Legislature(1995 - 1996)
01/18/1996 03:05 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
January 18, 1996
3:05 p.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative William K. "Bill" Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative Ramona Barnes
Representative John Davies
Representative Pete Kott
Representative Don Long
Representative Irene Nicholia
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 212
"An Act relating to the management and sale of state timber and
relating to the administration of forest land and classification of
state land."
- PASSED CSHB 212(RES) OUT OF COMMITTEE
OVERVIEW: State's Air Quality Plan Application
PREVIOUS ACTION
BILL: HB 212
SHORT TITLE: TIMBER MANAGEMENT; STATE LAND
SPONSOR(S): STATE AFFAIRS
JRN-DATE JRN-PG ACTION
03/01/95 530 (H) READ THE FIRST TIME - REFERRAL(S)
03/01/95 530 (H) STATE AFFAIRS, RESOURCES, FINANCE
03/16/95 (H) STA AT 08:00 AM CAPITOL 102
03/16/95 (H) MINUTE(STA)
03/21/95 (H) STA AT 08:00 AM CAPITOL 102
03/21/95 (H) MINUTE(STA)
03/21/95 (H) MINUTE(STA)
03/21/95 (H) MINUTE(STA)
03/22/95 844 (H) STA RPT 1DP 4NR 1AM
03/22/95 845 (H) DP: JAMES
03/22/95 845 (H) NR: OGAN, PORTER, IVAN, GREEN
03/22/95 845 (H) AM: WILLIS
03/22/95 845 (H) 2 FISCAL NOTES (DEC, F&G)
03/22/95 845 (H) ZERO FISCAL NOTE (DNR)
04/26/95 (H) RES AT 08:00 AM CAPITOL 124
04/26/95 (H) MINUTE(RES)
04/26/95 (H) MINUTE(RES)
09/19/95 (H) RES AT 09:00 AM
12/05/95 (H) RES AT 09:00 AM ANCHORAGE LIO
01/17/96 (H) RES AT 08:15 AM CAPITOL 124
01/17/96 (H) MINUTE(RES)
01/18/96 (H) RES AT 03:00 PM CAPITOL 124
01/18/96 (H) MINUTE(RES)
WITNESS REGISTER
REPRESENTATIVE JEANNETTE JAMES
Alaska State Legislature
State Capitol, Room 102
Juneau, AK 99801
Telephone: (907) 465-3743
POSITION STATEMENT: Testified on HB 212
JOHN STONE, Chief
Air Quality Maintenance
Division of Air and Water Quality
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801-1795
Telephone: (907) 465-5103
POSITION STATEMENT: Provided information on air quality control
ROBERT REGES, Assistant Attorney General
Natural Resources Section
Civil Division
Department of Law
P.O. Box 110300
Sixth Floor Dimond Courthouse
Juneau, AK 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Provided information on air quality control
JOHN KUTERBACH, Environmental Engineer
Division of Air and Water Quality
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801-1795
Telephone: (907) 465-5100
POSITION STATEMENT: Provided information on air quality control.
DAVID ROGERS, Attorney and Lobbyist
Council of Alaska Producers
P.O. Box 33932
Juneau, Alaska 99801
Telephone: (907) 586-1107
POSITION STATEMENT: Provided information on air quality control.
SVEND A. BRANDT-ERICHSEN, Attorney
Heller Ehrman White and McAuliffe
6100 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7098
Telephone: (206) 447-0900
POSITION STATEMENT: Provided information on air quality control.
KATHRYN LAMAL
Golden Valley Electric
P. O. Box 71249
Fairbanks, AK 99707
Telephone: (907) 452-1151
POSITION STATEMENT: Testified on air quality control.
CARL HARMON
Chugach Electric
5601 Minnesota Avenue, Building G
P. O. 196300
Anchorage, AK 99519-6300
Telephone: (907) 762-4739
POSITION STATEMENT: Testified on air quality control.
STEVE TOROK
Environmental Protection Agency
410 Willoughby Avenue, Suite 100
Juneau, AK 99801
Telephone: (907) 586-7619
POSITION STATEMENT: Answered questions on air quality control.
LEONARD D. VERRELLI, Director
Division of Air & Water Quality
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, AK 99801-1975
Telephone: (907) 5260
POSITION STATEMENT: Testified on air quality control.
BILL WALKER
Division of Air & Water Quality
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, AK 99801-1975
Telephone: (907) 465-5104
POSITION STATEMENT: Addressed an air quality issue.
ACTION NARRATIVE
TAPE 96-3, SIDE A
Number 000
CO-CHAIRMAN BILL WILLIAMS called the House Resources Committee
meeting to order at 3:05 p.m. Members present at the call to order
were Representatives Green, Ogan, Austerman, Barnes, Davies, Kott,
Long and Williams. Representative Nicholia was absent.
HB 212 - TIMBER MANAGEMENT; STATE LAND
CO-CHAIRMAN WILLIAMS announced that the agenda was a continuation
of the Wednesday, January 17, 1996, meeting on HB 212. He added
that committee members had been requested to submit any
amendments, in writing, so the committee could address them at this
meeting.
Number 120
REPRESENTATIVE JOHN DAVIES read his proposed amendment for CSHB
212, version "M." He referred to page 3, line 20, and said delete
the words "sales of 160 acres or less" and insert "sales under
500,000 board feet."
Number 165
CO-CHAIRMAN JOE GREEN objected for the purposes of discussion.
REPRESENTATIVE DAVIES said his purpose in offering this amendment
is based on the different productivity rates in different forests
of the state. He said in the Tanana Valley State Forest a sale of
160 acres is not a small sale, it is a large one. He added that
currently, 80 percent of the timber sales in the Tanana Valley
would be less than 160 acres. The productivity of the forest in
the Tanana Valley is different from the productivity in the Susitna
area. Representative Davies said that if HB 212 were to use
"500,000 board feet" instead of "160 acres" it would reduce the
amount of acreage sold in the Tanana Valley State Forest to
approximately 50 acres. He said the impact in the Susitna area,
because the productivity factor is about 3,000 board feet per acre,
the acreage would increase to about 166 acres. He concluded that
the value of having a number that has to do with the quantity of
board feet as opposed to acres is that it will accommodate the
different productivity of forests around the state. In the Tanana
Valley State Forest, a sale of 160 acres would be tantamount to
getting rid of the whole Five Year Schedule; 80 percent of the
sales would not be required to be on the schedule.
Number 348
REPRESENTATIVE JEANETTE JAMES objected to the proposed amendment to
HB 212. She said the wording of "160 acres" is a management tool
that is effective because when a sale of 160 acres is announced the
public can conceptualize that amount which they can not do with
500,000 board feet. She said the Department of Natural Resources
(DNR) gave testimony stating that they will put all sales, even
those under 160 acres on the five year schedule, even though they
are not required to do so.
Number 451
REPRESENTATIVE DAVIES said that he does not believe that there was
a strong consensus as to the wording of HB 212. He added that the
Board of Forestry is on record, with a unanimous recommendation
that if the committee leaves the wording of "160 acres" in HB 212,
the board requires that it be on the five year schedule at least
once.
Number 513
A roll call vote was taken on the proposed amendment to HB 212.
Representatives Davies and Long voted in favor of the amendment.
Representatives Williams, Green, Ogan, Barnes, Austerman and Kott
voted against the amendment. Representative Nicholia was absent
for the vote. The motion to adopt Representative Davies amendment
to HB 212 failed.
Number 536
REPRESENTATIVE DAVIES offered an additional amendment to HB 212.
On page 4, line 13, delete the word "management". The wording and
the purpose of the state forest would be, "the primary purpose in
the establishment of state forests is multiple use that provides
for production utilization and replenishment," et cetera.
Representative Davies said his primary purpose in deleting the word
"management" is to eliminate the connotation that the primary
purpose of the forest is bureaucracy, rather than multiple use.
Number 587
REPRESENTATIVE JAMES objected to the proposed amendment.
Number 625
A roll call vote was taken on Representative Davies proposed
amendment. Representatives Davies and Long voted in favor of the
amendment. Representatives Williams, Green, Ogan, Barnes,
Austerman, and Kott voted against the amendment. Representative
Nicholia was absent for the vote. The motion to adopt the proposed
amendment to HB 212 failed.
Number 638
REPRESENTATIVE DAVIES said he had one last proposed amendment to HB
212. On page 5, lines 20 to 24, delete Section 11 and renumber
accordingly. He said Section 11 is redundant with the list that is
provided on page 2.
Number 713
REPRESENTATIVE JAMES objected. She said the classifications listed
on page 2 are in relationship to the forest management plan and
Section 11 restates the objective of wildlife management within the
Tanana Valley State Forest.
REPRESENTATIVE NICHOLIA joined the committee meeting.
A roll call vote was taken on the proposed amendment to HB 212.
Representatives Davies, Long and Nicholia voted in favor of the
amendment. Representatives Kott, Austerman, Barnes, Ogan, Green,
Williams voted against the amendment. The motion to adopt the
proposed amendment to HB 212 failed.
Number 778
CO-CHAIRMAN GREEN moved that committee substitute for HB 212,
Resources version, 9LSO695-M, be moved from committee with
individual recommendations and attached fiscal note.
Number 796
REPRESENTATIVE IRENE NICHOLIA asked if the committee received any
fiscal notes for the new version from the Department of Fish and
Game (DFG) and the Department of Environmental Conservation (DEC).
CO-CHAIRMAN WILLIAMS said affected agencies can submit fiscal notes
to the House Finance Committee when it hears CSHB 212(RES).
A roll call vote was taken. Representatives Williams, Green, Ogan,
Barnes, Austerman, Kott and Nicholia voted in favor of moving the
bill from committee. Representatives Davies and Long voted against
moving the bill. The motion to pass committee substitute for HB
212, Resources 9LSO695-M, out of the House Resources Committee
succeeded. So HB 212(RES) moved from committee.
Number 870
CO-CHAIRMAN GREEN announced that the second part of the committee
meeting would be a work session on Alaska's air quality program
with the Department of Environmental Conservation (DEC) providing
background information. He said the DEC would explain the Clean
Air Act of 1990, also know as Title Five and then discuss HB 167,
passed by the 18th Legislature, which gives the DEC authority to
promulgate regulations to implement the clean air program. The DEC
would also provide information on the development of regulations
which the Commissioner signed one month prior to this meeting and
the last part of the agenda would be to discuss any outstanding
issues or problems with the rates. Co-chair Green provided some
information on how this meeting would be conducted and asked that
comments be focused on the regulations.
Number 1060
JOHN STONE, Chief, Air Quality Maintenance, Division of Air and
Water Quality, Department of Environmental Conservation, was first
to testify. He said that his division is responsible for
developing an air quality management program that regulates
industrial sources of air pollution in the state of Alaska and
gives the state primacy for that program under the Clean Air Act.
The 1972 Alaska State Air Quality Control Plan is a series of
regulations and guidance and allows Alaska primacy in granting
construction permits to large sources of air pollution. In
contrast, the National Pollutant Discharge Elimination System,
commonly referred to as wastewater permits, are given to large
industrial facilities in the state and are implemented by the
Environmental Protection Agency (EPA). The Air Quality Control
Plan also gives the state primacy for vehicle emission standards
program which is also administered by the DEC.
MR. STONE said in 1990, the Clean Air Act was amended by adding new
requirements including the Title Five Operating Permits Program.
This program required Alaska to submit, to the EPA, a plan for
meeting federal requirements for this federal operating permit
program. The DEC, several industries as well as environmental and
citizen groups worked to develop a language for the statutes that
give Alaska the authority to develop that program. The intent of
the legislation was for the DEC to develop a program that complied
with the Clean Air Act in a manner that met federal requirements,
allowed efficient and cost effective processing of permits,
required accountability from the DEC on matters relating to
recovery of program costs, and insured the productivity of Alaska's
businesses while protecting the health and welfare of the state's
residents. This legislature also intended for the DEC to implement
that bill in a manner that contained costs, minimized the number of
staff preforming air quality permit duties, fostered
accountability, improved the efficiency of government and used it's
contracting authority, as appropriate, to undertake all alternative
methods of accomplishing duties under this act. This statutory
legislation was passed in 1993. Title Five Permit Program was
designed in compliance with air pollution laws of the federal
government. In Alaska it is estimated that 450 facilities will be
subject to the statutory legislation.
Number 1274
MR. STONE provided an overview of what the Department Environmental
Conservation has done to meet the intent of HB 167 and listed
programs the DEC is in the process of developing. The DEC has been
involved in developing regulations to obtain primacy of all
important federal clean air programs. The DEC reorganized, adding
the new Air Quality Maintenance Section. This minimized the number
of staff preforming air quality duties and improved the efficiency
of how permits are processed which keeps costs low. The DEC is
developing a small business assistance program to help smaller
facilities subject to these statutes. General operating permits to
reduce the administrative burden on similar types of facilities
located throughout the state are being developed as well as
streamlining the permitting of requirements related to oil
exploration activities within the state. Other programs being
developed include a certification program that will allow private
air pollution inspectors in the state to conduct air compliance
inspections therefore a substitute by those inspectors for the DEC
staff. The Alaska Rural Electric Cooperative Association (ARECA)
and the department are working together to exempt small facilities
from permit requirements if their emissions are less than the
emissions that trigger a permit requirement. The DEC is also
writing regulations that would simplify the application
requirements, changing the EPA legalese into plain English so that
people can comply with those application requirements more easily.
Number 1361
MR. STONE said the DEC estimated the cost of a federal construction
permit program, based on proposed regulations that the EPA as put
forth, as $14 million would be funded by the federal budget and
user fees. He said that it would cost the department $2.7 million,
the majority of which would be derived from user fees.
Number 1440
MR. STONE gave an overview on the public process that the DEC uses
to develop regulations. When the air bill was completed in the
summer of 1993, workshops were held to explain the new law and to
get public input on what type of public processes should be
incorporated. Using that information, a proposal was given and
approved by Commissioner Sandor which included the strawman
regulation package distributed in December, 1993, with workshops
and video presentations to help clarify and get public input on the
most difficult aspects of that package. On June 1, 1994,
regulations were proposed with a 90-day public comment period
combined with additional workshops. After the 90-day period,
Commissioner Sandor adopted regulations in the fall of 1994. The
DEC continued to accept public recommendations through the winter
of 1995. Throughout the past summer, the department held meetings
to address the industry stakeholder concerns. In December,
proposed regulations to address those concerns were submitted to
the EPA, who are in the process of reviewing the DEC's program and
determining if it meets the federal minimal requirements.
Number 1558
REPRESENTATIVE RAMONA BARNES asked if the regulations were signed
into administrative code in December of 1994.
MR. STONE said yes they were.
REPRESENTATIVE BARNES commented that the DEC is then going through
an amendment process because those regulations have been signed
into law.
MR. STONE said the DEC adopted the regulations and sent them to the
Department of Law (DOL) in the December of 1994. He said the
department has been involved in amending portions of those
regulations. He said provisions have been adopted in place of the
provisions that were in the December 5, 1994, adoption.
Number 1600
REPRESENTATIVE BARNES asked Mr. Stone to supply those proposed
changes to the committee.
MR. STONE stated that the regulations the DEC had adopted will not
become effective until the EPA approves the program. He said he
would cover the parts of the regulations that received the most
comment. The first was whether the DEC had exceeded federal
requirements in order for the state to retain primacy in air
quality regulations. The second was whether or not the DEC provide
for all of the federal air pollution exemptions and the third was
what and how air pollution violations are excused.
MR. STONE discussed the policy principals used by Commissioner
Sandor and Commissioner Burden for making decisions regarding the
regulations for the new program. First, they wanted to develop
regulations that met the intent of the legislation. Secondly, they
did not want to fundamentally alter the existing programs in the
state that provided for primacy of those programs. Their concern
was to obtain primacy of the new programs adopted in the 1990 Clean
Air Act, namely Title Five.
MR. STONE addressed the DEC analysis of the concern raised by the
Alaska Stakeholder Coalition (ASC).
Number 1750
REPRESENTATIVE BARNES asked for an explanation of the Alaska
Stakeholder Coalition.
MR. STONE said the Alaska Stakeholder Coalition was a group of
industry representatives that assembled for the purpose of
providing uniform comment on these regulations. One of the Alaska
Stakeholder Coalition remaining concerns is regarding excess
emissions which are the air pollution violations that can be
excused. The industry feels that the DEC should provide
affirmative defense for more types of violations. Meanwhile the
EPA has informed the DEC that their adopted regulation provides an
affirmative defense for more "violations" than we are allowed to
provide if the state is to get primacy for this program.
Number 1813
CO-CHAIRMAN GREEN asked if the DEC were to grant an affirmative
defense for more types of violations then the state might lose
primacy.
MR. STONE said that would be one of the reasons. The second major
concern of the EPA is the ambient air quality impact requirements
which relate to those measures incorporated into Alaska's 1980
revision of the implementation plan giving control over granting
construction permits. The contention is that Alaska is applying
that program in excess of what is allowed under federal law. In
this new regulation package, the DEC did not endeavor to change
that 1982 prevention of significant deterioration (PSD) plan. The
plan is a set of measures distributed in the compliance burden
among the large sources of pollution in the state. In order to
revise that plan, compliance burdens would have to be redistributed
among those facilities or different facilities in order to obtain
primacy for that program. He said the DEC would be willing to
undergo this process, but did not do it because of the undertakings
of the Title Five requirements and the lack of staff resources.
MR. STONE said that the Alaska Stakeholder Coalition believes the
federal government has exemptions not currently recognized by state
regulations. The first has to do with insignificant pollution
sources which are the small pollution emitting activities within a
facility that do not have to be listed on the applications. The
EPA has told the DEC that the proposed amendments will need to be
altered over time because it goes beyond what the federal law
allows. The DEC feels that as the application process continues,
they will get a feel for what pollution sources can or cannot be
exempted.
Number 1975
MR. STONE said there is some concern over temporary source
exemptions, especially regarding exemptions for oil exploration
activities, that may have been provided under the Clean Air Act.
The Clean Air Act gives some exemptions for modifications and
pollution increases that are classified by the cause of the
pollution. In Alaska, exemptions are not given for the cause of
the pollution but rather by the amount of the pollution. This type
of approach was deemed more flexible. The EPA has informed the DEC
that they are not reviewing as much pollution increases as is
expected and are not sure if the Alaska program is adequate to meet
the federal requirements.
Number 2048
MR. STONE said the final Alaska Stakeholder Coalition concern has
to do with audit requirements such as how user fees are collected
and how the DEC is accountable.
Number 2078
REPRESENTATIVE BARNES asked if the user fees collected go into the
general fund.
MR. STONE said that the user fees have gone into the general fund,
but when the program is approved by the EPA, the user fees will go
into a clean air protection fund.
CO-CHAIRMAN GREEN remarked that this sounded like a dedicated fund.
ROBERT REGES, Assistant Attorney General, Natural Resources
Section, Civil Division, Department of Law, answered that it was a
dedicated fund. He added that it is exempt from the constitutional
consideration because the federal clean air act overrides it and
was approved by the legislature back in 1993.
MR. STONE said the Alaska Stakeholder Coalition requested
streamlined administrative procedures for issuing construction
permits which was a recent request and that the DEC is not against
making those changes. Finally, the last Alaska Stakeholder
Coalition concern is with the DEC's ability to specify terms and
conditions in permits to ensure compliance with the state air
quality statutes and regulations. The statutes limit the
establishment of those permit terms both in monitoring and how many
permit terms can be allowed without a regulation process.
MR. STONE said that the DEC would work with the various parties to
achieve consensus and would work to adhere to the legislators
intent in the statutes.
Number 2247
REPRESENTATIVE DAVIES asked if the $2.7 million operating budget
for air quality programs was paid entirely out of user fees. He
also asked how much the federal government program would expect the
regulated community to pay in user fee burden.
MR. STONE said 80 percent of the DEC figure is user fees. He said
the federal government figure would be $5.8 million for user fees.
REPRESENTATIVE DAVIES read from a section of the constitution that
dealt with dedicated funds under federal statutes. He said that
Alaska is voluntarily entering into agreement with a dedicated fund
because the state is seeking primacy.
Number 2230
REPRESENTATIVE AUSTERMAN asked if interpretations of the federal
clean air laws have been challenged by the state of Alaska.
Number 2236
MR. STONE said the state has had a long history of challenging the
EPA on interpretations on an ongoing basis. He said the DEC has
created regulations based on Alaska's needs which the DEC felt met
the minimum requirements of the federal law. He added that based
on what the EPA has told him today, the DEC will continue to
challenge their interpretations.
Number 2265
REPRESENTATIVE AUSTERMAN asked how challenges are presented.
MR. STONE said that in most cases the state needs to convince the
EPA of our position through on going discussion and contact. Once
the EPA is convinced, flexibility is gained in the ability to
implement the program.
Number 2390
CO-CHAIRMAN GREEN asked about the cases where the DEC is exceeding
the federal requirements on applications.
MR. STONE said the problems with the EPA involve not requiring
enough information on operating permit applications. He said the
only case where they would exceed the federal requirement would be
in regards to air pollution nuisance. The state has an air
pollution prohibited statute which directs the operator of a
facility to ensure that they do not create an air pollution
nuisance and does not allow for the federal excursion in cases of
emergency.
Number 2450
CO-CHAIRMAN GREEN asked if the EPA would allow an excursion for
that period because it is considered a nuisance.
TAPE 96-3, SIDE B
Number 000
MR. STONE said no, the affirmative defense is for unplanned events
and the federal requirements say that a state can provide an
affirmative defense to something that exceeds a technology based
emission standard and is in effect only if an emergency occurs.
Number 068
CO-CHAIRMAN GREEN asked if this was an EPA requirement in all
states.
MR. STONE said it is an EPA requirement of the Title Five permit
program. He added that all states may have different standards in
regards to start-up and shut-down conditions within that standard.
Some federal standards have start-up and shut-down conditions.
CO-CHAIRMAN GREEN asked if Alaska's penalty for a start-up
condition, that wasn't an emergency, would be a problem in this
state but might not be a problem in another state and wouldn't that
exceed the EPA minimum.
Number 145
MR. STONE said in this state if someone exceeded the DEC standards
on start-up and shut-down the state could take enforcement action,
but wouldn't have to do so. The DEC reviews those situations on a
case by case basis to see if it needs correction over time.
Addressing Co-Chair Green's question, he said that the DEC would
have to review what other states were doing, he then went on to
review why the DEC had addressed this issue in this manner.
Number 170
MR. STONE said that in the federal model it depends upon the
emissions standard type, the affirmative defense that has come into
controversy, both with the Alaska Stakeholder Coalition and the
EPA, comes from Title Five of the Clean Air Act. This specifically
relates to technology based emission standards. Those standards
are not used to protect public health. In the state implementation
plan developed in 1972, revised in 1982, there are health based
emission standards. Therefore the federal Title Five affirmative
defense does not apply to those standards, and instead the DEC
normal enforcement discretion is used. This discretion models the
EPA's discretion. Each state has developed different emissions
standards which sometimes accommodate a start-up and shut-down
process. The state of Alaska did not accommodate this process.
Number 198
CO-CHAIRMAN GREEN reiterated his question as to whether or not it
exceeded federal minimum requirements.
Number 201
JOHN KUTERBACH, Environmental Engineer, Division of Air and Water
Quality, Department of Environmental Conservation, explained the
air quality control plan that has been in place in the state since
1972. He said if the DEC were to show the EPA that extra emissions
for the start-up and shut-down process won't cause an ambient air
quality problem in our state they would allow an exemption. The
DEC is in the process of developing proof of this and will then
present revisions of Alaska regulations to incorporate these
exemptions.
Number 228
REPRESENTATIVE AUSTERMAN asked if there were disparity concerns
between the federal requirements generalized across all states.
Number 295
MR. STONE said that the EPA just monitors the DEC to make sure that
it meets the fundamental purpose of the Clean Air Act. Each state
can tailor a mix of control strategies and regulations.
Number 320
REPRESENTATIVE SCOTT OGAN said he heard of companies that cannot
start-up and shut-down facilities without being in violation of
regulations and asked Mr. Stone to respond to this.
MR. STONE said that the DEC has set up a guide on how to request
changes to those standards so that companies can comply.
CO-CHAIRMAN GREEN asked if any of the new regulations require any
additional permitting to an existing facility.
Number 370
MR. STONE said all existing facilities will have to submit an
application in order to get an operating permit that meets the new
operating permit program requirements.
Number 397
CO-CHAIRMAN GREEN received confirmation that the new operating
permits would be required nationwide. He then asked if the DEC
will follow the same guidelines as the EPA with regards to allowing
existing facilities to make certain changes without requiring
construction permits.
Number 435
MR. STONE said that facilities can make changes and would only need
a construction permit if the change they made pushed them past a
designated emission level. This system was kept because it was
felt it allowed for more flexibility and was simpler to use, but
this system has been questioned by the EPA. The federal provisions
differ in that they allow for exemptions depending on the type or
cause of pollution increase.
Number 535
DAVID ROGERS, Attorney and Lobbyist, Council of Alaska Producers,
representing the Alaska Stakeholder Coalition (ASC), was next to
testify. He said the ASC is an ad hoc group that industry
representatives formed a year ago to develop and communicate a
unified industrial position on issues of general concern. He
stated that other members of this group, besides the Council of
Alaska Producers, are the Alaska Oil and Gas Association, the
Pacific Seafood Processors Association, Chugach Electric, Homer
Electric Association, Alyeska Pipeline Service Company, UNOCAL,
Anchorage Municipal Light and Power, Golden Valley, and ARECA. He
said that Alaska Stakeholder Coalition still has concerns in four
general categories which include regulations that exceed minimum
federal requirements, regulations that are unrealistic, industry
proposals that take advantage of opportunity for streamlining the
permitting process, and industry proposals for increased
accountability.
Number 745
SVEND A. BRANDT-ERICHSEN, Attorney, Heller Ehrman White and
McAuliffe, representing Chugach Electric was next to testify. He
said that the industries feel that although the DEC has done a good
job there are some areas that they are not presently addressing
that they should.
Number 788
CO-CHAIRMAN GREEN requested and received confirmation that these
concerns deal with those falling under the DEC's control.
Number 835
REPRESENTATIVE BARNES asked if these are regulations that the DEC
is trying to amend.
MR. BRANDT-ERICHSEN answered the issues currently of concern are
those raised in response to the development of the December, 1994
regulations. Comments were made that winter and were not addressed
when those regulations finally came out of the Department of Labor
and were adopted in May of 1995. These issues have been addressed
and are currently under the EPA's review.
MR. BRANDT-ERICHSEN said the Congress, through the EPA, required
the development of operating permit programs by the states, Alaska
already had a combined construction and operating permit program.
A new or existing facility went through the same permit process
with a renewal time of five years. With the federal mandate, the
DEC had to split their program into two parts. One part being a
construction permit program for new facilities or changes to
existing facilities that are issues only once. The second part is
an operating permit program which is renewed every five years and
is supposed to incorporate existing requirements that come out of
air law.
Number 934
MR. BRANDT-ERICHSEN said this change in federal law has caused the
DEC to change the existing operating permit system. Currently, the
facility that gets an operating permit is now obligated to self
monitor and report their compliance. In exchange for this,
industry is supposed to get a clear understanding of what rules
apply. Alaska's divergence from the EPA model eliminates the EPA's
guidance. One of the new requirements is a national ambient air
quality standard, which is the surrounding air quality. The EPA
has stated that this standard is evaluated when it is new or
modified and should not be a new permit limit in the operating
permit program which the DEC has done. Facilities are required to
determine what effect they have on surrounding air quality and
proposed permit terms and conditions are based on those findings.
Mr Brandt-Erichsen said these terms should be in the construction
permits.
Number 1110
CO-CHAIRMAN GREEN inquired why an ongoing industry operation should
have to redo their operating permits.
Number 1136
MR. BRANDT-ERICHSEN said that any time that you try to figure out
the impact of a facility on the surrounding air; you must, at
first, try to use a model. These models tend to be conservative
and overestimate the impact. Usually, other methods of accurately
predicting the air quality levels are needed but they are more
expensive.
Number 1180
CO-CHAIRMAN GREEN asked if this cost was borne by the state or the
applicant.
Number 1239
MR. BRANDT-ERICHSEN said a large change to an existing facility is
proposed, the applicant is responsible for gathering that
information. The DEC's requirement that all facilities undergo the
ambient air standard is because a number of facilities were
permitted that did not have this type of review. The DEC is now
trying to get facilities to go back and do these reviews that
should have been done all along.
MR. BRANDT-ERICHSEN said the second issue is the broad language
that the DEC has included allowing conditions it feels are
necessary to implement the statute or the air regulations. The DEC
said that this is specifically designed for unusual situations such
as odor problems, but the language does not specify these
circumstances.
Number 1326
MR. BRANDT-ERICHSEN said there is one other area in which the DEC
has exceeded the EPA's requirements and this is with non-road
engines such as exploratory drilling rigs, floating fish processing
units and, in some cases, power generation. The DEC is treating
these as temporary stationary sources rather than mobile sources
which means they need to get operating permits. The EPA has
developed protocol in which they would be regarded as mobile
sources.
Number 1432
CO-CHAIRMAN WILLIAMS asked what are suggested changes to these
issues.
MR. BRANDT-ERICHSEN said the regulations could be narrowly drawn.
He felt that this provision does not belong in an operating permit.
Number 1471
MR. ROGERS said there are some specific additional requirements
that do belong in the program, but that they should be identified.
Number 1485
CO-CHAIRMAN WILLIAMS asked whether the Resources Committee could
drop or suggest new language.
Number 1539
MR. BRANDT-ERICHSEN said that the statutes should note that the DEC
will specify the operating permit program requirements.
Number 1570
MR. ROGERS said that the enabling legislation dealt with that issue
to some extent. The provision is current law 010E, it discusses
the development of regulations in any situation where emission
standard limitation monitoring reporting requirements and
compliance verification requirements are incorporated into more
than one permit. We do not want an ad hoc decision if these things
affect more than one permit.
REPRESENTATIVE OGAN asked for clarification of what industry is
looking for in the regulatory process.
Number 1692
MR. BRANDT-ERICHSEN talked about an existing facility applying for
an operating permit. When a facility gets its operating permit and
there is something in it that they did not have to do before; that
means changes in the facility that were not anticipated. He said
the impact of the facility on air quality is supposed to be
evaluated when it is built or when it is modified. If there are
particular problems with a facility that are discovered over time,
there are mechanisms in the Clear Air Act to deal with that.
Particularly, if there are ambient air quality problems in an area,
there are major portions of the Clean Air Act that address
specifically how that is supposed to be dealt with. The state is
supposed to do a planning process to evaluate what the source of
the problems are in an area and deal with it on an area-wide basis
rather than individual existing facilities.
Number 1735
REPRESENTATIVE DON LONG asked if the presentation by Mr. Stone was
premature before we addressed ASC's problem.
MR. ROGERS answered that the representative was getting a different
view of these issues.
Number 1830
MR. BRANDT-ERICHSEN stated his company has been working with the
Department of Environmental Conversation for 3 1/2 years on this
issue. He said a number of the issues between them are well
defined and there does not appear to be much middle ground. While
the department portrayed a situation where they are penned between
the EPA and Alaska industry on the vast majority of the issues that
we really care about, that is not the case. The department has
indicated their lack of willingness, given several opportunities to
change the regulations, to address the issues that we are raising.
He said there are some key issues, the two that he as identified,
that he doesn't feel that the department has any intention of
correcting without some direction from his company.
MR. ROGERS interjected the situation is at an impasse.
CO-CHAIRMAN GREEN wanted more clarification from Mr. Brandt-
Erichsen regarding the areas of differences with the DEC.
Number 1958
MR. BRANDT-ERICHSEN said a good example is how modifications of
facilities are handled. In the last set of regulations adopted in
December, the department adopted a different approach. It was not
something that his company asked for although it would be favorable
for some companies if approved. If the department were to adopt
the changes to the definition of modification that was suggested,
it would really simplify construction permitting for a number of
facilities. The changes that were asked for include allowing us to
switch fuels at a facility without having to get a construction
permit; allowing us to change hours of operation due to changes in
conditions without any changes in capital structure or changes in
shifts or a change in throughput without having to get a
construction permit.
Number 2062
REPRESENTATIVE DAVIES asked clarification of the assertion that the
DEC was asked to make these exemptions and would not.
MR. BRANDT-ERICHSEN replied that this issue was not responded to in
the most recent set of comments. He said in October, his company
filed comments raising this issue. The department prepared an
extensive response to comments, but this particular issue was not
addressed in that response. In prior discussions and informal
settings, some in the DEC have said that it is inconsistent with
the definition of modification contained in statute.
Number 2157
REPRESENTATIVE DAVIES asked if it was in October, 1995.
MR. BRANDT-ERICHSEN answered that was the most recent time this
issue was raised. It was also raised it February, 1995. He noted
he is sure this issue was discussed before then.
Number 2192
REPRESENTATIVE DAVIES asked Mr. Brandt-Erichsen to provide the
committee with a written detailed list of the issues, a issue
background briefing paper on what the issues are that he
specifically enumerated with the DEC. REPRESENTATIVE DAVIES said
he just wanted to understand what the issues are.
Number 2270
MR. BRANDT-ERICHSEN said he would provide a summary of comments on
the last set of regulations from the October filing.
Number 2323
REPRESENTATIVE LONG queried about construction permits and asked,
without the exemption put in by the state are we not exceeding the
federal EPA standards?
MR. BRANDT-ERICHSEN said the EPA does not have a construction
permit program that applies to the type of sources that are being
talked about. He said the problem is the EPA does not administer
this program, it is delegated to the states, it is a state program.
States are given a lot of latitude as to how they draw up their
construction permit program. In this area, the EPA would not
require a new permit for a facility, for example, that switched
fuels unless its fuel type was specifically specified in a permit.
CO-CHAIRMAN GREEN asked further clarification of the areas of
difference between the stakeholder's and the DEC where the EPA
said, states we do not have limits, you establish them?
MR. BRANDT-ERICHSEN responded that states have the authority to set
a different definition of modification .....end tape.
TAPE 96-4, SIDE A
Number 000
MR. BRANDT-ERICHSEN addressed violations and explained two types of
exceedencies. Unexpected malfunctions and types of problems that
result in elevated emission levels may violate a standard. The
current rules do deal with malfunctions or other unplanned events
that cause an exceedence. He said a number of states do allow
unavoidable excess emissions that occur during start-up and shut-
down to be excused and the EPA has found that acceptable. He said
he is talking about things that good air quality management
practices can not correct.
Number 286
REPRESENTATIVE DAVIES asked Mr. Brandt-Erichsen if he agreed with
the DEC's assertion that it is basically an EPA requirement that we
have to make this demonstration.
MR. BRANDT-ERICHSEN replied in order to have this change federally
recognized, we would have to get it incorporated into the State
Implementation Plan. To get it into the State Implementation Plan,
we have to satisfy the EPA that it is not going to hurt our ability
to meet ambient air quality standards. There would have to be a
demonstration. The question is, who is going to be the advocate
for this? Is the department going to put this on the companies
that care about this to do the whole thing, or is it going to be an
advocate for the process? He said, until we get it into the state
program, we are not going to get anywhere in getting it into the
federal program.
Number 339
REPRESENTATIVE DAVIES referred to the "advocate," and asked if this
implied also the question about who is going to pay for this.
MR. BRANDT-ERICHSEN said it is part of carrying out the
department's duties as well in managing the State Implementation
Plan to amend it as necessary, to manage that plan. That has not
been the issue on the table.
Number 524
MR. BRANDT-ERICHSEN said the industry is very concerned about
having an operating permit program go into effect where industry
will be documenting compliance status, reporting compliance status,
certifying compliance status and be subject to citizen suit or
state action based on that certification without having this issue
addressed.
MR. BRANDT-ERICHSEN discussed the streamline construction permit
process that takes minor sources and gives them an expedited review
process. If we are going to do additional work on this area, it
ought to be considered. It will benefit a number of facilities in
the state, it would make things easier for a number of facilities
and should be given some consideration.
Number 596
MR. BRANDT-ERICHSEN talked about accountability, audits both
performance and financial. There has been a suggestion from
industry that because of the amount of fees that will be collected
under this program that the way they are spent should be watched
closely. The department has not been very open to the idea of a
productivity audit, they indicate they feel it will not be a good
use of resources. We think it is something that will be needed, we
are going to have to take a look at how well this program is
operating. It is going to require a substantial "chunk of change"
from a lot of companies and they are concerned that their money not
be wasted.
Number 684
CO-CHAIRMAN GREEN wanted clarification that the agency was
likewise, not in favor of this.
MR. BRANDT-ERICHSEN said the department's response to comments on
this issue did include a one or two page response which indicated
the DEC felt it inappropriate for them to initiate.
Number 769
MR. ROGERS said other stakeholders were available on the
teleconference line.
Number 798
KATHRYN LAMAL, Golden Valley Electric, testified that the Coal
Burners of the Interior had worked with the DEC on the excess
emissions. The department is charging all the coal power plants
for their work on this issue. She said her comments were in
response to Representative Davies question about who was paying for
the work on the start-up, shut-down provision.
Number 853
REPRESENTATIVE DAVIES followed up on the audit issue, he asked if
there are specific things that Mr. Brandt-Erichsen is concerned
about or is this a general performance audit. He questioned what
the sore spots are.
MR. ROGERS said, "bang for the buck," is the overall concern.
Number 893
CARL HARMON, Chugach Electric, said we talk about industry here
paying the bill. It is not just industry, it is the consumer.
Every dollar we talk about comes out of the consumer's pocket.
Number 950
STEVE TOROK, Environmental Protection Agency, came forward at the
request of Co-Chairman Green. He said the EPA is willing to work
with the DEC in addressing the issues as the EPA reviews the DEC's
submittal and, hopefully, a submittal to the federal register for
an action on the state's proposal.
Number 1000
CO-CHAIRMAN GREEN asked Mr. Torok if the department was right or
are the operators are right.
MR. TOROK said it is difficult to answer in a generality because
the issues are very specific. As we are approaching the completion
of the review of the state's submittal, there a number of areas
where we do have problems with that submittal. We commend the
state and the DEC for putting together a program they think is in
the best interest of all Alaskans. Unfortunately, in some areas,
they push the envelope a little too far in terms of what the EPA
can approve. We will provide those comments to the state in those
areas. Some of those areas are serious enough that will probably
require some modification in the regulations. While we can still
proceed ahead with a public Federal Register action on the state
submittal, we will need from the department a commitment that they
feel they can get these deficiencies corrected prior to the time we
are ready to take a final Federal Register action.
MR. TOROK said among other issues, it was most prudent to give
interim approval to a portion of the state's program now, with
every indication that these issues can be worked out later in the
program without having to delay the federal approval. He said the
EPA will work with the state and the stakeholders to find the
middle ground. He said it was interesting to hear that the state
has not taken full advantage of the flexibility that the federal
law allows while, at the same time, there areas where the state has
pushed the envelope a little too far in that flexibility and the
EPA is going to have to push back to reach a middle ground.
Number 1180
CO-CHAIRMAN GREEN asked the department to respond to the
stakeholder's testimony. The chairman said he planned to dismiss
this hearing and take the issue up again after the committee has
received forthcoming information and the lists.
Number 1215
MR. STONE said he wanted to make it clear that the department did
not establish any new air pollution control standards during this
regulation process. All of the existing standards that were in
effect since 1972 and 1980, formed the basis of the new program.
He said, what has changed is the new operating permit program
requires a lot more information about compliance status. So, both
the DEC and the people that submit applications have to provide
much more scrutiny of what the compliance status of the facility is
with those existing air pollution control requirements. He felt
that is where some of the differences in agreement are coming from.
The DEC laid out a couple of processes in this last adoption to
help address that: (1) We laid out a guide on how to change the
air pollution control requirements so that industry can comply with
them. Obviously, Commissioner Burden was concerned that he did not
want to be in the position of providing all of these new standards
for facilities that may not be doing much at all to control
pollution. The DEC recognizes that it needs to strive for a
balance there. The important thing being that we still make sure
that that new standard will provide clean air surrounding the
facility or air that does not exceed the federal air standards.
CO-CHAIRMAN GREEN clarified that most of that was on new facilities
but the one the issue raised is with existing facilities and new
permitting.
MR. STONE replied that is an existing facility requirement. He
said most of the facilities that have that problem are existing
facilities, facilities that have been in Alaska for a long time.
CO-CHAIRMAN GREEN stated that there is a difference in opinion.
The department's view and the stakeholder's view. There still is
a difference of opinion whether that is necessary.
Number 1348
REPRESENTATIVE DAVIES said as he understood the stakeholder's
argument, they are saying there were some requirements that were
originally required in the construction permit having to do with
ambient air quality that are now appearing in the operating permit.
He asked Mr. Stone if he agreed with his statement.
Number 1364
MR. STONE replied that the stakeholders were addressing the ambient
air quality standards. Those are the standards that the EPA has
established that the state of Alaska has to meet everywhere in the
state. It is assumed, that if the air quality concentration of
those contaminants is below the standard, then the air will be
healthy. If it is above that standard, then it is unhealthy. In
the state of Alaska, the program that was developed in 1972 and
carried forward imposed the compliance burden on big sources of air
pollution. Basically, what we said is you have to comply with the
ambient air quality standards surrounding your facility. There are
240 big facilities in the state of Alaska. Now, when the operating
permit program comes into effect they have to show us how they are
going to comply with ambient air quality standards. That is a
requirement of the Operating Permit Program. This is difficult in
some cases. Mr. Stone said he and Commissioner Burden created a
document to help people get through that process.
Number 1442
REPRESENTATIVE DAVIES asked Mr. Stone to specifically address the
construction permit versus the operating permit.
Number 1474
MR. STONE said the state of Alaska, up until these regulations take
effect, had a permit program that not only was a construction
permit, it was also a operating permit; a combined permit system.
The purpose of that permit program since 1972 was to make sure that
facilities complied with the stack emission standards and the
ambient air quality standards. So, that is what was used over time
for that vehicle. That provides for primacy of our program. In the
air bill that was passed in 1993, that was broken up into two
programs. One was a construction permit program that would be for
new industrial expansion in an area, or increased industrial
expansion to an existing facility and that would require a review
of that facility before the permit construct was given along with
an opportunity for public comment.
Number 1504
CO-CHAIRMAN GREEN asked Mr. Stone if the situation is an attitude
difference more than a factual difference. He said he remembered
asking several times if the DEC felt it was exceeding federal
requirements. CO-CHAIRMAN GREEN stated that the stakeholders said
yes, and he felt from Mr. Torok that there are some cases, and two-
thirds of the testimony that maybe you are exceeding requirements.
Number 1574
MR. STONE said a lot of it has to do with interpreting regulations
and his responsibility is to make sure the department's program is
approved by the federal administrator. MR. STONE agreed that what
he does for purposes of having a program approved by the federal
administrator is at odds with what people asking him to do.
Number 1626
MR. STONE said with respect to adjusting the start-up, shut-down
standards for the coal burners, the EPA was present at one meeting
to make sure that everyone understood what the DEC has to do to
meet the EPA's concerns. He said the DEC's priority system has
been to issue construction permits for industrial expansion in the
state which is priority number one. Priority two is to work with
facilities on their compliance problems. There is not much staff
left to help other people beyond that.
Number 1664
CO-CHAIRMAN GREEN asked if there any merit to the state wanting to
have conditions, restriction, requirements in excess of what is
absolutely required by the EPA.
Number 1691
MR. STONE said there are situations in which the federal minimum
requirements do not provide certain protections from air pollution
to the public. He said the department has a threshold for
incinerators that is greater than, for permit requirements, what a
lot of people would like. The department's incinerator permit
threshold was established for federal primacy only. It does not
provide any additional health protection to the public. He gave
other examples such as odor control plans for facilities burning
old sewage sludge and cancer causing pollutants such as chloroform
from pulp mills.
Number 1770
LEONARD D.VERRELLI, Director, Division of Air and Water, Department
of Environmental Conservation, said we are talking around whether
the department can or can not be more strict than the federal
government. He said that was part of the statutory development.
There were instances where the DEC started regulations different
that the federal government such as the ammonia standards for
UNOCAL. He said, we have had that ability since 1972, we go beyond
the feds anytime we wanted to, it was there for our taking. We did
not abuse that authority, we did it when the public came in and
asked us to do that. In the statute, there is a provision that says
if the state wants to go beyond the federal government, or beyond
the statutes, there is a board of peers who reviews the need for
that regulation. For the onerous things, the DEC has a provision
in statute to take care of that, what we are dealing with in the
discussion here is very minute things that we have always had the
ability to do to protect the ambient air. What we are leaving out
of the discussion today is the public. We have heard from the
state side and the EPA side, we have not heard from the public who
also has input in this. Therein lies the problem. The EPA has
given us 26 pages of input. The most important thing that we have
to face today, we want primacy, you folks told us you want primacy.
That is the first thing we have to do.
Number 1893
C0-CHAIRMAN GREEN said the areas you feel you need to have more
stringent requirements are in the remote areas where there are big
facilities; and maybe in the metropolitan areas, you have not
restricted enough.
Number 1920
CO-CHAIRMAN WILLIAMS asked if the public had the opportunity to
comment on the EPA's comments.
MR. VERRELLI said EPA's comments had just been received and are 26
pages long. He said the DEC hopes the committee and others will
evaluate the department's submission. It is in the negotiation
phase. When we decide certain things have to go to regulation to
be fixed, it will go out for public comment.
Number 1920
MR. VERRELLI stated the committee meeting went beyond what the
public has had opportunity to comment on.
CO-CHAIRMAN WILLIAMS clarified that the public has already had the
opportunity to comment on it.
Number 1982
REPRESENTATIVE DAVIES referred to the argument from the
stakeholders regarding start-up and shut-down, and said the DEC
does not disagree with trying to seek that exemption but it is
going to take some time to do it. The stakeholder's concern was,
without that exemption in place, putting in the new requirements
that forced industry to report these violations, they are exposing
themselves to some potential losses.
Number 2027
MR. STONE said the new program provides that you can incorporate
compliance schedules within the permit. So, you can accommodate
situations where somebody may not be complying at the time you
issue the permit. The permit life is five years. Once the permit
is issued, the owner and operator is shielded from any intervention
by third parties or the state.
Number 2074
REPRESENTATIVE DAVIES asked if the compliance schedule specifically
provides an exemption for start-up and shut-down conditions.
MR. STONE said it could possibly. There is flexibility there.
Number 2088
REPRESENTATIVE OGAN said he hoped the department could come up with
something more than a five year compliance schedule type permit.
Number 2122
BILL WALKER, Division of Air and Water, Department of Environmental
Conservation, commented for the record that the start-up, shut-down
provision, (indisc.--repeated paper tearing, shuffling) we proposed
it in the strawman version, we proposed it in the formal proposal
and we received comment from the EPA that the DEC can not do this
without the demonstration. The DEC decided, at that time, that we
had a choice of either going with a case-by-case EPA approval for
every permit, which was not going to work for industry, or go with
what we have talked about developing for the future and which
Representative Ogan has asked us to do.
Number 2165
CO-CHAIRMAN GREEN announced the committee schedule for January 19,
1996 was HB 341, tax appeal process.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Chairman Green adjourned the meeting at 5:21 p.m.
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