Legislature(2009 - 2010)BUTROVICH 205
04/10/2009 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing - Judge Karl Johnstone, Board of Fisheries | |
| Overview: Fischer-tropsch Synthetic Fuels Pilot Program | |
| SB177 | |
| SB108 | |
| HB134 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 177 | ||
| += | SB 108 | TELECONFERENCED | |
| = | HB 134 | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
April 10, 2009
3:36 p.m.
MEMBERS PRESENT
Senator Lesil McGuire, Co-Chair
Senator Bill Wielechowski, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Hollis French
Senator Gary Stevens
Senator Thomas Wagoner
MEMBERS ABSENT
Senator Bert Stedman
COMMITTEE CALENDAR
Confirmation Hearing - Judge Karl Johnstone - Board of Fisheries
Confirmation Advanced
Overview: Fischer-Tropsch Synthetic Fuels Pilot Program
Heard
SENATE BILL NO. 177
"An Act repealing the termination of licensing and regulation of
sport fishing operators and sport fishing guides and licensing
and registration of sport fishing vessels; and providing for an
effective date."
MOVED CSSB 177(RES) OUT OF COMMITTEE
SENATE BILL NO. 108
"An Act creating the Stampede State Recreation Area."
MOVED CSSB 108(RES) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 134(RES)
"An Act relating to the terms and conditions of commercial
passenger vessel permits for the discharge of graywater, treated
sewage, and other wastewater; establishing a science advisory
panel on wastewater treatment and effluent quality in the
Department of Environmental Conservation; and providing for an
effective date."
MOVED SCS CSHB 134(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 177
SHORT TITLE: NO REPEAL OF SPORT FISH GUIDE LICENSING
SPONSOR(s): SENATOR(s) MEYER
04/01/09 (S) READ THE FIRST TIME - REFERRALS
04/01/09 (S) RES, FIN
04/06/09 (S) RES AT 3:30 PM BUTROVICH 205
04/06/09 (S) Heard & Held
04/06/09 (S) MINUTE(RES)
04/10/09 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 108
SHORT TITLE: STAMPEDE STATE RECREATION AREA
SPONSOR(s): SENATOR(s) THOMAS
02/17/09 (S) READ THE FIRST TIME - REFERRALS
02/17/09 (S) RES, FIN
03/20/09 (S) RES AT 3:30 PM BUTROVICH 205
03/20/09 (S) -- MEETING CANCELED --
03/27/09 (S) RES AT 3:30 PM BUTROVICH 205
03/27/09 (S) Heard & Held
03/27/09 (S) MINUTE(RES)
04/10/09 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HB 134
SHORT TITLE: CRUISE SHIP WASTEWATER DISCHARGE PERMITS
SPONSOR(s): REPRESENTATIVE(s) HARRIS
02/13/09 (H) READ THE FIRST TIME - REFERRALS
02/13/09 (H) CRA, RES
02/17/09 (H) CRA AT 8:00 AM BARNES 124
02/17/09 (H) Moved CSHB 134(CRA) Out of Committee
02/17/09 (H) MINUTE(CRA)
02/18/09 (H) CRA RPT CS(CRA) NT 5DP
02/18/09 (H) DP: HARRIS, MILLETT, KELLER, HERRON,
MUNOZ
03/02/09 (H) RES AT 1:00 PM BARNES 124
03/02/09 (H) Heard & Held
03/02/09 (H) MINUTE(RES)
03/16/09 (H) RES AT 1:00 PM BARNES 124
03/16/09 (H) Heard & Held
03/16/09 (H) MINUTE(RES)
03/25/09 (H) RES AT 1:00 PM BARNES 124
03/30/09 (H) DP: WILSON, JOHNSON, NEUMAN
03/30/09 (H) NR: OLSON, EDGMON, GUTTENBERG, TUCK
03/30/09 (H) RES RPT CS(RES) NT 3DP 1DNP 4NR 1AM
03/30/09 (H) AM: SEATON
03/30/09 (H) DNP: KAWASAKI
04/01/09 (H) CORRECTED RES RPT CS(RES) NT 3DP 4NR
2AM
04/01/09 (H) KAWASAKI SIGNED AM
04/02/09 (H) MOTION TO RETURN TO SECOND FOR AM 1
WITHDRAWN
04/02/09 (H) TRANSMITTED TO (S)
04/02/09 (H) VERSION: CSHB 134(RES)
04/03/09 (S) RES, FIN
04/03/09 (S) READ THE FIRST TIME - REFERRALS
WITNESS REGISTER
JUDGE KARL JOHNSTONE, Nominee
Board of Fisheries
POSITION STATEMENT: Presented background and qualifications.
MEL MORRIS, Member
Board of Fisheries
Kodiak, AK
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
JOHN JENSON, Chair
Board of Fisheries
Petersburg, AK
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
THERESA WISER, President
Sitka Charter Boat Operators Association
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
MONTE ROBERTS, President
Kenai River Professional Guide Association
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
RICKIE DEES, Executive Director
Kenai River Sport Fishing Association
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
STANLEY MALCOLM
Petersburg Charter Boat Association
POSITION STATEMENT: Supported Mr. Johnstone's appointment to the
Board of Fisheries.
MARK K. IDEN, Deputy Director
Operations
Defense Energy Support Center (DESC)
Department of Defense
POSITION STATEMENT: Presented overview of Fischer-Tropsch
Synthetic fuels pilot program.
SENATOR MEYER
State Capital Bldg.
Juneau, AK
POSITION STATEMENT: Sponsor of SB 177.
JOE HARDENBROOK
Staff to Senator Thomas
State Capital Bldg.
Juneau, AK
POSITION STATEMENT: Available to answer questions on SB 108 and
said the sponsor opposed the administration's proposed
amendment.
MARY SIROKI, Special Assistant to the Commissioner
Department of Transportation and Public Facilities (DOTPF)
POSITION STATEMENT: Supported SB 108 with administration's
amendment.
JEFF FARBER, Board Member
Sitka, Alaska Long Line Fishing Association (ALFA)
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
provision (e) on page 2, line 7.
JENNIFER GIBBONS, Executive Director
Prince William Soundkeeper
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
CAROLYN ROSEBURY, representing herself
Cordova, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
ERIC LEON, representing himself
Member, Cordova District Fishermen United
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
STEVE SMITH
Cordova District Fishermen United
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
JOHN FALKNER
POSITION STATEMENT: Supported CSHB 134(RES) without a sunset
date for (e).
DON HERNANDEZ, representing himself
Petersburg, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
PAULA TERREL
Alaska Trollers Association
Juneau, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
KARLA HART, representing herself
Juneau, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a seven-year
sunset for (e) from the time of the vote.
JOHN BINKLEY, President
Alaska Cruise Association
POSITION STATEMENT: Supported CSHB 134(RES) without a sunset for
provision (e).
GERSHON COHEN
Campaign to Safeguard America's Waters (CSAW)
Haines, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
ROD PFLEIGER, Manager
Membership and Community Relations
Alaska Cruise Association
POSITION STATEMENT: Supported CSHB 134(RES) without the sunset
for (e).
TAMMY GRIFFIN
Alaska Hotel Lodging Association
POSITION STATEMENT: Supported CSHB 134(RES) without the sunset
for (e).
TIM JUNE, representing himself
Haines, AK
POSITION STATEMENT: Supported CSHB 134(RES) with a sunset for
(e) on page 2, line 7.
ALPHEUS BULLARD, Legislative Counsel
Legislative Affairs Agency
Alaska State Legislature
POSITION STATEMENT: Explained how the sunset amendment changes
the intent language of HB 134.
TELITHA and HANNA WILSON
Alaska Youth for Environmental Action
POSITION STATEMENT: Presented statement in support of investment
in renewable energy technologies in Alaska.
ACTION NARRATIVE
3:36:35 PM
CO-CHAIR LESIL MCGUIRE called the Senate Resources Standing
Committee meeting to order at 3:36 p.m. Present at the call to
order were Senators Wagoner, French, Stevens, Wielechowski,
Huggins and McGuire.
^Confirmation Hearing - Judge Karl Johnstone, Board of Fisheries
Confirmation Hearing - Judge Karl Johnstone, Board of Fisheries
3:37:08 PM
CO-CHAIR MCGUIRE announced the confirmation hearing for Judge
Karl Johnstone, nominee for the Board of Fisheries, to be the
first order of business.
3:37:45 PM
KARL JOHNSTONE said he has been in Alaska since 1967 and has
been a user of the resource. He is intensely interested in the
Alaska's fisheries, and finds it to be challenging. He thinks he
could do a good job, and it gives him an opportunity to "give
back" to the state that has been very good to him.
3:39:40 PM
SENATOR WAGONER asked what his position is on the Board meeting
throughout the state of Alaska on issues pertaining to each
particular region. Currently, the Board doesn't seem to have the
wherewithal to do that.
MR. JOHNSTONE answered that there are many factors to consider.
The area has to have adequate infrastructure, hotels,
restaurants, Internet and cell phone service, emergency services
and airline services. After that the number of stakeholders,
cultural impacts, and economic impacts on the relevant community
should be considered. It's not cut and dried he said, and he's
all for having hearings in the area that the proposals affect
once the basics are met.
SENATOR WAGONER asked if he lives in Arizona right now.
MR. JOHNSTONE answered yes; he lives in Prescott, but he spends
more time in Alaska; it's close to 50/50. He would expect to be
spending even more time in Alaska because of the Board meetings.
3:45:32 PM
SENATOR HUGGINS said a commercial fishing group in Cook Inlet
filed a suit that might impact Alaskan dip netters and he wanted
his view on that issue.
MR. JOHNSTONE replied that he would hate to see any impact that
would take allocations away from the personal use dip net
fishery, particularly in the Kenai River, where a lot of fish
are harvested for personal use. Upper Cook Inlet has a fully
allocated fishery, but he would hate to see it go away. People
use them for personal consumption throughout the year.
SENATOR HUGGINS asked if he had any thoughts on the priority of
protecting fish versus allocation of them in the Cook Inlet
area.
MR. JOHNSTONE replied that the Board's rules and regulations
require it to address the stocks when they become "stocks of
concern." He wants to make sure none of those stocks becomes
totally depleted in the first place - using science. The Chinook
salmon fishery in upper Cook Inlet is of concern and people have
to share equally in the cutbacks in order to sustain the
resource.
3:50:15 PM
SENATOR HUGGINS said he had a number of complimentary e-mails
about Judge Johnstone. On the other hand, he specifically wanted
to know this year about the Deshka River where it appears that
up until mid-June people will not be able to keep a fish for
four days out of the week. What sort of thoughts come to his
mind in terms as fish management when a fish can't be kept for a
majority of the week?
MR. JOHNSTONE replied that is going to be necessary on the
Deshka River, as well as at Alexander Creek. That fishery looks
like it is slowly going away, and if it does, none of them will
have fulfilled their constitutional mandate. Everybody is going
to have to share in getting it back on its feet.
3:52:41 PM
SENATOR STEVENS asked what he has done to prepare himself for
serving on the Board.
MR. JOHNSTONE replied other than having an inquisitive
background and using his background as a judge in interpreting
information, he has put in a lot of hours in learning the ropes,
regulations and statutes that pertain to the Board.
3:54:06 PM
SENATOR WAGONER suggested that he look at the Kenai system in
the 60s when it was totally shut down for a number of years, and
that helped it recover pretty well.
MR. JOHNSTONE said he wouldn't hesitate to do that again if it
becomes necessary and the science backs up that decision.
3:55:01 PM
SENATOR WAGONER asked if he cared to discuss the appointment of
Richard McVey as the Coroner.
MR. JOHNSTONE said as the presiding judge, he was required to
hire a lot of people and one of them was the coroner. He wasn't
very happy with any of the applicants. Chief Justice Daniel
Moray told him about Richard Mr. McVey's interest in the job. He
is a former U.S. attorney, a former legislator for the State of
Alaska, former city attorney and a well-known lawyer that he
respected; so he offered him the job. He didn't want to take up
any more time on the issue. This was a mistake, but he was
reprimanded by the Supreme Court for giving the appearance of
impropriety, but Mr. McVey is still a great choice.
3:56:57 PM
MEL MORRIS, member, Board of Fisheries, said he lives in Kodiak
and supported Judge Johnstone's appointment. He comes to the
meetings prepared and he is impressed with his performance on
the Board so far.
3:58:22 PM
JOHN JENSON, Chair, Board of Fisheries, said he is a resident of
Petersburg and is a commercial fisherman. He supported Mr.
Johnstone's appointment for the reasons stated by Mr. Morris.
He's great to work with and comes to meetings prepared.
THERESA WISER, President, Sitka Charter Boat Operators
Association, Sitka lodge owner, supported Mr. Johnstone's
appointment to the Board of Fisheries for all the reasons
already stated. He is very articulate and cares about the
resource.
3:59:50 PM
MONTE ROBERTS, President, Kenai River Professional Guide
Association, supported Mr. Johnstone's appointment to the Board
of Fisheries. He's a great choice.
RICKIE DEES, Executive Director, Kenai River Sport Fishing
Association, fully supported Mr. Johnstone's appointment to the
Board of Fisheries. He takes a comprehensive view and is well-
informed and balanced. He puts the resource first.
4:00:58 PM
STANLEY MALCOLM, Petersburg Charter Boat Association, supported
Mr. Johnstone's appointment to the Board of Fisheries. He had
good information and was interested in listening to the people
in front of him. He didn't show preference to any one user
group.
SENATOR STEVENS said in accordance with AS 39.05.080, the Senate
Resources Committee had reviewed the Governor's appointment of
Karl Johnstone to the Board of Fisheries and recommended that
his name be forwarded to a joint session for consideration.
There were no objections and it was so ordered.
#
^Overview: Fischer-Tropsch Synthetic Fuels Pilot Program
Overview: Fischer-Tropsch Synthetic Fuels Pilot Program
4:02:40 PM
CO-CHAIR MCGUIRE announced the Fischer-Tropsch overview
presented by Mark Iden. She reminded members that Alaska had
been included in a pilot project for synthetic fuels production
by the Department of Defense with a deadline of 2014 for 50/50
synfuels.
MARK K. IDEN, Deputy Director, Operations, Defense Energy
Support Center (DESC), Defense Agency Logistics Agency,
Department of Defense (DOD), introduced Major John Martin who
takes care of the day to day energy business in Alaska for DESC.
4:03:23 PM
MR. IDEN said DESC is part of the Defense Agency Logistics
Agency within the Department of Defense. DESC is called the
"petroleum purchasing arm" for the Pentagon. Their mission is to
buy fuel for the DOD customers - Army, Navy, Air Force, Marines.
DESC is more than just fuels; it is an energy support customer.
They are involved in installing energy - natural gas, coal,
electricity and a whole series of services. As a matter of fact,
they privatized 12 utility systems here last year at the Army
locations (Fort Wainwright, Fort Greely, and Fort Richardson)
for $1-plus billion, and now they are buying back energy from
Doyon, the new provider. The bottom line is that they perform a
very broad range of missions for their customers.
DESC sells about 130 million/barrels of fuel a year, which
equates to about 4.5-5 billion gallons of fuel; this is a big
part of their business. They are engaging more and more on the
installation energy side to the tune of $1 billion/year. They
are a small organization by Washington, D.C. standards, with
about 1,000 people world-wide doing $15-17.5 billion/year of
business. They support war fighters and a lot of federal
civilian agencies throughout the United States.
4:05:37 PM
(Slide 5) MR. IDEN said he would now talk about the Fischer-
Tropsch Synthetic Fuels Pilot program, an Alaskan pilot program.
DESC had an industry summit in Anchorage on March 11-12 where
they introduced this program to the state and to the industry in
particular. They had been working on the background of this for
a couple of years and elected to pick the State of Alaska to go
forward with this particular initiative for reasons he would
talk about later. A series of experts from DESC were present to
talk about how the contract would be worked, how proposals would
be structured, how they would be evaluated, and all the issues
associated with this initiative. It is very complex in nature.
There are a lot of pricing and financial matters, and quality
and environmental considerations that need to be addressed. They
were very pleased with the conference; the second day saw
individual breakout sessions with a number of firms present.
(Slide 6) DESC picked the state of Alaska for this pilot because
natural gas and coal are two of the primary feed stocks that can
be used in the Fischer-Tropsch process and Alaska has plenty of
both. The other aspect of their decision is that they needed all
of their customers to agree to go to this different fuel instead
of the typical JP8 fuel that is currently used, and this area is
somewhat self-contained.
SENATOR STEVENS asked for a little bit of history behind
Fischer-Tropsch fuel.
MR. IDEN answered that Fischer-Tropsch is a chemical process
where different feedstocks - coal, natural gas and bio-mass -
are converted to a liquid-based fuel. Fischer-Tropsch is named
after the two Germans who developed this process. It was used
significantly by Germany at the end of WWII when they lost their
oil reserves out of Romania and had to use coal, basically, to
create liquid fuels. South Africa, all through apartheid, could
not get crude oil supplies and they used their coal resources to
create liquid fuels also. So, it's a proven technology that
hasn't been applied before because crude oil is so plentiful.
Anything that is a diesel burner can use JP8 fuel in the eyes of
the military, and that is the predominant fuel DESC buys
worldwide. It is equivalent to commercial jet A1 fuel. The one
difference is that special additives are used because of
military applications.
4:09:45 PM
SENATOR WAGONER asked the difference between this fuel and the
diesel that is currently produced that is low sulfur.
MR. IDEN said that is an interesting question. It's gotten to
the point now where aviation fuel is no longer considered the
clean pristine fuel, and the ultra-low sulfur diesel fuels have
been found to be cleaner burning. JP8 is their current fuel; the
synfuel blend that they are looking to buy in the future will
actually help them become a cleaner grade fuel. It is so clean
that it lowers the emissions criteria. Stricter emission
standards are coming down the federal pike soon and this fuel
will help the state meet those requirements.
SENATOR WAGONER said he understands that, but everyone in the
state is required, whether it's a fishing boat or a truck, to
use the low sulfur diesel. He thought Mr. Iden said they use the
JP8 as a base fuel for ground operations. "So what's good for us
is not necessarily good for the federal government?"
MR. IDEN said he was correct. They use JP8 for ground fuel
applications. "It is what it is."
4:11:42 PM
CO-CHAIR MCGUIRE asked what the additives are in Jet A1 fuel.
MR. IDEN replied that JP8 is very similar to the international
commercial jet fuel (Jet A1). There is a Jet A fuel in the Lower
48 that is slightly different; it has a lesser freeze point
restriction than Jet A1 does. JP8 has an identical freeze point;
the additives are things like fuel system icing inhibitor,
corrosion inhibitor, and lubricity improver. These additives are
unique to military systems and the performance characteristics
of their weapons systems.
MR. IDEN said they do not have synthetic fuel plants built
throughout the United States, because it is a large dollar
investment. Right now they do their business round the world on
annual contracts. They have the ability to go up to 5-year
contracts with five 1-year options on top of that for a total of
10 years, but industry has asked for up to 20-year contracts.
The Fischer-Tropsch process is easily adaptable for them. The
key point is that they are looking to go "feedstock neutral,"
which means they won't be telling anyone what to use - leaving
it to industry to figure out what makes the most sense to them.
But they do require a 50/50 blend of synthetic/conventional
fuel, because that is what all the weapons systems are using.
DESC's distribution system cannot blend, so the suppliers will
have to provide that function.
4:14:04 PM
JP8 pricing needs to be competitive, he said, but industry has
said it could do this even when oil was at $140/barrel.
SENATOR HUGGINS asked what other locations are going to have
demonstration projects.
MR. IDEN replied they are using Alaska as the pilot project, and
they will eventually apply the success from this, hopefully, to
the Lower 48. The Air Force requires 50 percent of its domestic
fuel to be blended 50/50 by 2016. In the Lower 48 he has
hundreds of customers and they are not all on board yet, and the
detail of having a location where he can get all of his
customers on board is critical; so the focus is on Alaska.
4:15:59 PM
CO-CHAIR MCGUIRE said what makes this pilot project unique is
that Alaska has all the five military bases together in one spot
and they are all in agreement. She wanted to know how this could
encourage economic development in Alaska and get fuel to
Alaskans in a more affordable fashion.
SENATOR WAGONER asked if this is the only process he is
accepting proposals on at this time.
MR. IDEN replied they are focusing on the Fischer-Tropsch
process because that is what is happening right now. They are
looking at other initiatives, but those are high in the R&D
side. They have a 2016 deadline, so they need a technology that
is already up and running.
4:18:22 PM
He said Section 526 of the Energy Independence and Security Act
of 2007 talks about life-cycle green house gas requirements and
it says when they buy this fuel for other than testing and
certification procedures, they need to insure that the life-
cycle green house gas requirements of the blended fuel are less
than or equal to a conventional petroleum product. So when they
start talking about feedstocks of coal and natural gas, they
need to look at, basically, the CO footprint and make sure it is
2
no higher than the existing process for conventional petroleum
products. Natural gas comes in with a very good footprint. It
basically starts out in a positive arena; coal has a very high
carbon footprint, which becomes a potential problem. Blended
fuels are basically cleaner than conventional fuel.
4:20:03 PM
CO-CHAIR MCGUIRE asked if part of the pilot project is a
recognition that at some point there will be a cap and trade
association with carbon.
MR. IDEN answered they aren't actively engaged in the cap and
trade aspect. They want to identify the model and tell folks
what the standard is.
4:20:59 PM
(Slide 7) For a little more background on this initiative, he
said it's a DOD-level program with the Air Force as the lead.
The Air Force is the biggest customer of DESC products, and they
have indicated they want to certify all of their platforms by
2011 on this 50/50 blend product. They have already certified
and tested the B52, the B1 Bomber, the C17 Cargo Aircraft, and
they are in the process of getting ready to test all of their
fighter aircraft, also. The Army is currently testing its ground
fuel and aviation equipment, helicopters in particular. Everyone
is wanting to get their equipment tested and certified and ready
to go within a short period of time.
4:21:42 PM
MR. IDEN said this process was started 2.5-3 years ago when they
went to industry with two requests for information (RFI); and in
2006 they received 28 responses moving forward in this general
area. Twenty-seven came back saying that Fischer-Tropsch is the
way to go. They also talked about the price concerns and
financial issues. In 2007 DESC did another more detailed RFI to
industry: could they blend fuel for them and put additives in,
and were there concerns about the contract duration.
4:22:29 PM
(Slide 8) They decided back then that they could approach this
from two ways. The short term acquisition was for certification
and testing; they awarded two series of contracts. The first one
was over 300,000 gallons of GTL product to Shell Malaysia that
has all been used.
Because DESC used gas for the first go-round, in June 2006 they
had a 60,000 gallon requirement specifically for testing the
other fuel, coal. That was awarded to the South African State
Oil Company (SASOL). DESC awarded a follow-on contract for
another 300,000-plus gallons - not because they mandated coal,
but because it was just the cheapest feedstock available at the
time. That fuel is in their distribution process right now -
again for testing and certification programs. That gets them
over the "initial hump." Now they need "to go operational."
4:24:01 PM
MR. IDEN said about 70 percent of the oil in the U.S. is from
foreign locations, and their goal was to get away from using
foreign oil and on to using domestic production. Building in
Alaska will be different than in the Gulf Coast area, but once
the plant is up and operational, the requirement will be
sustainable.
4:25:03 PM
(Slide 9) Why do this? It's energy security. The department
looked at this in the late 70s/early 80s during some Arab oil
embargos, but it was really a price-related issue then. Now it's
energy security. It wants domestic resources and has
environmental considerations, and this will help them get headed
in that direction. These plants take upwards of 3-5 years
depending on the size, scope and location to build; so they
literally need to start now.
Current petroleum providers like BP's Nikiski plant could do
this, but they are really looking at the new synthetic fuel
suppliers - like the ones that attended their Anchorage summit.
But participation by both is needed.
4:25:56 PM
CO-CHAIR MCGUIRE asked if he was going to address what the
criteria will be for processing the bids, and whether he would
weigh domestic companies more heavily.
MR. IDEN said that subject is a few charts ahead. Chart 10 is
the map and bulk fuel business locations in Alaska. Their major
customers are Elmendorf and Eielson where JP8 fuel will be
replaced. He explained that JP4 is an older version of fuel that
was used during the Viet Nam war, and now only a few locations
use it because of associated cold property issues.
Eielson JP8 is a little bit unique because some separate federal
earmark money might be building a CTL plant there. But if that
plant is built, it will be done separately and Eielson's fuel
requirements will probably be met by the DESC contract. He
further explained that this CTL program, which is called
enhanced use lease (EUL), was looked at in the Malmstrom Air
Force Base in Montana where essentially the base would just
provide the property for a plant to be sighted on. So if that
initiative goes forward, there is the potential for sighting a
CTL plant on Eielson Air Force Base. However, the ability to
sell the fuel from that facility is not part of that
arrangement. Some other vehicle would have to actually sell the
fuel to the government or other people, and DESC's contract
would be that vehicle.
4:28:28 PM
CO-CHAIR MCGUIRE asked if the supply will be born out of an RFP
process that will be open and competitive not only to the CTL
Eielson project, but to anyone who might be looking at GTL or
biomass to liquids.
MR. IDEN responded that was absolutely correct. They have other
programs that buy smaller volumes of fuel in the state, an
annual requirement of about 70-80 million gallons of fuel has
been identified so far. This sounds impressive, but compared to
Anchorage International Airport that uses more than 800-900
million gallons/year, their requirements are relatively small.
Fairbanks uses about 100-200 million gallons/year. DESC's
requirements within DOD are not enough to build a proper-sized
plant, so it is critical from his point of view that other
commercial requirements are looked at to make this project
feasible - like Anchorage, Fairbanks, and the state ferry
system.
SENATOR WAGONER asked what overall negative affect this would
have on the North Pole Tesoro Refineries. It sounds like he
would be going directly into competition with them eventually.
MR. IDEN replied that is a great question. The 50 percent
synfuel is displacing some of the existing petroleum refineries'
capabilities. They were invited to their summit, but he has
adopted a wait-and-see approach. He hasn't received any negative
input from them. This might be a positive for some refineries
because they might have to expand or do additional work. Another
thing is the emission standards are going up, and the current
jet fuels are going to have a problem meeting those criteria.
4:32:37 PM
SENATOR HUGGINS asked if the producers would start certifying
the engines at some point.
MR. IDEN answered that work is going on right now. A lot of the
engines the military uses, the bombers and the cargo aircraft,
are very similar to what the commercial aircraft use. He is
working hand in hand with Commercial Aviation Alternative Fuel
Initiative (CAFFI) on this process. "This is not a DOD go-it-
alone effort."
4:34:04 PM
A question was raised earlier today about the diesel engine -
Cummins and Detroit Diesel - and he knows the Army is doing
similar testing and certification on their diesel engines. He
assumed a bridge would be built between the commercial side and
DOD, "because a lot of similar motors are used out there." But
he has been more focused on the aviation side so far.
(Slide 11) They had their summit in March and their goal was to
explain their concept and approach, solicit input and feedback
from industry, which they got a lot of. They are going to refine
their acquisition strategy, issue an RFP, get offers, evaluate
the offers and eventually award a contract. They expect it will
take 4-5 years to actually build a plant, depending on where it
is located. From an operational point of view, their contract
will start once fuel is delivered; so they won't "eat into our
contract duration" during the construction time.
4:34:55 PM
(Slide 12) The "Notional Timeline" is how they traditionally do
business in their bulk fuels business. The idea was to put
something on the wall so people could "pick at it." The issue
solicitation of June 1, 2009 and first delivery of product in
2014 were okay, but in between there was a lot of input.
Industry said it needed 18 months to put a proposal together.
DESC knew a 60-day solicitation wasn't right, but it stimulated
discussion. They may go through a "pre-feasibility" or a "down-
select process" to let people know how they are going forward
and how they can discuss their projects with them. They would
down-select two or three viable alternatives and then issue the
formal solicitation that says, "Now I need your pricing
proposal, now I need your real specifics."
CO-CHAIR MCGUIRE asked him to let the committee know what date
they come up with.
4:36:43 PM
(Slide 13) Industry Summit Summation. They achieved what they
wanted to do in Anchorage; they got a lot of people together,
and categorized the feedback into three broad areas and 10
specific items. They are following up with legislative hearings
and continue to work this issue inside the Beltway with the Air
Force, the Pentagon and other people to refine their strategy.
This is a difficult complex initiative and they are going to do
it right.
He said a show stopper is if they can't get commercial industry
involved. The synfuel could be produced up here and potentially
be shipped to the Pacific Rim, but those transportation costs
will make it cost prohibitive. It must have in-state use.
(Slide 14) The three broad categories are:
· defining the requirement quantity/location, commercial
sector requirements, feedstock source/plant restrictions,
and Eielson AFB requirements.
· structuring the RFP for success: They can't go forward
until the 526 environmental criteria are fully specified;
the DESC, the EPA and the Air Force are working on them.
That's why they may do the interim process of the down
select. He said that Nikiski produces a syncrude that goes
to a traditional petroleum refinery that blends it with
traditional crude oil for a finished product.
· pricing structure: They thought they would price their
product just like regular JP8 that they buy. When they buy
it in Alaska they use existing market indexes. Alaska
doesn't have a big trading environment; so when they buy
for Alaska they work their pricing structure off an average
of a San Francisco/Los Angeles/Seattle set of pricing
criteria - like a Platts Oilgram. They thought they would
do the same thing for this because it is a drop-in
replacement product. The people who want to produce using a
coal stream said they prefer their coal-derived product be
priced according to the coal market place; the folks who
are producing product from a gas point of view prefer to
use a syn-component according to a natural gas structure.
The bottom line is that everyone needs to be evaluated
fairly - a coal offer and a gas offer at the same time.
· proceed by establishing a timeline of acquisition and go
through the pre-feasibility/down select process as he
described previously.
4:40:49 PM
(Slide 15) Areas for state assistance:
· financial incentives to industry to participate through tax
credits and loan guarantees.
· encourage the commercial aviation industry with incentives
for participation and price considerations. They are the 90
percent player in this game.
· streamline regulatory requirements for permitting and
easements and environmental standards.
4:42:21 PM
CO-CHAIR WIELECHOWSKI asked if this project is definitely moving
forward.
MR. IDEN answered that it doesn't have the final stamp of
approval, but they are moving in that direction. It has many
complex levels, but right now everyone remains onboard and it
appears to be a feasible approach. They have to know the
environmental guidelines first.
CO-CHAIR WIELECHOWSKI remarked that this is a great project;
it's better than shipping our product out of state. Why do we
need to incentivize this project, because it sounds like it's
going already? Is 30,000 gallons/day enough for one plant to
produce?
MR. IDEN answered the DOD's requirements in-state are 2,500
gallons/day and the industry has identified a good sized
economic plant would be about 25,000 gallons/day. DESC is a
tenth of the overall requirement; the commercial side of the
house makes up the difference. The commercial aviation industry
is saying it's not paying an extra penny for a gallon of fuel
because their costs are already so high. That is where he sees
part of the incentives going.
There are a lot of good reasons to do this from the state point
of view, from DOD's point of view and an American's point of
view. Now they need to put it together and figure out how to
best package it. They want to go forward, but he doesn't have
enough horse-power in terms of requirements to make it happen.
Incentives the state might provide potentially will be reaped in
the benefits of bringing that industry here and having the
workforce to build the plants. West Virginia estimated it would
take 2-3,000 people over a 3-4 year period of time. People would
have to run this plant on a continual basis. More construction
is associated with delivering the feedstock. "If it doesn't make
sense, industry will be the first to tell us, because they won't
bid on our efforts and they'll back out of it."
4:46:38 PM
SENATOR WAGONER said the figures on slide 10 add up to a little
less than 5,000 barrels/day, but that's a blend. So, only 50
percent of that figure would come from the plant's production.
Mr. Iden indicated that was correct. Then he asked where the CO
2
would be sequestered; the state has very few areas right now for
that.
MR. IDEN said he isn't involved in the valuation of that
project, but he could offer some generalizations. You can pump
the CO into wells and help the flow. A CTL plant would have to
2
meet that criterion.
4:48:07 PM
(Slide 19) Environmental Considerations: He said Section 526
language applies to a federal agency like him. So, these
criteria do not apply to whomever buys the fuel at Anchorage
International Airport, and the state and local entities haven't
defined their criteria yet. He is a little bit like the tail
wagging the dog.
The following charts showed some of the complexities they would
meet in the Lower 48.
4:50:51 PM
CO-CHAIR MCGUIRE thanked him and said the Senate sent Eugene
Arnett to their forum and he brought material back; she met with
Representative Neuman yesterday to coordinate efforts. They are
excited about the program.
SB 177-NO REPEAL OF SPORT FISH GUIDE LICENSING
4:53:33 PM
CO-CHAIR MCGUIRE announced SB 177 to be up for consideration.
SENATOR MEYER, sponsor of SB 177, said he thought they had a
pretty good discussion of this bill on Monday, and he was
available for questions. It continues an existing successful
program.
SENATOR HUGGINS said that some people have mentioned
establishing a sunset date of 2015, and asked if he would object
to that.
SENATOR HUGGINS moved to adopt conceptual Amendment 1 to extend
the sunset to 2015. There was no objection and Amendment 1 was
adopted.
CO-CHAIR MCGUIRE announced that she had already closed public
testimony on this bill and she apologized for that, but if there
are new aspects of testimony to offer, she would be happy to
receive them at 465-2267. There was no further committee
discussion.
SENATOR HUGGINS moved to report SB 177 as amended from committee
with individual recommendations and attached fiscal note(s).
There being no objection, CSSB 177(RES) moved from committee.
SB 108-STAMPEDE STATE RECREATION AREA
4:56:14 PM
CO-CHAIR MCGUIRE announced SB 108 to be up for consideration.
CO-CHAIR WIELECHOWSKI moved to adopt the committee substitute
(CS) to SB 108, labeled 26-LS0568\R. There was no objection and
version R was before the committee.
JOE HARDENBROOK, staff to Senator Thomas, sponsor of SB 108,
said the bill had already been heard once before, and the
administration wanted to make a statement on their proposed
amendment.
CO-CHAIR MCGUIRE said because of the lateness of the hour, she
asked Ms. Siroki to present the amendment in the next committee,
which is Finance, but she agreed that it is important to get the
administration's position on the record on what the bill would
be without the amendment.
4:57:35 PM
MARY SIROKI, Special Assistant, Department of Transportation and
Public Facilities (DOTPF), said they worked with the DNR to
assure they were on the same page and put together an amendment
that had legislative intent as well as specific clarifying
language that identified transportation and utility right-of-
ways. The intent meets the needs of Department of Natural
Resources (DNR) and says the DOTPF will issue to the DNR an
easement permit for their management of recreational activities
and the construction of recreational facilities within the
transportation right-of-way. The second part of the intent
language clearly says that the DOTPF will move and/or pay for
the relocation of infrastructure should DNR have constructed any
such infrastructure in the right-of-way. The third part of the
intent language states that the commissioners of DNR and DOTPF
may relocate the right-of-way within the Stampede Recreational
area.
The actual amendment specifically states that the DOTPF would
have a utilities and transportation right-of-way that exists in
the space of 500 ft. on either side of the RS2477 right-of-way;
it would go to the park boundary and then parallel the park
boundary and come back in where the RS2477 trail reenters the
recreation area. It also states that upon completion of a
transportation or utility improvement within the Stampede
Recreation Area the Department will only retain such right-of-
way as necessary for the operation of that route and will vacate
the rest of it.
5:00:23 PM
She said it is the administration's position that the inclusion
of a transportation and utility easement right-of-way through
this recreation area is necessary for its support of this bill.
SENATOR FRENCH, to understand the nature of the disagreement
they have before them, he asked how the sponsor views the
administration's request for an amendment.
MR. HARDENBROOK replied that Senator Thomas introduced this bill
to reflect the wishes of the Denali Borough and its elected
Assembly and administration. He has circulated to the members of
the committee a memo from the Denali Borough Mayor, Dave
Talerico, stating opposition to the proposed right-of-way. So
most people who will be most impacted by this amendment oppose
it and so does Senator Thomas.
SENATOR WAGONER said this could be taken care of later, but
asked if the Denali Borough is a second or first class borough.
MR. HARDENBROOK replied that they are a second class borough
without road powers.
SENATOR WAGONER stated if they don't have road powers, the only
person who is going to be building a road through there is the
State of Alaska. He understands why the state needs a road
right-of-way, but he didn't understand why they needed it to be
that big.
MS. SIROKI replied that the DOTPF believes that a 1,000-ft.
right-of-way gives them enough room to be able to locate a road
in the best area possible - so they could look at substrate and
avoid wetlands and historic and archeological sites.
SENATOR WAGONER suggested letting the next committee of referral
look at it.
At ease from 5:02 p.m. to 5:10 p.m.
5:10:55 PM
CO-CHAIR WIELECHOWSKI moved to report SB 108 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, CSSB 108(RES) moved from committee.
CSHB 134(RES)-CRUISE SHIP WASTEWATER DISCHARGE PERMITS
5:12:39 PM
CO-CHAIR MCGUIRE announced CSHB 134(RES) to be up for
consideration. She said they already had public testimony, but
she would open it up briefly to see if people had something
different to say than they said before.
5:13:33 PM
JEFF FARBER, Alaska Long Line Fishing Association (ALFA), Sitka,
had a letter that she asked him to summarize. He supported HB
134. He is a 10-year resident of Sitka and a 20-year commercial
fisherman. He values pristine clear waters that Alaska's fish
are harvested from. They have worked really hard to get that
message out to the public and don't want that message to be
degraded or compromised. They are committed to being good
stewards of Alaska's resources and expect that same commitment
from other users. He supported a sunset on the mixing zones for
cruise ship discharges.
5:15:28 PM
JENNIFER GIBBONS, Executive Director, Prince William Sound
Keepers, and serves on the Board of the Cordova Chamber of
Commerce. She sees this issue from both an environmental
perspective and tourist perspective. They have made good
progress in allowing industry some flexibility with the timeline
and that is both realistic and fair. But that needs to be
balanced with protecting our Alaskan waters by insuring there is
a deadline that will sunset the waivers allowed in Section (e).
They know that both from the technology conference earlier this
year and from DEC's March 2 report that the technology is
advancing, that the deadline has been the driving incentive
behind progress and that it is possible to meet the goal within
the next several years.
5:17:06 PM
CAROLYN ROSEBURY, representing herself, Cordova, urged amending
section (e) to sunset in 3-5 years, because this deadline is the
only incentive for compliance.
ERIC LEON, representing himself, said he is a member of Cordova
District Fishermen United, agreed with previous comments in
support of sunsetting section (e).
STEVE SMITH, Board Member, Cordova District Fishermen United,
supported HB 134 and sunsetting section (e) in 3-5 years.
Everything depends on fishing for him, so the cleanliness of our
waters is paramount.
JOHN FALKNER, representing himself, Homer, supported passing
CSHB 134(RES) without the sunset amendment. He operates three
hotel properties on the Kenai Peninsula, and has worked hard to
develop ground-based motor coach tours with the cruise companies
there. They are very price-sensitive and are the first things
visitors cancel when the price of their trip increases. In 2009
he had 600 more room cancelations than in 2008. More
importantly, he said the entire Clean Water Initiative should be
under review by this committee, because the process was "flawed
to the core."
5:20:47 PM
He is totally ignorant of chemicals and mixing zones, and his
research shows that those who voted for this initiative had no
idea what they were voting on. Secondly, how can an initiative
be considered valid if what the initiative implements is
unachievable?
5:21:36 PM
DON HERNANDEZ, representing himself, Petersburg, said he had
been a commercial gillnet fisherman in Southeast Alaska for 27
years and very much opposed allowing mixing zones in its waters.
He supported the sunset section (e) in 3-5 years and monitoring
at the point of release.
He has three major concerns: one is that he fishes in waters
where cruise ships are transiting. So he is concerned with how
their discharges affect his nets, with how they pollute our
waters and they affect public perception in the marketplace of
how pristine our waters are.
5:22:58 PM
PAULA TERREL, Alaska Trollers Association, said she and her
husband had been commercial fisherman in Southeast Alaska for 30
years. She complimented everyone on the compromise in HB 134,
but, she said, section (e) on the mixing zone waivers needs a
sunset. She said if the industry for some reason can't implement
the technology, the sunset provision could be extended or
removed later, but for now there needs to be a level playing
field.
5:24:45 PM
KARLA HART, representing herself, Juneau, asked to give the
industry no more than seven years from the date the Alaska
voters passed the cruise ship initiative for compliance. The
cruise industry excels at marketing and public relations, and
the will use the economic crisis and its impact on tourism to
give them added leverage in asking to roll back elements of the
voter-approved initiative.
She has worked around Alaska tourism since the 1960s; she served
on the Alaska Tourism Marketing Council in the 1990s and
regularly follows the cruise industry and Alaska tourism as a
matter of interest. Although there appear to be quite a few
cruise industry players in Alaska, it boils down to three; of
those, Carnival Corporation has about two-thirds of the ships
operating under the Princess, Holland America and Carnival
brands. Carnival is a publicly traded company; and this is one
company that has the resources to actually get this technology.
Carnival's 2008 annual report indicated that globally they have
$33 billion in assets, 88 ships, capacity of 170,000 passengers,
86,000 employees; they transport over 8 million passengers with
revenues of $14.5 billion, and have a net income of $2.3
billion. They have over $9 billion of vessels on order as they
"continue to grow their global footprint" as they say. Alaska
voters said they don't want that global footprint rimmed with
sewer sludge and toxic waste. Cruise lines have the resources to
address this but they lack the will. Their 2008 report said they
are improving fuel efficiencies, reducing their carbon footprint
and helping their bottom line. The problem is that meeting clean
water standards does not improve the corporate bottom line.
She stated that Mick Aaronson, Carnival's, largest single
shareholder, recently announced pulling a ship from Alaska in
2010 due to the $50/head tax also included in this voter
initiative. She believes this is part of their announced cost-
cutting measures that include leveraging all ships for
purchasing and negotiating contracts in Alaska. It's a game of
strategy and strategic investment. If he took all of his ships
and went home, Alaska tourism would survive. There would be a
crisis for the businesses that have become dependent on cruise
lines, but there would also be an opportunity to restructure
Alaska tourism from current monopolistic foreign controlled
tourism to a diverse resilient locally owned and controlled
tourism economy.
5:28:02 PM
JOHN BINKLEY, President, Alaska Cruise Association, said the
volumes the cruise ships discharge is relatively low compared to
municipal systems. The ships are not in a line and discharging
in spurts one after the other. They discharge continually
whether at dock or under way; as they produce the clean water it
is discharged from the ship. Because it is extremely clean it is
allowed to discharge continuously with a few exceptions, one
being Glacier Bay.
An EPA study indicated that an average ship discharges about
143,000 gallons per 24-hour period -compare that to communities
like Juneau that discharges over 9 million gallons in a 24-hour
period. It would take 53 cruise ships parked in Gastineau
Channel to equal what Juneau puts into the channel in one day.
MR. BINKLEY said copper is another item of concern and cruise
ships under the existing regulations produce far less than
communities in Southeast or Southcentral Alaska. The amount of
copper in parts per billion is much lower in any given gallon
that goes out and the gallons are far lower.
It's disconcerting to him to hear so much concern from the
fishing industry, because it is very important to the visitor
industry and cruise ships specifically to maintain clean
pristine waters, not only for Alaska, but for the world. That is
the livelihood of the ships, and if they don't maintain that
they are out of business, just like those in the fishing
industry.
He said they take great pride in bringing visitors to Alaska to
promote wild clean Alaska seafood. Many cruise lines buy
millions of dollars of seafood and promote it so that people who
go home have a desire to continue to buy Alaskan seafood. He
said it's simply not true that cruise ships are polluting the
waters of Alaska.
5:31:51 PM
Further, Mr. Binkley said that sunsetting provision (e) will
have the exact opposite effect. Industry has already invested
over $200 million complying with the initiative would have no
further incentive to invest if a set standard is not attainable.
Instead they investment in getting around Alaska regulations by
holding more waste water, altering itineraries to discharge in
waters beyond Alaska and simply ignoring the permitting system
that Alaska has in place. He opposed the amendment and supported
allowing the compromise to go through as it is, so the industry
can continue to work with the regulators to improve their
existing systems.
5:33:20 PM
GERSHON COHEN, Campaign to Safeguard America's Waters (CSAW),
said he is one of the sponsors of the cruise ship ballot
initiative, Haines, and he studied the issue of mixing zones for
nearly 20 years. At the last hearing there was a lot of talk
about the mechanics of mixing zones - how much pollution can be
absorbed, how big a mixing zone should be, who has mixing zones,
the impacts, et cetera. Unfortunately, most of these questions
cannot be answered with any certainty, because mixing zones are
not a matter of science where you control a set of conditions,
change one thing and make observations.
Mixing zones are a risk analysis with a laundry list of
variables. For each ship and course setting you need to know the
size of the mixing zone, the rate of the discharge, the speed
and design of the ship, the water body depth, temperature,
salinity and topography, the number of ships discharging in the
same area, the chemical relationships between multiple
pollutants, detailed profiles of local biota in terms of
tolerance potential for avoidance and proximity to a ship,
whether someone is harvesting and consuming contaminated
organisms, how the food will be prepared, and on and on. DEC has
never to his knowledge answered most of these questions when
approving a mixing zone nor does it routinely measure pollutants
at the boundaries of a mixing zone or the impacts within it.
The bottom line is the benefits of mixing zones are received by
the polluter; but the risks are borne by the public. He said
it's not true that this bill is an acceptable compromise to all
parties. The point of discharge phrase was reinserted, but the
original concept has been replaced with a temporary waiver
provision and no sunset date. In practical terms, without a
deadline there is no incentive for the rest of the ships to
improve performance.
Contrary to what was said a few moments ago, nearly one-third of
last summer's sampling events demonstrated ships can meet the
so-called impossible standards. DEC has documented that the
technologies exist to meet the water quality standards, although
some need to be reconfigured to fit on a ship.
MR. COHEN concluded that he thought a compromise and the
fundamental principal of the bill can be reached if it contains
a reasonable sunset of the temporary waiver provision. Then the
sponsors of the cruise initiative will support the bill.
5:36:43 PM
ROD PFLEIGER, Manager, Membership and Community Relations,
Alaska Cruise Association, said the complications of a sunset to
an ongoing business for planning purposes and itineraries will
continue to add a negative impact on the family businesses
throughout the state. Forty-five communities, including
governmental agencies, the Alaska Municipal League, the
Southeast Conference, and approximately 30 other organizations
represented by communities from chambers and visitors bureaus,
throughout the state have agreed on CSHB 134(RES) without a
sunset clause for (e).
5:38:35 PM
TAMMY GRIFFIN, Alaska Hotel Lodging Association, said she is a
director of operations for a hotel management company that has
eight hotels in Alaska. She is a life-long Alaskan and cares
about keeping the tourism industry healthy. She is having a very
difficult time understand why they are not allowing the
regulatory agency, DEC, to manage such things. Why let a ballot
initiative create laws when DEC manages from a scientific point
of view? It is not a mere threat that ships can be leaving
Alaska because the return on investment is not making sense. She
supported CSHB 134(RES) without the sunsetting provision (e).
TIM JUNE, representing himself, Haines, AK, said he was
originally on the cruise ship initiative committee and has been
a member of two Governor's Water Quality Task Forces, has been a
commercial fisherman for 25 years in Southeast Alaska, and was a
2001 special assistant to Governor Knowles for Oceans and
Watersheds. He encouraged the committee to respect the voter
initiative that passed by 58 percent, but more significantly it
passed with one side spending$8,000 while the cruise industry
spent $1.4 million. There is tremendous passion behind passing
this initiative.
He addressed the issue of copper, specifically, saying the
aquatic life standard for copper is 2.9 parts per billion. It is
significant in that a 2001 study showed that cruise ships were
putting about 7100 parts per billion before treatment at the
high end, for an average of 850 parts per billion. The point is
that copper "totally screws up" a salmon's olfactory senses and
their ability to come back to where they were born and to ward
of predators. The presence of high copper levels is very
significant and they should not let it be discharged into a
mixing zone.
MR. JUNE reminded them that these ships are mobile dischargers,
they are not like a town or city where they know what the
discharge point is. They discharge commonly in waters that are
frequented by sensitive life cycle of salmon fry that are even
more sensitive to copper.
He said they can use the existing DEC variance position until
this technology is available to ships. It is available to land-
based systems now. They have ways to get rid of the metals and
the ammonia, but it has to be adapted to the ship. It is good
for the DEC to work with the industry and the sunset clause is
very important to do that.
In closing, he reminded the committee that this industry has
been very successful in terms of major campaign contributions
and has access to the legislature.
CO-CHAIR MCGUIRE responded that many people who have testified
here on this subject also have offered campaign donations, and
they appreciate his testimony.
5:44:58 PM
CO-CHAIR MCGUIRE closed public testimony.
CO-CHAIR WIELECHOWSKI moved to adopt Amendment 1 identified as
26-LS0570\W.3.
26-LS0570\W.3
Bullard
AMENDMENT 1
OFFERED IN THE SENATE BY THE SENATE RESOURCES
COMMITTEE
TO: CSHB 134(RES), Draft Version "W"
Page 1, line 11:
Delete "if the"
Insert ". The"
Page 1, lines 12 - 14:
Delete ", in consultation with its science
advisory panel on wastewater treatment, determines
that compliance with those limits or standards is the
most technologically effective and economically
feasible"
Insert "shall establish and consult with a
science advisory panel on wastewater treatment to
evaluate the most technologically effective and
economically feasible treatment options."
Page 2, following line 18:
Insert a new bill section to read:
"* Sec. 3. AS 46.03.462(b), as amended by sec. 2 of
this Act, is amended to read:
(b) The minimum standard terms and conditions
for all discharge permits authorized under this
section require that the owner or operator
(1) may not discharge untreated sewage,
treated sewage, graywater, or other wastewaters in a
manner that violates any applicable effluent limits or
standards under state or federal law, including Alaska
Water Quality Standards governing pollution at the
point of discharge [, EXCEPT AS PROVIDED IN (e) OF
THIS SECTION];
(2) shall maintain records and provide the
reports required under AS 46.03.465(a);
(3) shall collect and test samples as
required under AS 46.03.465(b) and (d) and provide the
reports with respect those samples required by
AS 46.03.475(c);
(4) shall report discharges in accordance
with AS 46.03.475(a);
(5) shall allow the department access to
the vessel at the time samples are taken under
AS 46.03.465 for purposes of taking the samples or for
purposes of verifying the integrity of the sampling
process; and
(6) shall submit records, notices, and
reports to the department in accordance with
AS 46.03.475(b), (d), and (e)."
Renumber the following bill sections accordingly.
Page 4, line 2:
Delete "2014"
Insert "2015"
Page 4, line 17: It will be difficult because
Delete "2014"
Insert "2015"
Page 4, line 26:
Delete "AS 46.03.464 is"
Insert "AS 46.03.462(e), 46.03.462(f), and
46.03.464 are"
Page 4, line 27:
Delete all material and insert:
"* Sec. 8. Sections 3 and 7 of this Act take effect
January 1, 2015."
Page 4, line 28:
Delete "Sections 1 through 5 of this Act take"
Insert "Except as provided in sec. 8 of this Act,
this Act takes"
CO-CHAIR MCGUIRE objected.
CO-CHAIR WIELECHOWSKI said he thought this would be a one-line
amendment, but it's two-pages. This is a major policy decision;
and they need to remember people voted overwhelmingly. This is a
compromise to accommodate the industry by adding six years to
comply, and they have already had three. This sunset clause will
give them nine years to comply from the time voters voted on it.
The initiative sponsors support it, the sponsor supports it, and
he has been told the Governor supported it at her press
conference today.
ALPHEUS BULLARD, Legislative Counsel, Legislative Affairs
Agency, explained the amendment substantially changes the intent
language that prefaces the W version of this bill. Page 1, line
13, of the amendment provides what AS 46.03.462(b) will look
like once January 1, 2015 rolls around. The rest of the
amendment beginning on page 2, line 14, is conforming language
that changes some of the sections dealing with the Science
Advisory Committee, making their last report in 2016. On line 22
the amendment repeals AS 46.03.462(f) and AS 46.03.464 all in
2015. He offered to answer questions.
SENATOR FRENCH asked how all of those are repealed in 2015,
specifically language on page 2, lines 22-24.
MR. BULLARD directed him to page 4, line 26, of the version W
where section 6 provides that AS 46.03.464 is repealed. This is
the section dealing with the Science Advisory Panel. The
amendment amends AS 46.03.462(e) and (f); those are the
exceptions. Another subsection provides for how the exception to
the water discharge standards at point of discharge work.
Section 7 provides that all of this will take effect as amended
in 2015.
5:50:10 PM
CO-CHAIR MCGUIRE announced an at ease.
5:50:22 PM
CO-CHAIR MCGUIRE called the meeting back to order at 5:50.
SENATOR FRENCH said as Mr. Bullard was reaching the end of his
description, he had trouble tracking exactly how the repeal
works, and specifically referenced page 4, line 26, [CSHB
134(RES) version W] that says "AS 46.03.464 is repealed," but it
gives no date.
MR. BULLARD explained that the next line of the bill provides
when that section takes effect.
SENATOR FRENCH said he got it now. It's the same mechanism for
inserting the sunset.
MR. BULLARD answered yes. That large block at the beginning of
the amendment on page 1, line 13 through page 2, line 10,
provides that would occur at the moment those sections are
repealed, which brings that provision back into line as it
existed before the effective date of this act.
SENATOR FRENCH thanked him.
5:52:28 PM
SENATOR HUGGINS admitted that he didn't vote for this
initiative; it makes him uncomfortable when they do things to
the other guy - Juneau has one standard and we have another
standard for those who come to visit us if they are riding on a
cruise ship. Everyone wants pristine waters; and it disappoints
him that fishermen want a different standard for cruise ships.
It's a double standard and society has said over and over again
"equal opportunity, equal standards for equal people." But he
would reluctantly support the amendment, because it's important
to move the bill along.
5:54:57 PM
CO-CHAIR MCGUIRE added that their job as policy makers is to
balance development, the management of the state's resources,
the economy, the jobs and all of the things out there. She is
also troubled by the prevailing theme in Alaska in the last five
years that is anti-industry and anti those who want to spend
money and invest in this state. "We do want business," and these
cruise ships bring between almost one million people to visit.
Jobs throughout Alaska are 100 percent dependent on their
participation in its economy. The state is going to see a 40
percent decline in the tourism industry, bankruptcies and
businesses closing. Part of it is due to the economy and part is
due to the direct impact of the decisions that the cruise ship
industry has made with respect to investment in this state. This
is the place to argue about it.
She agreed with Senator Huggins that she values the pristine
waters of our state, but they need to be very careful when they
start to impose standards that are not only different and
distinct, but technologically impossible. She would not be
supporting the amendment, but she understands the sentiment with
which it is offered.
CO-CHAIR MCGUIRE asked if CO-CHAIR WIELECHOWSKI if he wanted to
look at the new version of the amendment.
CO-CHAIR WIELECHOWSKI responded that his staff put this language
together to help facilitate the dialogue. It places the
amendment into the bill; it is not a different version.
5:57:56 PM
SENATOR HUGGINS clarified that this is a six-year sunset
provision.
CO-CHAIR WIELECHOWSKI wanted that verified by Mr. Bullard.
MR. BULLARD answered that this amendment moves the sunset date
to January 1, 2015.
A roll call vote was taken. Senators Huggins, French, Stevens,
and Wielechowski voted yea; Senator McGuire voted nay; so
Amendment 1 was adopted.
5:59:03 PM
SENATOR FRENCH moved to report CS for HB 134(RES), as amended,
from committee with individual recommendations and attached
fiscal note(s). There being no objection, SCS CSHB 134(RES)
moved from committee.
At ease from 5:59 p.m. to 6:00 p.m.
6:00:27 PM
CO-CHAIR MCGUIRE invited Telitha and Hanna Wilson, Juneau
Douglas, High School students, Alaska Youth for Environmental
Action, to come before the committee.
TELITHA WILSON, Alaska Youth for Environmental Action, said this
year their focus is on renewable energy in Alaska. As part of
this campaign they collected over 600 signatures from youth and
adults across the state from both rural and urban communities
who support investment in renewable energy technology.
6:01:33 PM
HANNA WILSON, Alaska Youth for Environmental Action, read the
petition that basically said they support renewable energy
because it provides a brighter future of Alaska. It will create
long-lasting jobs, stabilize energy costs, lower carbon
emissions and protect Alaska's wild beauty. They support
expending the $100 million that was appropriated last year for
renewable energy projects, passing the proposed additional $50
million for the Renewable Energy Fund in the 2009 state budget
and supporting a strong federal renewable electricity standard
that will benefit Alaska.
CO-CHAIR MCGUIRE thanked them for their presentation.
6:02:14 PM
Finding no further business to come before the committee, Chair
McGuire adjourned the meeting at 6:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Synthetic Fuels Update - April 10 2009.ppt |
SRES 4/10/2009 3:30:00 PM |