Legislature(1995 - 1996)
03/27/1996 03:37 PM Senate RES
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SENATE RESOURCES COMMITTEE
March 27, 1996
3:37 p.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Drue Pearce, Vice Chairman
Senator Robin Taylor
Senator Georgianna Lincoln
Senator Lyman Hoffman
Senator Steve Frank
MEMBERS ABSENT
Senator Rick Halford
COMMITTEE CALENDAR
CS FOR HOUSE JOINT RESOLUTION NO. 59(RES)
Respectfully requesting the Environmental Protection Agency to
issue a final National Pollutant Discharge Elimination System
permit for Cook Inlet oil and gas operations that omits the
incremental permittee monitoring and reporting obligations
identified in the Agency's draft permit and, consistent with the
philosophy of the Agency's 1996 National Water Program Agenda,
allows the permittees to operate under pollutant discharge
monitoring and reporting requirements that are not more rigorous
than those requirements of the Cook Inlet National Pollutant
Discharge Elimination System permit in place.
CS FOR HOUSE JOINT RESOLUTION NO. 58(RES)
Relating to reauthorization and reform of the Endangered Species
Act.
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 397(FIN)
"An Act relating to the fisheries resource landing tax and to the
seafood marketing assessment; and providing for an effective date."
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 42
"An Act allowing a person to hold more than one entry permit for
certain fisheries and amending the definition of `unit of gear' for
purposes of the commercial fisheries limited entry program; and
providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
HJR 59 - No previous action to record.
HJR 58 - No previous action to record.
HB 397 - See Resources minutes dated 3/25/96.
SB 42 - See Resources minutes dated 2/6/95.
WITNESS REGISTER
Representative Joe Green
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of HJR 59 & HJR 58
Jim Evans
HC 1, Box 169
Kenai, AK 99611
POSITION STATEMENT: Testified in support of HJR 59
Bill Stamps
P.O. Box 130
Kenai, AK 99611
POSITION STATEMENT: Supports HJR 59
Dennis Randa
P.O. Box 3055
Soldotna, AK 99669
POSITION STATEMENT: Has concerns with HJR 59
Marilyn Crockett, Assistant Executive Director
Alaska Oil & Gas Association
121 W. Fireweed, #207
Anchorage, AK 99503
POSITION STATEMENT: Testified in support of HJR 59
Larry Little
P.O. Box 2787
Soldotna, AK 99669
POSITION STATEMENT: Supports HJR 59
Leonard Verrelli, Director
Division of Air & Water Quality
Department of Environmental Conservation
410 Willoughby Ave., Suite 105
Juneau, AK 99801-1795
POSITION STATEMENT: Testified in support of HJR 59
Norma Calvert
Marathon Oil Company
3201 C St.
Anchorage, AK 99501
POSITION STATEMENT: Testified in support of HJR 59
Ron Sommerville
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on HJR 58
Paula Easley
2134 Crataegus Ave.
Anchorage, AK 99501
POSITION STATEMENT: Supports HJR 58
Geron Bruce, Legislative Liaison
Department of Fish & Game
P.O. Box 2552226
Juneau, AK 99811-5526
POSITION STATEMENT: Testified on HJR 58
Frank Homan, Commissioner
Commercial Fisheries Entry Commission
8800 Glacier Ave., Suite 109
Juneau, AK 99801-8079
POSITION STATEMENT: Offered information on SSSB 42
Mark Jensen
P.O. Box 457
Petersburg, AK 99833
POSITION STATEMENT: Supports SSSB 42
John Jensen
P.O. Box 681
Petersburg, AK 99833
POSITION STATEMENT: Supports SSSB 42
Bob Grande
P.O. Box 29
Petersburg, AK 99833
POSITION STATEMENT: Opposes SSSB 42
Rocky Littleton
P.O. Box 1373
Petersburg, AK 99833
POSITION STATEMENT: Opposes SSSB 42
Steve Thomassen
P.O. Box 468
Wrangell, AK 99929
POSITION STATEMENT: Supports SSSB 42
Otto Florshutz
P.O. Box 547
Wrangell, AK 99929
POSITION STATEMENT: Opposes SSSB 42
ACTION NARRATIVE
TAPE 96-37, SIDE A
Number 001
CSHJR 59(RES) NPDES PERMIT FOR COOK INLET OIL & GAS
CHAIRMAN LEMAN called the Senate Resources Committee meeting to
order at 3:37 p.m. and brought CSHJR 59(RES) before the committee
as the first order of business.
REPRESENTATIVE JOE GREEN , prime sponsor of HJR 59, said for over 30
years there has been discharge of salt water that's produced with
oil. After it goes through cleaning facilities, it's put back in
the inlet, and the process has had no adverse effect to the
environment. Recently the Environmental Protection Agency came out
with a draft set of regulations which increase both the amount of
testing required and the frequency of testing. He said this is
just another attempt of government to harass an industry that for
over 30 years has been providing the state with revenue and has
been an environmentally satisfactory operation.
CHAIRMAN LEMAN opened the hearing to public testimony and stated
testimony would be taken from witnesses waiting to testify in
Kenai.
JIM EVANS , representing the Alliance in Kenai, echoing
Representative Green's comments, agreed the oil companies have done
an outstanding job in taking care of the environment for the past
30 years. He voiced the Alliance's support for HJR 59.
BILL STAMPS , representing the Alliance in Kenai and testifying in
support of HJR 59, pointed out that Cook Inlet did not make the 303
D list, which is a section of the Federal Clean Water Act that
requires states to identify to the EPA polluted water bodies that
may need additional control measures to meet state water quality
standards. The list approved by the EPA last August lists 56
Alaska water bodies identified as impaired by the EPA and DEC. The
EPA and DEC evaluated 130 bodies and chose 56 they felt needed the
most attention and Cook Inlet was not among them. He said even
with the favorable results of these studies, there are special
interest groups that will shut down the oil industry in Cook Inlet
if they are allowed to. If they are successful, they will also
succeed in devastating the economy of the Kenai Peninsula Borough.
CHAIRMAN LEMAN questioned the last time there was any substantial
spill in Cook Inlet that resulted in either the killing or the
harming of wildlife or any property or fishery. MR. STAMPS
responded that he didn't know, but he pointed out that the industry
this relates to is production and the drilling industry, not the
industry of transporting the oil.
DENNIS RANDA , representing Trout Unlimited as the statewide
chairman and testifying from Kenai, said that while Cook Inlet is
a real dynamic resource, the chronic impact on a long-term industry
such as the oil industry hasn't been researched and the data hasn't
been looked at, especially considering some of the new scientific
methodology. He has concern with dumping toxins and hydrocarbons
into the Inlet and into the mixing zone. He said he would like the
committee members making the decisions in the Legislature to
understand and not just blindly rubber stamp legislation because
it's from the oil industry, which the state of Alaska is certainly
dependent upon.
Number 300
MARILYN CROCKETT , Assistant Executive Director, Alaska Oil & Gas
Association and a member of the Board of Directors for the Resource
Development Council, voiced their appreciation for EPA's efforts
in compiling the conflict permit, but they are very concerned about
the draft permit's proposed increase in the amount of monitoring
and reporting. These additional requirements will not result in
any benefit in the environment, and will, in fact, add a tremendous
cost and administrative burden not only to the operators of these
facilities but to EPA as well. It is estimated that the cost to
comply with the additional monitoring and sampling requirements
will be in excess of $1 million annually.
Number 329
LARRY LITTLE , an employee of Shell Western E&P in Kenai, stated his
support for the position expressed by Bill Stamps in his testimony.
LEONARD VERRELLI , Director, Division of Air & Water Quality,
Department of Environmental Conservation, directed attention to a
whereas clause on page 2, line 12, and clarified that DEC is not
involved in EPA's NPDES process. DEC has its own 401 certification
process which comments on the permit and provides the state
criteria which is then rolled into the NPDES permit. He said DEC
has sent a letter to EPA which basically mirrors the intent of the
resolution and states that the monitoring is excessive and it lays
out several suggestions on how to correct that, as well as
suggesting what other things can be done to assure compliance with
the permits.
CHAIRMAN LEMAN asked if the resolution would be more accurate if
that conjunctive phrase were eliminated. MR. VERRELLI acknowledged
that it would. REPRESENTATIVE GREEN agreed that the conjunction
was probably misleading, and he said he had no objection to its
removal.
CHAIRMAN LEMAN also suggested adding a new whereas clause saying
that DEC has supported many of these recommendations to minimize
the costs and reduce the unnecessary burden, which he thinks would
lend more support to the intent of the resolution. SENATOR TAYLOR
then moved a conceptual amendment for a new whereas clause, and to
delete the conjunctive phrase on page 2, line 12. Hearing no
objection, the Chairman stated the amendment was adopted.
NORMA CALVERT , representing Marathon Oil Company and testifying in
Juneau, said Marathon has been involved in the operations in the
Inlet for approximately 30 years, and the additional monitoring and
sampling that is called for under the proposed permit adds
additional costs to the operations without any offsetting benefit
to the environment. She said these maturing fields are very
sensitive to increased costs, and she noted Marathon has made a lot
of changes in its operations to try to reduce costs, and they are
not in favor of increasing them for something that really has no
benefit.
There being no further testimony on CSHJR 59(RES), CHAIRMAN LEMAN
asked for the pleasure of the committee.
SENATOR TAYLOR moved CSHJR 59(RES), as amended, be passed out of
committee with individual recommendations. Hearing no objection,
it was so ordered.
CSHJR 58(RES) REFORM THE ENDANGERED SPECIES ACT
CHAIRMAN LEMAN brought CSHJR 58(RES) before the committee as the
next order of business.
REPRESENTATIVE JOE GREEN , prime sponsor of HJR 58, said as a
member of the National Energy Council, he has heard horror stories
about areas where there were perhaps overzealous reactions to the
Endangered Species Act going well beyond what was envisioned
originally by Congress. Private property owners were actually
destroying habitat that might ultimately be used by a member of an
endangered species or what might be considered or even projected as
being an endangered species or subspecies because of the fear that
there would be condemnation of significant amounts of land around
something like a den, a tree, etc. As a result, the Act was
working backwards; it actually was a disenfranchisement of private
property owners against endangered species.
Representative Green noted that Ron Sommerville was available to
respond to any specific and technical questions from committee
members.
RON SOMMERVILLE related that as a consultant to the leadership of
both bodies of the Legislature, one of his major responsibilities
has been with the Endangered Species Act.
SENATOR HOFFMAN directed attention to page 2, line 16, which
references section 7 of the Act and asks for greater flexibility,
and he asked Mr. Sommerville if he could expand on that. MR.
SOMMERVILLE explained there are two processes for getting an
incidental take permit from the federal agencies. Some states use
what is called a section 10, which is fairly complicated process.
Most of the states have supported the concept that section 7
consultation process for incidental taking would allow for a much
more expedited process and is much simpler than the section 10.
SENATOR HOFFMAN then asked if Mr. Sommerville would explain the
elimination of the concept of "distinct population segment." MR.
SOMMERVILLE said the definition of "species" has three parts:
species, subspecies or distinct population segment. Many of the
abuses that have occurred in Alaska relate to the concept of being
able to list a distinct population segment, and the U.S. Fish &
Wildlife Service has never defined what "distinct population
segment" is, which really gives the secretary almost unfettered
authority to apply it.
TAPE 96-37, SIDE B
Number 010
PAULA EASLEY , testifying from Anchorage in support of HJR 58, said
she believes that any federal or state law that does not also
protect property rights will not protect endangered species. She
noted the opposition to reforming the Endangered Species Act by
people who really don't understand why the reform is needed is
really growing. She said the Act is not working the way it should
and it is hurting communities all over the United States. She
urged the legislators' strong support for the resolution.
Number 120
GERON BRUCE , Legislative Liaison, Department of Fish & Game, voiced
the administration's support for the Endangered Species Act and its
goal of recovering threatened or endangered species to healthy
populations. He said fish and wildlife management must focus on
maintaining healthy populations, and prevention is the key. He
pointed out Alaska is fortunate to have the fewest number of
threatened and endangered species of any state in the union.
Currently, 17 listed species occur in Alaska, which includes 11
offshore marine mammal species, several species of waterfowl over
which the state has minimal authority for most of the year, as well
as other species principally managed by the federal government.
There are no Endangered Species Act listed species of fish or
wildlife over which Alaska has primary responsibility.
Mr. Bruce said the administration has expressed concerns with the
Endangered Species Act, both with its substance and with its
administration. Last fall a package of amendments was offered by
the Western Governors' Association as a middle ground in the
Endangered Species Act debate. The state of Alaska endorsed that
package. It would recognize states as the primary sovereign over
fish and wildlife and make them full partners with the federal
government in the recovery of threatened and endangered species.
He noted many of the elements of the Western Governors' Association
package have already been adopted by the federal administration as
regulations designed to improve its flexibility. Since the
adoption of these new regulations, it has become clear that the Act
has begun to function more smoothly, but additional improvements
can be made.
Mr. Bruce said the administration supports an approach that lowers
the rhetoric surrounding this issue, and for that reason the
administration does not believe that the Legislature should support
a specific congressional bill at this time. They feel it would be
more effective if HJR 58 were to focus on those issues that the
Legislature believes should be included in an Endangered Species
Act reauthorization and not specifically endorse one piece of
legislation or one approach. However, they do have concern with
the inclusion in HJR 58 of the provision on subspecies and the
recommendation of the elimination of the distinct population
segment concept.
BILL PERHACH , representing the Alaska Environmental Lobby, stated
their opposition to HJR 58. He referred to page 2, line 2, and
said he agreed with the statement that inadequate scientific basis
exists for many decisions made by federal agencies regarding the
listing of species, etc. He also said the requirements for
stricter scientific and quantitative criteria for listing species
makes sense to him, but it does not make sense to him to eliminate
the biological diversity reserve system when proposing requirements
for criteria. He said the resolution endorses the passage of HR
2275, but his understanding is that it is going nowhere because
Congress believes it is sending a wrong signal.
CHAIRMAN LEMAN suggested that if Mr. Perhach had any specific
amendments that he submit them to the committee for its
consideration. He then stated HJR 58 would be set aside and taken
up the following week.
CSSSHB 397(FIN) FISH LANDING TAX/SEAFOOD MARKETING ASSMT.
CHAIRMAN LEMAN brought CSSSHB 397(FIN) before the committee.
Testimony on the bill was taken at the committee's March 25
meeting. He stated if there was no further testimony, he would
entertain a motion on the bill.
SENATOR PEARCE moved CSSSHB 397(FIN) and the accompanying fiscal
notes be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
SSSB 42 LIMITED ENTRY & UNITS OF GEAR
CHAIRMAN LEMAN brought SSSB 42 before the committee as the final
order of business.
SENATOR TAYLOR , prime sponsor of SB 42, explained that last session
he and Representative Grussendorf submitted companion legislation
to allow for setting up a tier gear system within the dungeness
crab fishery. Part of the various compromises that were worked out
between the Limited Entry Commission and the fishing fleet as the
legislation moved through the process was the opportunity to do
what is called the stacking of permits. However, the way the law
currently exists, an individual can purchase a higher tier level,
but to do so, he must first sell one tier level, so it leaves the
individual with very little opportunity to break out of or move out
of that limitation on the gear.
Senator Taylor said the understanding was that a change would be
made in the House bill (HB 107) when it got to the Senate, but when
it did get to the Senate it was discovered the title was too tight
and it would have taken a two-thirds vote to get the title amended.
SSSB 42 will provide for the stacking option which will actually
eliminate numbers of people over time out of the fishery, but it
will still leave the same volume of gear.
FRANK HOMAN , Commissioner, Commercial Fisheries Entry Commission,
informed the committee that as a result of the passage of HB 107,
this past summer the Commission instituted a dungeness tiered pot
system that was designed to be reflective of the way the fleet was
at the time of the limitation. He said there are people on both
sides of the issue of whether to combine tiers so that an
individual could work his way up and have more pots. SSSB 42 will
allow the combining of tiers, although there would always be the
same number of permits, which is a maximum of 308, but they could
be consolidated into a smaller number of fishermen. He noted there
are people on the other side of the issue who want to leave a lower
tier in there so that there is an entry level, and they feel that
permits might be cheaper at a reduced pot level.
MARK JENSEN , testifying from Petersburg in support of SSSB 42, said
the reason he supported the tier system in the first place was
because it had a stacking and unstacking provision. Also, it won't
change the number of pots in the fishery, but it will reduce the
number of fishermen on the grounds. It will allow a person to get
into the fishery at a small level, like a 75-pot permit, and then
expand to whatever level he wanted to end up at in the fishery.
JOHN JENSEN , testifying from Petersburg, voiced his support for
SSSB 42 and the testimony given by Mark Jensen.
BOB GRANDE , a fisherman testifying from Petersburg, stated his
opposition to SSSB 42. He stated he originally supported the
tiered entry system because he was led to believe that there would
not be a stacking provision. He believes that if permits are
stacked, it will effectively ensure that all of the allowable gear
is actually fished; whereas with the small permits being fished,
many of those will either not be fished or be fished at a very low
level, which currently happens, and eventually 75-pot permits will
disappear.
ROCKY LITTLETON , testifying from Petersburg in opposition to SSSB
42, stated he agrees with Mr. Grande's comments. He believes it
will create more pressure in the fishery and that it defeats the
whole purpose of the tiered system.
STEVE THOMASSEN , testifying from Wrangell, voiced his support for
SSSB 42. He supports stacking so that some of the fishermen can
build up enough gear to make it worthwhile and feasible to go
fishing.
TAPE 96-38, SIDE A
Number 001
OTTO FLORSHUTZ , testifying from Wrangell, said one thing is clear
and that is that Fish & Game will have lots of charts and graphs to
prove the destruction of this resource under current and past
management plans, a forecast that's been heard for years. He said
at this point there are three unknowns: (1) how many permits will
be issued; (2) how many transferrable permits will be issued; and
(3) how many pots will be fished. This legislation will ensure
that all unfished tiers will be bought back and then aggressively
fished, in effect, setting a speed limit on an unknown road without
checking curves or road conditions. He suggested the bill could
work if it were amended to read that any tiers transferred would
forfeit or sunset one-third of their pot allotment.
There being no further testimony on SSSB 42, CHAIRMAN LEMAN asked
for the pleasure of the committee.
SENATOR TAYLOR moved SSSB 42 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
There being no further business to come before the committee, the
meeting was adjourned at 5:10 p.m.
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