Legislature(1995 - 1996)

03/27/1996 03:37 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   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              
 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                 
  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               
  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              
 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                
  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.                                                        
  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            
  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                 
  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                  
 There being no further business to come before the committee, the             
 meeting was adjourned at 5:10 p.m.                                            

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