Legislature(1999 - 2000)
02/21/2000 03:12 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
SB 273-OIL SPILL RESPONSE; NONTANK VESSELS & RR
CHAIRMAN HALFORD announced SB 273 to be up for consideration.
SENATOR PEARCE, sponsor, said we are too often brought together
as a legislature to react to events beyond its control and often
times beyond the control of the individuals who have been a part
of the events. That is what brings SB 273 before them today.
SENATOR PEARCE said that Alaska has the best oil spill prevention
and response program for crude oil, heavy crude carrying vessels,
and the pipeline because it provides 20 percent of the oil
produced in the United States. However, most of the oil spills
occurring in the waters of Alaska today come from carriers that
are not required to prepare for spill response by state law.
Since 1995, 93 spills from regulated vessels and facilities
occurred; a total of 5,286 gallons of oil were spilled. During
that same period, 945 separate spills from non-regulated carriers
occurred; over a quarter of a million gallons of oil was spilled.
SB 273 would expand the prevention and response program to
include larger non-tank vessels and the Alaska Railroad
Corporation (ARRC), which transports oil products in bulk.
SENATOR PEARCE stated the bill does a few simple things. It
requires non-tank vessels and ARRC to provide an oil discharge
prevention and contingency plan to the Department of
Environmental Conservation (DEC), as is presently required of the
oil industry and the tanker vessels that carry crude oil. It
requires proof of financial responsibility for those vessels that
are operating in our waters and it requires that the vessels be
subject to inspections by the State along with whatever Coast
Guard inspections are required under federal law. This is
because we have had 945 spills since 1995 that totaled over a
quarter million gallons of product. While that may sound like a
much smaller number than the 11 million gallons of crude spilled
by the Exxon Valdez, the non-crude petroleum products are often
more toxic than the heavy crude, which goes to the bottom and
doesn't intermix with the water column.
Also, these vessels frequently carry a larger volume than those
carrying fuel-less cargo, like the barges. One of the newest
cruise ships coming into Alaskan waters for the first time this
year carries 18,000 barrels of fuel - over three quarters of a
million gallons of fuel. The cruise ships, many of the cargo
ships, and state ferries, may have double hulls or bottoms that
protect the cargo, but the fuel tanks are in the area between the
second hull and the first hull, so the actual fuel of these
ships, as much as 18,000 barrels, sits right next to the hull -
only one hull away from the rocks.
Clearly, the entire 18,000 barrels would not be spilled because
the ships have separated tanks and baffling but they do carry a
very large amount of fuel. They are not currently required to
have a response system or equipment in place to prevent or
respond to spills. They are not required to have the ability to
finance the clean up effort and damages resulting from a spill.
We don't have in place the process by which we would require the
individual owners of the ships to respond. She expressed concern
that if we have an event, it would the same kind of situation
that occurred in Dutch Harbor in 1997 when the Kiroshima spilled
39,000 gallons of heavy bunker oil. Everyone spent a lot of time
pointing in different directions and no one went to clean up the
spill in the early days. Granted, the weather was bad and the
site was hard to get to, but that marine environment is important
and it was an important time period.
SENATOR PEARCE thought that any ships that ply our waters should
be required to have response plans. The ARRC is included in this
bill; it has had three derailments since 1992 and three spills in
the last four months. The largest spill was 167,000 gallons.
Two recent spills equaled approximately 125,000 gallons of jet
fuel that spilled out of tanker cars coming to Anchorage from
Fairbanks. The spill of 12,450 gallons was the actual diesel
fuel that was in the locomotive. That may have been caused by
human error and perhaps human negligence in that a valve was
jerry-rigged open. In 1999, 28,000 railroad cars carried an
average of 22,500 gallons of fuel per car, meaning that the
railroad carried 630 million gallons of fuel up and down that
corridor with no contingency plan. They have proof of financial
responsibility, which is probably the state. They have not had
clean up response in place and ready to go.
Non-tank vessels and the railroad would be covered by submitting
oil discharge prevention contingency plans to DEC consistent with
current requirements of tankers and oil facilities. The
contingency plan (C-plan) requires the prevention and response
equipment, personnel, and resources needed to respond to an oil
spill. It requires proof of financial responsibility based on
the maximum oil carrying capacity of the individual vessels and
it would require spill drills and inspections of the equipment.
SENATOR PEARCE explained that SB 273 allows DEC to adopt
alternative ways to achieve equivalent levels of spill prevention
and response in place of some C-plan requirements. Alternative
compliance would be determined through the negotiated rule making
process, so that a working group of representatives from
industry, agencies, and other parties to assist in development of
the regulations could be established. The vessel owner and/or
the railroad would be required to demonstrate proof of financial
ability to respond and clean up a major spill: $300 per barrel
for persistent oil; $100 per barrel for non-persistent oil.
Persistent oil is defined as heavy refined oil and fuel such as
bunker, crude, and lube oil. Non-persistent are the lighter
refined oils and fuels such as gasoline, diesel, kerosene, and
jet fuel, which are more toxic to both the fisheries resources
and the flora and fauna.
The law would take effect September 1, 2000, and the proof of
financial responsibility and the inspection requirement would
kick in. The actual C-plan requirement would not kick in until
June 1, 2001, to provide time to do the regulations and to give
the entities the opportunity to get their responses in place.
SENATOR PEARCE said she is pleased with the number of entities
that agree they should have prevention and contingency plans in
place, as well as a way to respond to a spill. The industries in
question have indicated that this bill is not a surprise. She
has reason to believe the small cruise ships want to voluntarily
comply, although they don't come under the 300 gross ton
requirement. The least receptive people who have contacted her
office are the representatives of the large fishing vessels that
maneuver in Alaska's most dangerous water during the worst times
of the year. The experience with fishing vessels, like the
Kiroshima, indicate to her that Alaska should have some sort of
requirements in place that aren't there now.
Number 1949
SENATOR GREEN asked if there has been some reluctance to further
empower DEC and give it more oversight authority.
SENATOR PEARCE admitted there are people in the State who don't
like the DEC, but she doubted any of them would disagree that
these groups should have contingency plans and the financial
ability to respond. DEC has its Spill Prevention and Response
(SPAR) group and while there have been a number of negotiations
over the finalization of contingency plans for the large tankers,
part of the problem was created by vagueness in the bill that
passed in 1990. The bill required best available technology,
which is an ever changing standard. She believes the system is
working quite well at the moment and that DEC has developed a
great deal of expertise during the last 10 years. She is
comfortable with giving oversight responsibility to the SPAR
folks. Someone has to have that authority and DEC has a lot of
regulations and knowledge in that area.
SENATOR GREEN asked, based on the initial newspaper article about
the ability of various owners to respond, whether companies will
have to have big pieces of equipment available onsite and whether
companies will have to own duplicate pieces of equipment.
SENATOR PEARCE said, taking the railroad for example, she would
expect that some response equipment would be stored on every
train to be used for an initial response. The trains travel
north and south, so the same train is probably making daily
trips. That would require two sets of equipment: one for the
northbound train and one for the southbound. Spill response
contractors are already in place throughout the state because of
current law. Seapro is in Southeast Alaska. It is the
consortium put in place by the Southeast vessels that come under
the present law because of all the fuel barged to every community
in Southeast Alaska. There is no reason the new entities
couldn't become part of those consortiums. The same thing is
true in Southwest Alaska; Cook Inlet has three consortiums.
SENATOR PEARCE clarified that not every vessel will have to have
its own set of equipment. However, she suspects that there is
not enough equipment in Seward today to respond to an accident
should a cruise ship go aground. She suspects there would have
to be a build-up of one of the coops in that area.
SENATOR TAYLOR said the unfortunate part is that those people who
have equipment are under contract to respond to the people who
have paid for that equipment. He stated, regarding the Kiroshima
incident, that equipment wasn't very far away on a barge. He
explained that Campbell Towing, located out of Wrangell, had a
tug and barge in the area for other purposes. It was willing to
move equipment to respond to the troubled vessel and start off-
loading oil so it wouldn't go in the water. Unfortunately, the
onsite DEC personnel did not have sufficient authority to allow
the movement of the equipment out of the area it was designated
to protect. Had anything occurred in the area where that
equipment was supposed to be available, everyone would have been
strictly liable under OPA '90. The incident occurred on a
Saturday night. Eventually, Commissioner Brown was located to
give the authorization to move the equipment so that it could be
moved to pump the oil. Everyone involved was very cooperative
and professional. He assumed that DEC has fixed that problem so
that a person who can give the contractors the right to respond
can be reached at all times.
SENATOR TAYLOR said he has spent a lot of time working on
contingency plans and he was shocked to find that every Navy and
Coast Guard vessel that moves up and down the coast has to have,
onboard, the spill response plan for each of the counties and
communities along the Pacific Coast. That requires a large
library of materials, most of which is outdated. In addition,
they don't know who to contact. All of the spill response plans
are different and they are not even indexed the same way. He
said he understands Senator Pearce's concerns and supports the
effort to provide a meaningful response when a spill occurs, but
he believes there should be some practical way of making sense of
it all when the oil hits the water.
He said he was present when Seapro was formed and it was created
only because there was no way that individual companies could
afford to respond. They collectively brought their money and
equipment together. It took years to get DEC to approve the
level of equipment, where it would be based, and how it would all
work. He said he does not want to see an overlay that creates
another 18 member committee in each community to solve a problem.
SENATOR TAYLOR said he is still waiting for DEC to show him how
it spent the two cents per barrel. He would like to know what
equipment it purchased and how much booming material is available
in Southeast. He also asked about the three cents per barrel
that went to DEC all of this time.
SENATOR PEARCE said the two cents per barrel was not to buy
anything; it goes into the $50 million contingency fund account.
The three cents per barrel was supposed to do several things. She
knows that DEC has purchased equipment around the state. One of
the reasons we don't have the same requirements in Alaska as
other states have is that Alaska did its first. Second, there
was a move made by California, Washington, and Oregon to create
an interstate compact with Alaska to decide what spill responses
would be up and down the entire West Coast. The Alaska
Legislature chose not join the compact, which she thought was a
good choice, because Alaska's requirements are not as onerous as
California's. On the other hand, she believes the ships that are
coming to Alaska should be prepared for an accident.
SENATOR PEARCE said the experience in Dutch Harbor was the first
of that kind in that area and everyone learns from each and every
incident. There were those same sorts of questions in Prince
William Sound, but after DEC has gone through all of the table-
top exercises over the years most of Senator Taylor's concerns
have been resolved.
SENATOR PEARCE said she believes that one non-profit spill
response organization writes all of the plans in the state of
Washington. Every vessel that sails into Washington's waters
gets a bill for $160 every time it enters. Because so many ships
come into those waters, the fee is only $160 per transit. She
thought that in Southeast, for instance, as more entities have to
join, the cost of that equipment will be spread out and, over the
long term, it will be better for everybody economically. She
noted she understands the frustrations in the past but she has
found that people in Southeast Alaska are glad there is a spill
response capability that wasn't here in 1989.
SENATOR TAYLOR said he would help her any way he could.
Number 1000
CHAIRMAN HALFORD asked who exempted public vessels.
SENATOR PEARCE said public vessels that are commercial are not
exempted so the ferries are not exempted, but she didn't know of
any other state vessels that fit. She noted that federal vessels
are exempt.
CHAIRMAN HALFORD asked about the biggest of the ADF&G boats.
SENATOR PEARCE replied that they are not 300 gross tons.
CHAIRMAN HALFORD asked what 300 gross tons equal in terms of
size. He noted the tonnage is fairly large, but the gallon
capacity is fairly low; it looks like a vessel has to be 300
gross tons or more and carry 6,000 gallons.
SENATOR PEARCE explained that those numbers were chosen because
that is what is in all the other states on the West Coast. She
did not want to bring in an entirely new group of vessels. There
is some question about whether gross tonnage should be the
measure; perhaps it should be displacement. The 300 gross
tonnage picks up the largest of the processing ships, but it does
not bring in any vessels that have limited entry permits. That
was a threshold that DEC was trying to get above.
CHAIRMAN HALFORD asked if a 150 foot Bering Sea crab boat weighs
less than 300 tons.
MR. PAT CARTER, aide to Senator Pearce, said that generally
speaking, a 150 foot vessel would fall under this but the gross
tonnage is based on cargo capacity and, depending on how the ship
is constructed, the tonnage can be calculated differently.
TAPE 00-04, SIDE A
Number 001
MR. CARTER explained that the intent was to exclude barges that
don't transport fuel - barges that transport containers, for
example. He noted a vessel could weigh 300 gross tons as a
barge, that is carrying fuel for dredging equipment or a crane
onboard.
CHAIRMAN HALFORD noted that most tenders in the fisheries may be
barges but they carry a lot more than 6,000 gallons of fuel.
MR. CARTER added that some of the tenders, especially those that
work the salmon fleet, will fall under that because they are fuel
barges that sell fuel to the fishermen. Part of their commerce
is generated by transporting fuel for cargo, so they are already
under the law now (as a tanker barge).
SENATOR TAYLOR asked what amount of equipment the railroad
carries now.
MS. WENDY LINDSKOOG, Alaska Railroad Corporation, said the ARRC
is currently revising its emergency response plan to meet
contingency plan requirements that currently do not apply to it.
ARRC believes, that as a state-owned entity, it should meet or
beat the standards the state requires of similar carriers. ARRC
believes that legislation to place this type of planning in
statute and regulation is prudent and will ensure consistency in
response planning and prevention over time. ARRC is especially
encouraged by provisions in this and other legislation that will
allow the railroad to craft regulatory standards with state
regulators to fit the railroad's unique operational situation
rather than simply impose a one-size fits all response planning
standard. ARRC will work actively with the legislature, DEC,
other state agencies, and the public to produce effective
regulations and response plans. She concluded saying ARRC
supports the legislation.
SENATOR TAYLOR asked what equipment is on the train now.
MR. ERNIE PIPER, Alaska Railroad Corporation, replied that every
locomotive has a three-man train crew and some spill response
equipment. It's really designed to respond to the most likely
scenario that three people could deal with, which might be a
small hole in the fuel tank of the locomotive, a leak from a
belly cap on a tanker or some kind of valve damage. They don't
carry equipment to do a major response.
SENATOR TAYLOR asked what equipment they carry.
MR. PIPER replied that pumps and other types of equipment used
for larger responses are staged at strategic locations along the
route. For example, some equipment is cached at the Hurricane
section just above Gold Creek and Canyon. Equipment is also
cached in Fairbanks and Anchorage.
SENATOR TAYLOR asked what kind of crew is available to respond.
MR. PIPER said the practical way for most carriers to deal with a
spill is to have independent contractors, which is what the
Railroad has.
SENATOR TAYLOR asked if ARRC's independent contractors were
ready, capable, and able to respond to the last couple of spills.
He heard a lot of criticism about the ability of the railroad to
respond to the spills.
MR. PIPER answered that ARRC has good contractors. The same
contractors are used by Alyeska Pipeline and others. The real
problem in each of the spills was that the locations were
particularly remote. In addition, the Gold Creek spill happened
during the middle of a storm that had Southcentral Alaska shut
down. He tells people that response is never clean and it
doesn't work very well; prevention is the key. He assured them
that there were ways to improve the response time and capability
and ARRC will do that. SB 273 will help.
SENATOR TAYLOR asked how the bill will help when nothing
prevented ARRC from going in that direction before the bill was
filed. He asked what ARRC's real plans are for the future, how
the bill will affect its overall economics, and whether SB 273
will work from a practical standpoint.
MR. PIPER answered that contingency planning in Alaska statute
and regulation actively involves two parts of the equation that
aren't normally involved - both the public and the regulatory
agencies. When everyone has a clear picture of what the likely
scenarios are, what dedicated equipment is available, and what
the response strategies are going to be in particular areas, it
makes things go a lot more smoothly. This bill is one of the
ways to actively involve more people to see what could be done to
do a response. It keeps the communications strong among all the
parties involved.
MR. BOB DOLL, Department of Transportation and Public Facilities
(DOTPF), stated support for SB 273. He pointed out that the
Marine Highway already has a written agreement with the DEC to
operate its vessels in support of an oil spill clean-up effort
and its ships have additional capabilities on board. His
principal purpose for testifying today is to point out DOTPF's
fiscal note, which indicates a source to pay the costs of DOTPF's
participation. That is one of DOTPF's main concerns.
SENATOR TAYLOR said his concern is that DOTPF has announced a
transition to a high speed fleet in Southeast, which will travel
in excess of 32 knots. He assumes that when one of those vessels
hits a rock, it will spray oil all over the place.
MR. DOLL replied that DOTPF doesn't expect that to happen. The
ferry system has a 37-year record of operating at 16 knots in
some very difficult waters and through challenging channels.
DOTPF expects to apply the same safety standards to the high-
speed fleet.
SENATOR TAYLOR said that traveling at half that speed, 18 knots,
the Taku ran directly into an island in the middle of the bay at
Prince Rupert on a clear night. Other vessels were run on to
rocks in Sergius Narrows and the bottoms were ripped out. Those
vessels do carry a significant amount of fuel. He said, "In
fact, we always were very happy that we had the oil tank on the
bottom of the vessel because when we ripped a hole in the bottom
of the boat, all we lost was fuel, we didn't lose a vessel."
Senator Taylor stated he wants to make certain that in going
through this process, the bill will not add one more layer of
cost and inefficiency to a system that certainly isn't operating
to the level of service he would like to see it.
MR. DOLL responded that DOTPF's costs are indicated in the fiscal
note. He noted that, "Anytime we talk about additional costs for
the Marine Highway operation we need to be cautious about that
and certainly I will continue to sound that note at every
opportunity." He did not believe this bill will affect the
marine highway service level. DOTPF already has contingency
plans in place. It does expect additional costs associated with
SB 273 and would like to target those expenses as much as
possible.
CHAIRMAN HALFORD noted that Senator Taylor volunteered to work on
this issue and he would look for two more volunteers to work with
the sponsor.
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