Legislature(2005 - 2006)HOUSE FINANCE 519

04/28/2005 08:30 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
Moved CSHB 218(FIN) Out of Committee
<Bill Hearing Postponed>
Moved Out of Committee
SENATE BILL NO. 103                                                                                                           
     "An Act relating to regulation of underground injection                                                                    
     under the federal Safe Drinking Water Act; and                                                                             
     providing for an effective date."                                                                                          
DANIEL  T. SEAMOUNT, JR.,  COMMISSIONER,  ALASKA OIL  AND GAS                                                                   
CONSERVATION     COMMISSION     (AOGCC),    DEPARTMENT     OF                                                                   
ADMINISTRATION, (via teleconference)  testified in support of                                                                   
SB 103.   The bill  allows AOGCC to  take over primacy  for a                                                                   
small number  of waste  disposal wells  now overseen  by EPA.                                                                   
He explained that these are seven  Class I wells on the North                                                                   
Slope.   He  spoke of  AOGCC's  primacy over  1,155 Class  II                                                                   
injection wells.   He said it  is complicated trying  to sort                                                                   
out which wells  apply.  He spoke of redundant  processes and                                                                   
opined that there would be considerable  time and money saved                                                                   
because of this bill.  AOGCC has  a more streamlined process.                                                                   
8:58:06 AM                                                                                                                    
Representative  Holm   inquired  about  the   duplication  of                                                                   
efforts  by  the State  of  Alaska  and  EPA.   Mr.  Seamount                                                                   
responded that  AOGCC's process for evaluating  and approving                                                                   
Class II programs  are very similar to EPA's.   The state has                                                                   
full-time inspectors and geological  staff.  EPA requests the                                                                   
state's help  on Class I  well applications.   Representative                                                                   
Holm asked  if permit  fees support the  work.  Mr.  Seamount                                                                   
explained that a grant funds Class II wells.                                                                                    
9:00:12 AM                                                                                                                    
Representative  Holm asked if  there is a  charge to  the oil                                                                   
companies for  injection permits.  Mr. Seamount  replied that                                                                   
EPA and the  state do not charge;  they pay a charge  for the                                                                   
injection based on how much gas  is produced.  Representative                                                                   
Holm said that the fiscal note  does not reflect the costs of                                                                   
the permits.   Mr. Seamount reported  that there would  be no                                                                   
cost, but savings.                                                                                                              
9:02:05 AM                                                                                                                    
Co-Chair  Chenault asked  if there  is  $127,000 for  federal                                                                   
funding for  Class II,  but no federal  funding for  Class I.                                                                   
Mr. Seamount said  that is correct.  Co-Chair  Chenault asked                                                                   
where the  money comes from.   Mr. Seamount replied  it comes                                                                   
from regulatory cost charge, which  is a direct charge to the                                                                   
operators.   He explained  the budgeting  process.   Co-Chair                                                                   
Chenault noted that they are paying  for the services for the                                                                   
injection of the waste.  Mr. Seamount agreed.                                                                                   
9:03:37 AM                                                                                                                    
Co-Chair Chenault inquired about  the presence of underground                                                                   
drinking  water.   Mr.  Seamount replied  that  there are  no                                                                   
underground supplies for drinking  water and all of the water                                                                   
is frozen by permafrost.                                                                                                        
9:04:59 AM                                                                                                                    
Representative  Foster   MOVED  to  report  SB   103  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
SB   103  was   REPORTED  out   of  Committee   with  a   "no                                                                   
recommendation"  recommendation and  with fiscal impact  note                                                                   
#1 by  the Department of  Administration, and with  zero note                                                                   
#2 by the Department of Natural Resources.                                                                                      
Representative  Hawker MOVED  to ADOPT  the letter of  intent                                                                   
for SB 103.  There being NO OBJECTION, it was so ordered.                                                                       
9:07:00 AM                                                                                                                    

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