Legislature(1995 - 1996)

03/22/1996 08:16 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 CSSJR 39(RES) - EPA'S NPDES PERMIT FOR PLACER MINING                        
 CO-CHAIRMAN GREEN announced the first order of business would be              
 CSSJR 39(RES), "Relating to the U.S. Environmental Protection                 
 Agency draft National Pollutant Discharge Elimination System                  
 general permit for placer mining in Alaska."  He explained the bill           
 has to do with the mixing zone, the dilution and discharge of                 
 fluids from mining operations.  It is a federal discharge permit -            
 the national discharge elimination system."                                   
 Number 119                                                                    
 ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman                
 Alaska State Legislature, came forward to give the sponsor                    
 statement for CSSJR 39(RES).  She indicated the Senate Resources              
 Committee is the sponsor of the resolution.                                   
 MS. KREITZER explained the resolution was introduced by the Senate            
 Resources Committee partly because the committee was concerned                
 about what they see as a trend.  The national level of the                    
 Environmental Protection Agency (EPA) is settling law suits                   
 involving parties who are directly impacted by regulations                    
 promulgated by the agency.  She said in this instance, what has               
 happened is the EPA has issued a new draft National Pollutant                 
 Discharge Elimination System (NPDES) general permit as a result of            
 the settlement of a lawsuit filed by the Sierra Club Legal Defence            
 Fund.  One of the elements of that settlement requires all                    
 dredgers, for the first time ever, to have a NPDES permit, despite            
 the fact that the EPA doesn't have the personnel to process all               
 these newly required permits.  This causes great concern to the               
 Senate Resources Committee.                                                   
 MS. KREITZER stated Alaska has a long solid history of mineral                
 production.  As other regions of the United States have perhaps               
 lost touch with the bounty of their natural resources, the EPA                
 should not subject Alaska to unscientific burdensome reporting and            
 permitting requirements at the whim of somebody who has never had             
 dirt under their fingernails.  The committee members are very                 
 concerned about this trend at the national level.  This resolution            
 was introduced to try to heighten the awareness of the EPA to the             
 concern of at least the Senate and, hopefully, the House to this              
 situation.  She noted Steve Borell was on line to answer any                  
 CO-CHAIRMAN GREEN asked if there was somebody in attendance from              
 the Department of Environmental Conservation (DEC) to address the             
 MS. KREITZER said she isn't aware if there is anyone who is in                
 attendance from DEC who is interested in testifying on the                    
 Number 324                                                                    
 STEVE BORELL, Executive Director, Alaska Miners Association,                  
 testified via teleconference from Anchorage in support of the                 
 resolution.  He said if the draft NPDES general permit goes into              
 effect, as it is currently written, it will have very serious                 
 adverse consequences on all mining in Alaska and any mining company           
 that needs a discharge permit.  He said this particular draft of              
 the permit references dredge and recreational mining in addition to           
 commercial operations.  It would include the smallest dredgers.               
 Mr. Borell said he believes this is a serious tourism issue in that           
 this permit, as written, would make it illegal for tourist coming             
 up for the celebration of the hundredth year anniversary of the               
 Klondike to bring a 1 1/2 or 2 inch dredge with them and do                   
 dredging in Alaska.  They would have to have the same kind of a               
 permit that a commercial miner having a D-9 and a 245 hoe would               
 have to have.                                                                 
 MR. BORELL said the permit has clearly been written by people who             
 definitely did not have dirt under their fingernails.  It is                  
 written in a way that not only will the small dredging operations             
 be required to have this permit for the first time, it will require           
 that every one of the small dredges have an individual permit and             
 not a general permit.  The EPA has, on one hand, proposed a permit            
 that will increase the number of the public people who has to have            
 a permit by several thousand.  Currently, there are probably about            
 300 of these permits in existence.  They are expanding that to                
 probably several thousand.  Mr. Borell noted his estimate is                  
 between 1,000 and 2,000.  Further, they are requiring that these              
 people would not be able to actually get this permit (indisc.), but           
 they would be forced to get an individual permit which is a long              
 process and much more difficult.                                              
 MR. BORELL said beyond this existing permit, itself, or one piece             
 of this proposed permit is an underlying policy on metals reporting           
 for arsenic.  He said this has a lot of people extremely concerned.           
 Mr. Borell informed the committee members he has had calls from               
 people throughout the United States questioning what is in the                
 permit.  He was also asked if he new that the EPA has allowed                 
 different rules in other states.  Mr. Borell said he does realize             
 that.  It seems that EPA is being more stringent with Region 10               
 then some of the other regions.  He explained the extension of the            
 permit is going to be that if the arsenic reporting protocol policy           
 is allowed in one permit, we're very likely to see it in the future           
 for other permits such as hard rock mining, fish processors, etc.             
 MR. BORELL said he would describe some of the recent events that              
 have been occurring.  Last Friday, at the request of Commissioner             
 Michele Brown, a meeting was organized in Fairbanks.  Four members            
 of the EPA's staff, three of which came from Seattle, attended the            
 meeting.  Department of Environmental Conservation, Department of             
 Fish and Game and Department of Natural Resources were all                    
 represented.  The purpose of the meeting was to see if indeed the             
 Mining Association was willing to sit down and talk to try to work            
 through a modification of this permit.  The answer was, "Yes,                 
 absolutely we're interested."  They had not been a part of the                
 process previously and hadn't been a part of the suit.  Mr. Borell            
 informed the committee members that there have been at least two              
 contacts this week between the Mining Association and the Sierra              
 Club Legal Defense Fund.  He said he is hopeful that something will           
 be beneficial.  We're approaching a critical time which is April 5.           
 Based on the settlement agreement between the Sierra Club Legal               
 Defense Fund and the EPA, on April 5 the EPA must issue a final               
 action.  Mr. Borell explained in no way does he want to do anything           
 that could be seen by (Indisc.) in breaching attempts to make a               
 negotiated settlement.  He said the committee needs to know that              
 the Alaska Miners Association is very concerned about this permit.            
 Mr. Borell said he would answer any questions the committee may               
 Number 774                                                                    
 CO-CHAIR GREEN said Mr. Borell had mentioned arsenic from a                   
 leaching project and he also spoke about the thousands of potential           
 recreational miners.  He asked if it is true that the recreational            
 miners will not be involved in any kind of arsenic or leaching                
 MR. BORELL said that is correct.  He said the permit is entirely              
 placer mining.  The extension is where the Alaska Miners                      
 Association believes where problems will be caused in the future.             
 He referred to policies that are included within the placer permit            
 and said if they are included in the placer permit, they expect it            
 will be impossible to keep them out of another permit at a later              
 Number 839                                                                    
 CO-CHAIR GREEN questioned what the current practice is on                     
 recreational mining as differentiated from a stationary source on             
 turbidity, settling ponds and that sort of thing.  He also asked if           
 there are any recreational mining operations that would be                    
 conducted in a tributary or in an actual anadromous stream.                   
 MR. BORELL referred to the last question and said Title 15, under             
 Fish and Game, makes it very clear that it is not legal to do any             
 mining in anadromous fish streams.  They specify on a person's                
 permit at what times of the year that occurs.  He explained a                 
 recreational dredge miner that has a four inch dredge currently               
 doesn't have the requirement of the NPDES permit.  When a miner is            
 required to apply for a mining permit and not for discharge, the              
 Department of Fish and Game receives a copy of that application for           
 review and they say, "O.K., you're on such and such a stream - that           
 means from May 15th to June 30th, or whatever the particular time             
 frame is, you're not allowed to be on that stream."  He pointed out           
 that stipulation is put in the form of a letter to the dredge miner           
 and it states that he is absolutely not allowed to be there during            
 that time.                                                                    
 MR. BORELL referred to other aspects and said a commercial scale              
 dredge miner would be that anything above a four inch intake nozzle           
 currently must have a discharge permit and they must do various               
 visual checks down below their operation each day to be able to               
 certify that, "Yes, indeed the affect of my dredging can't be seen            
 500 feet down stream."  Mr. Borell referred to the Forty Mile River           
 and said if you can see anything at all say 50 feet below the                 
 dredge, he would be surprised.  It settles out so rapidly.  He                
 noted he is speaking about a suction dredge and not a mechanical              
 dredge with buckets.  He noted fishing just below the dredge is a             
 good place to fish because the fish come to get the organic                   
 material that has been stirred up as part of the suction dredging.            
 CO-CHAIRMAN GREEN said, "Thank you.  So that kind of getting around           
 to the concerns that I was gunna express is that you don't see and            
 certainly Fish and Game, I imagine, would step in if they felt that           
 there was any affluent settlement on what would otherwise be a fish           
 egg burial area."                                                             
 MR. BORELL indicated that is a correct statement.                             
 Number 1073                                                                   
 REPRESENTATIVE JOHN DAVIES asked Mr. Borell if he is familiar with            
 the recreational dredging permits that are issued in California.              
 MR. BORELL responded he really isn't.  He noted it is his                     
 understanding, from Steve Hurshboc of Alaska Mining and Diving,               
 that in California everything less than eight inches is considered            
 recreational mining.  Mr. Borell said, "He has indicated, and again           
 I have not read this so I'm not certain of it, but he's indicated             
 that in California you just want to buy a fishing license or a                
 hunting license, you go buy a dredging license for $20, or some               
 number, and so long as your dredge is less than eight inches - I              
 think the number is that they've said - with no expected                      
 REPRESENTATIVE DAVIES asked if California has a particular arsenic            
 level associated with that permit.                                            
 MR. BORELL said in California he doesn't believe they require a               
 permit for an eight inch dredge or less.  He noted he isn't certain           
 about that.  In the discussions he has had with people, that                  
 question had never been asked.  He stated that arsenic is                     
 everywhere and is also in areas that have been highly mineralized.            
 When water which passes across rocks that have arsenic in them will           
 pick up arsenic.  He said he would fully expect that the California           
 arsenic levels would be the same kind of a thing we would see in              
 Number 1190                                                                   
 CO-CHAIRMAN GREEN noted that all members of the committee are                 
 present except Representative Barnes.                                         
 Number 1196                                                                   
 JAMES H. JOHNSON, Vice President, Northern Testing Laboratories,              
 testified via teleconference from Fairbanks.  He informed the                 
 committee they have a laboratory in Fairbanks and one in Anchorage            
 where they do a lot of drinking water, ground water, surface water            
 and NPDES discharge permit regulatory testing (indisc.).  He said             
 he strongly supports CSSJR 39(RES).  Mr. Johnson referred to the              
 language relating to the restrictions on the commercial mines and             
 said those are not the only restrictions in the resolution or in              
 the draft permit.  He suggested that CSSJR 39(RES) be strengthened            
 to include several other points.                                              
 MR. JOHNSON explained the settlement of the law suit has not been             
 settled.  He said he would like to clarify that the NPDES permits             
 that the miners have are valid permits at this point.  The EPA has            
 chosen the route of wanting to settle the law suit with a new                 
 permit, but that is not the only route to go.  He said the process            
 that has been taken is very bad and continues to set a precedence             
 for policy making in the court.  It has implications that go far              
 beyond just general permits for placer miners or dredgers.  It has            
 wide implications for all NPDES permit holders in the state of                
 Alaska and there are many many permit holders.  While this                    
 particular issue relates to the general permit for placer mining,             
 what is being introduced would be very onerous for all NPDES permit           
 holders.  Mr. Johnson said most people are aware of the arsenic               
 levels.  Arsenic is a very controversial issue, nationwide, and is            
 being discussed at most levels of EPA and amongst water                       
 professionals throughout the United States.  There is a wide                  
 disagreement on what really is a hazardous level of arsenic, both             
 to human health and to the environment.  The level of .18, in his             
 mind, has no basis in the evidence he has seen.                               
 MR. JOHNSON said as most people are aware, there is a lot of                  
 arsenic in the Fairbanks district.  He said that the previous day             
 he had reported out a drinking water analysis that had .15 parts              
 per million.  That's almost 1,000 times higher of an arsenic level            
 than what is being proposed for a discharge permit.  Mr. Johnson              
 said he would urge the state of Alaska to go beyond the resolution            
 and make a very active and aggressive effort to get involved in               
 this issue.  He again noted there are issues that are broader than            
 the specific issues of the resolution.                                        
 Number 1448                                                                   
 REPRESENTATIVE DAVIES asked Mr. Johnson if he knows how many                  
 hearings EPA had in Alaska on this proposed rule change.                      
 MR. JOHNSON said there was one in Anchorage and one in Fairbanks              
 that he is aware of.                                                          
 Number 1467                                                                   
 REPRESENTATIVE DON LONG said Mr. Johnson had mentioned to go beyond           
 the resolution and asked him what he would suggest.                           
 MR. JOHNSON said the state should become the lead agency for NPDES            
 permits.  This has been a problem in Alaska for some time and that            
 is one of the things that is a sticky legal issue.  He said if you            
 look at other states that have taken the lead for NPDES permits,              
 they are the states that have discharge limits that are above .18             
 that have 50 parts, per billion, when it was the current dredging             
 water limit.  One of the things that is being intended and it was             
 to the (indisc.), the EPA had adopted permit limits because the               
 state doesn't have primacy in this issue.  The state of Alaska                
 needs to be in control of as much of its own destiny as it possibly           
 can.  This is just another classic example of us being at the mercy           
 of federal regulations, even to a greater extent than we need to              
 Number 1581                                                                   
 MICHAEL CONWAY, Chief, Industrial Operations, Water Programs                  
 Division of Air and Water Quality, Department of Environmental                
 Conservation, was next to come before the committee.  He said                 
 currently, without having this NPDES authority from the federal               
 government, the state is in the role of certifying the federal                
 permits.  The EPA will draft an NPDES permit for a water discharge,           
 then the DEC would have to go through that particular draft permit            
 and look at the water quality standards for the state of Alaska.              
 If there are any provisions that need to be added to have the                 
 permit, as drafted, meet the water quality standards they put that            
 in a certification back to the EPA and they include that as a                 
 condition on the permit.  He referred to the general permit for the           
 placer mining operations and said the EPA had drafted that permit             
 without a whole lot of involvement from the state.  He noted that             
 with some permits, the department has more of an opportunity to               
 participate, but with this one there wasn't the opportunity to                
 participate.  It was drafted with a lot of interaction between the            
 EPA and the trustees.                                                         
 MR. CONWAY informed the committee that the previous week there was            
 a meeting with the resource agencies of the state, DNR, Fish and              
 Game, DEC, in the Fairbanks attorney general's office with the                
 Alaska Miners Association.  The DEC and the other state agencies              
 have some significant problems with that permit as well.  Through             
 the discussions of that particular group of people, a strategy was            
 developed to where the DEC and the other resource agencies will               
 work with the Alaska Miners Association and the public to provide             
 an alternate kind of permit.  The Alaska Miners Association is in             
 the process of asking for a panel hearing with EPA to be able to              
 present information.  Mr. Conway said the department has been in              
 contact with the Sierra Club Legal Defense Fund mining specialists            
 and have talked about the different issues.  He said as recently as           
 the previous day, Commissioner Brown received word that the Sierra            
 Club Legal Defense Fund, representing the trustees, would be                  
 willing to discuss the permit and would try to resolve a lot of the           
 issues that are not suited for the Alaska placer mining situation.            
 Number 1729                                                                   
 REPRESENTATIVE IRENE NICHOLIA asked Mr. Conway what his feelings              
 are on the .18 arsenic level requirements.                                    
 MR. CONWAY said the state has been working with the regional office           
 of the EPA in Seattle to bring that into alignment with some of the           
 other states that have a NPDES determination.  That level is as               
 high as .50 in other states.  He said they have been working with             
 them and they have concurrence with the EPA, Region 10, to go back            
 to the headquarters as this was a Washington, D.C., determination.            
 Commissioner Brown is writing a letter to ask for the level that is           
 in other states.  He noted the arsenic is naturally occurring in              
 Alaskan waters at fairly high levels, but it is still at safe                 
 REPRESENTATIVE NICHOLIA asked Mr. Conway if he had an estimated               
 number that they may be coming out with for Alaska.                           
 MR. CONWAY said the department is going to ask for up to 50.                  
 Currently, the department's staff is reviewing the information that           
 is available as to where they came up with the numbers for the                
 other states.  He said it will probably be in the neighborhood of             
 25 to 50.                                                                     
 Number 1808                                                                   
 CO-CHAIRMAN GREEN asked if the 50 parts per billion is permissible            
 for human consumption.                                                        
 MR. CONWAY indicated it is.                                                   
 CO-CHAIRMAN GREEN asked what that does over a period of time.  He             
 said he understands that arsenic is a cumulative type of a thing              
 and stays in the body.                                                        
 MR. CONWAY said it does, but noted he would have to get back to the           
 committee regarding the question.  He said he needs to speak to               
 some of the scientists who deals with that.  He said in discussions           
 he has had with scientists, that level is not going to be harmful,            
 even with accumulation.  Again, it occurs at very high background             
 levels throughout Alaska anyway.                                              
 CO-CHAIRMAN GREEN asked if he could assume that the DEC would be              
 sympathetic, if not supportive, of a resolution like SJR 39.                  
 MR. CONWAY explained the DEC is sympathetic to the resolution.  He            
 said they are in the process of being more aggressive to have a               
 permit that will work for Alaskan placer miners.  He said they also           
 agree that what is currently on the table is something that the               
 department cannot certify.                                                    
 CO-CHAIRMAN GREEN referred to the meeting in Fairbanks and asked              
 Mr. Conway if he got the same feeling from the Department of Fish             
 and Game.                                                                     
 MR. CONWAY said he got that same feeling from DNR, Fish and Game              
 and the attorney general's office.  There is no disfunction in                
 their ability to work this out for a statewide resolution.                    
 Number 1898                                                                   
 REPRESENTATIVE DAVIES asked what the drinking water standard is for           
 MR. CONWAY said currently it is .18 in the state of Alaska on the             
 water quality standards.  He said that is driven by the toxins rule           
 that comes out of Washington, D.C.  Mr. Conway said until they get            
 delegation, if they go that route for the NPDES, it defaults to               
 that toxic rule which is .18.                                                 
 REPRESENTATIVE DAVIES referred to the permit which was determined             
 by the settlement and asked if the level of arsenic is at the                 
 discharge level or if it is at the base of a mixing zone.                     
 MR. CONWAY explained that is the level that the discharge would be            
 required to meet.  Mr. Conway said they can grant a mixing zone.              
 He noted "mixing zone" is a technical term that the states are                
 allowed to do in certification where when the waste water comes out           
 of the discharged point, it is allowed to mix with the surrounding            
 water and exceed the state water quality standards, but at some               
 perimeter of that zone, it needs to meet the water quality                    
 standards.  He noted there are also air mixing zones.  Without a              
 state certification in any of these permits, the discharge has to             
 meet the water quality standards at the end of that pipe.  Mr.                
 Conway explained in this particular situation, which they have done           
 in the past and will continue to do with placer mines, is they                
 allow a parameter of mixing.  He said a lot of times you will see             
 visual sorts mixing such as with suspended solids like mud.  In a             
 state certification, it would be up to the state to provide a                 
 mixing zone and there are water quality standards that are laid out           
 as to what they are limited to be able to do for the sizes of those           
 mixing zones.                                                                 
 Number 2018                                                                   
 REPRESENTATIVE DAVIES asked Mr. Conway if he had any particular               
 examples of naturally occurring arsenic levels in rivers.                     
 MR. CONWAY stated he didn't currently have them with him, but he              
 would get them for the committee.  He noted they are working on               
 identifying the constituents in the watersheds that are of concern            
 around the state.                                                             
 Number 2064                                                                   
 CLARKE MILNE, Civil Engineer, testified via teleconference from               
 Fairbanks, in support of CSSJR 39(RES).  He informed the committee            
 he is a registered civil engineer in Alaska, he finished his                  
 masters work at the University of Alaska, Fairbanks, and has worked           
 in Northern Alaska for the last 20 years.  Mr. Milne said he knows            
 there are many issues that come before the committee and the                  
 legislature, but this issue is interesting from the point of view             
 that placer mining can be devastated by the proposed settlement               
 general permit.  Unfortunately, it need not be the case.  There was           
 (indisc.) finding no signification impact that supported the 1994             
 general permit brought by the EPA.  There was an agreement through            
 discussions between the environmental groups and Alaska Mining                
 Association to move ahead with the 1994 general permit.  It then              
 turned out that the environmental groups did sue.  Now the                    
 settlement permit is the result of that chain of reaction.                    
 MR. MILNE said, "Unfortunately, the combination of the arsenic                
 level that's set, the rules about dredging within 1,000 feet within           
 12 months and a number of other things that are mentioned in here -           
  moving your discharge within a mining season - it would basically            
 bind all truthful independent miners into a circumstance that they            
 couldn't adopt a general permit and they'd have to go get an                  
 individual permit.  It is unlikely that they'd be allowed to do               
 things under the individual that they were under the general, so it           
 could shut down placer mining and dredge work.  Unfortunately, I              
 think that would be inappropriate because there was this (indisc.)            
 and, therefore, there really is no driving force to protect human             
 health and environment that the 94 shouldn't again be extended into           
 this year while the (indisc.) go on."                                         
 MR. MILNE said he very much agrees that the state of Alaska, DEC              
 and Fish and Game should sit down in discussions with                         
 representatives of the miners or recreational miners and try to               
 work out a more workable solution that can allow mining.  He                  
 pointed out mining has been going on in Alaska for over 100 years             
 and hasn't devastated Alaska.  He said it can be worked out better            
 than what the permit does which is very unbalanced.                           
 MR. MILNE said he would like to clarify a comment made by Mr.                 
 Conway in that the current requirement is .18 EPB.  He said he                
 thought the thrust of the question was, "What are drinking water              
 standards?"  He said he believes the drinking water standards is              
 .50 EPB.  It is true that through default, because Alaska doesn't             
 have primacy and doesn't administer the Clean Water Act, that it is           
 .184 placer mining.  Mr. Milne said he believes the resolution                
 should move and he encourages better communication.  He said he               
 personally believes the EPA has not well represented the reality in           
 Alaska, especially Northern Alaska, where there is arsenic in the             
 water and the dredging and turbidity requirements.  Background                
 levels would not be allowed in the proposal.                                  
 Number 2257                                                                   
 GEORGE LOUNSBURY was next to testify via teleconference from                  
 Fairbanks.  He said he is a life-long Alaskan and owns a mining               
 operation with his brother in the Koyukuk area.  He said he                   
 supports SJR 39 and hopes it passes.  Mr. Lounsbury said he concurs           
 with Mr. Borell, Mr. Johnson and Mr. Milne with regard to the                 
 (indisc.) of the permit that the EPA has negotiated with the                  
 environmental organizations.  It appears to him that this is a                
 basic attempt to shut down the placer mining industry in Alaska,              
 especially the smaller operators.  He said it is a bad deal when              
 you invest in a bunch of equipment, time and effort and then have             
 somebody swoop in for what he feels is an unjust reason and puts              
 you out of business.  Mr. Lounsbury said he would like to see the             
 state become more involved in this permit process and get the EPA             
 and government, at the federal level, out of our lives.  He urged             
 passage of the resolution.                                                    
 Number 2309                                                                   
 REPRESENTATIVE DAVIES said it has been suggested that perhaps the             
 state should consider taking primacy in this area.  He asked Mr.              
 Lounsbury if he supports that.                                                
 MR. LOUNSBURY indicated he agrees wholeheartedly.                             
 REPRESENTATIVE DAVIES said if it were to be the case that a small             
 increment would have to be added to DEC's budget, would he support            
 MR. LOUNSBURY said he would support it.                                       
 Number 2337                                                                   
 CO-CHAIRMAN GREEN asked MR. CONWAY what would be involved for the             
 state to actually assume or get primacy.  He said he knows that it            
 is done with water injection wells through Alaska Oil and Gas                 
 Conservation Council (AOGCC), but he doesn't know about NPDES.                
 MR. CONWAY informed the committee members the department is                   
 currently working with the EPA in looking at the staffing levels              
 that would be required for us to have primacy.  It becomes a matter           
 of having permitting staff.  He noted there are rules that are                
 approved for our water quality standards, so that hurdle has been             
 over come.  Mr. Conway said the department has an EPA staff person            
 on loan for a year to look at what it would take for us to get the            
 NPDES primacy.                                                                
 CO-CHAIRMAN GREEN said he would presume that would include the                
 authority to establish regulations, etc., as well as administer               
 MR. CONWAY explained they currently have the authority to salvage             
 the regulations.  He said they would have to have permittees who              
 have been through the training process on the Clean Water Act.                
 Currently, his staff focuses in on the Alaska water quality                   
 standards, but they would then have responsibility for the whole              
 Clean Water Act on all of the issues which would require staffing             
 and training.                                                                 
 Number 2400                                                                   
 CO-CHAIRMAN GREEN said, "If we had primacy, the state of Alaska had           
 primacy and decided that .50 would be the number that we wanted               
 use, we would have that ability rather than have to stay with                 
 something that came to us from EPA."                                          
 MR. CONWAY said that is correct.  They would just go through and              
 amend the water quality standards.                                            
 Number 2430                                                                   
 FRED HEFLINGER testified via teleconference from Fairbanks.  He               
 informed the committee he has property in Fairbanks and he mines in           
 the forty mile district.  He said, "First of all I know that the              
 drinking water limit is 50 parts per billion and the arsenic limits           
 they are setting for us is .18 part per billion, which is 277 times           
 lower the standard that is allowed for drinking water.  It's funny            
 that 25 other states are allowed 50 parts per billion as there is             
 for 50 micrograms per liter, whichever way we want to put it, is              
 their standard.  It's kind of funny when they have a permit that              
 was good for five years, there has been an environmental assessment           
 done on it and then there is an agreement made behind closed doors            
 because the environmentalists are mad about it.  When the                     
 environmental EPA lawyer came up here from Seattle, Region 10                 
 lawyer, he admitted that he was a member of a couple of                       
 environmental organizations.  I believe we haven't had due process            
 on this and I believe that the lawyers for the EPA are                        
 environmentalists and that this is the thing that is done with all            
 our representation and it's completely unfair, but of course I know           
 the law is unfair.  (Indisc.) decided it is too expensive to go               
 into litigation on this issue, although there are some miners that            
 (indisc.--coughing) in Fairbanks that has an agreement with EPA               
 that they will defend his position in general permit and any court            
 cases, and they have not...."[END OF TAPE]                                    
 TAPE 96-39, SIDE B                                                            
 Number 001                                                                    
 MR. HEFLINGER continued, "...because the city drinking water                  
 standard if 50 parts per million - billion I mean - and dump it               
 into the Chena River - pollutes it.  Why that's probably the                  
 conclusion that probably the City of Fairbanks is polluting the               
 Tanana River with the out fall from the sewage treatment plant too.           
 There are a lot of problems on all the permits and everything and             
 I think that this is a real raw deal.  I'm sticking mostly to what            
 the placer miners want and I'm not worried about the dredgers, but            
 if the dredgers have to have a permit maybe everybody that runs a             
 jet boat should have a permit on the Kenai River and everywhere               
 else in Alaska because a jet boat is just a suction dredge that               
 produces propulsion.  O.K., then also on this EPA permit they want            
 us to estimate seepage  which is a big problem for me.  If I keep             
 my pond at the same level all summer, it's in - it's a sad                    
 situation, but there is always seepage and it's been (indisc.) by             
 EPA before.  They can't measure, they're gunna hold me liable to              
 measure in seepage, which I don't even know what it is.  I think              
 when you have things you can't measure -- are gunna hold people.              
 I think you would have a real problem."                                       
 Number 074                                                                    
 ROGER BURGGRAF was next to testify via teleconference from                    
 Fairbanks in support of SJR 39.  He said he believes in working               
 together with people to resolve issues, but this proposed permit              
 did not receive input from those who are being effected by the                
 proposed changes.  This proposed modified general NPDES permit is             
 a back door deal cooked up by the EPA attorneys, who previously               
 worked for environmental (indisc.) groups, without the input of               
 industry.  Mr. Burggraf said if this is not a conflict of interest,           
 he doesn't know what is.  Other witnesses have given good testimony           
 which he hopes the committee will consider.  He said the 1994                 
 general permit was issued for five years.  If the (indisc.) permit            
 is approved by EPA, those who presently hold valid general permits            
 will lose them.  Many operations will have to apply for new general           
 permits.  Others are going to have apply for individual permits.              
 This will probably occur right in the middle of the mining season.            
 Mr. Burggraf said it puts the whole industry in jeopardy.  Many               
 miners have borrowed money, have large investments and have based             
 their next five year mining operation on this general permit.  To             
 yank it out from under them and place them under a new permit, if             
 they're able to issue it, will jeopardize their ability to mine.              
 Mr. Burggraf said SJR 39 needs to be approved and the message needs           
 to be sent to the EPA.                                                        
 Number 188                                                                    
 KATHALEEN MIKE DALTON testified via teleconference from Fairbanks.            
 She said she doesn't think it was a knee jerk reaction to require             
 the .18 per billion, but was a well calculated move.  Ms. Dalton              
 said she suspects a sub-rosa agreement between the Northern Alaska            
 Environmental Center, the American Rivers Association, the Sierra             
 Club Legal Defense and agent or agents in the EPA.  She said she              
 understands that Alaska and one other state does have primacy in              
 EPA matters.  She said Commissioner Brown spoke the miners the                
 previous week and talked about the primacy issue.  Ms. Dalton said            
 we should look at that, as a legislature, and seek that primacy.              
 The .18 parts per billion is an outlandish exurbanite requirement.            
 Ms. Dalton informed the committee her family background is in                 
 mining.  She urged the committee to look into the primacy issue as            
 it could solve a lot of problems.                                             
 Number 258                                                                    
 HARRY JENKINS was next to address the committee via teleconference            
 from Fairbanks.  He stated he doesn't believe in holding the                  
 miner's heads under water forever.  Mr. Jenkins urged the committee           
 to pass SJR 39.                                                               
 Number 277                                                                    
 DON MAY gave his testimony via teleconference from Fairbanks.  He             
 stated he is the founder of Polar Mining and has since turned that            
 operation over to his sons.  He read from a letter written by Dan             
 May, President, Polar Mining, "As a second generation Alaska placer           
 miner and president of Polar Mining, Inc., I'm very concerned about           
 the current water quality standards revision and their effects on             
 our industry.  Further, I must protest the timing of the public               
 comment period and would request these regulations, revisions be              
 delayed.  Whereas the current Alaska placer mining general permit             
 modifications proposed by EPA, as a result of the Sierra Club                 
 lawsuit, their effects on placer miners have been contested by the            
 Alaska Miners Association.  The outcome of the federal charges is             
 unclear at this time.  Since the Alaska DEC water quality standards           
 are interrelated with those of the EPA I would request an extension           
 of the Alaska DEC water standards revision process in order to                
 first resolve the uncertainties arising from the EPA Sierra Club              
 law suit.  Once the EPA general permit issues are resolved, we will           
 need additional time to study the revision in light of the federal            
 regulations outcome.  I would further request that if the EPA                 
 issues excessively restrictive regulations, as are currently                  
 proposed, the Alaska DEC take a good look at what state regulations           
 it could modify or even implement in order to allow and encourage             
 the continuation of our industry.  Our mining company strives to              
 maintain a good reputation and has struggles to adapt to many                 
 regulation changes faced over the past ten years; however, there              
 comes a point in which it will no longer be possible to comply with           
 these unreasonable regulations.  As the current EPA proposal to               
 require a miner to discharge water with affluent limitations based            
 on drinking water status while the natural receiving water is unfit           
 for human consumption is absurd, superfluous and lacks a scientific           
 basis.  From where I stand, these proposed changes appear by                  
 designed, by environmental extremists with a purpose of eliminating           
 placer mining in Alaska.  For the past ten years Polar Mining has             
 provided year around jobs, near Fairbanks, with a work force of 43            
 employees.  During that time this one company has produced in                 
 excess of $40 million in new revenue, which is turned over and over           
 again in our community.  Given the chance to continue our mining              
 operations, I see a 10 to 20 year life future for our employees               
 just within a 20 mile radius of this town.  I applaud the Alaska              
 State Legislature for passing an act allowing for a mineral                   
 exploration incentive credit designed to stimulate and encourage              
 mineral exploration and development.  I want to thank you very much           
 for listening to us."                                                         
 Number 431                                                                    
 EDDIE GRASSER, Alaska Outdoor Council, came before the committee to           
 give his testimony in support of SJR 39.  He said one of the                  
 council's main bylaws is public access to public resources and                
 there are a large amount of people in Alaska that do recreational             
 mining activities.  He said they concur with comments made by Mr.             
 Johnson and Mr. Borell.  Mr. Grasser said they are looking at the             
 issue as an access issue and there are a lot of people that would             
 like access to the public resources for their utilization.                    
 Number 472                                                                    
 SARA HANNAN, Executive Director, Alaska Environmental Lobby, came             
 forward to address CSSJR 39(RES).  She read a couple of excerpts of           
 a position paper from the Sierra Club Legal Defense Fund written by           
 Dave Chambers, Ph.D. Geophysicists, and primary negotiator in the             
 settlement agreement that CSSJR 39 speaks to.                                 
 "The EPA was in a weak legal position in defending its case before            
 the court.  If the EPA loses in court, the court may require more             
 stringent standards that have been negotiated under the settlement            
 agreement.  For example, the appellants have asked that a complete            
 set of metals, approximately ten metals, not just arsenic as in the           
 case in the settlement agreement, be required for testing - and the           
 testing (indisc.) will be once a week as required in the NPDES                
 permit for other mine discharges rather than three times per year             
 as required in the settlement agreement.                                      
 "The arsenic level of .18 parts per billion is not related to the             
 settlement agreement.  The permit arsenic level was not an issue              
 discussed during the settlement negotiations.  Moreover, if there             
 is no settlement agreement, the arsenic standard for permits issued           
 under the 1994 general permit will still be .18 part per billion.             
 This is not an issue that is relevant to the settlement agreement.            
 "All dischargers, currently under law, including small section                
 dredges are required by the Clean Water Act to have an NPDES                  
 permit.  Under the settlement agreement small section dredgers must           
 apply, by mail, for a permit they're obliged to read and abide by             
 which contains a set of simple best management practices the EPA              
 sends to them.  There is no monitoring, no reporting and no fee for           
 this permit.                                                                  
 "The EPA has agreed to conduct studies to quantify the effects of             
 discharges from large section dredges greater than eight inches and           
 to analyze the qualities of metals being discharged from all placer           
 operations so that both miners and environmentalist will know                 
 whether these operations are causing metals pollution or damaging             
 stream beds in Alaska.  As with most settlement agreements, there             
 are many compromises leading to the settlement agreement that this            
 resolution speaks to, but there should be a distinguishing factor             
 made between what is part of the settlement agreement and what is             
 EPA process."                                                                 
 MS. HANNAN read from testimony given to the Senate Resources                  
 "At the beginning of the settlement agreement process, the Miners             
 Association chose not to intervene in the legal challenge to the              
 general permit.  In addition, they were offered an opportunity to             
 comment on the settlement agreement when it was in its final stages           
 and they declined.  The appellants are still willing to hear                  
 substantive concerns from the miners and to approach the EPA about            
 modifications in the settlement agreement if the changes requested            
 will preserve the integrity of the settlement agreement.                      
 "Secondly, currently the state of Alaska, under its water quality             
 regulations, allows for site specific exemptions which is something           
 that the state of Alaska has worked towards in the environmental              
 community in Alaska has cooperated with the mining constituency to            
 make sure we're pertinent because we have different mineralogy in             
 Alaska then you find in many places."                                         
 MS. HANNAN thanked the committee for time to give testimony.                  
 CO-CHAIRMAN GREEN asked if there were any other comments.  Hearing            
 none, he closed the public hearing.  He noted he would keep the               
 record open for written comments.                                             
 CO-CHAIRMAN GREEN turned the gavel over to Co-Chairman Williams.              

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