Legislature(2003 - 2004)

02/27/2003 03:21 PM House O&G

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 113-DISCHARGE PREVENTION & CONTINGENCY PLANS                                                                               
Number 0093                                                                                                                     
CHAIR KOHRING  announced that the  first order of  business would                                                               
be HOUSE BILL  NO. 113, "An Act extending the  renewal period for                                                               
oil  discharge prevention  and contingency  plans; and  providing                                                               
for an  effective date."   [The bill  was sponsored by  the House                                                               
Rules Committee by request of the governor.]                                                                                    
CHAIR KOHRING,  noting that [Larry  Dietrick] hadn't  yet arrived                                                               
to  present  the legislation  on  behalf  of the  administration,                                                               
offered a synopsis  based on Mr. Dietrick's  written testimony in                                                               
committee packets.   Chair Kohring explained that HB  113 has the                                                               
goal  of   improving  regulatory  efficiency  and   reducing  the                                                               
administrative  burden   [on  industry]  while   improving  spill                                                               
prevention, preparedness, and protection  of the environment.  It                                                               
lengthens to  five years [the  time for renewal of  oil discharge                                                               
prevention and contingency plans],  from the current three years.                                                               
He  offered his  understanding that  the administration  believes                                                               
this  will  create more  flexibility  in  the system;  will  give                                                               
industry more time to put  plans together; and will help industry                                                               
to  spend  more   time  on  oil  discharge   prevention,  and  on                                                               
implementing  plans already  in  place, before  having to  refile                                                               
their plans.   Thus  a five-year  renewal period  will streamline                                                               
the review  process for the  industry while  maintaining Alaska's                                                               
strong spill prevention and response standards.                                                                                 
CHAIR KOHRING  continued, noting  that oil  discharge [prevention                                                               
and]  contingency plans  are  required of  all  operators of  oil                                                               
terminals,  refineries,  crude  oil transmission  pipelines,  oil                                                               
exploration and  production facilities,  oil tank  vessels, [oil]                                                               
barges, nontank vessels  [over 400 gross tons,  and railroad tank                                                               
cars].   He  said there  is  concern that  this might  compromise                                                               
environmental  protection, but  the administration's  position is                                                               
that that  won't happen  and, if  anything, this  will complement                                                               
the   current  process   and  provide   those  who   must  submit                                                               
contingency  plans   more  time  to  adhere   to  the  regulatory                                                               
requirements and put  the plans into place.  He  added the belief                                                               
that this extension  to five years enables the  emphasis to shift                                                               
from paperwork to performance.                                                                                                  
Number 0389                                                                                                                     
MARY  SIROKY, Legislative  Liaison,  Department of  Environmental                                                               
Conservation (DEC), emphasized that  this legislation is to allow                                                               
[DEC] to  ensure that  oil spill protection  is even  better than                                                               
today.  Through  actual drills and putting plans  into place, she                                                               
said, [DEC]  intends to  ensure that people  can put  their plans                                                               
into place when  a spill happens.  She noted  that Breck Tostevin                                                               
from the Department  of Law should be on  teleconference to speak                                                               
to a proposed amendment.                                                                                                        
CHAIR  KOHRING  indicated  amendments would  be  addressed  after                                                               
testimony  was  taken.   He  informed  Mr. Dietrick,  who'd  just                                                               
arrived,  that he'd  explained the  legislation, but  requested a                                                               
Number 0530                                                                                                                     
LARRY  DIETRICK,   Director,  Division  of  Spill   Prevention  &                                                               
Response,  Department  of  Environmental Conservation,  read  the                                                               
first sentence of his written  testimony that had been summarized                                                               
by  Chair   Kohring,  which  stated,  "This   bill  supports  the                                                               
Governor's goal  of improving  regulatory efficiency  by reducing                                                               
the  administrative  burden  while  improving  spill  prevention,                                                               
preparedness and protection  of the environment."   He offered to                                                               
answer questions.                                                                                                               
Number 0607                                                                                                                     
REPRESENTATIVE  CRAWFORD noted  that he'd  had a  discussion with                                                               
Ms. Siroky  indicating this would  allow more drills  and testing                                                               
of  the actual  spill  response.   He  said  he  didn't see  that                                                               
direction in the bill, however.   He asked whether [DEC] would be                                                               
averse to  some intent language  that says the savings  from this                                                               
"break" would  be used towards  more drills and  actual [hands-on                                                               
training].  Recalling his time  in Valdez from 1974-1977, he said                                                               
a tugboat was  supposed to escort all oil tankers  out past Bligh                                                               
Reef, an oil response crew was supposed  to be on call 24 hours a                                                               
day,  and  there was  supposed  to  be  sufficient boom  [for  an                                                               
emergency].   All those went  by the wayside, however,  and there                                                               
was  no preparedness  for the  oil  spill in  1989.   He said  he                                                               
didn't  want  that ever  to  happen  again,  and didn't  see  how                                                               
extending this to  five years would [prevent it].   He emphasized                                                               
his desire  to see  more testing,  drills, and  hands-on practice                                                               
for an  oil spill response.   He again asked whether  [DEC] would                                                               
be averse to such intent language.                                                                                              
Number 0770                                                                                                                     
MR. DIETRICK replied:                                                                                                           
     I believe we'd  be more than willing to  review it. ...                                                                    
     That is the  concept, and that is what  we're trying to                                                                    
     do,   is  cut   down  on   the  bureaucratic   and  the                                                                    
     administrative burden of the  plan reviews, and that is                                                                    
     a substantial burden.  And  by doing that, we're trying                                                                    
     to  be  smarter  and  more efficient,  to  achieve  the                                                                    
     governor's goals.   And I  think this is a  smart piece                                                                    
     of  legislation in  that regard,  and it  frees up  the                                                                    
     operators  to focus  also on  spill prevention  and the                                                                    
     operation  of  their  plants,   which  is  where  spill                                                                    
     prevention  happens.   And so  that's very  good.   And                                                                    
     then the shift to  verification exercises and training,                                                                    
     yeah, we  think we can get  a ... better "bang  for the                                                                    
     [buck]" - better operation of the facilities.                                                                              
Number 0833                                                                                                                     
REPRESENTATIVE ROKEBERG  asked how long  it takes once a  plan is                                                               
drafted and submitted for review.                                                                                               
MR.  DIETRICK   answered  that  the  timeframe   depends  on  the                                                               
complexity  of  the facility.    Prince  William Sound  crude-oil                                                               
tanker  plans -  which involve  multiple owners  of tankers,  the                                                               
Trans-Alaska  Pipeline  System  (TAPS),  and  the  Valdez  Marine                                                               
Terminal  - are  bigger and  much  more complex  plans, and  take                                                               
longer  than smaller  plans for  smaller oil  terminal facilities                                                               
around  the  state.    There  is a  lot  of  upfront  negotiation                                                               
beforehand,  he indicated,  but once  a completed  application is                                                               
received, there is roughly a  65-day period for public notice and                                                               
REPRESENTATIVE  ROKEBERG  asked,  because  of  the  planning  and                                                               
review time,  whether a plan now  is only good for  two years and                                                               
some months, or whether the three  years dates from [the time of]                                                               
MR. DIETRICK answered that depending  on the complexity and which                                                               
facility the  plans apply  to, the  process may  begin up  to six                                                               
months  prior to  the expiration  date of  a plan  that is  to be                                                               
REPRESENTATIVE ROKEBERG said he  understood DEC's testimony to be                                                               
that the  preference is to  have everyone perfecting  the ability                                                               
to respond, rather than "sitting around writing plans."                                                                         
MR. DIETRICK concurred,  suggesting that setting it  back to five                                                               
years  would  result  in  a  significant gain  [in  time]  and  a                                                               
reduction in the paperwork burden.                                                                                              
Number 1051                                                                                                                     
MR.  DIETRICK,  in  response  to  questions  from  Representative                                                               
Rokeberg, explained that  the extent of changes [to  the plan] at                                                               
the time  of renewal really  depends on the facility,  the extent                                                               
to  which  the nature  of  the  operation  has changed,  and  any                                                               
corresponding change  in response  capability.  If  the situation                                                               
is status  quo, then  the changes  are relatively  minor compared                                                               
with  those when  somebody  has added  storage  tanks or  similar                                                               
modifications.  There is a  requirement to update, however, which                                                               
applies to  new technology  as well as  "typical things"  done at                                                               
renewal   time.     Therefore,   the  update   to  evaluate   new                                                               
technologies would be an item that all operators would perform.                                                                 
Number 1191                                                                                                                     
REPRESENTATIVE ROKEBERG  posed a  hypothetical example of  a port                                                               
facility that has expanded its  capacity, and asked whether it is                                                               
required under the current plans  that there be modifications for                                                               
that during the course of an approved plan.                                                                                     
MR.  DIETRICK answered  that there  is another  provision in  the                                                               
requirements  for  an amendment  of  a  plan.    If a  change  or                                                               
modification  to  a  plan  is  significant  and  may  affect  the                                                               
response capability during  the time when the plan  is in effect,                                                               
then that  would be triggered  and the operator would  request to                                                               
amend the plan within the three-year cycle.                                                                                     
REPRESENTATIVE ROKEBERG  asked whether provisions in  the current                                                               
process for  plans approved  by DEC  already have  flexibility to                                                               
account  for  a  substantial  change in  the  capacity  or  other                                                               
circumstances of a facility, or for new technological advances.                                                                 
MR. DIETRICK  said that  is correct.   In  response to  a further                                                               
question, he  said one benefit  of extending the renewal  is that                                                               
the  amendment  requirement  now  in  place  requires  continuous                                                               
changes  to that  plan for  anything  that happens  which may  be                                                               
significant during that plan cycle.                                                                                             
Number 1317                                                                                                                     
REPRESENTATIVE ROKEBERG  asked whether it is  correct, then, that                                                               
if  DEC  is  doing  its  job  and  the  amendment  process  works                                                               
properly,  there  should be  no  additional  risk whatsoever  "to                                                               
what's contemplated under a contingency plan."                                                                                  
MR. DIETRICK answered in the  affirmative, noting that there also                                                               
is a  mechanism whereby the  operator is required  to immediately                                                               
notify [DEC] of nonreadiness if,  for any reason, that operator's                                                               
equipment or response  capability isn't up to par and  in a state                                                               
of  readiness.   He  indicated the  department would  immediately                                                               
pursue  corrective  action  after   being  notified  by  such  an                                                               
REPRESENTATIVE   ROKEBERG   asked   whether  DEC   audits   these                                                               
capabilities or somehow checks on these plans periodically.                                                                     
MR. DIETRICK replied:                                                                                                           
     Yes, but  ... we think  there's a better "bang  for the                                                                    
     buck"  if we  can  increase working  directly with  the                                                                    
     operators  to  actually  verify  -  through  exercises,                                                                    
     training,  equipment audits,  and  [so  forth] -  their                                                                    
     capability. ... It's just  a much easier communication.                                                                    
     You can  work more  hands-on with  the operators.   You                                                                    
     can find out where problems  are that you can't through                                                                    
     the  theoretical plan-review  exercise.    So, yes,  we                                                                    
     would increase --  that is the intent.   And, actually,                                                                    
     I   believe  our   goal  would   be  to   get  improved                                                                    
     performance  and response  capability  as  a result  of                                                                    
     doing [this].                                                                                                              
Number 1429                                                                                                                     
MR.   DIETRICK,   in   response   to   further   questions   from                                                               
Representative Rokeberg,  explained that for noncrude  or refined                                                               
products, storage  in excess of  10,000 barrels is  the threshold                                                               
for  requiring a  contingency plan;  for crude  oil, the  storage                                                               
threshold is 5,000  barrels.  A plan is required  for an oil well                                                               
as  long  as  it  involves  liquid  hydrocarbons,  regardless  of                                                               
whether it is an exploratory well or a production well.                                                                         
REPRESENTATIVE ROKEBERG  suggested a  fuel oil company  with more                                                               
than 10,000 barrels would have to have a plan.                                                                                  
MR. DIETRICK affirmed that.                                                                                                     
CHAIR KOHRING thanked Mr. Dietrick and opened the public                                                                        
Number 1521                                                                                                                     
DANA  L.  OLSON referred  to  written  testimony she'd  sent  the                                                               
committee  and told  members that  contingency plans  address the                                                               
permittee,  not  the public.    Noting  that  AS 46.03.040  is  a                                                               
requirement  by the  legislature for  an environmental  plan, she                                                               
     It's  not been  done,  and that's  the public  process.                                                                    
     So, in other words, you  are assuming that the criteria                                                                    
     has  been  set for  these  [contingency]  plans, and  I                                                                    
     really am  just going  to have  to raise  an objection.                                                                    
     ...  You have  to have  a factual  basis first,  to ...                                                                    
     base a contingency  plan on, and that's  not been done.                                                                    
     Where  the technological  data is  not provided  to the                                                                    
     public  at the  lease  sale ...  stage  or the  coastal                                                                    
     consistency, at some  point it triggers a  need for the                                                                    
     public  to know  what  the secondary  effects are  from                                                                    
     this ... permitted activity.                                                                                               
     The  community right-to-know  laws  are meaningless  if                                                                    
     you  go in  and you  write a  contingency plan  and you                                                                    
     make ...  presumptions without any  public process.   I                                                                    
     would have  to raise an  objection.  I feel  that there                                                                    
     isn't  an adequate  public process  because you're  not                                                                    
     addressing  the  public;  you're  addressing  what  the                                                                    
     agency will do  and what the permittee  or the activity                                                                    
     will do, and ... not what the effect on the public is.                                                                     
     I  wanted to  say  that the  state's  disaster plan  is                                                                    
     supposed  to be  a community-based  effort, and  not an                                                                    
     agency-directed  or  an  legislative-enacted  activity.                                                                    
      And certainly contingency plans are basically a mini-                                                                     
     disaster plan.                                                                                                             
     And I'm  really going  to have to  object to  this five                                                                    
     years.  It  has no rational basis.  If  there is a need                                                                    
     because there is  a hazard or the public  welfare is in                                                                    
     need,   it's   an  arbitrary   decision-making   thing.                                                                    
     Disaster  is public  welfare, and  economics don't  ...                                                                    
     fathom  under national  security  either.   So I  don't                                                                    
     know how you're  going to address ...  a state disaster                                                                    
     plan when you are not addressing the public.                                                                               
Number 1701                                                                                                                     
TADD  OWENS,  Executive  Director, Resource  Development  Council                                                               
(RDC),  testified  that  RDC is  a  private,  nonprofit  business                                                               
association representing individuals  and companies from Alaska's                                                               
oil and  gas, mining, timber, tourism,  and fisheries industries;                                                               
it  mission  is  to  help   grow  Alaska's  economy  through  the                                                               
responsible   development  of   natural  resources.     Mr. Owens                                                               
specified that  RDC supports  HB 113,  which changes  the renewal                                                               
period  for DEC-required  discharge  and  contingency plans  ("C-                                                               
plans")  from  three  to  five   years.    Although  C-plans  are                                                               
essential  to spill  response preparedness,  he  said the  effort                                                               
associated  with  the  plan  renewals  is  significant  for  both                                                               
industry and the state.  He told the committee:                                                                                 
     Based  on   our  members'  experiences,   a  three-year                                                                    
     renewal  cycle  often  does not  result  in  meaningful                                                                    
     improvements in environmental  protection or regulatory                                                                    
     compliance.  Increasing the  time between renewals from                                                                    
     three to  five years will bring  the program's benefits                                                                    
     in line with its costs.                                                                                                    
     A  five-year  renewal cycle  will  allow  the state  to                                                                    
     focus its  resources on  site inspections,  rather than                                                                    
     the   office  work   associated   with  plan   reviews.                                                                    
     Currently, [DEC]  is responsible  for more than  125 C-                                                                    
     Plans in Alaska.   And we believe  that allowing agency                                                                    
     staff additional  time in the  field will  provide them                                                                    
     with   a  more   thorough  understanding   of  industry                                                                    
     operations.    A  five-year renewal  period  will  give                                                                    
     agency  staff a  better  opportunity  to determine  the                                                                    
     effectiveness  of existing  plans and  to observe  plan                                                                    
     implementation  prior to  any incident.   By  utilizing                                                                    
     this  information   and  experience,   subsequent  plan                                                                    
     renewals will  have better oversight,  incorporate more                                                                    
     high-value  improvements,  and  be less  vulnerable  to                                                                    
     legal challenges.                                                                                                          
     Meanwhile,  industry   will  be   able  to   shift  its                                                                    
     resources   away   from  the   largely   administrative                                                                    
     exercise   of   three-year   renewals   to   additional                                                                    
     prevention-specific  activities.   Improved  networking                                                                    
     and  communication  between  industry  and  [DEC]  will                                                                    
     further  emphasize  and  enhance the  quality  of  plan                                                                    
     renewals.    Also,  a  five-year  renewal  cycle  would                                                                    
     mirror  the federal  requirement, allowing  industry to                                                                    
     consolidate its review process.                                                                                            
     RDC's  members  believe   that  increasing  the  C-Plan                                                                    
     renewal cycle from  three to five years  will result in                                                                    
     a more  thorough public process,  the creation  of more                                                                    
     realistic  and  sophisticated  plans, and  establish  a                                                                    
     more  efficient  and   predictable  regulatory  regime.                                                                    
     HB 113 deserves the committee's support.                                                                                   
Number 1886                                                                                                                     
MARILYN   CROCKETT,  Deputy   Director,   Alaska   Oil  and   Gas                                                               
Association (AOGA),  testified that  AOGA is a  trade association                                                               
whose 17  member companies  account for the  majority of  the oil                                                               
and gas activity  in the state.  All of  AOGA's members that have                                                               
activity in the state are required  to have a C-Plan approved and                                                               
in  place.    She  told   the  committee,  "Clearly,  we  have  a                                                               
significant interest  in this legislation,  and we  encourage the                                                               
committee to pass it."                                                                                                          
MS. CROCKETT reported that AOGA  spent considerable time over the                                                               
past  12 months  looking at  permitting programs  and identifying                                                               
those  in need  of updating  and streamlining,  and early  on had                                                               
adopted   a  guiding   principle:      "accomplish  updates   and                                                               
streamlining  without  compromising environmental  protection  of                                                               
safety standards."   She said  HB 113 fits perfectly  within this                                                               
MS. CROCKETT indicated  the five-year cycle proposed  in the bill                                                               
is  the cycle  used by  the  federal government,  the West  Coast                                                               
states,  and "other  oil-producing  states  that we've  studied."                                                               
She reported that  the cost of renewal alone  can average $60,000                                                               
to  $100,000, depending  on the  type of  facility; that  doesn't                                                               
include legal challenges,  which can increase figures  up to half                                                               
a million  dollars.   In addition, the  renewal process  is time-                                                               
intensive.  She reported that  experience has shown that for some                                                               
plans,  even  with   submittals  180  days  in   advance  of  the                                                               
expiration   date,  approvals   can  still   average  360   days,                                                               
"essentially meaning that  once a renewal is  complete, work must                                                               
begin on the next renewal."                                                                                                     
Number 1982                                                                                                                     
MS. CROCKETT  emphasized what purpose a  C-Plan serves:  it  is a                                                               
blueprint describing  how an operator  will respond to  an event.                                                               
The proof  of its  effectiveness isn't how  often it  is renewed,                                                               
but whether the response identified  in the plan can be delivered                                                               
as   promised.      Demonstration  of   this   effectiveness   is                                                               
accomplished through  drills, she  said, suggesting this  area is                                                               
where the biggest benefit of  extending the renewal cycle will be                                                               
seen,  by shifting  the focus  from administrative  processing to                                                               
field performance.   The extension  also will  provide additional                                                               
time  for   agency  staff  to  increase   their  familiarity  and                                                               
understanding  of  a  particular  operation for  which  they  are                                                               
MS. CROCKETT,  calling these C-Plans "evergreen"  documents, said                                                               
they are  continually reviewed  by the  operators to  ensure that                                                               
the information is  kept up to date, and that  the plan continues                                                               
to reflect  the current  operation and state  of readiness.   She                                                               
noted that  DEC regulations require  that updates  and amendments                                                               
be submitted to the department.                                                                                                 
Number 2033                                                                                                                     
MS. CROCKETT  referred to the  amendment mentioned by  Ms. Siroky                                                               
[to be  discussed by  Breck Tostevin of  the Department  of Law].                                                               
That amendment  [later adopted as  Amendment 1], read  as follows                                                               
[original punctuation provided]:                                                                                                
     Page 1, following line 10:                                                                                                 
          Insert a new bill section to read:                                                                                    
          **Sec. 2  The uncodified law of the State of                                                                          
     Alaska is amended by adding a new section to read:                                                                         
          TRANSITION.       Notwithstanding   any   contrary                                                                    
     provision of AS 46.04,  including the review procedures                                                                    
     in AS  46.04.030, and the regulations  adopted under AS                                                                    
     46.04,  the   expiration  date  of  an   oil  discharge                                                                    
     prevention  and   contingency  plan  approved   by  the                                                                    
     Department  of  Environmental Conservation  before  the                                                                    
     effective date  of this Act  shall be extended  for two                                                                    
     years, or for  a shorter period if a  shorter period is                                                                    
     requested by the holder of the approved plan, if                                                                           
               (1) the plan is still in effect on the day                                                                       
     before the effective date of this Act; and                                                                                 
               (2)    the   Department    of   Environmental                                                                    
     Conservation has not given a  notice of violation of AS                                                                    
     46.04.030 to the  holder of the plan that  has not been                                                                    
     corrected  to the  satisfaction  of  the Department  of                                                                    
     Environmental Conservation.                                                                                                
     Renumber remaining sections accordingly.                                                                                   
MS. CROCKETT  specified that  AOGA supports  the amendment.   She                                                               
noted that  with her were  people she considered experts  in this                                                               
field who could answer technical questions.                                                                                     
Number 2129                                                                                                                     
DOUGLAS MERTZ,  Prince William Sound Regional  Citizens' Advisory                                                               
Council (RCAC),  testified in  opposition to  HB 113  as drafted.                                                               
Noting that his  organization is a coalition  of mostly municipal                                                               
and  borough  governments and  other  entities  formed after  the                                                               
Exxon  Valdez [oil  spill], he  said it  is actively  involved in                                                               
tracking the  entire process of  oil transportation  from Valdez,                                                               
through   Prince  William   Sound  and   throughout  that   area.                                                               
Intimately involved  in the C-Plan creation  and approval process                                                               
on an ongoing  basis, the RCAC has concluded that  it must oppose                                                               
this bill as  currently drafted because it will,  in fact, weaken                                                               
Alaska's   oil  spill   prevention  and   response  capabilities,                                                               
Mr. Mertz reported.                                                                                                             
MR.  MERTZ discussed  the three  ways  his organization  believes                                                               
this will  happen.  First,  extending the timeframe  inhibits the                                                               
timeliness of  the agency's ability  to incorporate  into C-Plans                                                               
those  lessons learned  from  on-the-ground, in-the-field  drills                                                               
and other  exercises, which are  an incredibly important  part of                                                               
learning and preparation for oil  spills.  Second, it reduces the                                                               
frequency  of  updating  the "best  available  technology"  (BAT)                                                               
analyses,  a  highly  important  part of  the  entire  oil  spill                                                               
process.    Under  the  C-Plan  requirements,  plan  holders  are                                                               
required  to   employ  BAT  in  their   oil  spill  preparedness,                                                               
prevention, and  response capacities.  Extending  the time period                                                               
for these  renewals will  basically defer -  and almost  double -                                                               
the time period during which  the BAT analyses must be undertaken                                                               
and implemented.   And  third, it reduces  the agency's  and plan                                                               
holder's  familiarization with  the plan,  which could  result in                                                               
complacency.   From the Exxon  Valdez and other major  spills, he                                                               
cautioned, [it  has been learned  that] what very  often precedes                                                               
such a spill is a period of complacency.                                                                                        
Number 2270                                                                                                                     
MR. MERTZ  countered testimony  that an  extension to  five years                                                               
would align Alaska's requirements  with federal requirements.  He                                                               
pointed out  that because Alaska's requirements  now are stricter                                                               
than the  federal ones,  the federal requirements  "tend to  be a                                                               
much  less extensive  plan update  to  the Alaska  requirements."                                                               
Furthermore,   the  federal   regulations   have  an   additional                                                               
requirement for  an annual review and  update.  There is  no such                                                               
requirement in Alaskan  law, and this bill wouldn't add  one.  He                                                               
     If you really  want to align what happens  on the state                                                                    
     level  with what  happens on  the  federal level,  then                                                                    
     that   same  annual   review  and   update  should   be                                                                    
     incorporated;  in fact,  you  could  lift the  language                                                                    
     from the federal regulations  and incorporate them into                                                                    
     state law directly, to truly make it in alignment.                                                                         
MR. MERTZ noted that the RCAC's  testimony was provided by fax to                                                               
each  member the  previously day,  and said  he wouldn't  read it                                                               
this  day.   He again  pointed out  that his  organization, which                                                               
follows  these issues  carefully,  is increasingly  uncomfortable                                                               
with  the  idea of  extending  this  plan  without this  kind  of                                                               
additional safeguard  and additional requirements that  ensure an                                                               
ongoing, mandatory duty to update  plans annually or on some more                                                               
frequent basis than five years.                                                                                                 
Number 2359                                                                                                                     
REPRESENTATIVE   ROKEBERG   offered    his   understanding   from                                                               
Mr. Dietrick's  testimony  that  already  in  existence  are  the                                                               
amendment   process   and    provisions   for   notification   of                                                               
nonreadiness with regard to C-Plans  in Alaska.  He asked whether                                                               
those  processes  aren't  working  correctly,  and  whether  they                                                               
aren't equivalent to annual review.                                                                                             
MR. MERTZ responded:                                                                                                            
     They're not the equivalent.   Those are ... tools which                                                                    
     can be used in the  extraordinary circumstances of true                                                                    
     inability  to  respond to  fulfill  the  plan, or  some                                                                    
     extraordinary  event  [that]  makes  actuality  diverge                                                                    
     from what's  in the  plan.   But that's  different from                                                                    
     what the  federal regulations  require, ...  an actual,                                                                    
     ongoing update incorporating  best available technology                                                                    
     ...  as  a regular  matter  -  in  other words,  ...  a                                                                    
     constantly  evolving   process  that   ...  continually                                                                    
     causes ...  an improvement in  the ability of  the plan                                                                    
     holder to perform.                                                                                                         
     What [Mr.  Dietrick] ... was  talking about  really can                                                                    
     be invoked  only in  extraordinary circumstances.   And                                                                    
     right now  the agency doesn't  have the ability  to say                                                                    
     to a plan  holder that "you must  do these incremental,                                                                    
     almost  continuous  improvements  in  your  ability  to                                                                    
Number 2434                                                                                                                     
CHAIR KOHRING asked whether anyone else wished to testify.  He                                                                  
then closed public testimony.                                                                                                   
Number 2453                                                                                                                     
REPRESENTATIVE ROKEBERG asked Mr. Dietrick to respond to the                                                                    
testimony of Ms. Olson about the public process and the idea                                                                    
that C-Plans are supposed to be a community-based effort.                                                                       
MR. DIETRICK answered:                                                                                                          
     The  public   review  process  is  provided   for,  for                                                                    
     contingency  plans.    It's   a  30-day  public  review                                                                    
     process  with  a  request for  additional  information.                                                                    
     And we ...  do those.  So ... that's  a fairly standard                                                                    
     public notice  review period  that the  department uses                                                                    
     for most of  its major permits and  authorizations.  So                                                                    
     that's the  one that's in place  for contingency plans,                                                                    
     and  that's  what we  use  to  provide for  the  public                                                                    
Number 2504                                                                                                                     
REPRESENTATIVE  ROKEBERG   asked  Mr.  Dietrick  to   respond  to                                                               
Mr. Mertz's three main points [also  set out in the RCAC's letter                                                               
dated February 26].  He offered  his own assessment that having a                                                               
plan longer leads to more familiarity, rather than complacency.                                                                 
MR. DIETRICK replied:                                                                                                           
     First of all, ... I think  the good news about the bill                                                                    
     is, I  think everybody has  the same goal.   The Prince                                                                    
     William Sound  Regional Citizens' Advisory  Council has                                                                    
     been given  an oversight  role under the  Oil Pollution                                                                    
     Act of 1990 to make sure we all  do a good job.  And we                                                                    
     work  with  them  all  the  time.    They've  got  good                                                                    
     expertise   and  experience,   and  we   ...  seriously                                                                    
     consider their  input on all  oil spill  prevention and                                                                    
     response  matters, ...  as we  do their  comments today                                                                    
     ... on  this bill.   So we treat those  very seriously,                                                                    
     and ...  they are  a very key  player here  in ensuring                                                                    
     the integrity of the system.                                                                                               
     We sometimes  disagree on the  approach and ...  how to                                                                    
     get to  those goals. ...  We believe that  actual field                                                                    
     testing is  a better way  to move forward and  test the                                                                    
     capability of  these systems than these  ... three-year                                                                    
     renewals.  And  that's why we believe  the extension to                                                                    
     five-year [renewals] is a substantial improvement.                                                                         
     With  regard to  the lessons  learned and  the delaying                                                                    
     the lessons  learned, we  do not  wait even  till three                                                                    
     years now  to incorporate  lessons learned  from drills                                                                    
     into a  plan.   We do  roll those into  a plan  now, if                                                                    
     they are  significant, by amendment.   So  extending it                                                                    
     to five years is neither  here nor there, because if it                                                                    
     is  significant,  the idea  is,  we  use the  amendment                                                                    
     process to include them now.                                                                                               
     And for major  plans, even in the  Prince William Sound                                                                    
     area, we  have monthly  meetings -  they call  them the                                                                    
     "response planning group" -  to review lessons learned,                                                                    
     sort   through   them,   determine   which   ones   are                                                                    
     significant; they're  even tracked  in a  system called                                                                    
     "Passport"  (ph).   We  ... would  like  to improve  on                                                                    
     that,  but ...  there very  clearly is  a mechanism  in                                                                    
     place to ... roll those  lessons learned in without any                                                                    
Number 2659                                                                                                                     
MR. DIETRICK addressed the RCAC's concern about review of the                                                                   
best available technology as follows:                                                                                           
     With regard  ... to the  second point in  their letter,                                                                    
     the  best  available   technology  reviews,  those  are                                                                    
     performed at  the time of  renewal, and ...  the intent                                                                    
     behind  those  is  to keep  these  plans  current  with                                                                    
     changes  in  technology.   Now,  the  technology-review                                                                    
     cycle  for oil  spill response  equipment is  ... long.                                                                    
     ... There  have not been  many breakthroughs.   A five-                                                                    
     year cycle  for a technology  review, I believe,  is an                                                                    
     appropriate  cycle.     As  a   matter  of   fact,  our                                                                    
     regulations require  that we conduct a  "best available                                                                    
     technology" conference on a  five-year basis right now.                                                                    
     This would simply line that up.                                                                                            
     The  best   available  technology  analyses   that  are                                                                    
     performed in these plans  [are] a theoretical exercise.                                                                    
     And we  believe it's  more important  - than  to review                                                                    
     those  - to  actually go  out and  test those  premises                                                                    
     more  frequently to  see if  they work,  to see  if the                                                                    
     technology  that was  analyzed  and arrived  at in  the                                                                    
     plan  is actually  the  ...  best available  technology                                                                    
     when you  implement it.   So increasing our  ability to                                                                    
     do  that in  the field  will, I  believe, drive  faster                                                                    
     advances  in technology  improvements,  because ...  we                                                                    
     will have  the ability  ... to  test those,  reject the                                                                    
     ones that  don't work, and  then seek  improvements ...                                                                    
     and get better ones ... that will work.                                                                                    
Number 2733                                                                                                                     
MR. DIETRICK responded to the RCAC's concern about complacency                                                                  
as follows:                                                                                                                     
     I  think the  third point,  then, was  the complacency.                                                                    
     And, indeed,  that is a significant  phenomenon that we                                                                    
     all need to  be aware of.  It's the  one that, a decade                                                                    
     ago, was pointed  to quite frequently.  And  I think no                                                                    
     one wants to slip back into that mode.                                                                                     
     This change, however, again, I  think is a smart change                                                                    
     because it  gets us away  from the  theoretical reviews                                                                    
     and gets us  [to] the point where we  can actually test                                                                    
     the capabilities  of the response system  and actually,                                                                    
     then,  through testing,  identify which  ones are  real                                                                    
     and which  ones aren't, and then  seek the improvements                                                                    
     that way.   So I think it's a much  more productive way                                                                    
     of 1)  interacting with the  companies, 2)  finding out                                                                    
     what does work, and 3)  that is really, in our opinion,                                                                    
     an increased  interaction with the operators,  which to                                                                    
     me   does  just   the  opposite   -   it  reduces   the                                                                    
Number 2835                                                                                                                     
REPRESENTATIVE ROKEBERG asked whether both the plan applicant                                                                   
and [DEC] have the ability to move to amend [a plan].                                                                           
MR. DIETRICK replied that he believes the statutes are quite                                                                    
strong.  He paraphrased from AS 46.04.030, which read in part:                                                                  
          (f) Upon request of a plan holder or on the                                                                           
     department's  own  initiative,  the  department,  after                                                                    
     notice  and opportunity  for  hearing,  may modify  its                                                                    
     approval  of  a  contingency  plan  if  the  department                                                                    
     determines that a change has  occurred in the operation                                                                    
     of  a facility  or vessel  necessitating an  amended or                                                                    
     supplemented   plan,   or  the   operator's   discharge                                                                    
     experience demonstrates  a necessity  for modification.                                                                    
     The  department,  after   notice  and  opportunity  for                                                                    
     hearing, may revoke its approval  of a contingency plan                                                                    
     if the department determines that                                                                                          
          (1)   approval   was    obtained   by   fraud   or                                                                    
          (2) the operator does not have access to the                                                                          
     quality  or quantity  of  resources  identified in  the                                                                    
          (3) a term or condition of approval or                                                                                
     modification has been violated; or                                                                                         
          (4) the person is not in compliance with the                                                                          
     contingency plan and  the deficiency materially affects                                                                    
     the plan holder's response capability.                                                                                     
REPRESENTATIVE  ROKEBERG requested  that Mr.  Dietrick provide  a                                                               
copy for  the committee's files  and for  the bill packet  [to be                                                               
given to the next committee of referral].                                                                                       
MR.  DIETRICK said  he would  gladly provide  those parts  of the                                                               
statute and the nonreadiness [provisions].                                                                                      
Number 2878                                                                                                                     
CHAIR  KOHRING   moved  to  adopt  Amendment   1  [text  provided                                                               
The committee  took an at-ease at  4:07 p.m. and was  called back                                                               
to order within a minute.                                                                                                       
Number 2911                                                                                                                     
BRECK   TOSTEVIN,  Assistant   Attorney  General,   Environmental                                                               
Section,   Civil  Division   (Anchorage),   Department  of   Law,                                                               
explained  that  Amendment 1  adds  a  transition provision  that                                                               
requires DEC  to administratively  extend the expiration  date of                                                               
an  oil  discharge  prevention  and  contingency  plan  that  was                                                               
approved before the  effective date of this Act.   That extension                                                               
would be  for two  years, or  for a shorter  period if  a shorter                                                               
period were  requested by  the holder  of an  approved plan.   He                                                               
said  a  shorter period  would  be  to  allow  a plan  holder  to                                                               
synchronize with  a federal  plan review or  if a  shorter period                                                               
were needed for some other reason.                                                                                              
MR.  TOSTEVIN  said  there  would   be  two  limitations  on  the                                                               
authority for extending  the plan renewal date.   First, the plan                                                               
would have to  be in effect on the day  before the effective date                                                               
of the  Act.  And second,  if the department had  issued a notice                                                               
of violation  to the  C-Plan holder  concerning the  C-Plan, that                                                               
would  have  to be  corrected  to  the department's  satisfaction                                                               
before the extension of the plan expiration date.                                                                               
MR.  TOSTEVIN explained  that the  intent  behind the  transition                                                               
provision  is to  extend the  expiration date  of existing  plans                                                               
without  requiring   a  new  administrative  review   or  renewal                                                               
procedures, or  requiring DEC  to adopt  unnecessary regulations.                                                               
This transition  provision would allow immediate  benefits to the                                                               
industry and  the department, he suggested,  as discussed earlier                                                               
by Mr. Dietrick.  He offered to answer any legal questions.                                                                     
TAPE 03-11, SIDE B                                                                                                            
Number 2976                                                                                                                     
CHAIR KOHRING  renewed his  motion to adopt  Amendment 1.   There                                                               
being no objection, it was so ordered.                                                                                          
The committee took an at-ease from 4:11 p.m. to 4:13 p.m.                                                                       
Number 2950                                                                                                                     
REPRESENTATIVE CRAWFORD moved to adopt [Conceptual] Amendment 2.                                                                
CHAIR KOHRING objected for discussion purposes.                                                                                 
REPRESENTATIVE CRAWFORD explained that  he wanted to adopt intent                                                               
language  taken   from  Mr.  Dietrick's  written   testimony,  as                                                               
     Streamlining the  process would allow the  applicant to                                                                    
     focus  on the  actual testing  of oil  spill prevention                                                                    
     and   response   preparedness  through   [in-the-field]                                                                    
     inspections, drills,  and exercises, which is  our most                                                                    
     effective means of  ensuring spill prevention, response                                                                    
     readiness, and protection of the environment.                                                                              
Number 2896                                                                                                                     
REPRESENTATIVE  ROKEBERG also  objected for  discussion purposes,                                                               
pointing out the need to have this be a conceptual amendment.                                                                   
REPRESENTATIVE ROKEBERG withdrew his objection.                                                                                 
CHAIR KOHRING  renewed his objection for  discussion purposes and                                                               
asked Mr. Dietrick to provide his thoughts on the amendment.                                                                    
Number 2850                                                                                                                     
MR. DIETRICK  offered his belief  that DEC would concur  with the                                                               
CHAIR KOHRING  withdrew his  objection.   He then  announced that                                                               
Conceptual Amendment 2 was adopted.                                                                                             
Number 2830                                                                                                                     
REPRESENTATIVE ROKEBERG moved  to report HB 113,  as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying  zero  fiscal  note.    There  being  no  objection,                                                               
CSHB 113(O&G) was  reported from  the House Special  Committee on                                                               
Oil and Gas.                                                                                                                    

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