Legislature(1997 - 1998)

03/20/1998 03:50 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
           SB 299 - WELL TEST FLARES & NONROAD ENGINES                         
                                                                               
CHAIRMAN HALFORD called the Senate Resources Committee meeting to              
order at 3:50 p.m. and announced SB 299 to be up for consideration.            
                                                                               
SENATOR LEMAN said he worked on the State's implementation of the              
Clean Air Act five years ago and one of the issues that remained               
unresolved was that of mobile sources vs. stationary.  EPA, Title              
5 regulations clearly point out that these are treated differently             
under the federal law.  At that time, DEC said they would work on              
it and his staff, particularly Ms. Kreitzer, has spent a lot of                
time in the last four years trying to come up with a constructive              
way to deal with this.  They had hoped this would be handled                   
administratively in the Department, but they have done an about-               
face and he felt it was necessary to introduce this legislation to             
get the issue on the table and proceed in a direction that he                  
thinks is appropriate for Alaska.                                              
                                                                               
MS. ANNETTE KREITZER, Aide to Senator Leman, reviewed SB 299 for               
the Committee.  She said it amends Alaska's air quality control                
statute to clarify that nonroad engines are mobile sources and are             
not to be regulated as though they are stationary facilities.                  
Section One provides guidance on the treatment of well test flares             
which are not part of a rig, but are brought on to a drill site                
after a well is completed.  It allows an operator to evaluate a                
well's potential flow of oil and/or gas.  Normally, only gas is                
burned at a test flare.  The associated oil and water are collected            
in storage tanks to be reinjected down a hole or transported to a              
production facility.                                                           
                                                                               
Section Two adds the EPA and state adopted regulatory definition of            
nonroad engines to Alaska statute, so that owners and operators                
have the same understanding at the state level as they do at the               
federal level of what a non-road engine is.  In addition, the bill             
adds the federal definition of stationary source to Alaska                     
statutes.                                                                      
                                                                               
To put this bill in perspective, currently there are at most 20                
rigs operating on the North Slope in Cook Inlet.  Those who are                
regulated by DEC might not say in public what they are willing to              
say behind closed doors due to perceived "intimidation" by the                 
Department.                                                                    
                                                                               
It appears now that DEC intends to go beyond the minimums set under            
the federal Clean Air Act.                                                     
                                                                               
SENATOR LEMAN said he was concerned with the intimidation regarding            
the issuance and timeliness of permits and how people might be                 
concerned about speaking out on this and he wondered how pervasive             
that concern was.                                                              
                                                                               
MS. KREITZER said over the last six years of working on oil and gas            
issues with the legislature, she has noticed this said in the same             
way by different people in different industries, not that she has              
seen an increase in these kinds of comments.                                   
                                                                               
SENATOR LEMAN said he had worked with the people from DEC and has              
found them to be extremely competent and professional, but there               
are times when they are pressured perhaps and that is why he would             
like to have the debate here.                                                  
                                                                               
MR. MIKE CONWAY, Director, Division of Air Quality Control, said               
the Department believes the bill would impose several limitations              
on the State's ability to regulate sources of air pollution as                 
needed to maintain compliance with the Clean Air Act.  It would                
prohibit the Department from regulating sources of air pollution               
that can violate the National Ambient Air Quality Standards in the             
prevention of significant deterioration increments.  It would                  
prohibit them from issuing permits to sources of air pollution that            
are specifically required to obtain permits under the Clean Air Act            
and believes it would jeopardize State primacy of the Air Program.             
They also believe the bill would increase third party intervention             
and permits to oil development activities on the North Slope and               
sends the wrong message to the public about Alaska's ability to do             
it right from the environmental perspective in developing its oil              
resources. The message is being sent at the wrong time, because we             
are working with the federal government to lease areas of the                  
National Petroleum Reserve Alaska for oil and gas exploration.                 
                                                                               
Since the 1977 Clean Air Act, the policy of Alaska has been to                 
obtain authority to manage its air quality.  We first obtained                 
primacy from the federal government in 1972 by starting an air                 
permit and air pollution control program.  In 1983, Alaska obtained            
primacy of the prevention of significant deterioration, the P.D.               
program, created by the 1977 Clean Air Act. In 1993, the Alaska                
Legislature passed new clean air laws with the intent to enable                
Alaska to maintain control of its air resources, to implement an               
air program that complies with the federal Clean Air Act, and to               
run an efficient air program.                                                  
                                                                               
In 1995 and  96, Alaska adopted new regulations implementing the               
1993 Clean Air laws and submitted the regulations to EPA for                   
approval.  To retain primacy, Alaska must demonstrate we will meet             
the requirements of the federal Clean Air Act which, in general,               
requires Alaska to develop and implement plans and regulations for             
preventing air pollution that exceed the National Ambient Air                  
Quality standards and the prevention of significant deterioration              
increments.  The National Ambient Air Standards established maximum            
permissible concentrations of air pollutants and ambient air.  The             
standards are necessary to protect public health with an adequate              
margin of safety and to protect the public health from any known or            
anticipated adverse effects.                                                   
                                                                               
The prevention of significant deterioration increments established             
maximum permissible increases in air pollution that may occur in               
geographic areas having air quality better than the national                   
ambient air quality standards.  Alaska has made a demonstration to             
EPA that its current air quality laws and regulations are adequate             
to meet the Clean Air Act requirements.  If we fail to do that, the            
EPA is required by law to implement its own air program in Alaska.             
                                                                               
Oil exploration and production activities on the North Slope are               
currently regulated by Alaska's permit program.  Under this                    
program, the North Slope facility operators, BP and ARCO, obtain               
the permits, not the drilling rig operators.  In 1996, DEC proposed            
a simplified procedure for controlling nonroad engine emissions                
including those associated with drilling rigs.  However, they did              
not proceed with the approach because of the controversy it                    
created.  In early 1997, the North Slope operators asked DEC if it             
was possible to come up with a better method of regulating air                 
pollution from oil exploration activities.  The reason for their               
request is the timeliness issue, because operators did not have the            
time to wait for case by case permit approvals.  The nature of                 
today's oil exploration industry requires quick lead times and                 
sufficient regulatory flexibility to move equipment throughout the             
Slope.  The compliance issue was that operators were having                    
difficulty showing air pollution from oil exploration activities               
meeting the Clean Air Act requirements through Alaska's current                
program.  The operators suggested that a performance based                     
emissions standard might be an alternative way to meet the Clean               
Air Act.                                                                       
                                                                               
In late 1997 and early 1998, the drilling contractors expressed                
their need to have sufficient regulatory flexibility to move                   
equipment around on short lead times.  DEC agreed to work with the             
operators and drilling contractors to come up with a better method             
of regulations that continued to meet the requirements of State and            
federal law.  In February of this year, DEC released draft                     
regulations to address the operators and drilling contractors                  
concern over timeliness and compliance while making sure that                  
Alaska's clean air laws remain in compliance with the Clean Air                
Act.  Very recently, it appeared that the drilling contractors                 
believe that a complete exemption of air pollution emitted by the              
industry from the Clean Air Act is possible and that a complete                
exemption appears to be their favored approach.  DEC has told the              
drilling contractors that a complete exemption is not possible if              
Alaska is to maintain compliance with the Clean Air Act because the            
Clean Air Act does not allow certain sources of air pollution to be            
ignored in determining compliance with its requirements. A ton of              
sulphur dioxide is a ton of sulphur dioxide.  It doesn't matter if             
it comes from a pulp mill or an oil rig.  Under some circumstances             
the State may determine that some sources of air pollution are too             
small to regulate, but this must be based on sound information.                
All information available to DEC at this time indicates that air               
pollution from oil exploration needs to be regulated or                        
significantly reduced to meet the Clean Air requirements.  Oil                 
exploration activities do not have "insignificant emissions" which             
are those considered from equipment like lawn mowers and snow                  
blowers, etc.                                                                  
                                                                               
There are 20 oil drilling rigs on the North Slope with five more               
planned in the near future.  The air pollution from a typical                  
diesel-fired oil drilling rig is equivalent to the air pollution               
emitted from 100 city buses or half the air pollution emitted from             
the Greens Creek mine or the air pollution emitted from a power                
plant in a city of 7,000 residents.  These are not insignificant               
emissions.                                                                     
                                                                               
CHAIRMAN HALFORD asked what's the largest thing that can be                    
insignificant under DEC's interpretation.                                      
                                                                               
MR. CONWAY answered that it depends on what the emission is.                   
                                                                               
Number 260                                                                     
                                                                               
MR. JOHN STONE, Chief, Air Quality Maintenance Section, added that             
there are two permit programs, both based on air pollution quantity            
thresholds.  The construction permit program also contains some                
categories based on equipment size.  In general the threshold is               
250 tons of any air contaminants per year in order to need a                   
permit.  It's 100 tons per year in the operating permit program,               
the equivalent of 330,000 gallons per year of diesel fuel consumed.            
This would be the lower size they would permit through the                     
operating permit program.                                                      
                                                                               
SENATOR TORGERSON asked what a drilling rig normally uses.                     
                                                                               
MR. STONE said he thought it was 2,000 - 6,000 gallons per day when            
they are operating.                                                            
                                                                               
SENATOR TORGERSON asked if they analyze their usage or do they go              
by actual days on the permit.                                                  
                                                                               
MR. STONE explained that they don't actually permit the drilling               
rigs, per se.  It depends on how the operator submits the                      
application.  They have the ability to select the operating rates              
in the application.                                                            
                                                                               
SENATOR TORGERSON asked if they take the requirements as if they               
would be running year-round or just for that length of time it                 
takes them to do the job.                                                      
                                                                               
MR. STONE answered that the application for the permit contains the            
operating rates anticipated by the operator and that's what they               
use to make the permit decision.  They can ask for year-long                   
operation or 60-day or 30-day.                                                 
                                                                               
CHAIRMAN HALFORD asked if they claim 60-day operation, and that                
puts them under the 330,000, do they need a permit?                            
                                                                               
MR. STONE answered yes.                                                        
                                                                               
MR. CONWAY clarified that a facility applies for the permit.  In               
their permit, they have to list all the pieces of equipment that               
have the potential to reach that level, including the boilers,                 
heaters, etc.                                                                  
                                                                               
Number 300                                                                     
                                                                               
CHAIRMAN HALFORD asked how far apart the facilities could be.                  
                                                                               
MR. CONWAY answered that it's up to the operator to define the size            
of the facility; they have to demonstrate that they have control               
over that facility.  The Clean Air Act is not based on the workers             
(which is handled by OCEA).                                                    
                                                                               
CHAIRMAN HALFORD said this applies to a mine as well.  If a mine               
has a pit that is a mile long and is running every kind of                     
equipment, plus a processing plant, he asked if that is one                    
facility or a whole series of separate facilities with permits or              
exemptions from the fuel burn-rate.                                            
                                                                               
MR. STONE answered that mines can be separate facilities.  They                
have done that.  The definition of facilities in statute is                    
basically the collection of contiguous or adjacent properties that             
are under common control or ownership, so there's a legal test to              
see what constitutes a facility.                                               
                                                                               
CHAIRMAN HALFORD asked when Vladez Creek Mine was operating, was it            
one facility or multiple facilities?                                           
                                                                               
MR. STONE said he would have to check, but Greens Creek, for                   
instance, is two facilities.  They have the port operation where               
they load the concentrate on the ships and then the actual mine                
operation which is seven and a half miles up the road.                         
                                                                               
MR. CONWAY reiterated that the choice is up to the operator on how             
they want to manage that facility.  His permitting staff usually               
works with the facility operator in the application phase to see               
how it best works for them.                                                    
                                                                               
SENATOR TORGERSON asked if any equipment is exempt from 6,000                  
gallons per day and do they count all the equipment that burns                 
diesel.                                                                        
                                                                               
MR. STONE answered that there is an exemption for certain                      
emissions, like nonroad engine emissions.                                      
                                                                               
CHAIRMAN HALFORD asked if nonroad engines that are part of an oil              
rig are exempt.                                                                
                                                                               
MR. STONE answered yes, that exemption was adopted in January 1997.            
                                                                               
MR. CONWAY clarified that first of all, you have to determine if               
the facility requires a permit based upon the inventory of its                 
emissions.  Mr. Stone stated that a nonroad engine does not count              
when the operator goes around to measure all the sources, but if               
all the other equipment that is measured exceeds the 100 tons or               
250 tons, it requires a permit.  Then all of the sources, including            
the nonroad engine source, needs to be counted as a total emission.            
                                                                               
                                                                               
CHAIRMAN HALFORD asked if there are two sources, internal                      
combustion engines and boilers or heat sources.                                
                                                                               
MR. STONE answered with respect to oil rigs, there are internal                
combustion engines, heaters, and test flares.                                  
                                                                               
CHAIRMAN HALFORD asked if things other than engines have to total              
up to the 100 or 250 tons per year and then, if the non-internal               
combustion engines do that, the permit applies to all of the                   
sources, including the internal combustion engines.                            
                                                                               
MR. STONE answered that is correct.                                            
                                                                               
SENATOR TORGERSON asked if they used federal specs.                            
                                                                               
MR. CONWAY answered that the program is approved by the EPA which              
provides oversight.  The State has the ability to have more                    
flexibility than the federal government does.  EPA sets the bottom             
floor; the flexibility comes in on things like the wart hog                    
facility which is permitted because it's off-shore and the State               
does not have primacy for the off-shore rigs.  The requirements EPA            
puts on wart hog were much more extensive than if the State had                
that part of the program.  The purpose of his testimony today is to            
let everyone know that if we drop below the floor, the EPA is                  
compelled to remove our primacy.                                               
                                                                               
SENATOR TORGERSON asked if specifications we adopt are superior to             
the federal specifications.                                                    
                                                                               
MR. STONE answered that the 100 and 250 tons comes from Section 167            
of the Clean Air Act.                                                          
                                                                               
SENATOR TORGERSON asked if that was the minimum or the maximum.                
                                                                               
MR. STONE answered that those are the exact numbers.                           
                                                                               
CHAIRMAN HALFORD asked if those are the exact numbers required                 
under federal law with the same exemptions or different exemptions.            
                                                                               
MR. STONE answered it is the exact same program we would get under             
the Clean Air Act with the same exemptions.                                    
                                                                               
SENATOR TORGERSON asked how wart hog was permitted at a different              
specification, then.                                                           
                                                                               
MR. STONE explained during the permit process, emission standards              
are developed that govern the amount of pollution that can leave               
that facility.  In that process, EPA is more stringent than the                
State is for similar operations on-shore.                                      
                                                                               
SENATOR TORGERSON asked if the EPA didn't follow their own                     
guidelines.                                                                    
                                                                               
MR. STONE answered that they did follow their guidelines, but they             
took a more stringent approach to following them.                              
                                                                               
CHAIRMAN HALFORD commented that a more stringent approach meant                
different numbers.                                                             
                                                                               
Number 420                                                                     
                                                                               
SENATOR LEMAN said he didn't think they were fairly representing               
what has happened and he thought further testimony would                       
demonstrate why the bill is necessary.  The threat of primacy                  
removal is one that DEC consistently brings and he's tired of                  
hearing it.  He said the legislature gave his department five years            
to do this and they haven't.  He asked if they had any hard data,              
not just modeling, that shows ambient air quality problems on the              
North Slope.                                                                   
                                                                               
MR. STONE answered that they don't have any hard data showing a                
problem.                                                                       
                                                                               
SENATOR LEMAN asked Mr. Stone if he had ever been on the North                 
Slope or on a drilling rig.                                                    
                                                                               
MR. STONE answered no, that he hadn't done either.                             
                                                                               
SENATOR LEMAN asked him if he had been invited.                                
                                                                               
MR. STONE answered that he had.                                                
                                                                               
SENATOR LEMAN encouraged him to go.                                            
                                                                               
Number 455                                                                     
                                                                               
MR. ROBERT REGES, Ruddy Bradley & Kolkhorst, said he was not                   
representing anyone, but he does work in the air quality field.  He            
did not want to speak for or against the bill, but wanted to raise             
an issue for consideration.  He wanted to answer a few questions               
first.  Insignificant emissions units, like lawn mowers are defined            
in regulations and defined by tons per year of emission as well as             
other things.  The cut-off he thought was three tons per year.                 
                                                                               
CHAIRMAN HALFORD asked how that worked out to gallons.                         
                                                                               
MR. REGES said he hadn't figured that out, but that the quantity is            
listed straight forward in the regulations.  One distinction                   
between the State and federal programs which is under some dispute             
is that the State said when you are trying to determine whether you            
qualify for a permit, there's an initial calculation of your                   
potential to emit for the entire facility.  The State said do not              
count the insignificant emission units(IEUs).  Don't include your              
lawn mower, if you're trying to permit your house.  The feds have              
come back and questioned that.  That's one way you can get                     
different numbers by different interpretations of the federal                  
regulations.  He said the list of IEU's is phenomenal, like                    
painting the parking lot and basic maintenance things.                         
                                                                               
SENATOR TORGERSON asked what the feds had questioned.                          
                                                                               
MR. REGES answered whether IEU's can be exempted in the initial                
calculations of the potential to emit.                                         
                                                                               
SENATOR TORGERSON asked if that was under a permit the State of                
Alaska has put in.                                                             
                                                                               
MR. REGES answered that it is codified in 18AAC, Chapter 15.  They             
have to be reviewed by EPA who came back to DEC and said in some               
respects, about a dozen, the State regulations have not met their              
minimum standards.  One of the questions they raised was that we               
are not calculating IEUs in the thresholds and said that we should.            
So there's a proposed regulation change.                                       
                                                                               
SENATOR TORGERSON asked about the rest of the states.                          
                                                                               
MR. REGES said he wanted to talk about those, but first he wanted              
to explain how big a facility can be.  Contiguous and adjacent                 
presents some interesting concepts.  There is a guidance document              
the State uses saying if emissions of any particular contaminant               
from one source mingle with emissions from another source, in the              
quantity greater than one microgram per cubic meter, then they are             
the same facility.  This means if you are on the North Slope, your             
facility can get fairly large, because emissions from one drill rig            
might intermingle with emissions from another drill rig in                     
concentrations greater than one microgram per cubic meter.  If they            
are one facility, they become subject to the permit requirement for            
the facility.                                                                  
                                                                               
What they are seeing on the Slope is a base camp with dorms and                
generators, etc. Then you have your drilling pads.  When you are               
doing calculations and the emissions intermingle, the camp becomes             
part of your facility.  Then you look at the next pad, if that                 
intermingles more than one microgram per cubic meter, that's part              
of the facility.  So when you're trying to get a permit for your               
base camp, you are looking at drill pads that are pretty far                   
removed physically.                                                            
                                                                               
CHAIRMAN HALFORD said he was trying to figure out how far down this            
went to the miner who might be operating 10 different pieces of                
equipment on a 40-acre mining claim.                                           
                                                                               
MR. REGES answered outside of the North Slope you have fewer                   
problems because there are distinct air sheds.  The proposed Borax             
Mine in Ketchikan, for instance, were separate facilities because              
it had valleys and there wouldn't be the cumulative impact.  One of            
the problems on the North Slope is that it becomes one big air                 
shed.  There are no mountains or valleys to change the air flow.               
                                                                               
SENATOR TORGERSON asked who defined air sheds.                                 
                                                                               
MR. REGES said the definition of facility in the statute is                    
contiguous and adjacent.  From the legal perspective, you look at              
whether it's contiguous in terms of air intermingling.                         
                                                                               
CHAIRMAN HALFORD asked if it was weather dependent.                            
                                                                               
MR. REGES said it was to some extent.  He thought you look at it on            
a case by case basis.  They can issue more than one permit, even to            
a single facility.  That authority was given to them with the Clean            
Air statute in 1993.  There was a problem with Healy Coal where the            
new clean coal technology facility is right next to the old                    
existing facility and they were not able to have separate permits.             
                                                                               
CHAIRMAN HALFORD asked what happens when two competitors are                   
operating in the same air shed.                                                
                                                                               
MR. REGES answered that part of the definition is that they have to            
be under common ownership and control.  He said he was here                    
principally to talk about the other states and to talk about an                
issue he hoped they would consider in going through any effort to              
prevent DEC from being the regulator.  In the last few weeks, it               
has come to his attention that there's a possibility of native                 
tribes becoming regulators.  He emphasized this is not a red                   
herring.                                                                       
                                                                               
The Clean Air Act describes native tribes expressly to include                 
Alaska natives.  The recent Venetie decision which dealt with                  
Indian country did nothing to affect the status of Alaska Natives              
as federally recognized Indian Tribes.  So, start with the fact                
that they are Tribes.  Second, the Clean Air Act says EPA may treat            
Tribes as states under certain circumstances.  If a tribe qualifies            
as a state, that tribe can become the regulator over the air route             
resources within its jurisdiction.  Just looking at the statute, it            
looks like they may only be treated as states on reservations.  So,            
one would say, in light of the recent Venetie case, not only don't             
we have any reservations, except for Metlakatla, we don't have any             
Indian Country.  But EPA has very consistently taken the position              
that it is not confined to reservations; it is not even confined to            
Indian Country.  EPA may interpret whether any given tribal body               
has any sufficient jurisdiction over air resources to give it                  
primacy.                                                                       
                                                                               
On February 12, 1998, EPA came out with its new Tribal Air Rule.               
There's one other state in the union that is similar to Alaska in              
this matter and that's Oklahoma.  It has a lot of drill rigs, oil              
production, a lot of natives, has no reservations.  He has dealt               
with Oklahoma a lot on native issues and they called him last week,            
because EPA is coming into Oklahoma to reassess whether states                 
should have primacy over air resources over which Indians have                 
jurisdiction.                                                                  
                                                                               
He has been practicing environmental law for 13 years and in his               
best professional judgement, if the Legislature wants to invoke                
this problem, take control away from the State agency, it could                
fall in the lap of the EPA or the Tribes.  He just talked to EPA               
and this is where the money, in the form of grants, is right now.              
                                                                               
He said they confronted this in the solid waste program a few years            
ago where the State has always had primacy over landfills.  EPA                
came in and said they were going to take over.  However, we fended             
that one off.                                                                  
                                                                               
SENATOR TORGERSON asked if this is being challenged in Oklahoma                
now.                                                                           
                                                                               
MR. REGES said they hadn't raised the challenge yet, but attorneys             
there called him to ask if we are interested in joining them in a              
challenge.                                                                     
                                                                               
TAPE 98-20, SIDE B                                                             
                                                                               
CHAIRMAN HALFORD asked how they defined the land base on which they            
try to extend air powers over.                                                 
                                                                               
MR. REGES answered that would be the issue to be litigated.  In the            
federal register, it is defined as "air resources over areas within            
the tribe's jurisdiction."  The precise argument Oklahoma is making            
is what might that be, if there are no reservations.                           
                                                                               
He dealt with EPA when he worked for the Department of Law and they            
tried to exercise jurisdiction over the solid waste program and                
they said they had federal congressional authority to treat tribes             
as state over Indian lands and Indian lands is somewhat broader                
than Indian country.  It is anything the tribe can demonstrate.                
                                                                               
He didn't think they wanted to take the regulatory control away                
from the State agency and assume we could hold the feds off,                   
because in Oklahoma the EPA is very actively trying to give tribes             
that authority.                                                                
                                                                               
Number 563                                                                     
                                                                               
SENATOR LEMAN asked if a substantial part of his background was in             
environmental law.                                                             
                                                                               
MR. REGES answered that he started practice in 1985 and worked with            
the EPA in Dallas, Texas for a few years.  He worked in private                
practice representing industry in Tucson, Arizona, for a few years,            
he worked on the Exxon-Valdez litigation on behalf of Exxon for one            
year, and worked for the Department of Law, representing DEC for               
six years and was one of the primary authors of this bill.  Now he             
is in private practice representing both citizens groups and North             
Slope industries.  He is not here today on behalf of anyone in                 
particular.                                                                    
                                                                               
SENATOR LEMAN asked if the intermingling of emissions applies when             
the drill rigs drill for 7 - 10 days and then move to drill                    
somewhere else.                                                                
                                                                               
MR. REGES responded that DEC's representative spoke truthfully when            
he said the companies that employ the drillers have the right and              
the ability to tell DEC what their expected operating scenario will            
be, so they could avoid some of the permitting problems by                     
presenting a permit application in which they say the drill rigs               
will not operate in close proximity to one another and they will               
not all operate at the same time.  They are reluctant to do that,              
in his experience, because it requires significant planning ahead              
in an industry that doesn't lend itself to that kind of planning.              
You don't know if you hit oil on one, you might want to explore                
there right away.  They prefer to give DEC a scenario that says                
just assume that at least some of the year all the rigs will be                
operating all at the same time in close proximity to each other,               
the worst case scenario.  If they can get a permit for that, they              
are O.K. for anything less than that.                                          
                                                                               
MR. RUSS DOUGLAS, Alaska Chapter, International Association of                 
Drilling Contractors (IADC), said on March 16 they unanimously                 
passed a resolution, 98-1, in support of SB 299.  He said the                  
Federal Clean Air Act established the means to protect and assess              
air quality resources throughout the states.  It provided for                  
maintenance of these air quality resources where the resources were            
determined to be within ambient air quality standard limits and                
provided requirements for improvement if those resources were                  
determined not within ambient air quality standards.  It clearly               
recognizes two categories of emission forces: mobile and                       
stationary.  The Committee has been talking about the stationary               
air sources.  Control of emissions from mobile sources is done                 
through establishment of federal emission standards which requires             
the manufacturers of mobile sources to manufacture their product to            
meet federal emission standards before they can be marketed.                   
                                                                               
Nonroad engines are a subset of mobile sources; they are internal              
combustion engines which are mobile and are subject to federal                 
emissions standards at the manufacturing level.                                
                                                                               
SB 299 codifies in State statute the federal distinction between               
mobile and stationary sources.  It also simplifies and clarifies               
treatment of nonroad engines as they relate to stationary sources.             
IADC does not believe SB 299 takes any regulatory authority away               
from the DEC.  The recent EPA ruling of December 30, 1997 on non-              
road engines  gives states the option to present to EPA a means by             
which they can control nonroad emissions provided they show that it            
is a necessary and reasonable effort.                                          
                                                                               
He said there is no drilling rig in Alaska that owns, operates, or             
has with its rig a well test flare.  It is codified in regulation              
that the actual and potential emissions of nonroad engines are not             
to be counted against the threshold for stationary source                      
determinations, thereby further separating stationary from mobile              
sources.  Normally an average rig on the Slope running slowly on               
diesel will average during a year 4,000 - 5,000 per day depending              
on the job they were doing.  In addition, there is a rig on the                
Slope that operates on natural gas and there are more expected in              
the near future.  On natural gas, you burn diesel at a much lower              
rate, more in the lines of 1,000 - 1,500 gallons per day.  There               
are also several rigs on the Slope that are capable of operating on            
electric high line power which also significantly reduces the                  
amount of diesel to be burned to that 1,000 - 1,500 per day level.             
                                                                               
SENATOR LEMAN asked if he still felt the bill was necessary after              
hearing testimony.                                                             
                                                                               
MR. DOUGLASS answered, "Yes."                                                  
                                                                               
Number 477                                                                     
                                                                               
MS. PAMELA MILLER, Program Director and Biologist, Alaska Community            
Action on Toxics, a program of the Alaska Conservation Foundation              
which seeks to protect human health and the environment from the               
toxic effects of contaminants and strive to stop production,                   
proliferation, and release of toxic chemicals that threaten                    
environmental and human health.  She opposed SB 299 because it                 
exempts significant sources of air pollution from permit                       
requirements and regulatory oversight.  This bill violates                     
requirements under the Clean Air Act and jeopardizes the State's               
implementation of the Act as delegated by federal law.  This bill              
blatantly ignores provisions of the Clean Air Act, so that federal             
takeover of management of Alaska's resources would be inevitable if            
this bill were to pass.  Some of the facilities proposed by this               
bill for exemption include some of the largest sources of air                  
pollution, including the well test flares used to dispose of oil               
and gas waste, diesel engines used to power drill rigs, asphalt                
plants, dirt burners, power plants, mines, etc.  Hazardous air                 
pollutants from these facilities are known to cause acute and                  
chronic respiratory illnesses. These are soot, carbon monoxide,                
nitrogen oxide, sulphur dioxide, and volatile organic chemicals.               
Some of the facilities burning hazardous waste produce cancer-                 
causing air pollutants such as dioxins and pherans. These                      
substances cause endocrine disruptions, reproductive disorders, and            
other serious health effects at extremely low concentrations.                  
There is no other limit to amount of pollution exempted by this                
bill.                                                                          
                                                                               
This bill will also have adverse economic consequences including               
imposition of federal highway fund sanctions.  The detrimental                 
health resulting from this bill will cause increases in health care            
costs for many Alaskans who already suffer from respiratory illness            
such as asthma.  Health care officials in Nuiqsut have been                    
concerned over the last several years that air pollution from                  
production facilities at Prudhoe Bay is causing dramatic increases             
in respiratory illnesses such as asthma, particularly during the               
air inversions of the winter months.  There is no hard data because            
there is no monitoring.                                                        
                                                                               
Number 432                                                                     
                                                                               
SENATOR LEMAN said that was interesting testimony and he shares her            
concern over public health, but we already have regulations that               
deal with the protection of workers' health when it comes to air               
quality and this bill does not destroy that ability.                           
                                                                               
SENATOR LEMAN moved to pass SB 299 from Committee with individual              
recommendations.  There were no objections and it was so ordered.              

Document Name Date/Time Subjects