Legislature(2003 - 2004)

04/14/2003 01:05 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 14, 2003                                                                                         
                           1:05 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Hugh Fate, Chair                                                                                                 
Representative Carl Gatto                                                                                                       
Representative Cheryll Heinze                                                                                                   
Representative Bob Lynn                                                                                                         
Representative Carl Morgan                                                                                                      
Representative Kelly Wolf                                                                                                       
Representative David Guttenberg                                                                                                 
Representative Beth Kerttula                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Beverly Masek, Vice Chair                                                                                        
COMMITTEE CALENDAR                                                                                                            
HOUSE JOINT RESOLUTION NO. 19                                                                                                   
Relating to the ultra low sulfur diesel fuel requirements of the                                                                
United States Environmental Protection Agency and their                                                                         
application to Alaska.                                                                                                          
     - MOVED CSHJR 19(RES) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 192                                                                                                              
"An Act designating the Department of Natural Resources as lead                                                                 
agency for resource development projects; making conforming                                                                     
amendments; and providing for an effective date."                                                                               
     - MOVED HB 192 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 208                                                                                                              
"An Act relating to hunting on the same day airborne; and                                                                       
providing for an effective date."                                                                                               
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS ACTION                                                                                                               
BILL: HJR 19                                                                                                                  
SHORT TITLE:FEDERAL DIESEL FUEL REQUIREMENTS                                                                                    
SPONSOR(S): REPRESENTATIVE(S)SAMUELS                                                                                            
Jrn-Date   Jrn-Page                     Action                                                                                  
03/26/03     0640       (H)        READ THE FIRST TIME -                                                                        
03/26/03     0640       (H)        RES                                                                                          
03/26/03     0640       (H)        REFERRED TO RESOURCES                                                                        
04/11/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
04/11/03                (H)        Scheduled But Not Heard                                                                      
04/14/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: HB 192                                                                                                                  
SHORT TITLE:DNR LEAD RESOURCE DEVELOPMENT PROJECTS                                                                              
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
Jrn-Date   Jrn-Page                     Action                                                                                  
03/12/03     0515       (H)        READ THE FIRST TIME -                                                                        
03/12/03     0515       (H)        RES, FIN                                                                                     
03/12/03     0515       (H)        FN1: (DNR)                                                                                   
03/12/03     0515       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/12/03     0515       (H)        REFERRED TO RESOURCES                                                                        
04/14/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
REPRESENTATIVE RALPH SAMUELS                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HJR 19.                                                                            
ERNESTA BALLARD, Commissioner                                                                                                   
Department of Environmental Conservation                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HJR 19; assisted in                                                                
presentation of HB 192 and answered questions.                                                                                  
TOM IRWIN, Commissioner                                                                                                         
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 192 and answered questions.                                                                   
RICHARD LeFEBVRE, Deputy Commissioner                                                                                           
Anchorage Office                                                                                                                
Office of the Commissioner                                                                                                      
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on HB 192.                                                                              
CHRISTOPHER KENNEDY, Assistant Attorney General                                                                                 
Environmental Section                                                                                                           
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on HB 192.                                                                              
ACTION NARRATIVE                                                                                                              
TAPE 03-30, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR  HUGH FATE  called the  House Resources  Standing Committee                                                             
meeting to order  at 1:05 p.m.  Representatives  Fate, Gatto, and                                                               
Wolf were present at the  call to order.  Representatives Heinze,                                                               
Lynn,  Morgan, Guttenberg,  and Kerttula  arrived as  the meeting                                                               
was in progress.  Representative Masek was excused.                                                                             
CHAIR FATE informed members that HB  208 was not being heard that                                                               
day at the request of the sponsor.                                                                                              
The committee took an at-ease from 1:06 p.m. to 1:15 p.m.                                                                       
HJR 19-FEDERAL DIESEL FUEL REQUIREMENTS                                                                                       
CHAIR FATE  announced that the  first order of business  would be                                                               
HOUSE JOINT RESOLUTION  NO. 19, Relating to the  ultra low sulfur                                                               
diesel  fuel  requirements  of the  United  States  Environmental                                                               
Protection Agency and their application to Alaska.                                                                              
Number 0270                                                                                                                     
REPRESENTATIVE RALPH SAMUELS,  Alaska State Legislature, sponsor,                                                               
characterized  HJR  19 as  a  resolution  that would  address  an                                                               
unfunded  mandate  from   the  federal  Environmental  Protection                                                               
Agency (EPA).  He explained that  low sulfur diesel fuel is going                                                               
to be mandated regardless of  the actions of the state, including                                                               
the  Department  of  Environmental Conservation  (DEC)  or  other                                                               
state  entities.   He indicated  low sulfur  diesel fuel  will be                                                               
used  [more frequently]  in mainly  rural communities  in Alaska,                                                               
where energy  is mostly produced  by diesel generators.   Whether                                                               
this fuel  will work  remains to  be seen;  also unknown  are the                                                               
kinds  of retrofits  required.   It won't  be this  year or  next                                                               
year,  but there  are going  to be  problems associated  with it.                                                               
Engine  manufacturers  are  going  to have  to  start  developing                                                               
engines that use this low sulfur  fuel, if they have not already,                                                               
he suggested.  He commented that  if people did not use this type                                                               
of fuel, there would not be new engines on the road.                                                                            
REPRESENTATIVE  SAMUELS cited  two problems  that the  resolution                                                               
addresses.   First, the state  has authority to  receive receipts                                                               
from the federal  government to do a health study  to see whether                                                               
there  actually  is  a  health  risk  involved  in  mostly  rural                                                               
communities  with  the  diesel   generation;  however,  thus  far                                                               
Congress hasn't funded  the health study, and so  the first phase                                                               
of the  resolution asks that  the federal government  provide the                                                               
money to do  the health study.  Second,  the resolution addresses                                                               
how  this will  affect the  logistics  and the  economy of  rural                                                               
Alaska  and  whether tanks  need  to  be retrofitted  or  whether                                                               
someone needs to go to the  Denali Commission to build new tanks.                                                               
Fuels  cannot be  mixed.   Therefore, if  a barge  only delivered                                                               
fuel to  rural communities once a  year and tanks were  half full                                                               
of the old type  of fuel, the tanks would have  to be emptied and                                                               
scrubbed before the low sulfur fuel could be added.                                                                             
Number 0454                                                                                                                     
REPRESENTATIVE  SAMUELS said  retrofits  might be  needed on  the                                                               
generators themselves,  but it was  not known what  exactly would                                                               
be involved.   There's  no way  to predict what  the cost  of the                                                               
[low  sulfur]  fuel might  be;  market  conditions are  going  to                                                               
determine   that.     Currently,  he   said,  there's   only  one                                                               
manufacturer  of the  arctic-grade  fuel, and  it  is in  Canada;                                                               
assuming  that  this  happens,   there  will  probably  be  more.                                                               
Tankers will  need to  be scrubbed  also.  "If  we go  50/50, you                                                               
could only  take half the load;  that's also going to  affect the                                                               
prices of fuel," he  said.  He added that while  the cost of fuel                                                               
cannot be determined,  the logistical costs can be -  the cost to                                                               
retrofit [equipment], the  costs to scrub the  tanks, and whether                                                               
new  tanks  need  to  be  built   are  all  things  that  can  be                                                               
REPRESENTATIVE  SAMUELS explained  that the  resolution asks  the                                                               
delegation to work  with the EPA and to coordinate  with DEC, the                                                               
Department  of  Community  &  Economic  Development  (DCED),  and                                                               
potentially  the Denali  Commission to  pool their  resources and                                                               
get the  EPA to fund  the health  study and determine  the costs.                                                               
He expressed  concern if  the costs and  the health  risks aren't                                                               
determined.   He said  there's absolutely no  doubt that  this is                                                               
going to  happen, so [the  legislature] should know about  it and                                                               
[work] to  get the  congressional delegation  to help  [the state                                                               
with funding].                                                                                                                  
Number 0628                                                                                                                     
CHAIR FATE asked  Representative Samuels if any  timeline that he                                                               
knew of would compel [the legislature] to set dates.                                                                            
Number 0665                                                                                                                     
ERNESTA  BALLARD,   Commissioner,  Department   of  Environmental                                                               
Conservation, explained  that low sulfur diesel  requirements for                                                               
trucks and buses [become effective]  in 2006, so before that date                                                               
it should be known  what needs to be done.   She said [DEC] wants                                                               
to  have a  good  handle on  the health  issues,  but that's  not                                                               
really the subject of Representative  Samuels' initiative; his is                                                               
far more  an interest for  the communities' sake in  planning how                                                               
they will handle fuel management.                                                                                               
Number 0742                                                                                                                     
REPRESENTATIVE  GATTO  asked  Commissioner  Ballard  what  health                                                               
issues  would be  involved in  switching from  using high  sulfur                                                               
fuel to low sulfur fuel.                                                                                                        
COMMISSIONER BALLARD said that's what [DEC] would like to know.                                                                 
REPRESENTATIVE GATTO asked if it  would reasonable to expect that                                                               
there would be a [health risk].                                                                                                 
COMMISSIONER  BALLARD  said  regarding  health  information,  the                                                               
[department] had  recently come to  understand a great  deal more                                                               
than  in the  past about  exposures to  diesel fumes.   For  many                                                               
years, those  exposures were considered  to be comparable  to the                                                               
exposures  to dust.   In  the last  five or  six years,  however,                                                               
national  analysis has  demonstrated that  there's a  far greater                                                               
risk  associated  with  those exposures  in  chronic  respiratory                                                               
diseases such as emphysema and  asthma, and that there is clearly                                                               
an established link between exposure  to diesel fumes and cancer,                                                               
she explained.                                                                                                                  
COMMISSIONER  BALLARD  said  it's  that work  and  the  exposures                                                               
associated with trucks and bus  diesel-exhaust fumes that led EPA                                                               
to  the national  promulgation and  the requirement  for the  low                                                               
sulfur  diesel fuel.   [The  department]  realized that  although                                                               
Alaska doesn't  have highway exposures comparable  to those which                                                               
were the basis  for that study, the state has  very unusual rural                                                               
exposures to diesel from combustion  in diesel generators.  There                                                               
is  no  other  place  in   the  country  that  would  have  those                                                               
comparable kinds of exposures, she added.                                                                                       
COMMISSIONER  BALLARD  offered  her belief  that  the  department                                                               
should have a  good handle on the health effects  of high sulfur,                                                               
low sulfur, or any sulfur diesel  fuel.  She said this is because                                                               
[DEC] issues permits  for all of those generators; if  there is a                                                               
health issue that the department should  be aware of, it needs to                                                               
build that into the permit  conditions.  The department's work is                                                               
independent  of  the  issue  that  really  is  at  the  heart  of                                                               
Representative  Samuels' resolution,  which is  to find  some way                                                               
for communities to better prepare  themselves to manage the fuel,                                                               
she suggested.   She  said regardless  of how  communities manage                                                               
the  fuel, [DEC]  should know  what health  issue may  pertain to                                                               
those exposures.                                                                                                                
Number 0914                                                                                                                     
REPRESENTATIVE GATTO asked  if would there be a  need for support                                                               
for  this   kind  of  resolution  if   the  engine  manufacturers                                                               
determine that they don't need  any modification to switch to low                                                               
sulfur diesel fuel.                                                                                                             
REPRESENTATIVE SAMUELS offered his  understanding that the engine                                                               
manufacturers  have already  made  the  modifications, and  using                                                               
high  sulfur diesel  fuel  in  an engine  would  result in  major                                                               
engine damage.  He said it's  a major modification and it's going                                                               
to  happen, because  once the  engines change  over, high  sulfur                                                               
fuel cannot be used.                                                                                                            
Number 0970                                                                                                                     
CHAIR  FATE  offered  that  it   seems  the  unintended  economic                                                               
consequences  far outweigh  the  unknown health  hazards [of  low                                                               
sulfur  fuel].   He mentioned   the  remanufacture of  engines or                                                               
people going broke because they can't afford the new fuel.                                                                      
REPRESENTATIVE SAMUELS  said he agrees with  Commissioner Ballard                                                               
that  it is  necessary to  know the  health risks,  which is  the                                                               
point  of the  resolution.   He reiterated  that [switching  from                                                               
high to low sulfur diesel fuel]  is going to happen in the future                                                               
whether the state likes it or not.   The EPA has come down with a                                                               
ruling, and the manufacturers have  been given the date [by which                                                               
compliance is  required].   Representative Samuels  suggested [it                                                               
is  necessary] to  find out  about the  health risks  and address                                                               
them if they exist, and to  find out the logistical problems that                                                               
are going to  arise.  For example,  how much is it  going to cost                                                               
to retrofit or to keep using the  high sulfur fuel?  If there are                                                               
no health problems  and someone can't afford  to retrofit, [using                                                               
the high  sulfur fuel]  would be  an option, he  said.   He noted                                                               
that there were  a lot of options available but  didn't know what                                                               
they were.   Representative Samuels told members  it shouldn't be                                                               
too much to determine what would  be required or what the choices                                                               
are going to be.                                                                                                                
Number 1152                                                                                                                     
REPRESENTATIVE  WOLF moved  to adopt  as  the proposed  committee                                                               
substitute  (CS) an  unofficial,  unnumbered  work draft  labeled                                                               
"Conceptual CS for  House Joint Resolution No. 19."   There being                                                               
no objection, the proposed CS was before the committee.                                                                         
[Tom  Chapple,  Acting  Director,   Division  of  Air  and  Water                                                               
Quality,  Department of  Environmental  Conservation, offered  to                                                               
answer questions.]                                                                                                              
Number 1245                                                                                                                     
REPRESENTATIVE  WOLF moved  to report  CSHJR 19  [the work  draft                                                               
labeled "Conceptual  CS for House  Joint Resolution No.  19"] out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying   fiscal  notes.      There   being  no   objection,                                                               
CSHJR 19(RES)  was reported  from  the  House Resources  Standing                                                               
HB 192-DNR LEAD RESOURCE DEVELOPMENT PROJECTS                                                                                 
[Contains discussion of SB 142, the companion bill]]                                                                            
Number 1294                                                                                                                     
CHAIR FATE  announced that the  final order of business  would be                                                               
HOUSE  BILL  NO.  192,  "An Act  designating  the  Department  of                                                               
Natural  Resources  as  lead   agency  for  resource  development                                                               
projects;  making conforming  amendments;  and  providing for  an                                                               
effective  date."   [HB  192  was sponsored  by  the House  Rules                                                               
Standing Committee by request of the governor.]                                                                                 
CHAIR  FATE  invited  Commissioner  Irwin of  the  Department  of                                                               
Natural  Resources   (DNR)  and   Commissioner  Ballard   of  the                                                               
Department  of Environmental  Conservation (DEC)  to explain  the                                                               
Number 1372                                                                                                                     
TOM  IRWIN,   Commissioner,  Department  of   Natural  Resources,                                                               
explained  that HB  192 designates  DNR  as the  lead agency  for                                                               
resource  development  projects.    He  emphasized  how  much  he                                                               
supports the  governor's priority  to develop  natural resources,                                                               
and said  this provides the  wealth for  Alaska and the  hope for                                                               
everyone's future.  He told the committee:                                                                                      
     The  purpose of  this bill  is to  help facilitate  and                                                                    
     expedite  resource   development.    This   bill  would                                                                    
     specifically   provide   the    commissioner   of   the                                                                    
     Department   of   Natural  Resources   with   statutory                                                                    
     authority  under   [AS]  38.05.020(b)  [to]   lead  and                                                                    
     coordinate all  matters relating to the  state's review                                                                    
     and  authorization  of resource  development  projects.                                                                    
     ...  In no  way  do  we ask  for  [or  are] we  wanting                                                                    
     authority to  make decisions  that are  appropriate for                                                                    
     the other commissioner, such as Commissioner Ballard.                                                                      
COMMISSIONER  IRWIN  emphasized  that the  bill  provides  needed                                                               
clarity, noting  that although the  department has served  as the                                                               
lead  for  mining  projects  and  will continue  to  do  so,  its                                                               
authority  to  serve  as  the  lead  agency  for  other  resource                                                               
development projects  isn't as explicit.   He explained  that the                                                               
primary responsibility  within DNR  for carrying  out lead-agency                                                               
coordination  functions  will rest  with  the  Office of  Project                                                               
Management  and Permitting;  this  new office  includes both  the                                                               
project-management  function and  the [Alaska  Coastal Management                                                               
Program (ACMP)], which are being combined for efficiency.                                                                       
Number 1570                                                                                                                     
COMMISSIONER IRWIN  told members that large  resource development                                                               
projects,  because  of  their  scope  and  complexity,  are  more                                                               
efficiently reviewed and  authorized using a lead  agency for the                                                               
coordination  and integration,  to  the extent  possible, of  the                                                               
various permitting processes of  the agencies involved, using the                                                               
project-team approach.   Smaller projects, normally  less complex                                                               
and  requiring  fewer  permits,   may  benefit  from  lead-agency                                                               
coordination for  review, but may  not require  the establishment                                                               
of a project team;  he said they "may want to  get into this type                                                               
of system  just to get  the information and  get out -  they will                                                               
have  the right  to proceed  as a  large project  or they  can be                                                               
readily funneled  into the appropriate area  where there's single                                                               
permits or simple permits, whichever the case."                                                                                 
Number 1656                                                                                                                     
COMMISSIONER  IRWIN  highlighted  a  three-phase  approach    for                                                               
resource  development projects  utilizing the  lead-coordinating-                                                               
agency and project-review-team  approach.  Phase 1  will focus on                                                               
evaluating  a proposed  project to  determine if  the lead-agency                                                               
project-team approach  would best  address review  and permitting                                                               
needs of  the project,  he noted.   Indicating he  was addressing                                                               
questions he'd been asked, he continued:                                                                                        
     A  company -  large  or small  -  individual, or  large                                                                    
     group  will come  with their  basic information.   They                                                                    
     will sit  down with the appropriate  agencies assembled                                                                    
     for this review, and they  will have the opportunity to                                                                    
     hear  everyone  around  the   table  talk  about  which                                                                    
     permits are  needed or not  needed.  But,  equally, the                                                                    
     agencies will be  able to have interchange:   "Well, if                                                                    
     you need  to get this,  you're going to need  this from                                                                    
     us," or,  "Gee, if you  get that, we don't  need this."                                                                    
     We  know  there's  multiple variables  in  this.    But                                                                    
     that's  where it  gets started,  and get  a good,  fair                                                                    
     chance up  front to see what's  happening; the agencies                                                                    
     get  the communications  that's  needed,  and then  you                                                                    
COMMISSIONER IRWIN said  Phase 2 results in  establishment of the                                                               
project  team,   development  of  an  integrated   agency  review                                                               
schedule,   delineation   of    information   requirements,   and                                                               
completion  of any  necessary agreements  among the  agencies and                                                               
applicant.     Phase  3   is  the   actual  project   review  and                                                               
authorization  process, including  public participation  tailored                                                               
specifically to the requirements for  permitting the project.  He                                                               
told members:                                                                                                                   
     Additionally, this  bill will assist in  our efforts to                                                                    
     streamline project  review and authorization.   It will                                                                    
     facilitate 1) the state's ability  to pull together ...                                                                    
     agencies to  address project-specific concerns,  and to                                                                    
     facilitate  and expedite  the review  and authorization                                                                    
     process; 2)  it will provide ...  more cohesive working                                                                    
     relationships  among agency  representatives -  I could                                                                    
     simply   call   this    "teamwork";   and   3)   better                                                                    
     communication, more  efficient permitting, consolidated                                                                    
     public  process  where  possible,   and  to  assist  in                                                                    
     integrating  the  state's  process  with  that  of  the                                                                    
     federal agencies.                                                                                                          
Number 1771                                                                                                                     
COMMISSIONER IRWIN concluded:                                                                                                   
     Speaking from  personal experience, the  laws governing                                                                    
     resource development have proliferated.   And there are                                                                    
     now more  agencies than ever with  permitting authority                                                                    
     over   resource   development   projects.      Resource                                                                    
     development  should  not  be   held  up  by  the  sheer                                                                    
     complexity  of government.   The  bill  is intended  to                                                                    
     help  alleviate  that  problem,   as  this  bill  would                                                                    
     authorize  DNR to  lead and  coordinate the  permitting                                                                    
     activities of all agencies  with jurisdiction over that                                                                    
     project.    Thank  you again  for  the  opportunity  to                                                                    
     present comments in support of this bill.                                                                                  
Number 1810                                                                                                                     
COMMISSIONER   IRWIN,   in   response    to   a   question   from                                                               
Representative Gatto, said several  groups are merging, including                                                               
the ACMP; although  titles are being created  for five positions,                                                               
they're merged with the other groups.   He then remarked, "In the                                                               
large project  concept, just as  I've worked  in ... on  the mine                                                               
projects, the  project managers  and the  support for  that whole                                                               
process  are  paid for  by  the  company  themselves ...  in  the                                                               
agreement.  It's a pay-as-you-go system."                                                                                       
Number 1851                                                                                                                     
REPRESENTATIVE GATTO referred to  Commissioner Irwin's mention of                                                               
a  proliferation  of agencies  and  groups  that deal  with  DNR.                                                               
Saying  there must  be  some value  to that  or  some reason  the                                                               
proliferation occurred, he suggested that  if the intention is to                                                               
strike these out of the  process, the legislature should know why                                                               
they were started to begin with  and then should ensure that this                                                               
value is incorporated elsewhere.                                                                                                
COMMISSIONER IRWIN responded:                                                                                                   
     The intent  is not  to strike them  out.   I appreciate                                                                    
     you  asking  that  question,  because  that's  why  I'm                                                                    
     talking  about  "lead  and   coordinate."    All  these                                                                    
     functions remain,  but the  individual doesn't  have to                                                                    
     go  here,  here,   here,  and  here.     And,  as  I've                                                                    
     experienced, through  no fault  of anyone,  when you're                                                                    
     talking back  here to Person  2, Person 5  doesn't know                                                                    
     you've talked with  [Person] 2; you don't  know to tell                                                                    
     them,  "Well, they  need  this."   And  Person 5  says,                                                                    
     "Yeah, we can  ... deal with it this way."   But if you                                                                    
     have everybody at the same  table in the same room, you                                                                    
     find  out these  two groups  can really  work together:                                                                    
     their timelines  can match; their studies,  if altered,                                                                    
     might take care of both situations.                                                                                        
     So it's  the getting  the people -  the functions  - in                                                                    
     the same room,  and then saying, "Here's  what we need.                                                                    
     Does everybody around  the table agree?  Is  it 20, 30,                                                                    
     40, 50 permits?"  And that can  be the case.  As you go                                                                    
     through   this,  each   individual   entity  that   has                                                                    
     knowledge,  decision-making authority,  says, "We  need                                                                    
     this.  [Can]  we supply this out of this  data?  We can                                                                    
     meet  this timeline."  ... As  a  group, you  set up  a                                                                    
     schedule and you can proceed.                                                                                              
     So  we're  not  eliminating.   We're  coordinating  the                                                                    
     functions.   If you can  eliminate, I think  that's the                                                                    
     job of us,  with the legislature, to say,  "We found an                                                                    
     area  we   can  effectively  eliminate."     We're  not                                                                    
     proposing that here.                                                                                                       
CHAIR  FATE said  he  would like  to  get Commissioner  Ballard's                                                               
reaction, since DNR  would be the lead agency.   He asked whether                                                               
she  sees  any  conflicts  with  that  kind  of  an  approach  to                                                               
Number 1986                                                                                                                     
ERNESTA  BALLARD,   Commissioner,  Department   of  Environmental                                                               
Conservation, asked  instead to read  her prepared remarks.   She                                                               
told members  that the  bill is not  about accumulating  power or                                                               
responsibility  in DNR,  but about  "critical path"  planning and                                                               
the organization of responsibility  among and between departments                                                               
of government;  it directs  DNR to  lead and  coordinate resource                                                               
development projects, and it directs  all the permitting agencies                                                               
to sequence their actions and  requirements so that timelines are                                                               
met.  She further said:                                                                                                         
     In  no  way  does   it  alter  the  specific  statutory                                                                    
     requirements  or  ...  regulatory  programs  in  effect                                                                    
     among   and   within   the  separate   departments   of                                                                    
     government   right   now.     You   have   heard   from                                                                    
     Commissioner Irwin about  our coordinated permitting on                                                                    
     large mine projects.   The experience that  we ... have                                                                    
     had  over several  years among  the agencies  in large-                                                                    
     mine  permitting  has  made it  clear  that  there  are                                                                    
     tremendous  efficiencies  that  can   be  gained  in  a                                                                    
     coordinated approach to permitting.                                                                                        
     We,   the  permitting   agencies,   can  identify   our                                                                    
     regulatory  requirements   in  a  systematic   way  and                                                                    
     thereby  ensure  that  the   most  critical  needs  and                                                                    
     timelines  for the  project  are  established and  met.                                                                    
     Also,   for    their   part,   industry,    through   a                                                                    
     [coordinated]  permitting process,  can understand  its                                                                    
     responsibilities and provide  ... needed information on                                                                    
     Key  to this  coordinated process:   the  key input  is                                                                    
     also the  key output, and  it is the foundation  of all                                                                    
     permitting,  and  that  is   data  standards  that  are                                                                    
     acceptable to  all and are common  across permit lines.                                                                    
     One of  the things that  I think drives  industry nuts,                                                                    
     and  appropriately  so,  is  a  different  data-quality                                                                    
     standard  for  each   permit,  a  different  monitoring                                                                    
     regime,  a  different  monitoring  cycle,  a  different                                                                    
     reporting period.                                                                                                          
Number 2095                                                                                                                     
COMMISSIONER BALLARD continued:                                                                                                 
     We can work together and  assure that the foundation of                                                                    
     resource   protection  is   built  into   the  resource                                                                    
     development from the get go,  and that is, to know what                                                                    
     data  we need,  to  what  degree we  need  it, at  what                                                                    
     quality  level, at  what level  of protection,  and how                                                                    
     will  it be  used to  assure that  the protections  are                                                                    
     there.  And that's really  ... the principal benefit of                                                                    
     this  whole  program, is  that  instead  of having  ten                                                                    
     years  of information  here,  two  orders of  magnitude                                                                    
     over there, three standard  deviations over here, we're                                                                    
     able to sit together and get  a common set of ... input                                                                    
     so we  have a common  set of information output  at the                                                                    
     The state's  citizens benefit from this  approach also.                                                                    
     In  rural  communities,  where   most  of  the  state's                                                                    
     resource development  occurs, it  is more  difficult to                                                                    
     track separate ...  agency processes than it  may be in                                                                    
     urban  Alaska.   With  a coordinated  process, we,  the                                                                    
     agencies, will  ... hold joint public  meetings so that                                                                    
     concerned  citizens  can   see  the  entire  regulatory                                                                    
     In any  regulatory decision, there is  a certain amount                                                                    
     of  discretion available  to the  permitting authority.                                                                    
     It's  important  to me  that  citizens  see that  where                                                                    
     discretion is used  in one aspect of a  project, it may                                                                    
     be   offset  by   another   permitting  decision   made                                                                    
     somewhere  else.    I  think,   for  instance,  of  the                                                                    
     differences  in  outcome  from recycling  water  versus                                                                    
     energy  requirements:   if  we  require  a mine  to  do                                                                    
     recycling  of   water,  we're  expecting   that  diesel                                                                    
     generators will  be on-site to drive  pumps; that means                                                                    
     there may be  more air impacts.  We need  the public to                                                                    
     see the  whole picture,  and not  see the  water permit                                                                    
     separate from  the water resource permit,  which may be                                                                    
     a DNR permit separate from  the air permit, which would                                                                    
     be back to DEC.                                                                                                            
     Without   this   "critical   path"   planning,   public                                                                    
     participation  might  happen  based  on  public  notice                                                                    
     requirements  in  our Administrative  [Procedure]  Act.                                                                    
     For  individual permits,  it could  be months  or years                                                                    
     separating individual  permit presentations  and public                                                                    
     opportunity to comment.                                                                                                    
Number 2221                                                                                                                     
COMMISSIONER BALLARD continued:                                                                                                 
     I've talked with  many members of this  committee - and                                                                    
     talked  before,  before  the   committee  -  about  the                                                                    
     efforts underway  to review all of  our regulations and                                                                    
     statutes  to ensure  that they  are meaningful  and ...                                                                    
     have not  become the  victims of  "mission creep."   As                                                                    
     part of  that process,  we at  DEC propose  deletion of                                                                    
     AS 46.35,  permit coordination  and extension.   And  I                                                                    
     understand there's [an  assistant attorney general from                                                                    
     the Department of Law] on  the phone that can help walk                                                                    
     us through the deletion of this Act.                                                                                       
     This statute was  enacted in 1977.  In  that same year,                                                                    
     the  legislature  established  the  coastal  management                                                                    
     program,   which   became   the   permit   coordinator.                                                                    
     AS 46.35  has  become a  relic.    There is  one  small                                                                    
     section  of that  that is  being relocated,  and you'll                                                                    
     find  those   responsibilities  in  the  new   bill  in                                                                    
     Sections 2  and 3.   The net effect  ... of that  is an                                                                    
     improvement   in   the  Department   of   Environmental                                                                    
     Conservation's  authority to  use our  appeals process.                                                                    
     The DEC process  is easier to use and well  laid out in                                                                    
     understandable regulations.                                                                                                
     It's also important to understand  what Senate Bill 142                                                                    
     [or HB 192]  does not do.  Senate Bill  142 [or HB 192]                                                                    
     ... does  not change the protective  standards that the                                                                    
     regulatory agencies have  developed and fine-tuned over                                                                    
     the last decade.   It does not  change DEC's permitting                                                                    
     requirements,    our    regulatory   discretion,    our                                                                    
     responsibility for enforcement,  or our appeal process.                                                                    
     The bill  simply ensures "critical path"  planning, and                                                                    
     I think  it's a tremendous  benefit to both  the permit                                                                    
     applicant and to the public.                                                                                               
COMMISSIONER BALLARD said she hoped this addressed some of the                                                                  
issues raised by Representative Gatto.                                                                                          
Number 2326                                                                                                                     
REPRESENTATIVE  KERTTULA asked  whether the  concept is  that DNR                                                               
would  be stepping  into  the  role played  by  DGC [Division  of                                                               
Governmental Coordination]  for a  project affecting  the coastal                                                               
zone, for example.                                                                                                              
COMMISSIONER IRWIN indicated the goal is consistency and added:                                                                 
     We know how  well it worked on the  mining project, and                                                                    
     if we  want to get into  it further, ... I'll  ask Dick                                                                    
     LeFebvre  because he  was the  project manager  for the                                                                    
     large project  teams.  But  we want  to do it  the same                                                                    
     for all these projects, to  be able to have people come                                                                    
     together   -  and   I'm  talking   about,  first,   the                                                                    
     individual or  the company, like  I said, and  then the                                                                    
     various agencies.  And an  individual has a really hard                                                                    
     time  getting   the  agencies  together.  ...   To  get                                                                    
     somebody  together  on the  same  date  borders on  the                                                                    
     impossible.  But I know  [Mr. LeFebvre] was able to get                                                                    
     the  agencies together  for our  project, and  it saved                                                                    
     innumerable  meetings  and  adjustments  that  wouldn't                                                                    
     have been necessary.                                                                                                       
COMMISSIONER IRWIN indicated it should  be the same gathering [of                                                               
data]  for the  coastal  zone as  for the  large  mining or  oil-                                                               
related projects.  He suggested Mr. LeFebvre could elaborate.                                                                   
Number 2436                                                                                                                     
REPRESENTATIVE  KERTTULA said  she doesn't  disagree that  having                                                               
teams and a set schedule is a great  way to treat this.  She also                                                               
agreed that  [the current process]  is confusing  to individuals,                                                               
although perhaps  not so  much if the  coastal zone  [program] is                                                               
the  framework or  for  a large  company that  is  used to  doing                                                               
permits.  She expressed concern,  however, about what will happen                                                               
if DEC  or the Alaska  Department of Fish  & Game (ADF&G)  is the                                                               
agency that  is impacted, for example.   She asked who  will make                                                               
the final decisions  and what happens if there  is a disagreement                                                               
within the team.   Will a regulatory system be  set up to outline                                                               
this?   She also asked whether  only DNR staff will  take on this                                                               
function of coordination and leading.                                                                                           
COMMISSIONER  BALLARD  replied  that  HB 192  doesn't  alter  the                                                               
responsibility  that lies  with the  regulatory agencies  to make                                                               
their own decisions,  based on their own  standards and following                                                               
their own regulations.  She explained:                                                                                          
     This  bill  does  not  require  me  to  negotiate  with                                                                    
     [Commissioner  Irwin] about  an  air permit.   It  does                                                                    
     require my air-permitting staff  to coordinate from the                                                                    
     outset on  the development  of a project  to understand                                                                    
     the   choices  that   the  project   manager  has   for                                                                    
     deployment of diesel generators.                                                                                           
     And on any large project  in the state of Alaska, there                                                                    
     are  many   choices  for   the  deployment   of  power-                                                                    
     generating capability.   And if we work  at the outset,                                                                    
     hand in  hand, our air  staff can say, "Look,  here are                                                                    
     two things  that are going  to be very  difficult about                                                                    
     this project:  it's near this  site, or it's ... in the                                                                    
     shadow  of a  canyon and  ... in  the winter  you might                                                                    
     have  an  accumulation  of   contaminated  air,  or  it                                                                    
     doesn't vent  well," or  whatever.   We're able  to sit                                                                    
     down  at the  beginning  and suggest,  at the  project-                                                                    
     design  stage, what  the  major  permitting issues  and                                                                    
     hurdles will  be so that  the project can  be developed                                                                    
     in a way that makes it permittable.                                                                                        
     The  opposite  approach   would  be  for  [Commissioner                                                                    
     Irwin]  and  his  staff  to work  merrily  along  on  a                                                                    
     project  that  conforms  well to  the  geology  or  the                                                                    
     hydrology or to the presence  of the resource, and only                                                                    
     later find out from us that  they have laid it out in a                                                                    
     way that  makes it  extremely difficult to  permit, and                                                                    
     that  if we  could have  been at  the outset,  we could                                                                    
     have suggested  a different approach:   move  the road,                                                                    
     move the generation, handle the water differently.                                                                         
Number 2589                                                                                                                     
COMMISSIONER BALLARD continued:                                                                                                 
     So it does not, in any  way, require a brokering of the                                                                    
     standards of environmental protection  or of habitat or                                                                    
     other resource protection.   But it does put  us all at                                                                    
     the  table at  the  beginning to  design a  permittable                                                                    
     project.  And in the end,  on all of these projects, it                                                                    
     is   ultimately   the   permitability  of   them   that                                                                    
     determines   the    final   project    design,   right,                                                                    
     [Commissioner Irwin]?   They  can't go forward  if they                                                                    
     can't be permitted.  So  let's get that decision moving                                                                    
     along on the  same track as the  capital decisions, the                                                                    
     marketing decisions, the  project-sizing decisions, the                                                                    
     timing decisions  - 'cause in  the end, if it  can't be                                                                    
     permitted, it's not going to be built.                                                                                     
Number 2628                                                                                                                     
REPRESENTATIVE WOLF remarked that what he'd just heard sounds                                                                   
fantastic, but asked "which gorilla you're going to get" to                                                                     
bring all those folks together.                                                                                                 
COMMISSIONER IRWIN deferred to Mr. LeFebvre.                                                                                    
Number 2658                                                                                                                     
RICHARD LeFEBVRE, Deputy Commissioner, Anchorage Office, Office                                                                 
of the Commissioner, Department of Natural Resources, responded:                                                                
     I'm  not  exactly  a  gorilla.   But  since  1992  I've                                                                    
     coordinated these  projects, and  I've found  that most                                                                    
     of  the  agency personnel  are  very,  very willing  to                                                                    
     participate and  actually quite  thankful that  we have                                                                    
     someone  that's  able  to facilitate,  coordinate,  and                                                                    
     synchronize each of the portions  of ... the integrated                                                                    
     schedule that we develop as a  team.  What that does is                                                                    
     allow  them   to  focus  on  their   actual  permitting                                                                    
     requirements  and review  of the  project, and  ... let                                                                    
     the coordinator  or project manager be  responsible ...                                                                    
     to see that  they get to ... meet  the proper deadlines                                                                    
     and  to attend  the meetings  and have  the information                                                                    
     that they need to develop their decisions. ...                                                                             
     We  do not  have any  authority-making power;  that, as                                                                    
     Commissioner   Ballard   indicated,  rests   with   the                                                                    
     permitting  agencies themselves.   But  I've found  the                                                                    
     process  very  successful.   As  far  as how  ...  it's                                                                    
     integrated with the  ACMP, as we did  on other projects                                                                    
     in Point  Thomson, we do  an integrated  schedule; ACMP                                                                    
     is  a part  of that  schedule, and  they carry  out ...                                                                    
     their functions and responsibility  just like the other                                                                    
     permitting  agencies. ...  The  exception  is that,  as                                                                    
     project   manager,   I   coordinate,   then,   in   the                                                                    
     development of  the schedule, but each  of the agencies                                                                    
     ...,  what they  do is  helped to  develop that  actual                                                                    
     schedule, and then we all carried it out as a team.                                                                        
Number 2736                                                                                                                     
COMMISSIONER BALLARD added:                                                                                                     
     There's another  way to  look at  the gorilla.  ... The                                                                    
     gorilla  is really  the resource  to begin  with.   The                                                                    
     challenge to  all of us in  Alaska is to find  a way to                                                                    
     get the resource to market,  and it is a true challenge                                                                    
     because  of  the remoteness  and  the  vastness of  our                                                                    
     territory.   And anything we  can do, on  the executive                                                                    
     side  or   on  the  legislative  side,   to  focus  our                                                                    
     attention on the resource, and to focus early enough.                                                                      
COMMISSIONER  BALLARD  cited  an example  involving  mining,  the                                                               
detailed steps, and the ultimate pouring of a brick of gold.                                                                    
Number 2794                                                                                                                     
REPRESENTATIVE  WOLF said  this idea  is music  to his  ears, but                                                               
questioned the ability to get  people from state agencies to work                                                               
together well.   He said  he wants to  see who this  "marshal" is                                                               
and how much  weight that marshal will carry in  order to be able                                                               
to get these folks to the table.                                                                                                
COMMISSIONER IRWIN responded that there can  and will be a lot of                                                               
issues, but said he'd had the  privilege of seeing how it worked,                                                               
because of  Mr. LeFebvre and  folks in the various  agencies such                                                               
as  [the habitat  division  in  ADF&G] and  DEC.   He  emphasized                                                               
building on that  vision, and cited Mr. LeFebvre's  work on Point                                                               
Thomson as  an example.   Commissioner Irwin said he  himself [if                                                               
DNR is the lead agency]  is ultimately responsible, and will have                                                               
to  face the  legislature a  year from  now; the  legislature can                                                               
hold the  department accountable  as to  how this  is progressing                                                               
then, and the department should  be able to bring forth examples.                                                               
Acknowledging that  it won't be perfect,  he expressed confidence                                                               
in taking the next step and holding on to this vision.                                                                          
Number 2944                                                                                                                     
REPRESENTATIVE  HEINZE  remarked  that  a  few  years  ago  state                                                               
government was pretty lean; because  of budgetary constraints, it                                                               
has become more so.  She  asked, once this vision is attained and                                                               
working,  that it  not  be  lost over  "not  having a  position."                                                               
Indicating  she foresees  this  as a  finely  tuned machine  that                                                               
works  well,  she  said  she feels  comfortable  because  of  the                                                               
background of the current commissioner;  however, she asked [what                                                               
may happen under] another commissioner.                                                                                         
TAPE 03-30, SIDE B                                                                                                            
Number 2982                                                                                                                     
COMMISSIONER IRWIN replied:                                                                                                     
     I understand  the concern.   I'm  ... frankly  not sure                                                                    
     how to answer  down the road.  But if  we get something                                                                    
     in place and  we know it's worked and  it's starting to                                                                    
     work  again, and  we're starting  to build  on this,  I                                                                    
     think the  agencies themselves  ... protect  their turf                                                                    
     at times;  we all  probably want to  - you  all protect                                                                    
     your  turf.   But as  they see  this becoming  more and                                                                    
     more  efficient, if  nothing  else -  and please  don't                                                                    
     take this  comment wrong  - if  nothing else,  from the                                                                    
     lazy side,  when people  know they  don't have  to redo                                                                    
     work, if  they don't  have to go  to other  meetings, I                                                                    
     think we  have an opportunity to  get something rolling                                                                    
     where people won't want to let it go.                                                                                      
     But what  I've seen  - and you  talk about  enough help                                                                    
     and cutbacks and all those  things - I really think the                                                                    
     agencies I've been  around are ... like you  all:  they                                                                    
     don't  know when  morning starts,  and they  don't know                                                                    
     when  the  end of  the  workday  ends.   I  see  people                                                                    
     working 16,  18 hours a day.   I see people  working on                                                                    
     the weekends,  because they really do  care about their                                                                    
     own areas.  They want to  make this work.  They ... see                                                                    
     an  excitement about  the  state.   And  we can't  keep                                                                    
     doing that to  people.  And if we can  get efficient, I                                                                    
     think that also  should help.  But I don't  know how to                                                                    
     answer all the  "what ifs," but we need to  be aware of                                                                    
Number 2905                                                                                                                     
REPRESENTATIVE  KERTTULA  referred  to   the  wording  "lead  and                                                           
coordinate  all  matters  relating  to  the  state's  review  and                                                           
authorization of  resource development projects"  [paragraph (9),                                                           
page  2,  line  23],  noting  that  it  is  a  strong  statement.                                                               
Acknowledging that  it isn't the  intent of the  legislation, she                                                               
suggested  that the  commissioner's wouldn't  want to  share each                                                               
other's appeals,  and asked Mr.  Kennedy whether there is  a need                                                               
to be clearer.                                                                                                                  
Number 2874                                                                                                                     
CHRISTOPHER  KENNEDY, Assistant  Attorney General,  Environmental                                                               
Section, Civil Division (Anchorage),  Department of Law, answered                                                               
that it  doesn't concern him a  great deal, in part  because this                                                               
is modeled  after a  statute that's  been on  the books  for some                                                               
time, [AS]  27.05.010, which made  DNR the lead agency  in mining                                                               
matters; nobody  has ever tried  to interpret that to  "marry all                                                               
the  appeals together."    He said  it isn't  the  intent of  the                                                               
legislation and  suggested that there  will be  clear legislative                                                               
history with regard to that, as well as the prior model.                                                                        
Number 2828                                                                                                                     
REPRESENTATIVE GUTTENBERG requested an  overview of the effect of                                                               
Section 4, which repeals several portions of statute.                                                                           
MR.  KENNEDY  answered  that it's  the  environmental  procedures                                                               
coordination  Act, adopted  in 1977  as  an effort  to bring  all                                                               
kinds of  environmental permitting  under "one  giant procedure,"                                                               
under  which,  to  his  belief,  some  joint  appeals  have  been                                                               
possible.    He said  it  was  quickly, if  not  instantaneously,                                                               
supplanted by the coastal zone  process in almost every instance,                                                               
so DGC  became the  coordinating body  to bring  permitting under                                                               
one roof in multipermit projects.  He  said as far as he has been                                                               
able to  determine, although one  or two instances may  have been                                                               
missed, AS  46.35 has never been  used in its entire  history; it                                                               
never got off  the ground and is  a vestige in the  statutes.  He                                                               
went on to say  that the purpose is simply to  repeal it to avoid                                                               
any confusion over  which agency is the  coordinating agency when                                                               
permits span several agencies.                                                                                                  
Number 2718                                                                                                                     
REPRESENTATIVE  KERTTULA asked,  if  there are  permits from  one                                                               
agency only, whether DNR will "basically shift to that agency."                                                                 
MR. KENNEDY deferred to Mr. LeFebvre.                                                                                           
MR.  LeFEBVRE answered,  "If it's  a  single permit  requirement,                                                               
normally they  would go directly  to the agency involved.  ... We                                                               
wouldn't intend to coordinate that."                                                                                            
REPRESENTATIVE KERTTULA  pointed out that the  language says it's                                                               
for   all  matters.     She   asked  whether   there  should   be                                                               
clarification.   She  suggested there  could be  an appeal  later                                                               
down the road for not having provided coordination.                                                                             
COMMISSIONER  BALLARD  offered  that  the  enabling  language  is                                                               
"may", not "shall",  and so the commissioner of  DNR retains some                                                               
discretion.   She  said  it  clearly is  a  statute that  enables                                                               
rather than  directs the commissioner, and  that organizes rather                                                               
than mandates the responsibility.                                                                                               
REPRESENTATIVE KERTTULA agreed,  but said there is a  lot of case                                                               
law  on the  fact that  when there  are specific  provisions like                                                               
this set  out, [an  agency] might wind  up being  responsible for                                                               
doing it, even  though the [statutory] language says  "may".  She                                                               
suggested it may be worth thinking about.                                                                                       
Number 2606                                                                                                                     
REPRESENTATIVE  GUTTENBERG  expressed  concern  about  what  will                                                               
happen  if one  agency doesn't  agree  that a  project should  go                                                               
forward, for example.                                                                                                           
COMMISSIONER BALLARD replied:                                                                                                   
     One  of   the  reasons  we   have  so  many   pages  of                                                                    
     regulations is to make as  clear to both the developing                                                                    
     community  and  the  interested stakeholders  what  the                                                                    
     terms  and conditions  for protective  development will                                                                    
     be. ...  Individuals, whether they  be employed  at DNR                                                                    
     or  DEC,  are  charged   in  their  daily  duties  with                                                                    
     implementing  the  regulations,   not  with  developing                                                                    
     their  personal views  about whether  or not  a project                                                                    
     should or  should not  proceed.   A mixing  zone either                                                                    
     can or cannot be permitted.                                                                                                
     We have  clearly stated regulations  that we  follow to                                                                    
     determine whether  the impacts  and where the  point of                                                                    
     compliance will be,  and so on. ... This  bill does not                                                                    
     change,  at all,  the responsibility  of DEC  to follow                                                                    
     its  own ...  regulations, and  those regulations  make                                                                    
     crystal  clear   -  whether  it's   air  or   water  or                                                                    
     underground injection or whatever it  may be - how that                                                                    
     will proceed.                                                                                                              
COMMISSIONER BALLARD  said employees  and commissioners  come and                                                               
go.   She offered her  belief that  this is a  bipartisan concept                                                               
developed  in   the  previous  administration   and  successfully                                                               
followed, and  said this administration  is proposing  to broaden                                                               
it.  She  added that she sees  it as "an issue  that simply rises                                                               
above  the  beliefs  of  the individuals  who  are  involved  and                                                               
commits the employees to following a coordinated process."                                                                      
Number 2446                                                                                                                     
CHAIR FATE asked whether anyone else  wished to testify.  He then                                                               
closed public testimony.                                                                                                        
Number 2427                                                                                                                     
REPRESENTATIVE HEINZE  moved to  report HB  192 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
REPRESENTATIVE  GUTTENBERG [objected]  to commend  Representative                                                               
Kerttula's legislation relating to  one-stop permitting, which he                                                               
indicated would mesh with this.  He then withdrew his objection.                                                                
Number 2396                                                                                                                     
CHAIR FATE asked whether there  was any further objection.  There                                                               
being no objection, HB 192  was reported from the House Resources                                                               
Standing Committee.                                                                                                             
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 2:15 p.m.                                                                 

Document Name Date/Time Subjects