Legislature(2003 - 2004)
03/25/2003 01:41 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 74(RES) am
An Act extending the renewal period for oil discharge
prevention and contingency plans; and providing for an
effective date.
LARRY DIETRICK, DIRECTOR, SPILL PREVENTION AND RESPONSE,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, stated that SB 74
would streamline the permitting process by lengthening the
time for renewal of oil discharge prevention and contingency
plans from three to five years.
A five-year renewal period would streamline the contingency
review process for industry while maintaining Alaska's
strong spill prevention and response standards. Oil
Discharge Prevention and Contingency Plans are public
noticed and then reviewed and approved by the Department of
Environmental Conservation.
Mr. Dietrick continued, the Oil Discharge Prevention and
Contingency Plans are required for operators of oil
terminals, refineries, crude oil transmission pipelines, oil
exploration and production facilities, oil tank vessels, oil
barges, non-tank vessels of over 400 gross tons and railroad
tank cars.
Mr. Dietrick emphasized that the bill would provide multiple
benefits from the proposed change:
· The bill furthers the goal of permit
streamlining with no loss of environmental
protection and complements initiatives
currently being undertaken by the Department
to shift the emphasis away from
the administrative review and approval
process to field verification of response
capability.
· The bill would significantly reduce the
administrative burden on the regulated
community and shift the emphasis from
paperwork to performance.
· The reduction in paperwork would increase the
ability of operators and the Department to
focus on spill prevention and facility
operation.
· The change would allow operators more time to
make practical enhancements to their spill
prevention and response capabilities.
· The change would improve environmental
protection and preparedness through increased
field presence and the ability to work
directly with operators to ensure response
readiness through on-site facility and vessel
inspections, spill drills and exercises.
· Finally, the change would make the State
renewal cycle consistent with the five-year
renewal cycle for the federal oil spill
contingency plans required under the Oil
Pollution Act of 1990, as well as those of
other West Coast states.
Co-Chair Harris clarified that the legislation proposes to
change the time period for the contingency plan from three
to five years. He referenced the zero fiscal note,
commenting that the review and approval process should
consume less time for the Department given the longer
extension. Co-Chair Harris thought that information should
reduce costs to the Department.
Mr. Dietrick responded that the Department had looked at
that closely, however, the trade off was a reduction in
litigation which the Department presently is under. He
emphasized the "extraordinary" workload assumed by the
Department. Additionally, there could be a fundamental
shift in field verification. The intent was not to lower
the standard of protection but rather to make a shift from
the time spent on paperwork to the time spent with operators
working on the standards. He continued, the focus would be
on exercising drills with additional time guaranteeing that
the readiness is maintained.
Co-Chair Harris reiterated that the intent was only to
extend the time period with no regulatory function. Mr.
Dietrick acknowledged that was correct and that there would
be no other change in the statutory requirements or
lessening of any of the current environmental protection
measures.
Co-Chair Harris asked if any comments had been submitted
from local regional citizen advisory councils. Mr. Dietrick
advised that the Prince William Sound Regional Citizens
Advisory Committee had provided a letter dated February
26th, 2003. (Copy on File). He added that Cook Inlet
Regional Citizens Advisory Committee had not provided
testimony or comments to the Department to date, however,
understood that they had indicated three points of concern:
· Extending the time frame;
· Reducing the frequency of the technology
reviews; and
· Reducing agency and plan familiarization with
the contingency plans.
Representative Hawker questioned the context of these
contingency plans and who would be impacted by the changes.
Mr. Dietrick responded that the categories of facilities are
the same categories regulated under current statute. Under
that statute, they are required to have oil discharge
prevention contingency plans with the thresholds varying a
little. Generally speaking, if there is a crude oil
terminal with a total volume of over 5,000 barrels, they
then are required to submit a plan.
Representative Stoltze questioned if the proposed
legislation would include railroad tankers, of which some
pass through some of his neighborhoods. Mr. Dietrick
advised that this plan is not required for the Alaska
Railroad.
MARILYN CROCKET, (TESTIFIED VIA TELECONFERENCE), DEPUTY
DIRECTOR, ALASKA OIL AND GAS ASSOCIATION (AOGA), ANCHORAGE,
testified that AOGA is a trade association whose 17 member
companies account for the majority of oil and gas
exploration, development, production, transportation,
refining and marketing activities in Alaska.
Every AOGA member conducting activities in Alaska is
required to have an Oil Spill Prevention and Contingency
Plan (or C-Plan) approved and in place. Therefore, AOGA
has a significant interest in SB74, and encourages the
Committee to report it out.
Ms. Crocket stated that AOGA spent a considerable amount of
time over the past 12 months identifying permitting programs
that were in need of updating and streamlining. Initially,
AOGA adopted a principle to guide them through the process.
That principle reads:
"To accomplish updates and streamlining without
compromising environmental protection or safety
standards".
Ms. Crocket commented that SB 74 fits perfectly within that
principle. The bill would extend the renewal cycle for C
Plans from the current period of three years to five years,
the cycle required by the federal government, west coast
states and other oil producing states.
She added that preparation and processing of a renewal
application is an expensive endeavor. Renewal costs can
average between $60,000 and $100,000 dollars for just the
renewal. Additionally, the renewal process is time-
intensive. Experience has shown that for some plans,
approvals can average 360 days, essentially meaning that
once a renewal is complete, the work must begin on the next
renewal.
Ms. Crocket pointed out that it is important to recognize
what the purpose of the C Plan serves. It is a "blueprint",
describing how an operator responds. The proof of the
effectiveness of the plan is whether the response identified
in the Plan can be delivered as promised. Demonstration of
effectiveness has been accomplished through drills. That
area should be the largest benefit of the extended renewal
cycle, shifting the focus away from administrative
processing to field performance.
Representative Stoltze MOVED to AMEND the bill on Page 2,
Line 2, deleting "five years" and inserting "three years".
Co-Chair Williams OBJECTED for the purpose of discussion.
Mr. Dietrick explained that there is one renewal time frame
set in statute that applies to all facilities. The change
from three to five years would need to apply to all other
facilities. Under the current bill, if the change is made,
it would apply to all categories.
Co-Chair Harris asked if Representative Stoltze's intent was
that the Alaska Railroad be required to go through a full
compliance review on oil discharge every three years, while
other facilities covered by the legislation would then be
every five years. Mr. Dietrick thought that was correct.
Co-Chair Harris asked if the Department of Environmental
Conservation provides reviews of existing contingency plans
on a year-to-year basis. Mr. Dietrick responded that the
Department has looked at the process for renewals and
updates currently in the Alaska Statutes. In 1990, when the
Legislature made the updates, they did provide many
mechanisms in Statute that spell out an "evergreen type
process" with a requirement for non-notification for
readiness. If at any time, the capability is diminished,
they would be required to immediately notify the Department.
The Legislature had built in a strong continuous process for
the notification including routine plan updates. The intent
of the years involved supercedes the fact that there are
strong mechanisms in place to provide for the continuous
update and refreshing of the plan.
Co-Chair Harris asked what would be the "down side" for the
State in implementing three rather than five years. Mr.
Dietrick observed that the renewal process itself is not as
important as the ability to routinely check the test
capability base for inspection as well as increased emphasis
on prevention. With the mechanisms currently in statute,
the Department believes that the State could go to a five-
year plan and not sacrifice anything while at the same time
provide greater efficiency in reducing paperwork.
Representative Stoltze thought that the amendment was
arbitrary, noting that many people in his district live on
the railroad line. He identified the need to make the
Railroad more responsive to the public.
Representative Hawker voiced his support for the concept of
the amendment. He noted that he had received comments
regarding the non-responsiveness of the Alaska Railroad and
that they do not act as a "team-player". He noted that he
would not favor passing the amendment at this time, however,
suggested that further consideration regarding these
concerns be brought forward.
Representative Stoltze WITHDREW the MOTION to adopt the
amendment.
Co-Chair Harris echoed concerns voiced by Representative
Stoltze, agreeing that they would be addressed later.
Representative Foster MOVED to report CS SB 74 (RES) am out
of Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 74 (RES)am was reported out of Committee with a "do
pass" recommendation and with zero fiscal note #1 by the
Department of Environmental Conservation.
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