Legislature(1995 - 1996)
03/27/1996 03:37 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 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.