Legislature(1995 - 1996)
03/22/1995 03:50 PM Senate RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SRES - 3/22/95
HB 128 WASTE DISPOSAL PERMIT EXEMPTION
JACK PHELPS, staff to Representative Williams, prime sponsor of HB
128, gave the following testimony. HB 128 was introduced as a
result of a recommendation from the Alaska Minerals Commission.
Recently the Department of Environmental Conservation (DEC) began
a general permitting process for incidental discharges associated
with mineral drilling and well drilling. For years, those
discharges were treated as minimal and inconsequential under AS
46.03.100. That statute is extremely broad and states any
discharge to any waters, surface or land, to the state, requires a
permit. The mineral and well drilling industries feel the process
presents unnecessary compliance problems. HB 128 exempts the
industry from the permit process if the operation does not produce
a point source discharge into a surface water of the state and is
incidental to the general industry activity. The first two
sections of the bill deal with the transference of current dual
jurisdiction, eliminates DEC oversight, and places oversight
authority with the Alaska Oil and Gas Conservation Commission
(AOGCC). Representative Williams worked with DEC on Section 3 to
satisfy DEC's concerns regarding specificity. The Department of
Fish and Game (DF&G) was concerned about affects on habitat
therefore direct surface water discharges were excluded from the
exemption. He noted the Alaska Oil and Gas Association (AOGA) has
suggested an amendment to Section 3, to page 2, line 27 and page 3,
line 16.
SENATOR LEMAN announced there is a proposed amendment from DEC as
well, and that he planned to take testimony and hold action on the
amendments until Monday. MR. PHELPS explained the DEC amendment
rearranges Section 3, but does not appear to make any changes.
SENATOR TAYLOR asked about the word "annular." MR. PHELPS replied
it refers to the space between the casings in an oil well.
Number 120
SENATOR LEMAN noted some of the mud produced from drilling is
radioactive. He asked if that material is included under hazardous
wastes (EPA 40 C.F.R., Part 261) or if it could be reinjected into
the annular space. MR. PHELPS could not specifically answer, but
stated that is the precise reason for the transfer of authority to
AOGCC since they are familiar with those activities and are able to
make those determinations. SENATOR LEMAN commented he was
referring to the natural material that is produced.
DAVE JOHNSTON, Chairman of the AOGCC, testified in support of HB
128, especially in regard to the transfer provision. The AOGCC
believes HB 128 will improve oversight by consolidating authority
for annular disposals and streamline permitting requirements.
Currently two agencies have oversight authority, the AOGCC and the
DEC. THE AOGCC has the expertise to evaluate proper casing, proper
submitting programs, proper injecting procedures, etc. This is an
outgrowth of the Underground Injection Control Program (UIC)
implemented by the AOGCC since 1986, and mandated by the federal
Safe Drinking Water Act. The annular disposal program is very
similar.
The transfer of this authority was recommended by the Interstate
Oil and Gas Compact Commission when they conducted a peer review of
Alaska's exploration and production waste management program.
Number 177
Regarding Senator Leman's question about radioactive materials, MR.
JOHNSTON replied naturally occurring radioactive material (NORM) is
a class 2 fluid, and is injected under a UIC program. The EPA has
reviewed UIC procedures for disposal of class 2 fluids.
Number 222
CHRIS PHILLIPS, Operations Engineering Manager for BP Exploration
in Alaska, testified as a representative of AOGA. AOGA supports
the intent of Sections 1 and 2 of HB 128, transferring oversight
authority to AOGCC as the transfer of jurisdiction will promote
regulatory efficiency. Regarding the exemptions contained in
Section 3, subsection (f)(1)(B), he suggested the following
clarifying amendment.
Delete:
(f) Except as to discharges arising out of exploration and
development drilling for oil and gas resources,
Add to page 3, line 16:
"otherwise required" after the word "permit."
He explained the first amendment would remove any danger that the
language could be construed as creating a new permitting
requirement; the second amendment would prevent expansion of the
scope of permitting requirements.
Number 274
SENATOR TAYLOR questioned the need for the legislation at this time
if it merely preserves the status quo in statute.
MR. PHELPS responded that last spring and summer the DEC began a
public comment period on a new general permit, as the result of a
concern raised by a member of the general public. That process
raised a great deal of reaction among industry members because they
saw no reason to create a new permitting process for activities
that had gone on for years without causing any problems. HB 128
restores the status quo.
Number 300
SENATOR FRANK asked if the public member's concern was aimed at
challenging DEC for not enforcing the law. MR. PHELPS answered
affirmatively, and clarified that the current statute is so broad
that any discharge without a permit under AS 46.03.100 could
probably be considered a violation. Section 3 places in statute,
provisions that were assumed to have been there.
SENATOR TAYLOR felt it is ludicrous that so much time has to be
wasted to pass a bill that has been unnecessary for the past 20
years. He expressed concern about DEC's budget.
Number 320
NEIL MACKINNON, representing the Alaska Minerals Commission (AMC),
stated HB 128 is one of the top recommendations of the AMC. He
stated when he attempted to begin drilling on his property at
Jualin, he was notified that he needed a drilling permit. In
researching AS 31.05.030, he found any discharge into the air, land
or water of the state, other than domestic wastewater, must be
permitted. He noted that could be interpreted to mean businesses
discharging wastewater into municipal treatment plants would
require permits. After contacting DEC, he was told DEC received a
complaint from a member of the public about Echo Bay's drilling
operations, which prompted the enforcement of the statute. MR.
MACKINNON felt the situation raises a serious equal protection
issue and enforcement of this statute is a deterrent to mineral
exploration. He added no other state or country requires such
permits.
Number 398
STEVE BORELL, Executive Director of the Alaska Miners' Association
(AMA), testified in support of HB 128. He agreed with Mr.
Mackinnon's comments. The AMA is primarily concerned with Section
3, regarding water well drilling and incidental construction. He
believed DEC selectively applied the statute to the proposed permit
regulations. He commented the bill will correct a technicality in
statute, to allow the status quo to continue. Without the passage
of HB 128, burdensome requirements will be added to the permitting
process which will not provide any benefits. He believes Governor
Knowles supports the measure.
SENATOR TAYLOR asked how long Mr. Borell has lived in Alaska. MR.
BORELL replied he has been in Alaska since 1986, but also lived in
Alaska in 1970-71. SENATOR TAYLOR commented on the change of
attitude toward mining and wildlife from 40 years ago.
DAVID ROGERS, representing the Producer's Council, testified in
support of HB 128. He reserved judgement on the proposed amendment
until he had time to review it.
SENATOR LEMAN announced HB 128 and the proposed amendments would be
held until Monday.
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