Legislature(2001 - 2002)
03/25/2002 01:10 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
SB 343-BEST AVAILABLE TECHNOLOGY:DISCHARGE PLAN CO-CHAIR MASEK announced the first order of business, CS FOR SENATE BILL NO. 343(RES), "An Act clarifying the term 'best technology' required for use in oil discharge prevention and contingency plans; affirming existing Department of Environmental Conservation regulations defining 'best technology' and oil discharge prevention and contingency plans approved using those regulations; and providing for an effective date." Number 0154 SENATOR JOHN TORGERSON, Alaska State Legislature, presented CSSB 343(RES) on behalf of the Senate Resources Standing Committee, sponsor, which he chairs. He explained that the bill responds to the Alaska Supreme Court's February 1, 2002, ruling in Lakosh v. Alaska Dept. of Environmental Conservation by clarifying the meaning of "best available technology requirement for oil spill contingency rulemaking plans." First, it clarifies that the 1997 negotiated regulations, which establish a three-tiered approach for making best available technology (BAT) determinations, is a correct interpretation of the statute; second, it confirms the continued validity and effect of the 1997 regulations, which have been utilized in approving over 100 contingency plans since April 1997; and third, it affirms the continued effect of contingency-plan approvals issued under the 1997 regulations, and ensures that plan holders can continue to operate under those approvals. SENATOR TORGERSON said this bill doesn't eliminate or weaken the BAT requirement; however, some have incorrectly argued that the bill rolls back protections enacted in 1990 after the Exxon Valdez oil spill. The BAT requirement has been part of the contingency statute since 1980, long before the Exxon Valdez oil spill. In 1990, the legislature amended the existing law to add rigorous oil spill response planning standards; however, the legislature did not address the relationship between the planning standards and the best available technology. This bill would restore the 1997 consensus criteria developed in negotiated rulemaking, which have been used for making BAT determinations for the last five years. Number 0362 LARRY DIETRICK, Director, Division of Spill Prevention and Response, Department of Environmental Conservation (DEC), came forward to testify, noting that DEC is responsible for reviewing and approving all discharge prevention and contingency plans for over 120 facilities in Alaska. Those facilities include: oil terminals, pipelines, exploration and production facilities, tank vessels, oil barges, nontank vessels, and the railroad. In addition, DEC has been working with the Department of Law since the supreme court ruling to devise a remedy that meets the supreme court ruling on best available technology that is described in the contingency plans. MR. DIETRICK said the issue is the legislative intent for meeting the "best available technology" statutory requirement. The court noted that when an agency has adopted regulations under a delegation of authority from the legislature - using the process prescribed by the Administrative Procedure Act - it is presumed the regulations are valid; thus the review is limited to whether the regulations are consistent with and reasonably necessary to carry out the purposes of statutory provisions, and whether the regulations are reasonable and not arbitrary. Following the Exxon Valdez oil spill, the legislature established what are arguably the toughest response planning standards in the world, he noted. MR. DIETRICK further explained that when reviewing the contingency plan, DEC had interpreted the statute to mean that meeting Alaska's tough response planning standards also satisfies the BAT requirement, if the equipment is proven, reliable, and appropriate for its intended use and the magnitude of the spill it is addressing. This interpretation was developed through an extensive workgroup process when the regulations were developed in 1997. The court recognized that this approach has considerable merit and that the agency judgment in this regard deserves considerable deference, but only to the extent that the legislature actually granted DEC authority to define "best available technology" in terms of reliance on the response-planning standards. Number 0500 MR. DIETRICK told members the court has raised a rather narrow question regarding whether [DEC's] regulatory interpretation meets the intent and lies within the limits of authority delegated by the legislature. Best available technology wasn't defined by the legislature, so the court has interpreted the statutory language to mean that the legislature intended to impose two separate requirements. This precludes DEC from relying on the response-planning standards or performance standards put in regulation to establish the BAT requirement. Number 0555 MR. DIETRICK noted that the court's ruling has invited the legislature to clarify the intent. The department believes any legislation should meet the following goals. First, because of the timing of the release of the court decision and the time remaining during this [legislative] session, it is important that any legislation be limited to what is necessary to address the court ruling; there isn't time to entertain other statutory changes and to do credible research in coordination with the regulated community and other stakeholders. Second, legislation should be passed this session to ensure continued operation of Alaska's facilities and eliminate the "cloud of uncertainty" from the court ruling regarding the validity of existing plan approvals made since 1997. Third, the legislation must validate the existing regulations and preserve the approach for making BAT determinations as envisioned by the 1997 task force. Fourth, the legislation must sustain the same level of rigor for plan reviews as now practiced, and not diminish the existing response capability. Fifth, the legislation must continue to support the ability of the department to evaluate new technologies and make BAT findings. Number 0707 MR. DIETRICK said SB 343 meets these five goals and provides a straightforward language clarifying the legislative intent. In addition, it validates the BAT approach taken by the department in a 1997 negotiated-rulemaking process and affirms the continued effect of contingency plans approved by the department since 1997. He suggested the language is responsive to the supreme court ruling, and doesn't reduce the rigor of existing contingency-plan reviews or diminish the response readiness and capability of industry. The bill also provides for the department's periodic examination of new technologies to keep Alaska on the forefront of environmental protection worldwide. He stated that the department supports SB 343. Number 0762 REPRESENTATIVE STEVENS asked Mr. Dietrick when and where the last [oil] spill DEC was involved in occurred, and what the best available technology was that the DEC used in the cleanup. MR. DIETRICK indicated [oil] spills occur almost daily in different amounts across the state. He talked about a large spill in Prince William Sound where a new boom was used, and said [DEC] believes it would be a good candidate for reviewing and making a determination of its best available technology. He offered an example of a recent event: a fish processor hit a rock [in Prince William Sound], resulting in the largest refined-products spill there. The recovery rate was over 50 percent, using aforementioned technology and the Alyeska SERVS [Ship Escort Response Vessels System] response capability. Number 0879 DOUGLAS MERTZ, Prince William Sound Regional Citizens' Advisory Council (RCAC), came forward to testify, noting that his organization involves 18 communities and other entities within the area affected by the Exxon Valdez oil spill. He said the RCAC recognizes the need for [SB 343] and for clarification after the supreme court decision. He mentioned concerns about the enormous amount of discretion that [CSSB 343(RES)] would give DEC on how and whether to implement the BAT requirement. He referred to the statute and said it uses the word "may" rather than "shall" [several times], and where it can say "shall", it says "may". He said as a result, DEC is vested with an enormous breadth of discretion, from making the BAT requirement highly burdensome, to making it a "meaningless walk- through," or anything in between. MR. MERTZ expressed concern that the department should implement the regulations put together by a bipartisan group in 1997. He said there is general agreement that these are good regulations and really do the job. He suggested that if implemented, they would be to the entire state's advantage. One part of those regulations - considered important by everyone who put together that package of regulations, including the agency, the industry, environmentalists, and the RCAC - was the requirement that every five years a conference on BAT [would be held]; experts from industry, government, and all sources could come together and attempt to reach a true consensus on what is the best available technology. He pointed out that although the conference was supposed to happen every five years, the deadline was missed last year; now, there is a request in to fund, from the "470 fund," [a conference] in the upcoming fiscal year. MR. MERTZ told members it is important that discretion in the department be narrowed by the legislature's telling the DEC [to comply] because regulations require it. He said "we've" given [the legislature] language that would accomplish that, fairly mild language in the declarations section at the beginning of the bill that would simply say these regulations were put together and that they are the law, just as the statute is. MR. MERTZ referred to a handout that would later be addressed by proposed conceptual Amendment 1. Titled "Suggested Changes to Senate Bill 343," it read: The Prince William Sound Regional Citizens' Advisory Council suggests that such language could be inserted into Senate Bill 343 at 1(a)(5) by changing it to read as follows (new language in boldface): (5) under AS 46.04.030(j) and 46.04.070, the Department of Environmental Conservation adopted regulations at 18 AAC 75.445(k), effective April 4, 1997, that established a reasonable three-tiered process, including periodic Best Available Technology Conferences, for defining what was meant by best available technology; MR. MERTZ explained that adding the foregoing language would make it enormously difficult for the agency to "write off" that part of the existing regulations and essentially decline to take the best opportunity for discovering and defining what the best available technology is. Number 1137 REPRESENTATIVE GREEN referred to page 3 [line 30] and asked Mr. Mertz whether he felt that [provision] was stringent enough. For example, a company might find that the technology it is already using is the best available technology. He surmised that [a company] would find the best available technology. MR. MERTZ suggested [the provision] meant "they" shall come up with a declaration as to what is the best available technology. It may be standards-based or something else, but doesn't require going through the processes they committed themselves to in the 1997 regulations. The [regulations], by contrast, require that a process is gone through in order to examine what [technology is available] and to make a fact-specific finding. He said that is what [his organization] would like to see tightened up here, either through making those "mays" mandatory or through the milder suggested method - referring to the regulations and the declarations so those regulations clearly are required. Number 1268 MR. MERTZ, in response to Representative Green's request for an example, suggested that the worst-case scenario would be if the agency decided it didn't have the manpower or funding to do an actual examination regarding what technology exists. New things are happening all the time. For example, if the five-year examination through a conference weren't held, and the only requirement would be for the entities to present their contingency plans to be examined - to find whether they could clean up a specific number of gallons in a certain number of hours - then the specific technology wouldn't be examined and compared to evolving technology in the rest of the world. Instead of being a standard that improves as technology improves, it would be fixed forever until "they" decide to reexamine what exists in the world. Number 1368 REPRESENTATIVE GREEN posed a scenario in which "they" had looked at a "C Plan" [contingency plan] and agreed that the equipment available is the best available technology; however, some new technology had been developed in the meantime that wasn't covered but [that the provision] said will be covered. He asked if that meant DEC would be derelict in its duties. MR. MERTZ said he didn't think so. REPRESENTATIVE GREEN asked Mr. Mertz if he was concerned that "they" won't stay abreast of current technology. He mentioned that there might be extenuating circumstances. He said the bill says they are going to stay abreast of technology to the best of their ability and may not [have the technology most recently available]. He expressed concern that if the bill says "will", then they won't ever be able to stay [current] on [the most recent technology available]. MR. MERTZ responded that the beauty of referring to the 1997 regulations is that they provide a methodology for reassessing periodically - every five years. This would prohibit a judge from saying that recently developed new technology must be incorporated into the C Plan approvals. REPRESENTATIVE GREEN indicated he'd interpreted the ruling of the supreme court to mean that some definition was needed. He mentioned that he thought the supreme court would be satisfied as long as [BAT] was addressed. He remarked, "I think if you nail that too tight, you're almost determined to fail." MR. MERTZ replied, "That's why we are not advocating nailing it too tight." He mentioned that the requirement is not tied to specific technology. He indicated that requiring so many "shalls" would make it possible for somebody to claim that because there is certain new technology currently available, regardless of when it was developed, the new technology must be incorporated. He offered his belief that by [having the bill refer to] the regulations and the five-year conference, a reasonable judge would [maintain that] the requirement for a grand reexamination is every five years, not every month. Number 1565 REPRESENTATIVE GREEN asked Mr. Mertz if he was concerned that the "may" would allow it not to be done. MR. MERTZ said [that would be so] if it weren't coupled with a reference to the regulations - an affirmation that the process in those regulations is what is intended. REPRESENTATIVE GREEN offered his understanding that regulations are an advent after a statute has been determined. CO-CHAIR MASEK remarked that she thought Representative Green had a point, and that it was better to fix the problem by statute rather than regulation. Number 1612 MR. MERTZ, in response to Representative Kerttula, explained that the [regulations] were created in 1997; the first five-year conference should have occurred during the last fiscal year. REPRESENTATIVE KERTTULA asked where the process was in terms of holding such a conference. MR. MERTZ answered that DEC and the industry support [the conference], and there is a component in the governor's CIP [capital improvement project] budget for seed money for it, for the coming fiscal year. It is anticipated that the industry would also provide the experts some money, and there may be funding from other sources. He said the plan is underway. Number 1664 REPRESENTATIVE KERTTULA asked when the response standard was last looked at in statute; if the Exxon Valdez [oil spill] was the last time there was a response standard; and if the RCAC felt comfortable that by overturning the case and saying, "If you meet the response standard, you are best available technology," that meets what needs to be done in Alaska. MR. MERTZ said no. He explained that the RCAC has been very much involved in examining C Plans and - at least in Prince William Sound - actual capabilities for cleanup. There has been a good deal of controversy and concern about meeting those performance standards, whether those [standards] had become outdated since the Exxon Valdez [oil] spill, and the legislation immediately following. He said with those performance standards in place, "we" are at a juncture: the technology is rapidly outstripping what was put in place back then. REPRESENTATIVE KERTTULA asked Mr. Mertz if there was technology that the state wasn't using that he thought would be better. MR. MERTZ said, "No." Number 1749 REPRESENTATIVE KERTTULA asked Mr. Mertz if he was satisfied to accept mentioning of the conference in the bill. MR. MERTZ replied that it would be "folly" for the legislature itself to set new performance standards every year or to declare what the best available technology is; it should be left to the agency that has expertise to decide some of these [issues]. If [the agency] is given complete discretion and not required to update periodically, however, then there is a risk that updating and reexamining won't happen as time goes on. He remarked that [requiring this conference] is a sensible middle ground. CO-CHAIR SCALZI called the RCAC the "watchdog group" for the industry. He asked Mr. Mertz if [the RCAC] has watched and participated in compliance standards that the industry is under, and the overview that DEC has. MR. MERTZ answered in the affirmative. CO-CHAIR SCALZI asked Mr. Mertz whether he thought there was enough [in place] without [placing] further mandatory requirements on legislative intent. MR. MERTZ said the watchdog function the Prince William Sound RCAC and its sister organization in Cook Inlet perform is very valuable. However, the [organizations] aren't regulatory agencies and have no authority. He said only DEC and the federal authorities can do that. Number 1865 CO-CHAIR SCALZI said Mr. Mertz was correct, but that the RCAC is better than the legislature at knowing where a problem in a situation may occur. He said [legislators] value agencies like [the RCAC] to help them know that the industry is keeping up with certain standards, and hope to rely on the input that [the RCAC] gives them every year. He said he didn't know if it was needed to have regulations [put in place] that might be unnecessary. He remarked that he thought relying on [the RCAC] was perhaps better than relying on some of the agencies. Number 1937 MARILYN CROCKETT, Deputy Director, Alaska Oil and Gas Association (AOGA), came forward to testify, noting that AOGA has 19 member companies and represents all of the [oil and gas] producers in the state, including the three in-state refiners. She said because of the nature of their operations, all of AOGA's members are required to have "oil spill discharge" and contingency plans in place. She said AOGA has a vested interest in resolution of this issue. MS. CROCKETT noted that on February 1, 2002, the Alaska Supreme Court determined it was unable to find the legislative intent it was looking for, in deciding whether the regulations promulgated by DEC, following a stakeholder process, in fact met with the legislature's intent when the bill was passed. She said AOGA participated in that stakeholder process, along with other public-interest groups, the RCACs, local municipalities, and utilities. That process began in 1996, and the regulations were adopted by the department in 1997 after the group reached agreement on what those regulations should contain. Two sections of the regulations that the supreme court has thrown out are [18AAC 75.445](k)(1) and (2), dealing with the BAT's meeting the response-planning standard and the prevention standards. With regard to the conference, she said Mr. Mertz is correct: industry supports the conference and the regulations it worked on with the stakeholder group. She agreed the conference should be held this year; the regulations were adopted in 1997, and 2002 is the five-year timeframe for that. Number 2038 MS. CROCKETT said this decision has placed everyone - AOGA's members, the public, and DEC - in a tenuous position. She explained that those two provisions are not on the books at this time, so the department is not able to approve any new contingency plans, nor able to process the renewals in a timely fashion. She said C Plans have to be renewed every three years. At the time of renewal, they must include the best available technology that has been proven reliable and appropriate for whatever that activity is. MS. CROCKETT said the court decision was also very limited in its scope, and it acknowledged that the legislature had [given] considerable authority to the department in making these determinations - they simply could not make the link that the two sections of the regulations provided. She emphasized AOGA's strong support for the bill as it reads, and said AOGA is not pursuing any diminishment of the department's authority, nor would AOGA support any diminishment of the department's authority at this time. MS. CROCKETT said the objective [in the passage of SB 343] is to remove the obstacle that [the industry] is faced with because of the supreme court decision, and [AOGA] is hoping to get a validation of the regulations that were developed through the stakeholder process. It is a time-critical factor for industry: some projects are very close to getting final approvals for all of their permits but are unable to reach that final-approval stage because of the two provisions being removed. She again encouraged passage of the bill. Number 2136 REPRESENTATIVE McGUIRE asked Ms. Crockett how she responds to the concern that there needs to be more reference to the [BAT] conference in the statutes, as opposed to in the regulations. MS. CROCKETT answered that [AOGA] doesn't believe the bill needs to be amended to include that specific provision because it is in the regulations. She remarked that the entire set of regulations could be included in the bill, if necessary, to make everyone more comfortable. The department has the regulations in place governing how it makes these determinations. She said the [amendment] that had been suggested is to the findings section of the bill, and reiterated her concern about the timing and that the bill pass as soon as possible. Number 2222 BRECK TOSTEVIN, Assistant Attorney General, Environmental Section, Civil Division (Anchorage), Department of Law, testified via teleconference. He noted that he would cover two topics: the reasoning and effect of the Alaska Supreme Court's recent decision concerning the BAT requirement for oil contingency plans, and how the legislation responds to the supreme court's decision in a focused and measured way. MR. TOSTEVIN explained that SB 343 seeks to clarify the statutory requirement that oil spill contingency plans use best available technology in light of the Alaska Supreme Court's ruling in the Lakosh v. DEC case. The best available technology has been in place since 1980 for response equipment used in C Plans. Due to the addition of oil spill prevention to the C Plan statute in 1990, the BAT requirement became applicable to prevention equipment at that time. In addition, the 1990 amendments added the rigorous oil-spill-response planning standards to the C Plan statute, but the legislature didn't address the relationship between the planning standards and the BAT requirement. MR. TOSTEVIN said the court found two parts of DEC's regulatory criteria for determining whether an oil discharge contingency plan uses BAT to be inconsistent with statute. These regulatory criteria were developed as part of a negotiated rulemaking in 1997, which included numerous stakeholders from throughout the state with a broad range of interests. In the Lakosh case, the Alaska Supreme Court was confronted with a general challenge to these regulations. He said the court's ruling was a narrow legal decision focusing on the language of the regulations, as opposed to a technological determination of whether any particular piece of equipment or technology used in the C Plan was indeed the best available. MR. TOSTEVIN reported that in finding parts of the regulations inconsistent with the statute, the court relied upon the dictionary definition of the term "best" - concluding that in the absence of legislative history to the contrary, the BAT regulations could not rely on the stringent response planning standards for oil spill response technologies, nor rely on performance standards set forth in regulation for determining BAT for prevention technologies. The Alaska Supreme Court concluded that while reliance on performance standards for determining BAT had considerable rhetorical merit - and had been used in other federal and environmental statutes in lieu of a one-size-fits-all technological rule - the absence of specific legislative history on the interplay between these standards and the BAT requirement led the court to the conclusion that the criteria were invalid with regard to the statute. Number 2409 MR. TOSTEVIN said given the Alaska Supreme Court's ruling overturning the 1997 workgroup's use of the response-planning standards and the prevention-performance standards, the BAT statutory requirement is ripe for legislative clarification. He said [SB 343] would restore the regulatory criteria adopted in the 1997 negotiated rulemaking, which had been used in approving more than 100 C Plans since April 1997. He suggested this legislation doesn't weaken the BAT requirement, but is an effort to restore the consensus criteria used for making BAT determinations for the last five years - criteria that have resulted in major improvements in oil spill prevention and response. MR. TOSTEVIN explained that SB 343 clarifies that the 1997 negotiated rulemaking regulations that established a three- tiered approach for making BAT determinations are a permissible interpretation of the statute. Also, [SB 343] affirms the continued validity and effect of the 1997 regulations; if SB 343 is enacted, DEC would not be required to revise its BAT regulations. Furthermore, [SB 343] affirms the continued effect of the contingency plan approval issued under the 1997 regulation and ensures that plan holders could continue to operate under those approvals. Number 2461 REPRESENTATIVE KERTTULA asked Mr. Tostevin if the department only looks at the performance standard when it makes a determination on best available technology, and if work had been done to try to make a determination of what's available and what could be reasonably expected from the companies to have available. MR. TOSTEVIN answered that for response equipment, the regulation requires that if it is technology that meets the response-planning standard, it also must be proven, reliable, and appropriate for its intended use. For example, if used for nearshore skimming, the equipment would have to be reliable and appropriate for that purpose, and would also have to be reliable and appropriate for the magnitude and type of the spill it is addressing. He said it isn't simply meeting the response- planning standards; rather, there are additional criteria involved in making that determination. REPRESENTATIVE KERTTULA asked whether that was in the statute or in regulation. MR. TOSTEVIN said it was in the 1997 regulations. REPRESENTATIVE KERTTULA asked if there are any other regulations [with similar requirements] - not just to meet a performance standard. MR. TOSTEVIN explained that the regulations call for the review and the five-year conference to review breakthrough technologies; if DEC finds there is a new technology [available], it makes a finding with respect to that technology. He noted that it would be picked up in the next renewal of the contingency plan process. Number 2585 SUE ASPELUND, Executive Director, Cordova District Fishermen United (CDFU), testified via teleconference. Ms. Aspelund told the committee that CDFU fought long and hard following the Exxon Valdez spill to make sure the oil companies and the state have worked to ensure that oil spill contingency plans are the best possible to prevent a repeat of 1989. The BAT is one of the most crucial elements within prevention and response contingency planning. Furthermore, CDFU supports the proposed amendment language submitted by the Prince William Sound RCAC [text provided previously]. She said CDFU strongly encourages the inclusion of periodic BAT conferences consistent with the 1997 regulations, as negotiated by stakeholders that included CDFU; furthermore, it is CDFU's opinion that compliance with the performance standard and adherence to best available technology are two very significant things. Number 2637 ROSS COEN, Alaska Forum for Environmental Responsibility, testified via teleconference, noting that his organization is a nonprofit group dedicated to holding industry and government accountable to environmental laws and regulations. He mentioned that he had testified in previous committees in opposition to [SB 343]. He said he is opposed to [SB 343's] intent and believes DEC should promulgate regulations that comply with, not circumvent, the supreme court's decision. He said he also believes the legislature should withhold action while [DEC] holds a public-comment period on such regulation changes; he offered his understanding that this bill is on the way to passing. He stated that he fully endorses an [DEC]-sponsored conference on BAT, which was stipulated in the 1997 regulations but never has been held. He said the conference is supported by the RCAC and AOGA. He strongly encouraged that the conference be [included in this] legislation. REPRESENTATIVE KERTTULA asked if the theory behind having the conference is so everyone can find out what the [BAT] is - some commitment on the record, not just in regulations that haven't been followed. MR. COEN indicated he would like to see this bill go down. However, given the present circumstances, he would like to see a conference [added to the bill]. Number 2738 GARY CARLSON, Senior Vice President, Forest Oil Corporation ("Forest Oil"), testified via teleconference, noting that Forest Oil holds leases on approximately 200,000 acres, primarily in the Cook Inlet, and a license for an additional 200,000 acres in the Copper River Basin. He said Forest Oil is a major investor in resource development in Alaska. He indicated he'd like timely passage of SB 343. Mr. Carlson explained that Forest Oil is one of the companies caught in the dilemma caused by the supreme court ruling. Forest Oil supports the position of AOGA, [DEC's] prior testimony, and the [assistant] attorney general's analysis of the bill. The State of Alaska has one of the most comprehensive oil spill prevention and requirements in the world, he told members. Forest Oil's position is that SB 343 is necessary to clarify the legislative intent as well as DEC practices and regulations currently in place. MR. CARLSON said in Forest Oil's case, the Redoubt Shoals development phase includes facility and pipeline installation; more than 300 jobs this summer are in jeopardy without quick resolution of this problem. Forest Oil has "built" BAT and all aspects of Redoubt development, including state-of-the-art materials of construction, facilities siting, and innovative pipeline design. After more than three years in the permitting process, Forest Oil anticipates having all required state and federal permits in place by early April. The current BAT requirements have changed the permitting rules in the middle of the process, however. Alaska offers a limited construction season; therefore, getting SB 343 on the books within the next few weeks is critical to the commercial success of this project. The project is not only critical to Alaska operations, but to the industry as a whole, he told members. He encouraged the committee, the legislature, and the administration to act as quickly as possible to enact SB 343 as it is now written. Number 2864 TOM LAKOSH testified via teleconference, noting that he was the plaintiff in Lakosh v. DEC. He explained that he'd pursued litigation because in 1995 when the Prince William Sound contingency plans were approved, several communities, affected individuals, and user groups had appealed the decision of that contingency plan; one basis was that the department had failed to adequately consider best available technology as it was understood then. Subsequently, during the litigation process - the administrative appeal process - DEC decided to change the regulations because it couldn't withstand the strict scrutiny of the law at that time, he told members. Now, DEC has again failed to apply the law as it was written in 1980, and has failed to implement any form, manner, or shape of the regulations. He has been compelled to pursue this at every turn, he said. He mentioned the 1997 regulation and the demand that the agency substitute the technology conference and subsequent analysis of breakthrough technology. TAPE 02-19, SIDE B MR. LAKOSH noted that several committee members live in districts where there are severe problems with dealing with hazardous substance spills - in particular, oil spills. He recommended asking Forest [Oil Corporation] if it can respond in Cook Inlet's ice from its new development; that may stop its ability to be approved under the "reliable and appropriate" standard, he suggested, because currently there is no reliable and appropriate method of removing oil from ice-bearing waters; however, there are some scant references to it in various contingency plans. Under none of them does DEC have the delusion that any of these permittees can respond in broken rivers; in fact, Susan Harvey (ph) lost her job over this same type of political fix to a technological problem, he informed the committee. MR. LAKOSH, with regard to floating ice, said there is no ability to meet the response-planning standard under those conditions. He referred to Prince William Sound and said the huge barges and millions of dollars' worth of equipment are unable to respond in seas higher than six feet - those systems are designed poorly and require people to work on deck, and there is a limit to that. However, some design features in some of their equipment show a great deal of promise for expanding the ability to work in the more severe Alaskan conditions. Number 2987 MR. LAKOSH told members the BAT [provision] was supposed to improve the ability to protect Alaska's resources, because it's not constitutionally permissible to put an ultrahazardous activity in the middle of everybody else's reasonable, concurrent uses without the ability to mitigate the damage that the hazardous activity could create. Comparing an oil spill to a fish trap, he said the constitution outlawed fish traps because they didn't provide for sustained yield and reasonable concurrent use. He said neither do oil spill contingency plans - mere "paper tigers" - that don't employ the best technology designed to operate in Alaskan conditions. MR. LAKOSH urged the committee to go back through the testimony and take time to look at what the response problems are in each particular district. He requested that members include a requirement for DEC to examine improvements in the ability to address those problematic spill-response situations; that is what BAT is needed for. There is a big gap in the ability to recover spills under severe Alaskan conditions, he explained. The spill equipment presently [used] has been stagnant for some time and was never designed to operate under Alaskan conditions. He indicated that in recent years many northern European countries have [acquired technology more advanced] than [Alaska's current] system. MR. LAKOSH said this inability of DEC to properly determine BAT goes back 21 years - 21 years of accumulated damage to Alaskan citizens from DEC's dereliction of duties, including problems of response to spills in ice, response to spills in high seas, and response to spills in tundra, as seen at the Livengood spill. He also mentioned the railroad-related spill in [the Willow] area and the need to have BAT response in the Susitna [River] regarding ice. MR. LAKOSH said the legislature is essentially taking an administrative role in approving illegally issued permits; that administrative function may be subject to appeal. There are several other bailouts that the legislature will have to do if DEC isn't strictly directed to provide the analysis of spill technology that was mandated by law by two previous legislatures. He said, "This legislature, by a wave of a wand cannot reinterpret as a matter of law." Encouraging the committee to look at the changes he'd recommended, Mr. Lakosh said the [changes] are not that far from the RCAC's or DEC's position in using the technology conferences and an analysis for breakthrough technology. He suggested that it be done on a semiannual basis instead of every five years, however, to be more consistent with statute. He mentioned the response industry and some conversations with manufacturers. Number 2676 REPRESENTATIVE KERTTULA asked Mr. Lakosh if he had brought the tractor tugs to the awareness of the industry. MR. LAKOSH said that was not his original action, but he did strongly support them, and he strongly supports their being tethered throughout Prince William Sound. REPRESENTATIVE KERTTULA asked Mr. Lakosh if he'd argued to see those [tractor tugs] used. MR. LAKOSH said yes. Number 2610 SUSAN SCHRADER, Alaska Conservation Voters (ACV), came forward to testify. She told the committee ACV believes SB 343 will weaken the state's oil spill response laws. In addition, this bill will be a disincentive to the oil industry to spend the money needed for resource research and development on best available technology. She reported that [ACV] also believes this bill gets DEC "off the hook" for requiring best available technology. She said the opinions of the attorneys that she works with differ from the assistant attorney general's opinion. She remarked that the supreme court case is about differing opinions. She said ACV is opposed to [SB 343], which represents a rollback in the oil spill protection laws that the legislature passed a number of years ago. She concluded by saying she hoped the committee would consider all viewpoints on this bill. Number 2546 REPRESENTATIVE KERTTULA asked Ms. Schrader how she would have DEC determine what is best. MS. SCHRADER indicated she wasn't the person to answer that question because her knowledge of the details of oil spill planning and prevention was minimal. REPRESENTATIVE KERTTULA suggested that a standard of "the best" is inherently unworkable because it would be [difficult to determine] what "the best" is. She asked if the problem was a performance standard. She indicated that even with the best technology available in the world, if there is not a good performance standard, then it [might] not meet the necessary requirements. MS. SCHRADER referred to the supreme court decision. She said there are two lines of approach to determining the quality of the C Plan: meeting performance standards and planning standards, and also addressing best available technology. She indicated ACV would like to see the "winnowing" process - the alternative analysis to determining best available technology - be kept in regulations, and that DEC be required to go through that process. She indicated if an applicant comes in with a draft plan and it meets the planning standard, then that would allow DEC to determine that as the best available technology. She said DEC is not required to go though the winnowing process, however, which ACV feels would result in a potentially stronger more protective plan. Number 2438 REPRESENTATIVE KERTTULA remarked that DEC is testifying that it is not changing its regulations; however, it is meeting regulations that are currently on the books. She asked Ms. Schrader if this bill allows [DEC] to get out of something that it currently does in regulations. MS. SCHRADER said ACV's belief is that DEC doesn't need to address the Lakosh decision through statute; it already has started its regulatory process to address the court's decision. She indicated ACV would like to see that process continue. She said ACV does support the concept of a conference, whether every five years or every year. A conference between DEC and industry shouldn't be the end to determining best available technology, however. There has to be opportunity for public comment on whatever comes out of those conferences. She said ACV thinks DEC can address all of the court's concerns through the regulatory process. Number 2381 REPRESENTATIVE McGUIRE asked if ACV supported the regulations that came out of the stakeholder working group; whether the stakeholder panel included [an environmental] representative and who that person was; and whether Ms. Schrader has a problem with the concept behind the regulations and their being implemented in statute. MS. SCHRADER answered that she'd tried to determine who the environmentalists were on the stakeholder group, but nobody she has worked with knows or has come forward. She said ACV was just formed in 1997, and didn't take a role in [the stakeholder group]. She said, however, that ACV does agree with the supreme court's interpretation that DEC did not promulgate regulations coming out of that 1997 stakeholder group that comport with the statute. MR. DIETRICK recalled that the 1997 stakeholder group included RCACs and industry groups; the lead contact for the environmental community was Patty Saunders (ph), who represented a number of environmental organizations, and another person who was her alternate. There were other participants, but all stakeholders were at the table, he remarked. REPRESENTATIVE McGUIRE said she wanted it stated on the record that there was representation by the environmental community. REPRESENTATIVE KERTTULA asked Mr. Dietrick if there would be any impact by requiring a five-year conference and mentioning it in the intent statement. She offered her understanding that this is something DEC will do. Furthermore, it is not much of a requirement, and the RCAC has asked that it be done. Number 2205 MR. DIETRICK said he didn't think there would be a problem with that. He remarked that the problem that has been expressed is timing with regard to passage of the bill. He said the proposal by the Prince William Sound RCAC included in the packet hadn't been reviewed internally, but that his first review would indicate it isn't a problem. MR. DIETRICK pointed out that DEC believes in holding the BAT conference, had agreed to that process in 1997, and thinks it is an important and efficient way for the state to examine new technologies; without the conference, DEC does it on an individual plan review basis. He added that he would argue that there are benefits to the conference, the industry, and all parties. Doing a comprehensive review on a periodic basis allows DEC to identify technologies that individual companies may not have to repeat, he explained. There are 120 facilities, so there's an efficiency there in making the BAT review and moving in that direction. Number 2112 CO-CHAIR MASEK referred to a letter submitted by DEC. She said there are five points that refer to [SB 343]. She remarked that it seems to be in order. She said she didn't think it had caused the committee that much concern, and that it is testimony from DEC's deputy commissioner. She said she felt this bill would answer some of the issues from the [supreme] court's ruling in wanting the legislative body to clarify its intent. She remarked that she believes this legislation does that. REPRESENTATIVE KERTTULA said after the Exxon Valdez [spill], she thinks the BAT standard was a compromise from requiring the industry to meet the best technology. She remarked that there was an intense reaction [to the oil spill]. She said it was a compromise to come down from something that could have been required of the industry. Best available technology ends up being a "circular" standard; if there is not a good performance standard, then it's not going to matter what kind of technology there is because it's going to be meaningless, she suggested. She referred to Mr. Dietrick's testimony and said the converse is also true: when there is a conference, scientific information is shared; when it's known what's available, the performance standard can be pushed. REPRESENTATIVE KERTTULA referred to the testimony about oil and broken ice, which she said is a difficult issue. She said DEC and the industry are in an eternal balance of how to meet a performance standard and how to do what's reasonable. She said the supreme court's decision was correct on the language - it looked behind the intent and tried to do the best it could. She remarked that the committee is stuck in a difficult position because it doesn't want to stop everything from moving forward. She mentioned the Exxon Valdez oil spill, and said she had some real concerns about this legislation. "It's not really in me to just overrule a court case and say, 'Go on your way,'" she added. REPRESENTATIVE KERTTULA explained that her biggest concern is that DEC has very few resources; it has excellent people who do everything that they can, but there is concern about their future. She mentioned testimony and the compromise that seems to be coming forward of at least putting the five-year conference in the intent [language]. She therefore told members that what she would like to see coming out of the committee today is explicitly mentioning the conference in the intent language, which will help both sides. Mr. Dietrick is right, she said: it is going to help the industry because DEC will not have to review every single plan. Number 1878 REPRESENTATIVE GREEN remarked that the addition is in the bill to guide litigation and to help the supreme court understand what the legislature meant when saying "they" have the authority to determine what the best available technology is. He indicated there is no way for the statutes to stay current on best available technology, and that it would be difficult for the legislature to stay informed because technology is constantly changing. REPRESENTATIVE GREEN indicated perhaps a superlative would essentially force noncompliance. Therefore, "may" is the only logical way to go for an agency charged with ensuring that the best technology is available. He also indicated using "may" would allow a watchdog organization to monitor the administration for compliance, whereas "must" would result in micromanaging of the administration. REPRESENTATIVE GREEN indicated that it is important to resolve the issue and get permits processed. He suggested that putting things in intent language helps the supreme court with another piece of litigation. He mentioned an incident in 1989; he indicated the intent was not in statute. He told the committee that [SB 343] takes care of what the supreme court found was missing. He expressed his desire to move the bill out. CO-CHAIR SCALZI indicated agreement with Representative Green on the practical application of the service project. He said most local fishing vessels have participated throughout the state since the Exxon [Valdez] oil spill. Each year, the vessels go through the practice of picking up material that is supposed to symbolize an oil spill, and every year there is some new change. He said often [the process] goes backwards: methods used a couple of years ago may be more efficient than new technology or machinery. He indicated the equipment's effectiveness won't be known until it is used on an actual oil spill. CO-CHAIR SCALZI offered that [this issue] is subjective, and that the latitude of having "may" in the language is needed. He said he thought referencing the [conference] would be fine if it's part of the intent language, and is what the legislature wants to do. He added that the bill is written fine the way it is, however, and that he supports moving it out. CO-CHAIR MASEK indicated her belief that nothing is being taken away; the legislature must validate the existing regulations and preserve the approach to use for making that determination as envisioned by the 1997 task force. She said the same level of rigor for plans reviewed must be sustained, as now practiced, and not diminish existing response capability. She said the legislation must continue supporting the ability of the department to evaluate new technologies and make BAT findings. Number 1469 REPRESENTATIVE KERTTULA responded that she thought the language Co-Chair Masek had read was from DEC; however, it is not in the bill itself. She said mentioning the conference is very little to ask. REPRESENTATIVE KERTTULA began specific discussion of [conceptual Amendment 1]. She referred to line 21, but suggested [an amendment] would be more appropriate after line 17: to add language that the regulations require best available technology every five years. She explained that the conference will identify best available technology in an orderly way. She indicated [the amendment] is in line with the RCAC and [current] regulations. She said she didn't think it would cause any problems, but seems to engender some goodwill on the part of the RCAC and other groups. Number 1420 REPRESENTATIVE KERTTULA moved to adopt the foregoing as [conceptual Amendment 1], to add the language wherever the drafter believes it is appropriate. Number 1399 CO-CHAIR MASEK objected. REPRESENTATIVE KERTTULA, in response to Representative Green, clarified that [conceptual Amendment 1] would say that regulations require a BAT conference every five years, which will identify best available technology in an orderly way. She pointed out that there are almost two pages of intent [language before the committee]. She said she would be in [favor] of taking it all out, but that if there are two pages, it seems little to ask that one sentence about a conference be added. CO-CHAIR MASEK responded that she thought Representative Kerttula had a good motive; she reiterated her own belief, however, that the issue is "answered" in regulations and doesn't need to be included in the bill. CO-CHAIR MASEK called an at-ease from 2:29 p.m. to 2:30 p.m. Number 1198 A roll call vote was taken. Representative Kerttula voted for conceptual Amendment 1. Representatives Fate, Chenault, Green, McGuire, Stevens, Masek, and Scalzi voted against it. Therefore, conceptual Amendment 1 failed by a vote of 1-7. Number 1174 REPRESENTATIVE GREEN moved to report CSSB 343(RES) out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSSB 343(RES) was moved out of the House Resources Standing Committee.
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