Legislature(1993 - 1994)
02/07/1994 04:41 PM Senate RES
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SENATE RESOURCES COMMITTEE
February 7, 1994
4:41 P.M.
MEMBERS PRESENT
Senator Mike Miller, Chairman
Senator Loren Leman, Vice Chairman
Senator Steve Frank
Senator Drue Pearce
Senator Fred Zharoff
MEMBERS ABSENT
Senator Al Adams
Senator Dave Donley
COMMITTEE CALENDAR
CS FOR HOUSE JOINT RESOLUTION NO. 49(RES)
Requesting the United States Department of the Interior to adopt
regulations that give a narrow interpretation to certain
definitions under the Oil Pollution Act of 1990 relating to
evidence of financial responsibility that must be shown by offshore
facilities.
SENATE BILL NO. 215
"An Act relating to and redesignating the oil and hazardous
substance release response fund and to its use in the event of a
disaster emergency; repealing the authority in law by which marine
highway vessels may be designed and constructed to aid in oil and
hazardous substance spill cleanup in state marine water using money
in the oil and hazardous substance release response fund; amending
requirements relating to the revision of state and regional master
prevention and contingency plans; altering requirements applicable
to liens for recovery of state expenditures related to oil or
hazardous substances; amending the authority to contract to provide
personnel to respond to a release or threatened release of oil or
a hazardous substance and to contract to conduct spill related
research; reassigning responsibility for the oil and hazardous
substance response corps and for the emergency response depots to
the Department of Environmental Conservation, and for the operation
of the state emergency response commission and its attendant
responsibilities for the local emergency planning commissions to
the Department of Military and Veterans' Affairs; and modifying
definitions of terms relating to the preceding provisions;
terminating the nickel-per-barrel oil conservation surcharge;
levying and collecting two new oil surcharges; and providing for
the suspension and reimposition of one of the new surcharges; and
providing for an effective date."
PREVIOUS ACTION
SB 215 - See Resources minutes dated 11/19/93, 1/19/94, and
2/7/94.
HJR 49 - See Resources minutes dated 2/7/94.
WITNESS REGISTER
Jeff Logan, Legislative Assistant
c/o Representative Joe Green
Capitol Building
Juneau, Ak. 99801-1182
POSITION STATEMENT: Commented on HJR 49.
Mead Treadwell, Deputy Commissioner
Department of Environmental Conservation
410 Willoughby, Suite 105
Juneau, Alaska 99801-1795
POSITION STATEMENT: Supported HJR 49.
Krista Rogerson
P.O. Box 1386
Valdez, Ak. 99686
POSITION STATEMENT: Opposed SB 215.
Becky Gay, Executive Director
Resource Development Council
121 Fireweed, Suite 250
Anchorage, Ak. 99503
POSITION STATEMENT: Supported SB 215.
Sheri Schlotfeldt, President
Ak. State Chamber of Commerce
217 2nd Ave., Suite 201
Anchorage, Ak. 99502
POSITION STATEMENT: Supported SB 215.
Norma Calvert
Marathon Oil
3201 C St.
Anchorage, Ak. 99519
POSITION STATEMENT: Supported SB 215.
Patty Ginsberg
Prince William Sound RCAC
750 W 2nd Ave., #100
Anchorage, Ak. 99501
POSITION STATEMENT: Opposed SB 215.
Tom Lakosh
P.O. Box 100648
Anchorage, Ak. 99510
POSITION STATEMENT: Opposed SB 215.
Ken Freeman
7604 Snow View Dr.
Anchorage, Ak. 99507
POSITION STATEMENT: Supported SB 215.
Judy Brady, Executive Director
Alaskan Oil and Gas Association (AOGA)
721 W. Fireweed
Anchorage, Ak. 99502
POSITION STATEMENT: Supported SB 215.
Walt Parker, Chairman
Hazardous Substance Spill Technology Review Council
3724 Campbell Loop Rd.
Anchorage, Ak. 99504
POSITION STATEMENT: Opposed SB 215.
Mike Macy
Wave Riders
308 G St.
Anchorage, Ak. 99501
POSITION STATEMENT: Opposed SB 215.
Sue Libenson
824 O Place
Anchorage, Ak. 99501
POSITION STATEMENT: Opposed SB 215.
Paul Headlee
Tanana Chief's Conference
122 First Ave.
Fairbanks, Ak. 99701
POSITION STATEMENT: Opposed SB 215.
Mike O'Maera
P.O. Box 1125
Homer, Ak. 99603
POSITION STATEMENT: Opposed SB 215.
Mary McBurney, Executive Director
Cordova District Fishermen United
P.O. Box 939
Cordova, Ak. 99574
POSITION STATEMENT: Opposed SB 215.
Walt Furnace, General Manager
Alaska Support Industry Alliance
4220 B St.
Anchorage, Ak. 99503
POSITION STATEMENT: Supported SB 215.
Tim Robertson
P.O. Box 175
Seldovia, Ak. 99663
POSITION STATEMENT: Opposed SB 215.
ACTION NARRATIVE
TAPE 94-6, SIDE A
Number 001
CHAIRMAN MILLER called the Resources Committee meeting to order at
4:41 p.m. and announced HJR 49 (FED REGS UNDER OIL POLLUTION ACT OF OF
1990) to be up for consideration.
JEFF LOGAN, Legislative Assistant, House Oil and Gas Committee,
said the sponsor had a schedule conflict and asked him to testify
on behalf of the bill. He said the terms "navigable waters,
offshore facility, and responsible party" were defined in a very
broad manner in the regulations for OPA '90. CSHJR 49 requests the
MMS to reinterpret and narrow these definitions.
MR. LOGAN said it's important to deal with this resolution quickly,
because the MMS has scheduled a hearing on the regulations in
Anchorage for February 16 and they would like it to be a part of
the public record. He explained that this resolution asks the MMS
for specific action. SJR 40 asks Congress for specific action. He
thought the resolutions compliment each other.
MEAD TREADWELL, Deputy Commissioner, Department of Environmental
Conservation, said the administration supports this resolution and
feels it's complimentary to SJR 40 which passed the Senate today.
Number 95
SENATOR PEARCE moved to pass HJR 49 from Committee with individual
recommendations. There were no objections and it was so ordered.
SENATOR MILLER announced SB 215 (OIL/HAZARDOUS SUBS. RELEASE
RESPONSE FUND) to be up for consideration and to receive public
testimony.
KRISTA ROGERSON, Valdez, opposed SB 215 and supported testimony
submitted by the RCAC.
BECKY GAY, Executive Director, Resource Development Council,
supported a strong emergency fund as stated in the original
legislation. It's imperative that the 470 Fund be allowed to
accumulate to $50 million level, the original intent, she said.
They think the .02/.03 split gives clear direction and a spending
cap for addressing noncatastrophic spills. It would allow the Fund
to reach the $50 million level slower than the original allocation,
but much sooner than the current deficit accumulation practice
which will never get there. There is no incentive for state
agencies to ever let the Fund get to the $50 million level, because
there are so many areas to spend the money. She suggested using
general fund monies and oil spill settlement money.
She supported SB 215 as written.
Number 220
SHERI SCHLOTFELDT, President, Ak. State Chamber of Commerce,
testified that they are concerned that the money that has been
appropriated to the Fund has been used for purposes other than
intended in the original legislation. It is not fair public policy
to make the oil industry pay for other industry spills.
MS. SCHLOTFELDT recommended capping the Fund and using the money
for the original purpose. She supported SB 215.
Number 241
NORMA CALVERT, Marathon Oil, supported the position developed by
the Alaska Oil and Gas Association (AOGA). They believe SB 215
will reestablish focus on the original intent of the 470 Fund.
Number 281
PATTY GINSBERG, Prince William Sound RCAC, strongly opposed SB 215.
She said there is money set aside right now at the state and
federal level to respond to an emergency spill. We have much to
lose, because the public's exposure to oil and gas spill impacts
would increase dramatically. SB 215 alarmingly discounts the
seriousness of spills defined as less than catastrophic. It is
insufficient to support the state's spill prevention and response
program.
MS. GINSBERG said the catastrophic oil spill reserve is redundant.
The federal Oil Pollution Act established a $1 billion fund. She
said there are no reserves set aside for the more common huge
spills of less than 100,000 barrels or for prevention.
Passing SB 215 would cripple DEC's ability to prevent and respond
to spills.
TOM LAKOSH, Anchorage, resident, opposed SB 215 and said that it
would be an imposition on the Department of Law and on Department
of Environmental Conservation. An ounce of prevention is worth a
pound of cure. This is a demonstrative attempt by the industry to
prevent the public from protecting themselves.
Number 406
SENATOR PEARCE said she thought the RCAC did a study on tractor
tugs and that it was inconclusive. MR. LAKOSH responded that the
second part of the study hadn't been concluded, but they are
assessing the need for at least two tractor tugs and a salvage tug
to respond to open water oil spills. All the vessels might be
required for the Alyeska marine terminal lease renewal as well as
under the OPA '90 open seas response.
SENATOR PEARCE asked if the study is not complete, how can anyone
know what equipment is necessary? MR. LAKOSH answered many studies
have shown tractor tugs are required for this type of traffic.
Salvage tugs are necessary in the open seas.
Number 422
KEN FREEMAN, Anchorage resident, supported SB 215. He said it was
imperative that the 470 Fund be allowed to accumulate $50 million
to assure that funding is available if another spill ever occurs.
JUDY BRADY, Executive Director, Alaskan Oil and Gas Association
(AOGA), said the 470 Fund currently does not fulfill the purpose
for which it was originally created. It is clear that the Fund was
never intended to fund one third of the DEC's operating budget.
She said there is a lot of confusion about what the balance in the
470 Fund really is and it is necessary to clarify some of the
confusion.
AOGA strongly supported SB 215. It would provide $50 million for
the emergency fund originally envisioned in 1989 undiluted by other
environment related expenditures. They think the balance of money
in the oil reserve account should be transferred to the new
account. They support the permanent .02 per barrel tax that would
go into a separate account insuring a permanent source of funding
for state prevention and preparedness programs while oil is being
produced in Alaska. This would provide some sort of certainty for
the industry and for Alaskans.
Number 550
WALT PARKER, Chairman, Hazardous Substance Spill Technology Review
Council, opposed SB 215. It would not provide the flexibility that
is needed over the next few years in working out what remains to be
done on a prevention and response program which will serve Alaska
for the next several decades.
Number 576
MIKE MACY, Co-author of the Alaska Master Plan for Oil and
Hazardous Substance Spills, testified on behalf of the Alaska Wave
Riders.
TAPE 94-6, SIDE B
Number 580
MR. MACY pointed out that the state of Alaska is facing huge
revenue short falls and the oil companies still make tens of
millions of dollars. SB 215 would give them yet another tax break.
He asked why was the legislature so determined to gut the DEC.
Legislature has already given control of catastrophic spill
response to the Department of Military and Veterans Affairs, an
agency with little spill response experience and no interest in the
responsibility for protecting Alaska's environment.
He pointed out that spill volume is only one factor in determining
the seriousness of a spill. The legislature created the 470 Fund
in the belief that paying for spill response preparedness is part
of the cost of doing oil business in Alaska.
SUE LIBENSON, Anchorage resident, said it is hard to grasp why the
legislature is considering reducing a tax that has been working and
which is not hampering the oil industry when the state is facing an
enormous budget crisis.
She pointed out that the legislature failed to adopt most of the
recommendations of the Oil Spill Commission due to pressure from
the oil industry. The 470 Fund is one of the few actions the
legislature decided to take. She said prevention is the only real
key. Money is much better spent on prevention and contingency
planning, rather than worrying about how much money you have on
hand for a response.
Number 512
PAUL HEADLEE, Tanana Chief's Conference, opposed SB 215 as well as
putting 2/5 of the 470 Fund money into a release, prevention, and
response account. He said the vast majority of spills are 1,000
gallons or less. 470 Funds help rural villages meet their
contingency plan responsibilities.
SB 215 appears to be a tax relief to oil companies while shifting
the cost to Alaska communities and the general fund. Protecting
the environment would be taking a step backwards from the original
intent of the 470 Fund.
Number 498
GAIL PARSONS, Homer resident, opposed SB 215. DEC's ability to
clean up spills needs to continue to be supported by the 470 Fund.
Prevention is the name of the game.
Number 484
MIKE O'MEARA, Homer resident, opposed SB 215. He supported the
testimony presented by Sue Libenson and Patty Ginsberg.
Number 450
MARY MCBURNEY, Executive Director, Cordova District Fishermen
United, supported the position of the Prince William Sound RCAC and
opposed SB 215. SB 215 does a great job of addressing catastrophic
spills. OPA '90 and SB 215 basically insures that catastrophic
spills will be covered.
The .02 that is left over to address the problems that need to be
taken care of. About 94% of all spills are much less than 100,000
barrels. She asked that the amount be raised to .05 to insure
there is enough money to support the state's ongoing programs for
prevention and response.
Number 424
WALT FURNACE, General Manager, Alaska Support Industry Alliance,
supported SB 215. He said the commitment in 1989 when the 470 Fund
was established was to set aside a fund equal to $50 million as an
emergency response key that could be drawn upon in case the state
of Alaska experienced a situation similar to the Exxon Valdez.
Alaska Statute 26 includes language that says the industry would
agree to pay a tax equal to .05 per barrel and that that tax would
be collected until the fund reached $50 million at which time it
would be suspended.
Number 344
TIM ROBERTSON, Seldovia Alaska, opposed SB 215. He owns a lodge
and his business depends on having clean coastal waters. He is in
favored continued use of the .05 barrel tax to pay for, most
importantly, prevention; second, to monitor production and
transportation of oil products; and third, to establish a reserve
to respond to the needs of spills and contaminated spots.
SENATOR MILLER thanked everyone for their participation and
adjourned the meeting at 4:55 p.m.
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