Legislature(2005 - 2006)CAPITOL 124

04/27/2005 01:00 PM RESOURCES


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HCR 10 SUPPORTING KENSINGTON GOLD MINE TELECONFERENCED
Moved CSHCR 10(RES) Out of Committee
+ SB 144 EMISSION CONTROL PROGRAM PERMITS/REGS TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 27, 2005                                                                                         
                           1:10 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jay Ramras, Co-Chair                                                                                             
Representative Ralph Samuels, Co-Chair                                                                                          
Representative Jim Elkins                                                                                                       
Representative Carl Gatto                                                                                                       
Representative Kurt Olson                                                                                                       
Representative Harry Crawford                                                                                                   
Representative Gabrielle LeDoux                                                                                                 
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Paul Seaton                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 10                                                                                              
Supporting the development of the Kensington Gold Mine.                                                                         
                                                                                                                                
     - MOVED HCR 10 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SENATE BILL NO. 144                                                                                                             
"An Act relating to regulations, definitions, and permits under                                                                 
the emission control permit program; and providing for an                                                                       
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSSB 144(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: HCR 10                                                                                                                  
SHORT TITLE: SUPPORTING KENSINGTON GOLD MINE                                                                                    
SPONSOR(s): RESOURCES                                                                                                           
                                                                                                                                
04/19/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/19/05       (H)       RES                                                                                                    
04/27/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: SB 144                                                                                                                  
SHORT TITLE: EMISSION CONTROL PROGRAM PERMITS/REGS                                                                              
SPONSOR(s): RESOURCES                                                                                                           
                                                                                                                                
03/16/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/05       (S)       RES, FIN                                                                                               
03/21/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/21/05       (S)       Moved CSSB 144(RES) Out of Committee                                                                   
03/21/05       (S)       MINUTE(RES)                                                                                            
03/22/05       (S)       RES      RPT     CS           5DP     1NR                                                              
                         SAME TITLE                                                                                             
03/22/05       (S)       DP: WAGONER, DYSON, STEVENS B, STEDMAN,                                                                
                         SEEKINS                                                                                                
03/22/05       (S)       NR: GUESS                                                                                              
04/06/05       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/06/05       (S)       Scheduled But Not Heard                                                                                
04/08/05       (S)       FIN RPT CS(RES)  2DP 4NR                                                                               
04/08/05       (S)       DP: WILKEN, GREEN                                                                                      
04/08/05       (S)       NR: BUNDE, HOFFMAN, OLSON, STEDMAN                                                                     
04/08/05       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/08/05       (S)       Moved CSSB 144(RES) Out of Committee                                                                   
04/08/05       (S)       MINUTE(FIN)                                                                                            
04/22/05       (S)       TRANSMITTED TO (H)                                                                                     
04/22/05       (S)       VERSION: CSSB 144(RES)                                                                                 
04/25/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/25/05       (H)       RES, FIN                                                                                               
04/27/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JIM POUND, Staff                                                                                                                
to Representative Jay Ramras                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HCR 10 on behalf of the House                                                                    
Resources Standing Committee.                                                                                                   
                                                                                                                                
RANDY MCGILVERY, Environmental Manager                                                                                          
Coeur Alaska                                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Expressed support for HCR 10.                                                                              
                                                                                                                                
AMY SEITZ, Staff                                                                                                                
to Senator Thomas Wagoner                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented CSSB 144(RES) on behalf of the                                                                   
Senate Resources Standing Committee.                                                                                            
                                                                                                                                
JOHN KUTERBACH, Program Manager                                                                                                 
Air Permits                                                                                                                     
Division of Air Quality                                                                                                         
Department of Environmental Conservation                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding CSSB 144(RES).                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CO-CHAIR   JAY  RAMRAS   called  the   House  Resources   Standing                                                            
Committee  meeting  to  order  at  1:10:08  PM.    Representatives                                                            
Gatto, Crawford,  Elkins, Olson, Samuels, and Ramras  were present                                                              
at  the  call  to  order.    Representatives  Kapsner  and  LeDoux                                                              
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
HCR 10-SUPPORTING KENSINGTON GOLD MINE                                                                                        
                                                                                                                                
1:10:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS announced  that the first order  of business would                                                              
be   HOUSE   CONCURRENT   RESOLUTION  NO.   10,   Supporting   the                                                              
development of the Kensington Gold Mine.                                                                                        
                                                                                                                                
1:10:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SAMUELS  moved to adopt the committee  substitute for HCR
10,  labeled   24-LS0925\F,  Bullock,  4/21/05,  as   the  working                                                              
document.   There being  no objection,  Version  F was before  the                                                              
committee.                                                                                                                      
                                                                                                                                
JIM  POUND,  Staff  to Representative  Jay  Ramras,  Alaska  State                                                              
Legislature,  presented HCR 10  on behalf  of the House  Resources                                                              
Standing  Committee, sponsor  by request,  which is co-chaired  by                                                              
Representative Ramras.  Mr. Pound explained:                                                                                    
                                                                                                                                
     [House   Concurrent   Resolution]   10  is   a   support                                                                   
     resolution  for  the  Kensington  Gold  Mine,  which  is                                                                   
     located north  of Juneau.   They're in the  final stages                                                                   
     right  now   in  their  permitting  process,   and  this                                                                   
     resolution   will  help  with   that  final   permitting                                                                   
     process.    Once the  permitting  process  is  complete,                                                                   
     Kensington  will  hire  approximately  300  construction                                                                   
     workers  in  order  to  build the  mine.    After  that,                                                                   
     approximately   225   people   will  be   in   long-term                                                                   
     employment  within the Juneau  area.  The company  Coeur                                                                   
     Alaska  does  have  a  reputation  for  local  hire  and                                                                   
     working  within  the  local  regions of  where  they  do                                                                   
     build their  mines.   So far they  have spent over  $150                                                                   
     million  just  on  development,  permitting,  and  going                                                                   
     through the  legal process of preparing  Kensington Gold                                                                   
     Mine  for what  they hope  to be  a groundbreaking  some                                                                   
     time  in the  month of  July.   Again,  this passage  of                                                                   
     this resolution  will show  that the legislature,  along                                                                   
     with  the  other  supporters   that  you  have  in  your                                                                   
     packets  supports the improvement  and increased  mining                                                                   
     operations throughout the state.                                                                                           
                                                                                                                                
1:11:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO  asked if  the  $150 million  also  included                                                              
equipment purchases.                                                                                                            
                                                                                                                                
MR.   POUND   deferred   that   question   to   a   Coeur   Alaska                                                              
representative.                                                                                                                 
                                                                                                                                
REPRESENTATIVE GATTO asked if any gold has been removed yet.                                                                    
                                                                                                                                
MR. POUND replied no.                                                                                                           
                                                                                                                                
1:12:51 PM                                                                                                                    
                                                                                                                                
RANDY  MCGILVERY,  Environmental  Manager, Coeur  Alaska,  thanked                                                              
the committee  for introducing the  resolution.  He said  that the                                                              
company  has been  in  support of  this bill  for  over 15  years,                                                              
during  which  they   have  "done  an  extensive   job  of  public                                                              
communication  and  consultation  involving  all  of  the  special                                                              
interest groups  and stakeholders  in the  region."  He  commented                                                              
that the company  is looking forward to starting  the project this                                                              
summer.                                                                                                                         
                                                                                                                                
1:14:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked if there are 1 million  ounces of gold                                                              
in the mine.                                                                                                                    
                                                                                                                                
MR. MCGILVERY  answered, "Yes....   Our annual production  will be                                                              
100,000  ounces  per  year.   So  we're  projecting  10  years  of                                                              
operation at this time."                                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO asked if the mine would close in 10 years.                                                                 
                                                                                                                                
MR.  MCGILVERY  answered that  the  mine  would close  unless  the                                                              
company could develop future reserves.                                                                                          
                                                                                                                                
REPRESENTATIVE  GATTO asked  if  the company  would mine  anything                                                              
other than gold, such as silver or platinum.                                                                                    
                                                                                                                                
MR. MCGILVERY  responded  that it  is a pretty  unique deposit  of                                                              
only gold.                                                                                                                      
                                                                                                                                
REPRESENTATIVE GATTO  asked, "How much it would cost  to produce a                                                              
single ounce: a couple hundred dollars?"                                                                                        
                                                                                                                                
1:15:10 PM                                                                                                                    
                                                                                                                                
MR.  MCGILVERY replied  that  this was  correct,  and the  current                                                              
price for gold is over $400 per ounce.                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO  calculated that Coeur would  expect a profit                                                              
of about  $1 million.   He asked  if the ore  would be moved  by a                                                              
barge.                                                                                                                          
                                                                                                                                
MR. MCGILVERY  answered,  "We'll be producing  a concentrate.  ...                                                              
So 100  percent of the  ore goes to the  mill: 95 percent  of that                                                              
material  goes to  the  tailings impoundment,  5  percent of  that                                                              
material is produced  as a concentrate, and that goes  off site to                                                              
a smelter."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO asked  if  the tailings  will be  considered                                                              
environmental waste.                                                                                                            
                                                                                                                                
MR. MCGILVERY responded:                                                                                                        
                                                                                                                                
     One  of the things  that's extremely  important to  know                                                                   
     about  the project  is that  in  the flotation  process,                                                                   
     all  of the metals,  including the  gold, are  extracted                                                                   
     from  the ore.    So all  that's left,  essentially,  is                                                                   
     beach  sand.   It has  a lower  concentration of  metals                                                                   
     than  the  natural  surrounding environment.    It's  so                                                                   
     important  for  us to  nail  the flotation  process  and                                                                   
     extract all the metals out.                                                                                                
                                                                                                                                
REPRESENTATIVE  GATTO   asked  if  a  chemical  is   used  in  the                                                              
flotation process.                                                                                                              
                                                                                                                                
MR. MCGILVERY answered  that the chemical used is  made of organic                                                              
polymers that degrade naturally in the impoundment.                                                                             
                                                                                                                                
REPRESENTATIVE  GATTO asked  [how long  it takes  for the  organic                                                              
polymers to degrade].                                                                                                           
                                                                                                                                
1:16:33 PM                                                                                                                    
                                                                                                                                
MR. MCGILVERY  answered that the  process water is  liberated from                                                              
the tailings through  consolidation.  As the  tailings consolidate                                                              
over time,  more and more  of the process  water comes out  of the                                                              
tailings.   He said  that 90 percent  of the consolidation  occurs                                                              
in  five years,  and  total consolidation  is  complete within  20                                                              
years.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  GATTO   asked  if  there  are  any   other  mining                                                              
activities within 10 miles of the proposed mine.                                                                                
                                                                                                                                
MR.  MCGILVERY replied  that  the closest  mine  is the  Kennicott                                                              
Greens Creek mine on Admiralty Island.                                                                                          
                                                                                                                                
1:17:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  asked, "Can  you speak, briefly  please, to                                                              
the  philosophy  that Coeur  Alaska  has  toward paying  its  fair                                                              
share in taxes to the State of Alaska?"                                                                                         
                                                                                                                                
MR. MCGILVERY  replied that  he is  the environmental  manager and                                                              
cannot answer that question.                                                                                                    
                                                                                                                                
1:18:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS closed public testimony.                                                                                        
                                                                                                                                
1:18:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ELKINS moved  to report  the committee  substitute                                                              
for   HCR  10,   labeled  24-LS0925\F,   Bullock,  4/21/05,   with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There  being no  objection, CSHCR  10(RES) was  reported from  the                                                              
House Resources Standing Committee.                                                                                             
                                                                                                                                
SB 144-EMISSION CONTROL PROGRAM PERMITS/REGS                                                                                  
                                                                                                                                
1:18:34 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS  announced that the  next order of  business would                                                              
be  SENATE  BILL  NO.  144,  "An   Act  relating  to  regulations,                                                              
definitions,  and  permits  under   the  emission  control  permit                                                              
program; and providing for an effective date."                                                                                  
                                                                                                                                
CO-CHAIR SAMUELS moved to adopt CSSB 144(RES), labeled 24-                                                                      
LS0677\F, as the working document.  There being no objection,                                                                   
Version F was before the committee.                                                                                             
                                                                                                                                
1:19:22 PM                                                                                                                    
                                                                                                                                
AMY  SEITZ,  Staff   to  Senator  Thomas  Wagoner,   Alaska  State                                                              
Legislature,  presented  CSSB 144(RES),  labeled  24-LS0677\F,  on                                                              
behalf  of the  Senate Resources  Standing  Committee, sponsor  by                                                              
request, which is chaired by Senator Wagoner.  She explained:                                                                   
                                                                                                                                
     Senate Bill  144 is a  cleanup bill.   Back in  2003 the                                                                   
     legislature passed  a bill, I believe it  was House Bill                                                                   
     160,  that's purpose  was to streamline  the Alaska  air                                                                   
     permitting  program  by  aligning   it  to  the  federal                                                                   
     requirements  for  air  permitting.   And  when  [Alaska                                                                   
     Department  of  Environmental Conservation  (ADEC)]  was                                                                   
     adopting  regulations  to  carry the  changes  out  they                                                                   
     realized  that  there  were   some  problems  that  were                                                                   
     missed that  needed to be  addressed - not  very serious                                                                   
     ones,  but ones  that  needed to  be  addressed so  that                                                                   
     they  could be  in  alignment with  federal  regulations                                                                   
     for  requirements,  and  so  the state  could  keep  the                                                                   
     primacy over the air permitting process.                                                                                   
                                                                                                                                
     One  of the  changes  is that  it  just  works with  the                                                                   
     definitions,  makes sure the  definitions match  federal                                                                   
     definitions.   And another  change is  dealing with  the                                                                   
     fees.  Right  now the air permitting program  is funding                                                                   
     entirely  by its user  fees.   So SB 144  puts in  a way                                                                   
     for {ADEC] to  revoke permits if the fees  are not paid.                                                                   
     This  will ensure that  the air  permitting program  can                                                                   
     continue being funded by fees.                                                                                             
                                                                                                                                
1:22:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SAMUELS asked if "major source" is a federal term.                                                                     
                                                                                                                                
MS. SEITZ replied that the definition of "major source" referred                                                                
to on page 2, line 7 of the bill.                                                                                               
                                                                                                                                
CO-CHAIR SAMUELS asked if "stationary source" is also a federal                                                                 
term.                                                                                                                           
                                                                                                                                
MS. SEITZ deferred the question to an ADEC representative.                                                                      
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  what the  actual federal  definition                                                              
for "major source" was.                                                                                                         
                                                                                                                                
MS. SEITZ deferred the question to a ADEC representative.                                                                       
                                                                                                                                
1:23:32 PM                                                                                                                    
                                                                                                                                
JOHN  KUTERBACH, Program  Manager,  Air Permits,  Division of  Air                                                              
Quality,  Department of  Environmental  Conservation, stated  that                                                              
he was available to answer questions from the committee.                                                                        
                                                                                                                                
REPRESENTATIVE  LEDOUX  reiterated   her  question  regarding  the                                                              
federal definition of "major source."                                                                                           
                                                                                                                                
1:24:10 PM                                                                                                                    
                                                                                                                                
MR. KUTERBACH replied  that the federal definition  comes from the                                                              
Clean  Air Act,  and he  said, "It  parrots the  language that  is                                                              
being removed,  but not exactly."   He pointed out that  under the                                                              
Clean  Air Act  the  term "major  source"  means: "Any  stationary                                                              
source  or   group  of   stationary  sources   located  within   a                                                              
contiguous area  and under  common control that  is either  of the                                                              
following: a  major source as defined  in Section 112,  or a major                                                              
stationary source  as defined  in Section 302  or Part D  of Title                                                              
I."     He  noted  that  the   difference  between   that  federal                                                              
definition and  the current state  definition is that  the federal                                                              
definition  refers   to  a  stationary   source  or  a   group  of                                                              
stationary  sources  under common  control,  while  the state  law                                                              
only  refers  to  a  single  stationary  source.    Therefore,  he                                                              
explained,  the state  regulations  are not  as  stringent as  the                                                              
federal regulations,  and cannot be approved under Title  V of the                                                              
Clean Air Act.                                                                                                                  
                                                                                                                                
1:25:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SAMUELS turned  to page 4, line 22 of the  bill and noted                                                              
that the bill  would give the ADEC  the ability to revoke  a minor                                                              
permit.  He asked  for an explanation of the difference  between a                                                              
minor permit and a major permit.                                                                                                
                                                                                                                                
MR.  KUTERBACH  clarified  that  the difference  between  a  minor                                                              
permit and a major  permit was spelled out two years  ago in House                                                              
Bill  160.   He  said  that the  minor  permit program  are  those                                                              
permits that are  required for management of Alaska's  air quality                                                              
that  aren't specifically  required  under the  federal Clean  Air                                                              
Act, and  it is  based on the  potential of  [a facility]  to emit                                                              
air pollutants.   He pointed out that the reason  why this part of                                                              
the bill  only refers to  minor permits  and not major  permits is                                                              
that  major permits  must  be renewed  every  five  years and  the                                                              
state  has the  ability to  refuse  renewal if  fees aren't  paid.                                                              
Whereas  minor   permits  may  last  forever  and   therefore,  he                                                              
concluded, the state  needs to have the authority  to revoke those                                                              
permits if the fees aren't paid.                                                                                                
                                                                                                                                
1:27:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SAMUELS noted that  on page  6, line  3, the  bill would                                                              
repeal AS 46.14.990(18).  He asked what this statute says.                                                                      
                                                                                                                                
MR. KUTERBACH  replied that  this would  repeal the definition  of                                                              
modification, which  was originally needed two years  ago in House                                                              
Bill 160  to tell what  types of  modifications need  new permits.                                                              
However,  he said,  there  is nothing  currently  in statute  that                                                              
refers  to  modifications  and  therefore  this  definition  isn't                                                              
needed.  He noted,  "The definition that we did  have prevented us                                                              
from  using  that term  in  our  regulations consistent  with  the                                                              
federal regulations."                                                                                                           
                                                                                                                                
1:28:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS closed public testimony.                                                                                        
                                                                                                                                
1:28:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON  moved  to   report  CSSB  144(RES)  out  of                                                              
committee  with individual  recommendations  and the  accompanying                                                              
fiscal notes.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GATTO  clarified  that the  committee  was  moving                                                              
Version F  of the bill.  There  being no objection,  CSSB 144(RES)                                                              
was reported from the House Resources Standing Committee.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Resources Standing Committee meeting was adjourned at 1:29:04PM.                                                              

Document Name Date/Time Subjects