Legislature(1993 - 1994)
02/17/1993 03:56 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATOR MILLER called the Resources Committee meeting to order at 3:56 p.m. and announced SB 103 AIR QUALITY CONTROL PROGRAM to be up for consideration. JANICE ADAIR, Assistant Commissioner, Department of Environmental Conservation, said in 1990 Congress passed amendments to the Clean Air Act which created a comprehensive permit program for facilities that emit air pollutants. The federal changes would require changes to statutes and the accompanying regulations in probably all 50 states, and certainly here in Alaska. The down side to not making these changes in Alaska and keeping the Air Quality Program being run by the state is that industry, needing the permits, would have to go to EPA in Seattle or Denver to get them and federal highway funding would also be cut off as there is a mandate in the Clean Air bill to cut off highway funding after 18 months. Last year the Department invited a group of the affected industries and the environmental community to participate in a work group to advise them on how the federal program could best be worked, Ms. Adair said. The bill before them is the product of that group. She said that Tom Chapple, DEC, chaired the Committee. The Committee decided that it wanted to deal only with those elements that were essential and required for the federal program, so the bill is much smaller than it was last year. Number 113 TOM CHAPPLE, Environmental Engineer, said he is the project manager for the permits group within the air quality section. He explained that the 1990 Act is the first major overhaul since 1970. It works on the premise of protecting public health and welfare. It sets ambient air quality standards. The emphasis is to clean up areas that currently exceed those public health standards or maintain areas that are currently within those standards. The two primary mechanisms to get at that goal are a permit program to manage emissions from stationary sources of air pollution and the other addresses mobile sources of air pollution. SB 103 addresses only the permit program. The concepts of the permit program are that one permit would contain all the requirements of the act that apply to a given installation. The operator would know what he needs to do to comply with all five hundred pages of the Act. And SB 103 contains the concept of being able to voluntarily opt out of the program if air emissions are right at the cut off level. The Act requires public participation in each and every permit and EPA participation in reviewing that permit. There are administrative and judicial review features, so once a permit action is taken, there is an appeal process. Another major feature of the Act is the acid rain program that has the focus of reducing emissions from large power plants. Since this is primarily an east coast problem, Alaska is totally exempt. In the SB 103 the state would do the enforcement so only one entity needs to be dealt with. The EPA, however, has much more enforcement authority. Number 195 Another change in the Act is that Congress created 189 hazardous air pollutants. But they didn't establish public health standards for these pollutants. Congress wanted to use technology to reduce the emissions and see what that does over a period of 10 years. Three types of facilities need permits, ones that emit 100 tons or more of a regulated air pollutant, ones that emit 10 tons or more of any one of the hazardous air pollutants, or if you emit less than 10 tons one but emit more than 25 tons of any number of them. Facilities subject to specific federal emission limits also need a permit. There are two major categories here, one is new source performance standards which is an equipment specific type of emission standards. If there is a specific federal regulation for a type of equipment, then that facility would need a permit. Currently 170 permits are issued to separate installations around the state. Current criteria says that any new installation that emits more than 250 tons needs a permit. The new Act requires a permit from any existing or new facility that emits 100 tons. This is why they will need to issue permits to a projected 450 installations. MR. CHAPPLE said the state could be more responsive to the needs of its public and industry than EPA could if they were running the permit program. He felt it was important to prevent federal intervention. The fee structure in SB 103 is designed to create several incentives that foster efficiency. They want to make sure everyone understands the rules of the program, therefore, they are explicit. The current program lacks this understanding. Number 320 SENATOR FRANK asked if he had an estimate of how much it would cost industry to comply with the new federal standards. Mr. CHAPPLE answered they hadn't determined that yet. SENATOR FRANK said he was trying to get a sense of what was going to be involved besides extra administrative costs. MR. CHAPPLE said the Clean Air Act requires the state to enhance the scope of what's in the permit and its attention to permits. There are more requirements to assure compliance as time moves on - periodic maintenance of the oversight of the activity. This should help correct some compliance problems they are now having. As for the burden of preparing the permits, this is an upgrade, but not a major overhaul, of how existing industry is currently regulated. Number 376 CARL HARMAN, Environmental Engineer, Chugach Electric, supported SB 103 fully. If this bill is not passed this year, the air program will be put in the hands of EPA. Number 398 STEVE TAYLOR, Manager, Environmental Affairs, BP, and representing the Oil and Gas Association, commented that in reality the federal act is one of the most onerous pieces of environmental legislation that has ever been passed. It imposes many requirements on the state of Alaska that are unwarranted and unnecessary. If Alaska doesn't implement the program, EPA would and that would be an unworkable situation. Certain provisions built into the Act allow flexibility within the state, for example, the general permit program. Another advantage is that the program could be implemented much cheaper by the state than by the federal government and used the fee structure in SB 103 as an example. They also felt that the jobs for processing the permits should go to Alaskans rather than to people in Seattle or Denver. The state fee structure is extremely fair, MR. TAYLOR said. Anyone who applies for a permit will pay for the actual time DEC spends in processing the permit. The permittee will have a chance to appeal the cost if he thinks it is too much. He will also be able to cut costs by doing an extremely good job of preparing his permit and he can do a good job of complying if he wants to reduce the cost of enforcement. The emission fee is also fair and equitable, because it is scaled according to how much emission the facility has. The federal Act has mandatory penalties which is something that is relatively new in the field of air quality. Therefore, structured into the bill is a method to ensure that the front line employee that happens to be operating a piece of air equipment is given sufficient training so that he will know when he is violating the law. Number 485 RUSSELL HEATH, Director, Alaska Environmental Lobby, supported SB 103 and agreed with previous testimony. SENATOR FRANK asked if he was a member of the working group. He said he was not, he is standing in today for Andy Goolinger who was the member representing the environmental community. Number 497 SENATOR FRANK asked how they decided who would make up the working committee and if efforts were made to bring in the small operators. MR. CHAPPLE said they asked people who were directly involved. They intended to have a seat for the small business sector, but they learned that a lot of small industry wasn't going to be involved. This Act really affected the category of rural power people who were already represented on the committee. There are probably less than a half dozen dry cleaners, auto body shops, and the construction industry that will need permits. They did contact the Association of General Contractors and the Executive Director did come to a couple of their meetings. Number 537 SENATOR FRANK said he had a letter from the Alaska Forest Association saying they couldn't participate in the citizens advisory group. MR. CHAPPLE answered they invited the timber industry and pulp mills to be involved, but for various reasons they declined. Number 550 ROBERT REGES, Assistant Attorney General, said his case load is mostly DEC related. He said the benefits the lawyers gain from a permit program are that it offers the individual operators an informal setting in which to engage in dispute and resolution. It gives the Department of Law the opportunity to gain perspective and background for comparing facilities for exercising enforcement discretion. They can see which operators are suffering a problem that is endemic to their type of facility and which operators are clearly out of sync with the rest of the similarly situated owners and operators. MR. REGES asked them to look at Section 156 which dealt with the regulatory authority and noted that a number of section from last years bill had been deleted. TAPE 93-9, SIDE B Number 580 Number 565 SENATOR FRANK questioned the fact that this bill would not reach a small facility that is a heavy polluter. He also wondered if it was good regulatory philosophy for the Department to use a best available technology approach rather than having a specific level of pollution or something like that. Number 536 MR. REGES explained that if two facilities are under common ownership and control and are contiguous, they would be treated as one facility and would become subject to the permit program. However, there are certain diminimous thresholds below which it's not administratively practical to go. MR. CHAPPLE commented on Senator Frank's concern that this Act would not be improving practices at all facilities rather than just selecting some. He said in reality 100 tons of air pollution in most of Alaska is inconsequential and doesn't cause a public health problem. Part of the Department's job when they implement the program is to decide if there is a public health concern. Another part of the act, MR. CHAPPLE said, focuses on the use of new technology. When new equipment is installed at a new facility, you should implement best available control technology for that new technology. This is one of the major themes of the Act. Number 515 SENATOR FRANK asked if they had the discretion to make that sort of public health judgement within the federal law? MR. CHAPPLE said they implement those provisions now in their permit program. There is no overall incentive to bring everyone up to a higher level. MR. CHAPPLE explained that one of the explicit reasons Congress said they did not want to establish public health standards for hazardous air pollutants is because it's gotten caught in the quagmire of debate over what is adequate to protect public health. Experience has shown them that establishing safe levels has not worked. Number 431 MR. REGES said the way he understood it is that health based perspectives were extrapolated from inconclusive observations. Technology based perspectives are simply seeing what technology is out there and identifying the best example of it for a standard. It is very objective and is based on what they are already achieving. He explained that there are two standards, the out of stack emissions and the ambient standard. Number 405 SENATOR MILLER said he would put SB 103 into a subcommittee consisting of himself as Chairman, Senator Leman, and Senator Zharoff.