Procedures Act that Trustees for
Alaska - the Sierra Club Defense Fund came forward and challenged
the state's water quality regulations. It was a result of the
former Commissioner Burden put together a group to look at the
water quality standards, see what the issues were and how they
could be addressed. Ms. Adair referred to the Administrative
Procedures Act and said the person making the petition has to give
the DEC the information they need to evaluate the petition. In HB
51 there is no such requirement. So any of the scientific data,
any of the technical information, any of the research would have to
be done by the department and they are not funded to do that kind
of work.
MS. ADAIR said she would also like to point out that the state
water quality regulations also give people the ability to come in
and petition for a lower standard where the background is lower
than the federal or state standard. So there is currently the
ability for people to come in and get some different standard based
on what they're actually finding in their waterbody. Ms. Adair
said those are some of the problems the DEC sees with HB 51, and to
the extent the legislation is unclear, it's is hard for the
department to make specific recommendations on how to fix it. She
said to the extent that unclear legislation becomes unclear
statutes, it increases the cost for implementing for everybody
including the permittees who have to go through the process. So
rather than improving anything, it just adds confusion and
inefficiencies reducing the DEC's ability to be responsive and
effective. The bill is also very process oriented, it creates
duplicative processes over and above the Administrative Procedures
Act. Ms. Adair said the DEC sees the bill coming with more process
and more costs and they are not sure of the value of either since
they are not certain of the intent of the sponsor.
Number 255
REPRESENTATIVE KEMPLEN referred to the issue of whether or not
sufficient resources exist in the DEC to adequately administer the
regulations. There is a perception that there is slack in the
department and they could absorb additional responsibilities and
additional process. He questioned whether industry or members of
the public have come forward to express concern that the department
is not meeting its charge because of inadequate funding or
inadequate resources.
Number 337
MS. ADAIR said, "Yes and no. Of course to some extent people think
it's a matter of how we set our priorities and if we did just what
they wanted us to do, then we would have enough money, but then
there would be someone else whose priority would not be ours and
they would have a similar concern. I don't think that across the
board the department -- I think that we're able to meet out charge
in many areas. There are some of particular concern and this
particular program area, water quality, is one of those."
MS. ADAIR explained she used to work on the department's budget and
it was the target of reductions for several years in a row. She
said she really isn't sure why except that there has been a lot of
dissatisfaction with how it operates in the state. She said the
DEC could not absorb the running of this program the way it is
established in HB 51. It would be impossible. Ms. Adair said she
doesn't think that anybody in attendance wants to set the public up
for expectations that can't be realized and she would hope that
they wouldn't want to set the department up for failure as well.
Number 443
REPRESENTATIVE KEMPLEN explained one of the things that the
legislature is working very hard at doing is getting economic
development to occur in the state, particularly the natural gas
pipeline which is a multi-billion dollar project. If we are
successful that is going to produce a lot of growth and development
throughout the state. If such growth and development begins to
occur, it will produce additional demands on the DEC to handle the
permits, economic analysis, et cetera. Typically, when economic
growth occurs it occurs fairly quickly. Representative Kemplen
question how quickly the DEC could respond to adding the additional
resources to meet that growth.
Number 535
MS. ADAIR explained they see themselves as a partner in the
economic development of the state. She said whether the state has
the DEC or not, there are laws on the books about necessary permits
or approvals from the state that are required before a variety of
things can be done, most of which are associated with some kind of
economic development. If those programs were gone, then people
would simply be dealing with the federal government, the EPA out of
Seattle and in some cases out of Washington, D.C. She said it
really depends on the area you're looking at. She said they would
see themselves as having a role to play in that economic
development.
REPRESENTATIVE KEMPLEN stated he and his constituents would not
want to see environmental quality is sacrificed during periods of
rapid economic growth because the DEC doesn't have the ability to
monitor that economic growth.
Number 744
REPRESENTATIVE BUNDE referred to Ms. Adair expressing some concern
about the concept of receiving water and how it is something that
needed to be looked at more thoroughly and said he needs more
education.
MS. ADAIR explained HB 51 says that the state could not require the
discharge of water to be of a higher standard than the receiving
water. She said the point of her concern is that the EPA, in its
water quality standards, often sets technology based limits. It
doesn't really matter what the receiving water is, but technology
exists to clean that discharge up to a higher level. The standard
is set based on that technology that exists rather than looking at
the water that the discharge is going into.
Number 744
REPRESENTATIVE BUNDE said, "I suppose that this is an extension of
garbage in, garbage out kind of thing. If you've got a polluted
water source that you're using in your industry, you're saying then
that industry should in effect clean up the pollution that they've
received as well as whatever they create."
MS. ADAIR explained the way she thinks of it is that it's an
opportunity to use technology to improve a waterbody as opposed to
retaining a waterbody that may have pollutants.
Number 798
REPRESENTATIVE OGAN referred to page 1, line 11 through 13, Section
2, "The department may not adopt a regulation under this sections
unless the department considers whether compliance with the
regulation is economically feasible for the person governed by the
regulation;". He said, "I put myself in your shoes for a little
bit and I tried to figure out how the heck you would determine,
`Well, can we adopt a regulation on this? It might not be
economically feasible for you.'" Representative Ogan said it is
pretty subjective criteria for writing regulations. He said what
is economically feasible for a multi-million dollar international
mining company might not be economically feasible for "Joe six-pack
placer miner." He asked how that determination is made. He also
asked Ms. Adair if she sees this as a major obstacle in being able
to write a regulation.
MS. ADAIR said, "Yes indeed, and beyond that we have no ability to
obtain any kind of economic data from companies that we're
regulating or if we did, the ability to keep it confidential - it
would become a public record upon their giving it to us. And so I
wouldn't give it to a state agency to have it become a public
record if it was my financial data about my company."
MS. ADAIR explained the DEC regulates municipal drinking water
systems whether it is in Tuntutuliak or in Anchorage. She noted
there are vast differences in the resources of those communities.
The department regulates solid waste facilities across the state.
She said, "Do we look to the state then and say the state can
afford this, therefore, a municipality can?" She said she wouldn't
know how to approach it.
Number 944
REPRESENTATIVE BRICE questioned how may other states have primacy
over their NPDES program.
Number 959
MICHAEL CONWAY, Acting Director, Division of Air and Water Quality
Department of Environmental Conservation, indicated he would get
the information for the committee. He added most state have NPDES
primacy and there are only a few that don't.
REPRESENTATIVE BRICE also requested some background as to what it
cost those states to run the program. He noted he was also
bothered by the fiscal note and asked why there wouldn't be program
receipts.
Number 998
MS. ADAIR responded that the department doesn't have statutory
authority for program receipts for NPDES. She said it would have
to be added to their authority.
REPRESENTATIVE BRICE said he thinks what the bill is trying to get
at is to merge state and federal programs and not have duel
programs. He asked what the department is doing regarding this.
MS. ADAIR explained the only way to merge is to delegation of
NPDES. She noted the Air and Water Quality Division is going out
with a contract to try and summarize all of the issues that would
be necessary for the department to address to develop a plan to see
if it's feasible to have the delegation of the program. She said
the DEC believes it to be an expensive program and there may not be
the will to have it once the cost is determined. The EPA does have
certain criteria that they use before they'll delegate a program to
any state. She said we need to look at what their criteria is and
see where there are matches and then make a plan to bring those
things into alignment.
Number 1095
REPRESENTATIVE RYAN referred to a couple of instances he knows of
regarding mining operations in the Interior. On Ester Dome the
naturally occurring runoff was 10,000 times of arsenic, the EPA
minimum. That was allowed to occur and go into the (Indisc.) River
because obviously it was an Act of God, but if it were a miner were
to take that same water and use it to wash out (indisc.) mill
products then they have to clean that water up to a drinking water
standard before they could put it back into the system. Other
miners, using water that came from glacial fed streams and rivers
had to go with the requirements. He asked if the DEC would
consider the criteria for the run of water discharged from a mining
operation to be that what occurred naturally if you're taking in
the background consideration or would they still have to meet the
21 turbidity units for a criteria for drinking water quality before
it could be put back into the watershed.
MR. CONWAY explained they have been able to work out through the
placer mine general permit the ability to go to the background
level. It's the reading that's taken above where there has been a
disturbance. This was negotiated with the EPA by the DEC and the
Alaska Miners Association. He said arsenic brings up one of the
rules where the department's commission is now trying to petition
the EPA, in an interim period while additional studies are done, to
be able to use the DEC's numbers. Mr. Conway stated this is a case
where the DEC's standard would be less than what the EPA standard
current is. He noted they are bound by the national toxins rule to
have those lower standards, but they have the ability through the
EPA permit. Mr. Conway explained currently the EPA issues the
NPDES permit. The state certifies that permit, so we have the
ability to negotiate with the EPA and the applicant things like the
background levels and what is economically feasible, et cetera.
Number 1247
REPRESENTATIVE OGAN referred to the fiscal note and asked if he is
correct in noting that there is an error in decimal points.
MS. ADAIR indicated he was correct and stated the DEC has put out
a corrected one.
Number 1264
REPRESENTATIVE BUNDE said, "Brings me back to my earlier in
receiving, Representative Ryan's question, that - Ms. Adair I
thought I heard you say that the water coming in, we have the
technology to clean it up - whoever uses is now responsible for
cleaning it up, but yet you're telling me that if it's coming in
naturally polluted, I guess would be the term I would use, then
they only need to bring it back up to the receiving level. Is
that...."
MS. ADAIR explained she only meant to indicate that there are some
water quality standards that are technology based, not all of them.
In this case, it was a negotiated agreement through using the
permit to go to background. It is not just one way or the other.
REPRESENTATIVE BUNDE said it would depend on the EPA's judgement as
to whether the user of the water would be required to bring water
that they receive up to a higher standard if the technology
existed.
MS. ADAIR said she thinks those are actually established as a
regulation. She said she doesn't think it is at their whim. Ms.
Adair said she would get him more details and let him know.
Number 1335
REPRESENTATIVE ROKEBERG said, "I am very disappointed to hear that
the department doesn't, after of over a year of struggle,
understand what the intention - my intention is in this bill and I
am also concerned that the testimony is that the implementation of
the bill would potentially paralyze the department and not allow it
to do it's work. I mean that's certainly my intention nor is it
the intention of the the vast number of people in the state that
supports this legislation. Just on the contrary, it is not. So
let me just ask the Chairman if we could ask of the Department of
Environmental Conservation to submit in writing to this committee
and to the sponsor any of your concerns you expressed in your
testimony today, and to do so as rapidly as possible, and hopefully
before we have the hearing next Tuesday - continue the hearing on
the bill."
CHAIRMAN HODGINS noted the committee would address the issue the
following Thursday, January 30.
REPRESENTATIVE ROKEBERG continued, "Next Thursday. At that time
that will I think enable us to respond to any problems that are
exhibited by your testimony. And also if in part and parcel of
that, if after this length of time has your department been able to
identify how many regulations exist in the Alaska regulatory scheme
that are more restrictive than the EPA requirements."
Number 1436
MS. ADAIR responded, "Mr. Chairman, Representative Rokeberg, we
will get you that information by the thirtieth and I will defer to
Mike on the water quality standard comparison. I know they were
working on it."
MR. CONWAY indicated he would make that part of the report.
CHAIRMAN HODGINS announced HB 51 would be addressed again on
January 30.
ADJOURNMENT
CHAIRMAN HODGINS adjourned the House Special Committee on Oil and
Gas meeting at 12:01 p.m.
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