Legislature(1999 - 2000)
04/12/2000 02:03 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
April 12, 2000
2:03 p.m.
MEMBERS PRESENT
Representative Bill Hudson, Co-Chair
Representative Beverly Masek, Co-Chair
Representative John Cowdery, Vice Chair
Representative John Harris
Representative Carl Morgan
Representative Ramona Barnes
Representative Jim Whitaker
Representative Reggie Joule
Representative Mary Kapsner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 273(RLS)(title am)
"An Act regarding oil discharge prevention, and relating to
contingency plans and proof of financial responsibility for all
self-propelled nontank vessels exceeding 400 gross registered
tonnage and for railroad tank cars; authorizing inspection of
nonbank vessels and trains; and providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: SB 273
SHORT TITLE: OIL SPILL RESPONSE; NONTANK VESSELS & RR
Jrn-Date Jrn-Page Action
2/15/00 2305 (S) READ THE FIRST TIME - REFERRALS
2/15/00 2305 (S) RES, FIN
2/21/00 (S) RES AT 3:00 PM BUTROVICH 205
2/21/00 (S) Heard & Held
2/21/00 (S) MINUTE(RES)
3/03/00 (S) RES AT 3:00 PM BUTROVICH 205
3/03/00 (S) Heard & Held
3/03/00 (S) MINUTE(RES)
3/20/00 (S) RES AT 3:00 PM BUTROVICH 205
3/20/00 (S) Moved CS(Res) Out of Committee
3/21/00 2677 (S) RES RPT CS 5NR SAME TITLE
3/21/00 2677 (S) NR: HALFORD, MACKIE, TAYLOR, GREEN,
3/21/00 2677 (S) PETE KELLY
3/21/00 2677 (S) FISCAL NOTES (DEC, DOT)
3/24/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
3/24/00 (S) Heard & Held
3/27/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
3/27/00 (S) Moved CS(Fin) Out of Committee
3/27/00 2745 (S) FIN RPT CS 2DP 6NR SAME TITLE
3/27/00 2746 (S) DP: TORGERSON, PARNELL; NR: PHILLIPS,
3/27/00 2746 (S) GREEN, ADAMS, PETE KELLY, WILKEN,
LEMAN
3/27/00 2746 (S) PREVIOUS FISCAL NOTES (DEC, DOT)
3/27/00 2746 (S) REFERRED TO RULES
3/30/00 (S) RLS AT 11:45 AM FAHRENKAMP 203
3/30/00 (S) MINUTE(RLS)
3/31/00 2814 (S) RLS TO CAL W/CS 1OR 03/31
NEW TITLE
3/31/00 2814 (S) PREVIOUS FISCAL NOTES (DEC, DOT)
3/31/00 2815 (S) READ THE SECOND TIME
3/31/00 2815 (S) RLS CS ADOPTED UNAN CONSENT
3/31/00 2815 (S) ADVANCED TO THIRD READING
UNAN CONSENT
3/31/00 2815 (S) READ THE THIRD TIME CSSB 273(RLS)
3/31/00 2816 (S) AM NO 1(TITLE AM) ADOPTED
UNAN CONSENT
3/31/00 2816 (S) PASSED Y16 N2 E2
3/31/00 2816 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
3/31/00 2819 (S) HALFORD NOTICE OF RECONSIDERATION
3/31/00 2819 (S) RECON TAKEN UP SAME DAY
UNAN CONSENT
3/31/00 2820 (S) PASSED ON RECONSIDERATION Y17 N1 E2
3/31/00 2820 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
3/31/00 2821 (S) TRANSMITTED TO (H)
4/03/00 2831 (H) READ THE FIRST TIME - REFERRALS
4/03/00 2831 (H) RES, WTR, FIN
4/03/00 2831 (H) REFERRED TO RESOURCES
4/12/00 (H) RES AT 1:45 PM CAPITOL 124
WITNESS REGISTER
SENATOR DRUE PEARCE
Alaska State Legislature
Capitol Building, Room 111
Juneau, Alaska 99801
POSITION STATEMENT: Testified as the sponsor of SB 273.
ED PAGE, Captain
United States Coast Guard
P.O. Box 25517
Juneau, Alaska 99802
POSITION STATEMENT: Answered questions with regard to SB 273.
LARRY DIETRICK, Acting Director
Division of Spill Prevention & Response
Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801-1795
POSITION STATEMENT: Answered question with regard to SB 273.
ACTION NARRATIVE
TAPE 00-33, SIDE A
Number 0001
CO-CHAIR MASEK called the House Resources Standing Committee
meeting to order at 2:03 p.m. Members present at the call to
order were Representatives Hudson, Masek, Cowdery, Harris,
Morgan, Barnes, Whitaker, Joule and Kapsner.
SB 273 - OIL SPILL RESPONSE; NONTANK VESSELS & RR
CO-CHAIR MASEK announced that the one item of business was CS FOR
SENATE BILL NO. 273(RLS)(title am), "An Act regarding oil
discharge prevention, and relating to contingency plans and proof
of financial responsibility for all self-propelled nontank
vessels exceeding 400 gross registered tonnage and for railroad
tank cars; authorizing inspection of nontank vessels and trains;
and providing for an effective date."
Number 0125
SENATOR DRUE PEARCE, Alaska State Legislature, sponsor of SB 273,
explained the bill as follows:
Alaska arguably has the world's best oil spill
prevention and response program, mostly, unfortunately,
as a result of the Exxon Valdez accident. However, our
current program is limited to vessels that carry oil as
cargo (tank vessels) and onshore oil facilities such as
oil wells, pipelines, refineries and tank farms.
Specifically, nontank vessels covered by this bill are
defined as self-propelled watercraft of 400 or greater
gross registered tons. These vessels would include
larger fishing and processing vessels, cargo and
cruiseships and public vessels engaged in commerce,
such as all but one of the Alaska state ferries. SB
273 requires these vessels to provide a response plan
that would allow for the cleanup of a spill as quickly
as possible with minimum damage to the environment.
The legislation also requires vessel operators to
provide proof of financial ability to respond to
damages resulting from a spill.
Alaska is the only state on the West Coast of our
country that has not extended their contingency plan
[C-plan] and financial responsibility laws to include
nontank vessels. In light of recent spills from these
vessels in our waters, and from the railroad on our
land, I believe it's time to strengthen our oil spill
laws and include these vessels. This bill provides a
heightened awareness of prevention and response
readiness, and I hope will help reduce and at least
control the number and consequences of oil spills in
the future.
The railroad is also included in the bill. Just since
the introduction of SB 273, there have been three
incidents involving vessels in or near Alaskan waters.
The fishing vessel [F/V] American Star went aground in
Unimak Pass. The crew was airlifted off by the [U.S.]
Coast Guard. The vessel rolled in the surf and remains
on the rock. The M/V [motor vessel] Pacsun, which is a
log vessel, went aground in Icy Bay. After several
days, it was successfully refloated; however, SERVS
[Special Escort Response Vessel System] had to dispatch
one of their large tugs as well as response equipment
to assist in this effort. Most recently in nearby
Prince Rupert, the cargo vessel [M/V] Bovec went
aground, and it's our understanding that it remains
aground.
We have also had a number of experiences in our state
of vessels operating without pilots aboard, and I
believe that there are marine pilots online and present
here today to talk about some of those. I believe you
also have a packet in your file that documents,
including Coast Guard documentation, some of the
concerns about vessels in our waters that have had
movement that have been of concern.
Of course, we all know the [M/V] Kuroshima grounded out
near Dutch Harbor. It spread 39,000 gallons of bunker
fuel back in November of 1997. The M/V Jacha, operated
in heavy ice floes, ustained both bow and propeller
damage. Despite heavy damage, the vessel was loaded
and failed to report the incident to the U.S. Coast
Guard. I believe that was in Togiak. The Coast Guard
believes there was a possible oil spill, and the Coast
Guard has concluded that the vessel master and officers
were aware of the problems. That same ship, along with
the motor vessel Mononok and the Mabah, on February 17
of just this year, 2000, operated in state waters and
anchored without a pilot onboard during a trip that
should have had a pilot.
SENATOR PEARCE emphasized that ships known to be in Alaskan
waters probably had a spill that was not reported - in waters
that have some of the most precious fishing resources of the
state. They have also been moving without a pilot onboard in
what she considers an unsafe unsafe manner. For example, in
January, the M/V Cherry Star moved without a required pilot
aboard, and the Coast Guard sent a letter expressing grave
concern over the movement of that ship.
SENATOR PEARCE noted that when first introduced, the bill was
consistent with Coast Guard and state requirements at 300 gross
tons; however, that was raised to 400 gross tons in the Senate
Resources Committee, through an amendment proposed by Senator
Taylor. Senator Pearce restated that the following are covered:
cruiseships, Alaska state ferries, large fishing and processing
vessels, and cargo ships. Government-owned and operated vessels,
if not engaged in commerce, would be exempt; that would include
the university vessel, but the ferries that are over 400 gross
tons would be covered, as would the the railroad, which has oil
transportation and tanker cars. She stated:
Nontanker vessels frequently carry more volume than
those carrying fuel as cargo. They're not currently
required to have a system and equipment in place to
prevent or respond to spills. And while cargo ships
usually have their cargo in a double hull, oftentimes
the area between the outer hull and the double hull is
the area that is used as the actual fuel tank. So, if
those ships go on the rocks, while the cargo may not be
at risk to be spilled - whatever that cargo might be -
the fuel from the ship is [at risk]. So, when we talk
about the safety of a double-hulled cargo vessel, it
may not be safe in terms of you're just one hull away,
in terms of your fuel, from the rocks.
At present, these vessels are not required to show us,
the state, that they have the ability to finance a
cleanup effort and any damages resulting from the spill
or [to] pay the fines that are already in law. And
nontanker vessels, unfortunately, have had a
significant spill history in our waters. We included
the railroad because they've had three derailments
since 1992 and three spills in the last four months;
the largest of those was 167,000 gallons. It's my
understanding from the railroad ... today that their
cleanup costs - for the spills that they're still
presently working on, to try to keep the fuel from
getting to the Susitna River - are running in the 13 to
14 million dollar range, but that's just of the costs
that they know of to date.
Specifically, under the bill, nontank vessels and the
railroad would have to have a oil discharge, ...
prevention and contingency plan that would be submitted
to the Department of Environmental Conservation [DEC],
consistent with current requirements of tankers and oil
facilities except the planning standard is much lower.
Tankers and all fuel barges [and] tank farms throughout
the state presently have to meet the standards that are
already in statute; those were set back in 1990. Those
include being able to contain, control and clean up 15
percent of a spill to a maximum of 300,000 barrels in
72 hours.
The planning standard in this bill, for the nontanker
vessels, takes a step back from that. It says you have
to show that you can have equipment available - it
doesn't have to be onboard, but equipment available -
to contain and control 15 percent of your maximum
volume in 48 hours. There is not a cleanup requirement
as we have for the present tanker vessels, whether they
be our crude oil tankers or the fuel barges that bring
fuel to villages and communities throughout the state,
whether it's on the river system or in our ocean
waters.
There are presently five nonprofit cooperatives in the
state that have been formed as a response to the
original bill back in 1990. Some of those existed
before that bill because requirements were already in
place. We came in and strengthened the requirements,
but it's not as though tankers didn't have requirements
before 1989; we just found out that they weren't
working very well. We also under this bill provide
that the ships show - the owners show - that they have
financial responsibility or the ability to pay for a
cleanup of a spill, and that's based on their maximum
volume, carrying capacity, of their actual vessel.
And, under the bill, we allow that DEC could inspect
... whatever prevention equipment that might be
required; and I think that Larry Dietrick can speak
more specifically to this, but it sounds as though,
maximum, we're probably talking about ... what the
[U.S.] Coast Guard appears to be headed toward in their
requirements anyway, which is ... a portable pump
onboard so that you can handle pumping, off-loading, or
even pumping amongst tanks in the vessel, and also some
sort of a towing package so that they could get the
ships under tow if necessary. ...
Larry [Dietrick] can speak more closely to this, but it
is not our expectation nor our intent to have to carry
any sort of booming or those sorts of materials onboard
the nontanker vessels. And, in fact, with the
exception of the barges that are pulled by tugs,
present standards do not require booms be carried on
the actual tanker vessels that you see moving around
the big tankers, because there is no way they could
deploy it. So, DEC would be allowed to inspect, just
to make sure that the equipment was onboard as required
and the response contractors do go through drills. And
those would continue to be allowed as they are already
happening around the state.
The bill not only allows but actually requires DEC to
adopt alternative ways to achieve equivalent levels of
spill prevention and response in place of certain C-
plan requirements if there are areas where those
requirements cannot be met. Mr. Dietrick can give you
a more specific example, but under the present law and
the requirement for fuel barges to go to some of the
remote areas of the state, their present requirements
are, under the present law, that they would have to
show that they could actually clean up a spill in 72
hours.
It's apparent to everyone concerned that in our remote
waters that is not going to be possible, so DEC has
already used an alternative compliance and has allowed
the fuel carriers in those remote areas of the state to
adopt lower planning standards, because we all
understand that there are some events that you are just
not going to be able to plan for, and to try to get
equipment that would actually clean up, within 72
hours, a spill to every port in the state or along all
the coastline of the state is impossible.
This bill has even lower standards, so the requirements
in terms of equipment that's already out in the remote
areas - there's equipment in Nome, there's equipment
sitting in Bethel, there's equipment in Naknek, I
believe, in Dillingham, there's equipment in Unalaska -
we would not expect to see more equipment be required
because of this spill; it's already out there.
Financial responsibility: the vessel operators and
owners and the railroad would be required to show that
they can respond and clean up a major spill to the tune
of 300 dollars per barrel of persistent oil or 100
dollars per barrel of nonpersistent. We use the Coast
Guard definitions of persistent versus nonpersistent.
After much discussion on the Senate side, everybody
agreed that those ... [were] the ... definitions to
use. We have complied with Coast Guard standards that
are already in place, wherever possible, to make it
easy for everybody to understand how to comply, and so
they understand the terms. And, Representative Hudson,
you would probably understand those certainly better
than I.
The new law, we made changes on the Senate side ... to
have compliance and have the laws take effect so that
we would have an opportunity at the legislative level
to look at what the draft regulations next year and
then a second time of the following years. So, for the
moment, in this bill, September 1, 2000, would be when
we would have to have proof of financial
responsibility, but the actual date for the contingency
plans to go into effect has been pushed back to April
1, 2002, so that's two years out. I know that we have
some of the pilots online, as I mentioned, to discuss
the realities in our state of some of the ships that we
see coming and going.
... We have excluded deck barges by defining nontanker
vessels as vessels that are self-propelled. We have
raised the gross tonnage threshold from 300 to 400
gross tons. We have removed the existing direct action
clause that's in present law to allow P & I [Protection
& Indemnity] clubs to participate in the financial
responsibility section of the bill. We've also
extended the effective date to April 1, as I mentioned;
that will allow additional time for industry to
participate in the process, as well as providing
legislative oversight during the process of drawing up
the [regulations] and getting compliance.
We have proposed liability language that you have in
your packet, ... liability language that will allow the
co-ops ... to have an umbrella response in the response
plan that they have, being an umbrella response that
everybody can use as that portion of their plan that
would then limit the liability of the other members of
the nonprofit co-op. ... In response to request by the
industry, we specifically would like to see language
that requires that tramp vessels making one-time calls
have to be allowed to come into our waters under an
umbrella plan and costs must be reasonable. Now, that
is not anything new. At present, Tesoro brings ...
tramp vessels into Cook Inlet, as do the oil companies,
as have, in the past, other companies that have been
bringing fuel either in or out of our waters,
particularly jet fuel.
We also support the language that would say that it's
not our intent that we force nontank vessel owners to
join any particular PRAC [Primary Response Action
Contractor]. These response contractors that have
[sprung up around the state have done so in response to
the present laws that are in place. They include
Alaska Clean Sea; SERVS, which is the one primarily for
the Valdez oil terminal of Alyeska, along with Chadux
[Alaska Chadux Corporation]; CISPRI [Cook Inlet Spill
Prevention Response Incorporated], which is the Cook
Inlet response contractor that has grown up because of
the petroleum tankers and the jet fuel handling in Cook
Inlet; and then in Southeast Alaska you have SEAPRO
[Southeast Alaska Prevention Response Organization],
which is also primarily because fuel, of course, is, as
all of you are painfully aware and so are we when we
are down here -- all the fuel in this area of the state
has to be brought in, and it's waterborne. Those are
already in place; it's not our intent to tell any
entity that they have to join any specific one of
those. We think that there is competition amongst them
and, as has been mentioned in our work sessions, some
of the folks in the industry may decide that they would
rather form their own co-ops and have their own
response contractors ....
Number 1560
REPRESENTATIVE COWDERY requested confirmation that they were
addressing primarily water vessels and the railroad.
SENATOR PEARCE answered that he was correct.
REPRESENTATIVE COWDERY asked whether it includes trucks that
deliver fuel to service stations or to private residences.
SENATOR PEARCE responded no.
Number 1595
REPRESENTATIVE BARNES referred to the fiscal notes, which she
totaled up to $731,507. She noted that there was no fiscal note
in the committee packet for the railroad. She asked Senator
Pearce to address how SB 273 interacts with the Oil Pollution Act
of 1990 (OPA 90); she said under that law there were considerable
burdens placed on all the people that would fall under this bill.
SENATOR PEARCE explained that OPA 90 only covered the oil
tankers; therefore, the ships brought in under SB 273 are not
under OPA 90 requirements.
Number 1667
REPRESENTATIVE BARNES referred to a letter in the committee
packet from the Alaska Steamship Association (ASA), and read:
ASA offers the following comments relative to SB 273.
Many of the member companies (cargo, container and
cruise) in ASA operate nontank vessels, and thus we are
directly impacted by the proposed legislation. Our
members also provide maritime transportation services
to the Alaskan timber, mining, and fishing industries.
Our specific concerns are the additional financial
burden this bill places on us, over and above what we
already bear under existing federal statute; [it] is
not clear and may be substantial.
REPRESENTATIVE BARNES commented that obviously the non-oil tanker
vessels do fall under the federal Act because according to the
ASA they are already paying under the federal statute. She
continued to read from the letter"
The practical impact of this bill is that we will be
forced to join the only statewide co-op in place at
this time, Chadux; to our knowledge, Chadux does not
have the equipment that may be required to respond to
spills of the persistent oils that many of our cargo
vessels carry as bunkers.
REPRESENTATIVE BARNES asked why the ASA is saying that they fall
under OPA 90, when Senator Pearce says they don't. She also
asked what the impact is on timber, mining and fishing in the
state.
SENATOR PEARCE responded that the railroad should have provided a
fiscal note, which would show that the cost would be to the
railroad, not to the general fund. It does not go through the
state's budget, because they are not under the Executive Budget
Act. Second, OPA 90 does not cover ships, but that does not mean
that the U.S. Coast Guard does not have requirements for ships in
terms of response capabilities and costs. She does not think
that the ASA letter is dealing with OPA 90 requirements, Senator
Pearce said. She indicated it is true that there is only one
statewide co-op at this time, but that does not mean that they
have to join that one.
REPRESENTATIVE BARNES said she is very aware of how the railroad
is funded and that they do not fall under the Executive Budget
Act; however, the railroad is a state asset that is continually
having to turn to the federal government to upgrade their
equipment. This will have an impact of some nature, and she
thinks they should be privy to that. In addition, it seems to
her that there is considerable impact to the state budget from
the fiscal notes that she has totaled up. More important is what
the impact is going to be on the Red Dog Mine, Greens Creek Mine
and basically any mining operation that moves in and out of the
state, because it is very difficult for these entities to compete
in the world market. So any additional cost in transmitting the
ore has a tremendous impact on them. She indicated that her main
concern is that under SB 273 everything that moves in and out of
the state on the water, with regard to resource development, is
affected. She wondered what the economic impact will be on all
those industries.
Number 1973
SENATOR PEARCE indicated someone from Chadux was online and would
be willing to talk about the estimated costs.
REPRESENTATIVE BARNES stated that she wants any testimony from
Chadux or any other entity that collects money from these
companies in writing so that she can analyze it on a case-by-case
basis. She said she resents the railroad or anybody else giving
her a zero fiscal note. She added:
It says SB 273 will create no fiscal impact to the
state general fund. I know that; I'm not an idiot. I
want a correct fiscal note from the railroad that
clearly lays out what it's going to cost, and never
mind the general fund. The railroad is an asset of the
state, and please, in the future, don't give me a zero
fiscal note expecting me to look at it like I'm some
kind of an idiot.
Number 2104
CO-CHAIR HUDSON wondered about the relationship of vessels that
would be affected by SB 273 to not only OPA 90 but perhaps other
federal maritime requirements of the U.S. Coast Guard. He
invited Captain Ed Page of the U.S. Coast Guard to come before
the committee.
REPRESENTATIVE BARNES requested that Commissioner Michele Brown
from the Department of Environmental Conservation come before the
committee.
CO-CHAIR HUDSON indicated that Commissioner Brown had been
invited.
SENATOR PEARCE explained that Commissioner Brown was in transit
to Anchorage from a meeting in Philadelphia, where she was
working on getting Cominco's air quality permits.
Number 2200
CO-CHAIR HUDSON requested clarification that OPA 90 relates to
bulk oil transport and the associated maritime requirements
surrounding that.
CAPTAIN ED PAGE, United States Coast Guard, replied that OPA 90
predominantly focused on oil tankers in the wake of the Exxon
Valdez incident; however, it also had some influence on nontank
vessels, although he thinks there is some confusion as to how
much. It was certainly not to the level envisioned by Senator
Pearce's bill, he said, with respect to the pollution response
caches of equipment; however, OPA 90 further raised the
liability, and the certificate of financial responsibility had to
be carried by non-petroleum vessels.
CAPTAIN PAGE said there is a suite of regulations to deal with
prevention, and there is also regulation to deal with prevention
and response for tank vessels. However, Senator Pearce is
discussing the non-petroleum vessels with respect to requiring
contingent plans and shore equipment. There is internationally
an oil spill pollution emergency plan requirement that has been
adopted by the IMO for vessels over 400 gross tons, which has
some information on how to respond to a spill. It is essentially
a two- or three- page document.
CAPTAIN PAGE informed members that Senator Pearce's bill is
looking at something more comprehensive with respect to spill
response. It is an area that the U.S. Coast Guard, other than
through the liability of provisions, has not specifically
addressed. He added that, as addressed previously, OPA 90 does
have some application to it. The only area he would have concern
would be with the inspection provisions of prevention measures
that now requires equipment on vessels; it was referenced in the
ASA letter regarding the U.S. Supreme Court Intertanko case, with
respect to carrying equipment being beyond the purview of the
U.S. Coast Guard.
CO-CHAIR HUDSON reflected on the Exxon Valdez oil spill, which he
said really was the aegis of significant oil spill laws in
Alaska. He always took the position that a state should not
statutorily, or in any other way, inject itself into actual
vessel inspections, he said. He believes that vessel inspection,
whether of an oil tanker or a large passenger vessel, should be
left up to a specialist. He agreed that the DEC does not have
the expertise to go on a vessel and determine if a particular
tank is gas-free or whether there is a hardly detectable crack or
metal fatigue. He noted that they do not want any of that in
their statutory language. He referred to Representative Barnes'
question about the relationship with OPA 90. He asked Captain
Page if he would address that question.
CAPTAIN PAGE indicated he does not see any real conflicts with
OPA 90. In fact, the one area that is somewhat duplicative in
state legislation, as far as the liability caps, is covered, and
that is allowed for; Congress has specifically given the states
that authority to add on or to have their own liability
provisions with respect to vessels. He noted that it is one
provision that he sees that exists and is acceptable. With
respect to the provision of spill response equipment, that would
not be addressed by OPA 90 for non-petroleum tank vessels.
REPRESENTATIVE BARNES asked Captain Page if he does admit that
there is some overlap in liability between the federal law and SB
273, even though the state has been given the opportunity to make
laws of its own through OPA 90.
Number 2453
CAPTAIN PAGE indicated that the only overlap he has concerns
with, as he mentioned before, is with the inspection provisions.
He commented on Senator Pearce's reference to prevention with
regard to pumps onboard vessels; he said that is dangerous
territory with respect to the Intertanko case because it is
requiring equipment on vessels that are engaged in international
trade, and that is usually considered under the purview of the
U.S. Coast Guard to determine. He said that is an area he has
concern with and where he would expect some overlap.
SENATOR PEARCE explained that the financial responsibility
requirements under OPA 90 are to the federal government, not to
the state. Therefore, they have to show financial responsibility
but it is for the fines under federal law, and the money that
they would spend on the cleanup for a vessel could be paid back
to the U.S. Coast Guard. The inspection provision follows the
requirements of SB 273, not inspecting for safety of a vessel,
although under present law regarding crude oil tankers, tank
farms, barges and oil field equipment, DEC has the right to go in
if nobody else is doing an inspection. Therefore, that law is
not being changed. They are just allowing DEC to inspect any
requirements of a contingency plan and anything that the vessels
have agreed to do with respect to prevention credits; DEC can
inspect that they are actually doing what they said they would
do, and that is what the inspection provisions in SB 273 does.
It has nothing to do with inspecting for whether a vessel is
seaworthy, Senator Pearce added.
REPRESENTATIVE BARNES referred to an article out of the Anchorage
Daily News titled "Facts Needed to Form Cruise Ship Regulations,"
dated March 17, 2000, in which Commissioner Michele Brown says,
"Once we have accurate facts that we know are sound, we can
structure management and regulatory decision making upon that
foundation. The working group will make public reports on that
aspect (indisc.) as well." Representative Barnes noted that
Commissioner Brown also says in the article that before any
legislation is developed, they need to address four specific
concerns. Noting the date of the article, she suggested they had
not had time to identify those concerns.
Number 2766
REPRESENTATIVE HARRIS asked whether the vessels in service that
are maintaining an oil spill response capability have to provide
their own C-plans.
SENATOR PEARCE indicated response vessels are exempt under
present law.
LARRY DIETRICK, Acting Director, Division of Spill Prevention &
Response, Department of Environmental Conservation, stated that
they have been in contact with Alyeska, and that in the
negotiated rule making they would make it explicit that response
vessels are exempt.
REPRESENTATIVE BARNES requested clarification that even though
the oil spill money was used to build the ferry [the Kennicott],
it is not an "oil-sucking ferry."
SENATOR PEARCE pointed out that it only provides a platform that
can be used as a command center. The ferry itself is not a
"skimmer," and the marine architects laughed at the idea, quite
frankly. She explained that what the ferry system has done, in
conjunction with DEC, is to have roll-on/roll-off containers at
ports around the state.
REPRESENTATIVE BARNES indicated that when the funding for the
ferry was before the state, she was serving on the Finance
Committee, and the way they got around using federal funds was
that they were going to make it an "oil-sucking ferry." She
wondered how [the state] had managed to use federal funds.
SENATOR PEARCE agreed that the early discussion and utilization
of money was supposedly to build a natural-response vessel, and
that is not what they ended up building.
TAPE 00-33, SIDE B
CO-CHAIR HUDSON recalled that the ferry was built with a
combination of federal highway money. What they did with the
Kennicott that they did with no other vessel was take $12 million
out of the nickel-a-barrel fund or one of the other oil funds.
The Kennicott has the capability of hauling booming material; it
also has redundant communication systems and the ability to bring
onboard 100 to 150 workers who could provide a floating command
center. He indicated Representative Barnes was right that it was
the first time, and it was characterized beyond what it actually
was.
Number 2851
CO-CHAIR MASEK wondered what the process is regarding tanker
vessels operating in Western Alaska and what they have to do to
comply with requirements.
MR. DIETRICK explained that in Western Alaska they currently have
a plan in place with the non-crew operators, which was just
negotiated; it provides for a hub-based system to get to the
remote areas of Alaska, which allows a tiered response anywhere
from Nome, Bethel, Naknek, Dillingham, Dutch Harbor, Kodiak or
Cook Inlet. With any spill in the state, 80 percent of the
problem is logistics, he noted, so that is what drives the
response strategy. The hub-based system is designed to provide
for 24-hour delivery to a scene from any one of the hubs. It is
also backed up by the ability to deliver equipment from Anchorage
to that hub within the same 24 hours and [to deliver] equipment
from out-of-state within 72 hours.
CO-CHAIR MASEK wondered how a vessel that is only in Alaska for a
few days would comply with the provisions under SB 273.
Number 2742
MR. DIETRICK responded that in working with the sponsors, they
recognize that everyone is aiming for a streamlined process, and
they envision a four-part plan: one, an onboard vessel response
plan; two, the membership in a cooperative; three, negotiated
prevention measures for onboard; four, financial responsibility
that the ship could execute through the existing infrastructure.
SENATOR PEARCE added that under the present tanker vessel law,
she had mentioned Tesoro as one example of an entity that brings
spot charter vessels into the state. Tesoro is the owner of the
crude oil onboard and the holder of the actual plan. She
believes that under SB 273, for the non-crude carriers, for the
non-tanker vessels, they could build an umbrella ability so that
every vessel does not have to have a plan. She noted that the
oil-tankers turn around C-plan approvals in 24 hours for huge
crude tankers.
CO-CHAIR MASEK said in looking at some of the C-plan requirements
in SB 273, she wonders how the operators and owners can develop a
C-plan if the guidelines have not yet been developed.
MR. DIETRICK explained that the intent with the nontank vessels
would be to basically have a single plan that would be
incorporated in the regulations. The four-part notification
requirement that he had just discussed would be the activation of
the plan. It is a plan by rule; when they negotiate the
regulations, that is when the guidelines would be discussed and
incorporated into the rule.
Number 2541
CO-CHAIR HUDSON asked what the window of opportunity is for
nonpersistent fuel cleanup.
CAPTAIN PAGE answered that with regard to the refined products -
the diesels - the majority of that oil within 24 hours will have
dissipated and evaporated, although a fraction will remain for a
few days. He explained that when they are talking about 300- to
400- foot vessels, they are moving into heavy persistent oils,
such as from bulkers and cruiseships. The persistent fuel oils
stay in the water a lot longer, and they have the heavier
fraction of petroleum products. He indicated that low-speed
diesels tend to be the choice these days because of lower cost,
but they also have lower quality. Therefore, they are seeing
more and more of the persistent oils.
CO-CHAIR HUDSON indicated that the concern he has heard from a
number of people is with the unknown factors in the negotiated
regulations, for example, "Trust me, we are going to sit down and
negotiate something that you'll be able to live with and that
we'll do what you want to do in the legislation here." He
understood why Representative Barnes wanted Commissioner Brown to
come before the committee to discuss the negotiated regulation
process, he added, because it looks as though that is going to be
a concern.
Number 2337
SENATOR PEARCE informed the committee that she was chair of the
Oil & Gas Committee on the Senate side when the Exxon Valdez oil
spill happened. House Bill 567, which went through the Senate,
required a C-plan and had planning standards and requirements
that were extreme. They fought to get standards in present law
for the crude carriers and the petroleum industry that were not
ridiculous and that would help to protect the waters of the
state, she recalled, and thought they came up with a balance.
SENATOR PEARCE indicated she finds herself in an interesting
position of defending DEC, because after HB 567 was put into
effect DEC tried to help the statewide fuel carriers that found
themselves covered under HB 567. The area was vast, and there
was no way for those entities that carry fuel to meet
requirements to clean up 15 percent of their total volume, a
maximum of 300,000 barrels, in 72 hours; therefore, DEC went
through an alternative compliance effort.
SENATOR PEARCE pointed out that those communities are able to get
their fuel today at a price that is not totally outrageous
because DEC set up a cascading hub-system and was willing, under
alternative compliance, to back off on the absolute planning
standard. She noted taht SB 273 also pushes out the effective
date to April 1, 2002. The legislature will have an opportunity
next year or the following year to take action to make changes.
She reiterated that they have seen DEC work with the industry and
come to some rational decisions. She noted that there are some
costs involved, but protecting the waters of Alaska is important
enough that [the legislature] should make sure that they are
protected.
Number 2059
REPRESENTATIVE BARNES wondered how much a company like Petro Star
Inc. has to pay for being a member of SEAPRO and on each
individual run they make. She indicated her real concern is what
the economic impact is going to have on the state in moving goods
and services.
SENATOR PEARCE replied that Petro Star Inc. has to meet greater
standards than those in SB 273; the latter will cost less. Petro
Star Inc. is carrying fuel under the tanker-vessel law, and they
have to prove they can clean up the fuel in 72 hours.
REPRESENTATIVE BARNES said she understands that, but she is still
trying to get an idea of what the associated cost will be on the
industry in the state. She knows it is going to cost the state
close to a billion dollars, she added, pointing out that she had
totaled the fiscal notes to be $731,507.
SENATOR PEARCE reiterated that Chadux was online.
MR. DIETRICK asked the committee to consider the three associated
rule makings: one, alternative compliance; two, the best
available technology regulations; and, three, the efforts on the
North Slope to try to get the response situation and broken ice
taken out. He addressed the question of whether nontank vessels
would have to carry booms and skimmers onboard, saying the answer
is no because those would be served by the hub-system. [SB 273
was held over.]
CO-CHAIR MASEK recessed the House Resources Standing Committee
meeting at 3:15 p.m. to the call of the chair.
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