Legislature(2001 - 2002)
03/04/2002 03:40 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 308-COASTAL ZONE MGMT PROGRAM/COUNCIL CHAIRMAN TORGERSON announced SB 308 to be up for consideration. SENATOR THERRIAULT, sponsor of SB 308, said he started out with legislation that repealed the whole coastal zone management program and eventually boiled it down to four or five different issues. SB 308 contains two of those issues, plus a third one that wasn't contemplated at that time. Section 1 deals with a ban on the adoption by reference of our state statutes and regulations by coastal districts. This is actually the way the coastal zone system is working now and we are just trying to define that in statute. Section 2 is the new section that was not discussed a number of years ago. It talks about phasing for the permitting of Alaska North Slope gas pipeline. What that deals with is the project is so large in scope that it's very difficult for anybody actually proposing the gas pipeline to submit all of the paperwork to permit the entire line. They don't know exactly which streams they're crossing, whether they're going to go under or over. It would allow state agencies to perform that work in phases. Section 3 is conforming language that conforms statutes with changes made in section 4…. It deals with modifications to the petition process. The petition process is the last additional sort of bite of the apple that the person who is opposing a permit has after you've gone through the agency process. You have the ability to have numerous reviews of the agencies as they are making a determination to issue a permit. After that's been finalized, a consistency determination has been made, there was yet this final petition process, which I believe the individuals with the administration will come forward and indicate has been used as a delaying mechanism. All the petitions that have been granted have been either after the time line has nearly run out, they're either removed or they're found to be without substance and dismissed. So, I believe there is an agreement even by the state administration that section 4 is needed to streamline the process and get to finality. SENATOR WILKEN moved to adopt the committee substitute to SB 308, version C, dated 3/4/02. There were no objections and it was so ordered. The hearing on SB 308 continued. MR. KEN DONAJKOWSKI, Manager of Permitting, Phillips Alaska, Inc. said: Phillips Alaska, Inc., is in support of eliminating individual petitions under the Alaska Coastal Management Program process. This petition process significantly delayed a total of 5 consistency determinations on Phillips projects in the months of December and January just passed. This petition process enables an individual to easily hamper responsible oil and gas development and the Committee substitute for SB 308 appropriately removes this needless component from the ACMP process. SENATOR ELTON asked if any of the five petitions significantly change the terms under which Phillips had to operate. MR. DONAJKOWSKI replied that apart from delays, there were no changes whatsoever to those projects. MR. PATRICK GALVIN, Director, Division of Governmental Coordination, said they are responsible for the implementation of the Alaska Coastal Management Program. He explained: The Alaska Coastal Management Program is the state's response to the federal Coastal Zone Management Act, which gives the state the opportunity to develop a plan that the federal government would comply with and provide money for. We have to make sure the plan meets certain federal standards and in light of that when the Alaska program was put into place, it was designed to be decentralized. It was providing most of the power to the local governments instead of retaining it within the state. In order to insure the federal government that the state retained some control over that, the petition process was put into place to allow the Coastal Policy Council, which is the state's body overseeing the program with some authority that local plans were being implemented. During that time, there was no review of the individual projects. When that came about in the mid-80s it wasn't anticipated that the petition process used for the protection of the state's interest and making sure the local plans were being implemented would be used on individual project reviews. It was. So, in 1994, the legislature took legislative action to create a separate petition process for project reviews that said it wasn't going to be basically a complete review of the decision, but would be merely a check on whether the process was fair. It was just a matter of if a person submitted a comment on a consistency review and they felt their comments were not fairly considered, they could ask the Coastal Policy Council to review that and if so, remand it back to the agency to do it again. Since that time, we've dealt with a handful of petitions to clarify how the process worked and since those regulations were put into place basically in the spring of 1999, we've had up until this week 18 petitions that have been submitted by individuals saying that their comments were not fairly considered. Of those 18, 10 were rejected outright by staff saying that they didn't meet the requirements to even file the petition. Of the remaining eight, three of them were withdrawn before a hearing and five of them were dismissed by the Coastal Policy Council. So of the 18 that have been filed since the beginning of FY 2000, none of them have been remanded for consideration by the state agency. While we've come to recognize that the process does not provide an adequate experience for anybody, it's frustration pretty much across the board. Those who file petitions come in hoping to have the entire decision looked at and they're frustrated that all they get is a review of the process and it's a pretty low standard for the state to be able to overcome and say we considered your comment. So at this point, while desiring an opportunity and perhaps coming up with a different vehicle for providing individuals with an opportunity to participate in an appeal, we don't have time for that and we don't oppose eliminating the B1 petitions. With regard to the phasing issue, a real quick background on that one, the phasing law that's in place now was also adopted in 1994. It was in response to a court decision that found that a state oil and gas lease needed to be redone because it didn't look at the impacts associated with potential development and the court said that there was no authority in the law to restrict the consistency determination to the lease sale stage or phase of the project. The legislation was drafted in order to allow for the phasing of oil and gas development - so that we could have the lease sale phase separate from the exploration phase, separate from the development phase and each one could be reviewed separately. Because the legislation was written for that purpose, it doesn't really fit any other type of project. When we were looking at the issue of a North Slope Natural Gas Pipeline project and the scale of this type of project, all we recognize is that it was going to demand such a large amount of information that one, the company or the proponent of the project would likely not have the resources to develop all that information up front, because frankly under the Coastal Management Program, until you can get your consistency determination, you can't get any permit for the project. Two, even if the companies were able to muscle the resources and to generate the amount of information that would be necessary to review the entire project, the state agencies would not be in a position to be able to review it and comprehend the magnitude of the information and give an adequate evaluation of all the issues they normally would look at in the time frames that would be provided. Three, even if the state agency somehow came up with the resources, the public wouldn't have the ability to be involved in the process because of the magnitude of the information. Given that, we recognize that it would be beneficial to be able to phase this type of review and, as I mentioned before, the phasing statute right now is designed primarily for the lease sale situation. So, it doesn't fit very well with a project of this type. Rather than looking at trying to generate language for a type of project that might fit the gas line and fit other appropriate projects, we recognized that the approach that's taken in this bill is probably the best approach - to say that a natural gas pipe line that goes from the North Slope to market needs to be treated special or differently. It's unique; it's an unprecedented nature. Therefore, it should be phased in a way that would be appropriate for that type of project. What we want to make clear is that it is the unprecedented size of this project that makes it appropriate to look at phasing. It's not just that it's a large project. We are concerned that just the language alone right now gives the implication that a large project deserves to be faced. We would recommend that the legislature look at including some legislative findings as to the unprecedented nature and size of a natural gas project in order to justify this exception to the phasing law so that it isn't seen as a precedent for just any large project being appropriately phased. Also, it should be noted that the Coastal Management Program is a very important program to local governments in particular and to members of the public and we are concerned that the title of this bill is quite broad and we would recommend that the title be refined to recognize the changes that are actually being made to the program such that it doesn't allow for any unexpected additional changes to the program that the administration or local governments may be much more opposed to. Thank you. 5:10 p.m. CHAIRMAN TORGERSON said he wasn't sure there needs to be legislative findings on how big this project is. SENATOR ELTON agreed and said the specificity of this language would preclude anything else. It would in fact, take a change in legislation if there was interest in phasing another project. MR. JOHN SHIVELY, Alaska N.W. Natural Gas Transportation Company, supported SB 308 and thanked the sponsor, Senator Therriault, for including the phasing language in section 2, which is of most concern to them. He thought Mr. Galvin explained the problem well. This is a very complicated project. Ordinarily, before you could get a consistency determination, you have to have every single permit in front of government approved. We don't believe that makes sense and so we support this language and we appreciate the opportunity to testify and would be happy to answer questions. SENATOR TAYLOR moved to pass CSSB 308(RES) from committee with individual recommendations. SENATOR THERRIAULT interrupted to explain that the changes in the CS deal with the fiscal impact and there should be a zero fiscal note. MR. GALVIN explained that the original version had some provisions that would have required additional staff time. This one eliminates those, resulting in a zero fiscal note. CHAIRMAN TORGERSON asked him to prepare one. TAPE 02-08, SIDE A There were no further objections and CSSB 308(RES) passed from committee.
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