Legislature(2005 - 2006)BUTROVICH 205
02/28/2005 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Confirmation Hearing: Alaska Oil and Gas Conservation Commission (aogcc) | |
| Start |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 103 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 28, 2005
3:32 p.m.
MEMBERS PRESENT
Senator Thomas Wagoner, Chair
Senator Ralph Seekins, Vice Chair
Senator Ben Stevens
Senator Fred Dyson
Senator Bert Stedman
Senator Kim Elton
Senator Gretchen Guess
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARING:
Alaska Oil and Gas Conservation Commission - Dan Seamount
CONFIRMATION ADVANCED
SENATE BILL NO. 103
"An Act relating to regulation of underground injection under
the federal Safe Drinking Water Act; and providing for an
effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 103
SHORT TITLE: OIL & GAS: REG. OF UNDERGROUND INJECTION
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/14/05 (S) READ THE FIRST TIME - REFERRALS
02/14/05 (S) RES, FIN
02/28/05 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
Dan Seamount
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, Alaska 99503
POSITION STATEMENT: Confirmation candidate and supported SB 103.
Marilyn Crocket, Deputy Director
Alaska Oil and Gas Association (AOGA)
121 West Fireweed Lane
Anchorage, Alaska 99503
POSITION STATEMENT: Supported SB 103.
ACTION NARRATIVE
CHAIR THOMAS WAGONER called the Senate Resources Standing
Committee meeting to order at 3:32:10 PM. Members present were
Senators Elton, Ben Stevens, Seekins, Dyson, Stedman, Guess and
Chair Wagoner.
^Confirmation Hearing: Alaska Oil and Gas Conservation
Commission (AOGCC)
DAN SEAMOUNT, nominee for the Alaska Oil and Gas Conservation
Commission (AOGCC), said he would be happy to continue serving
on the commission. He wanted to give something back to the state
and he has five more years of experience since he was last
appointed.
SENATOR SEEKINS moved to forward Mr. Seamount's name to the
joint session for confirmation to the AOGCC. There were no
objections and it was so ordered.
SB 103-OIL & GAS: REG. OF UNDERGROUND INJECTION
CHAIR WAGONER announced SB 103 to be up for consideration.
MR. SEAMOUNT, Alaska Oil and Gas Conservation Commission,
explained that SB 103 would give the state of Alaska the ability
to obtain primacy in enforcement for the underground injection
of waste streams of a certain class of well. "If we were to
obtain this primacy, then we would have oversight over all oil
and gas related waste injection wells in the state."
He provided a slide presentation that explained the AOGCC
regulates operations affecting subsurface oil and gas resources.
It insures reliability of oil and gas flow measurements so the
state gets its proper revenue and taxes and insures that
underground sources of drinking water are protected.
MR. SEAMOUNT explained that currently the state has primacy over
Class II wells that accept wastes generated by oil and gas
operations. They are injected into a formation where they will
never be seen again. Another type of Class 2 well is an
injection well whose purpose is for enhanced oil recovery. Both
kinds are very valuable. The proper underground injection of
material to enhance oil recovery has resulted in billions of
dollars in revenue and taxes to the state. Also, the best place
to put oil field waste is deep underground. That is much better
than transporting it and the possibility of having a spill.
Title 31 gives the commission its authority. SB 103 adds Class I
wells, which currently are overseen by the Environmental
Protection Agency (EPA) to the AOGCC's oversight authority.
Right now two agencies are performing the same job and one is
protecting a non-existent resource - fresh water.
He proposed that the AOGCC control underground injections
through primacy or single disposal class, which could come at a
later date. While it supports this endeavor, the EPA does not
think this is legally possible. Nevertheless, it has formed a
task force with the AOGCC to figure out a way for the state to
achieve primacy and SB 103 would allow the task force to
continue.
MR. SEAMOUNT explained there are five classes of disposal wells
under the Safe Drinking Water Act. Class I wells take
industrial, hazardous, non-hazardous and municipal waste. The
North Slope has seven Class I wells. Class II wells handle oil
and gas waste. An upcoming argument is that none of the industry
would be on the North Slope if it wasn't for oil and gas, so any
waste that's created there is directly associated with it and
there shouldn't be any Class I wells there. They should all be
Class II wells. "Plus the fact that you don't have any
underground sources of drinking water."
Class III is solution mining; there is none of that in Alaska.
Class IV, illegal now, is radioactive waste injection. There are
no Class IV wells in Alaska. There are a lot of Class V wells in
Alaska comprised of whatever doesn't fit into Classes I-IV.
The EPA said it would be okay for the AOGCC to take over all
classes of wells, but Mr. Seamount is only asking for Class I
and II wells and he said, "There may be a little rub there."
MR. SEAMOUNT related that there are only seven Class I wells in
the state, 1,155 Class II wells, and more than 3,000 Class V. He
said it is a waste of money to have redundant programs. One
agency could oversee the wells, reducing time, money and
confusion - even some litigation about what kinds of fluids can
go down Class I and II wells - while still providing protections
that are needed when injecting waste. Also, getting EPA
approvals takes longer than getting AOGCC approvals.
He explained that the agencies duplicate multiple tests and EPA
has no permanent on-sight field inspector. The state has two
inspectors at all times. The EPA is only overseeing seven out of
1,162 Underground Injection Control (UIC) wells. It seems costly
for EPA to continue doing this and it is supportive of giving
primacy to the AOGCC.
One slide he presented illustrated the similarities in
construction of Class I and II wells that have about a $1 per
barrel difference in operating expense. He said it would take a
lot of effort to change the status quo, but it is worth doing.
MR. SEAMOUNT said if AOGCC gets primacy of the two well classes,
there would be less industry confusion and more savings to the
taxpayer and industry. In the future, if AOGCC decides to go to
one class of disposal well on the North Slope [which would need
a new statute as well as an EPA ruling], the same good things
would happen. He emphasized again that a lot of time and money
is put into resolving confusion between the AOGCC, EPA and the
industry.
SENATOR ELTON asked if he would be negotiating with the EPA for
primacy of wells on state, private and federal lands.
MR. SEAMOUNT answered yes.
SENATOR ELTON asked if the North Slope's role would change if he
negotiated primacy with the EPA.
MR. SEAMOUNT replied no.
SENATOR SEEKINS asked if SB 103 gives him the authority to ask
EPA for primacy. Mr. Seamount indicated yes. Senator Seekins
asked if he would have to create regulations necessary to comply
with the federal requirements.
MR. SEAMOUNT replied yes.
SENATOR GUESS asked if Alaska could have Class I wells that are
not related to oil and gas.
MR. SEAMOUNT replied yes. He added that most Class I wells in
this country are not related to oil and gas. However, the North
Slope has oil and gas infrastructure that generates waste and
it's been mandated that it go down a Class II well, but argument
is that the North Slope waste should be Class II waste.
SENATOR GUESS asked if this bill puts all current Class I wells
and into the future under the AOGCC regardless of whether they
had anything to do with oil and gas.
MR. SEAMOUNT replied yes. If Class I wells were found that are
not related to oil and gas, he would talk to the Department of
Environmental Conservation (DEC) about how to regulate them. He
explained:
The fact is that all Class I wells are constructed the
same and they are constructed to the same standards
that the AOGCC requires. It could turn out that we
could oversee non-oil and gas related Class I wells,
but we haven't come to that point yet.
SENATOR GUESS asked if that's why SB 103 doesn't specify Class I
wells as non-oil and gas and does the commission feel
comfortable regulating those.
MR. SEAMOUNT replied he feels comfortable that the commission
could find a reasonable solution. "I don't think it will be a
big problem."
MARILYN CROCKET, Deputy Director, Alaska Oil and Gas Association
(AOGA), supported Class I primacy being given to the AOGCC. It
has the technical assets and infrastructure required to have
primacy. In 2003, the Independent Groundwater Protection Council
conducted a peer review and the commission was given very high
marks and comments.
CHAIR WAGONER seeing there were no questions, said he would hold
the bill and adjourned the meeting at 3:58 p.m.
| Document Name | Date/Time | Subjects |
|---|