Legislature(2001 - 2002)
02/21/2002 11:05 AM House O&G
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
February 21, 2002
11:05 a.m.
MEMBERS PRESENT
Representative Scott Ogan, Chair
Representative Hugh Fate, Vice Chair
Representative Mike Chenault
Representative Vic Kohring
Representative Gretchen Guess
Representative Reggie Joule
MEMBERS ABSENT
Representative Fred Dyson
COMMITTEE CALENDAR
HOUSE BILL NO. 439
"An Act removing provisions providing an opportunity to petition
for review of proposed consistency determinations under the
Alaska coastal zone management program."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 439
SHORT TITLE:COASTAL ZONE PETITION
SPONSOR(S): OIL & GAS
Jrn-Date Jrn-Page Action
02/15/02 2287 (H) STA, RES
02/15/02 2287 (H) READ THE FIRST TIME -
REFERRALS
02/19/02 2321 (H) STA REFERRAL REMOVED
02/19/02 2321 (H) O&G REFERRAL ADDED BEFORE RES
02/21/02 (H) O&G AT 10:00 AM CAPITOL 124
WITNESS REGISTER
KEN DONAJKOWSKI, Permitting Manager
Phillips Alaska, Inc.
P.O. Box 100360
Anchorage, Alaska 99510
POSITION STATEMENT: Testified in support of HB 439.
JERRY GALLAGHER (ph), Manager
of Government and Community Relations
Phillips Alaska, Inc.
P.O. Box 100360
Anchorage, Alaska 99510
POSITION STATEMENT: Answered question pertaining to HB 439.
JUDY BRADY, Executive Director
Alaska Oil and Gas Association (AOGA)
121 West Fireweed, Suite 207
Anchorage, Alaska 99503
POSITION STATEMENT: Expressed AOGA's appreciation for
introduction of HB 439 and explained what AOGA hopes to
accomplish with the legislation.
PAMELA LaBOLLE, President
Alaska State Chamber of Commerce
217 2nd Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 439.
PATRICK GALVIN, Director
Division of Governmental Coordination (DGC)
Office of the Governor
P.O. Box 11030
Juneau, Alaska 99811-0030
POSITION STATEMENT: Testified that DGC doesn't oppose HB 439
but said there needs to be discussion with regard to another
vehicle; offered history and answered questions.
ACTION NARRATIVE
TAPE 02-10, SIDE A
Number 0001
CHAIR SCOTT OGAN called the House Special Committee on Oil and
Gas meeting back to order at 11:05 a.m. Present at the call
back to order were Representatives Ogan, Chenault, Fate,
Kohring, Guess, and Joule. [For minutes on the overviews of
Alberta Energy and Anadarko, see the 10:05 a.m. minutes for this
same date.]
HB 439 - COASTAL ZONE PETITION
Number 0046
CHAIR OGAN announced that the committee would hear HOUSE BILL
NO. 439, "An Act removing provisions providing an opportunity to
petition for review of proposed consistency determinations under
the Alaska coastal zone management program." [HB 439 was
sponsored by the House Special Committee on Oil and Gas.]
CHAIR OGAN informed listeners that at the current meeting the
committee would hear invited testimony in order to establish the
need for the legislation. However, there would be a full public
hearing February 26.
Number 0114
CHAIR OGAN explained the reasons for the bill. A number of
people in the industry had approached him, and there had been
discussions with the [U.S.] Department of the Interior. He
expressed concern that the petition for review [being deleted by
HB 439] is being used as a "dilatory stalling tactic" by people
who want no oil development. Chair Ogan said he was encouraged
that the Alaska Oil and Gas Association (AOGA), the Alaska
Support Industry Alliance ("Alliance"), and a number of industry
people had stepped up to the plate. He said he'd introduced the
bill for those reasons and to ensure that there are reasonable
regulations.
CHAIR OGAN remarked that if it were up to him, he would like to
see the whole program eliminated; however, he didn't think it
would be possible. Therefore, he was looking to "do something
with great restraint that will just simply be helpful."
Number 0268
KEN DONAJKOWSKI, Permitting Manager, Phillips Alaska, Inc.,
offered the following testimony:
I am the manager that's responsible for permitting in
the state of Alaska for Phillips, Alaska, Inc. And
thank you for the opportunity to testify today.
Phillips Alaska, Inc., is testifying in support of HB
439 because the Alaska Coastal Management Program
(ACMP) ... petition process addressed in this bill
significantly delayed a total of five consistency
determinations for Phillips Alaska during the months
of December and January just past. This petition
process enables an individual to easily hamper
responsible oil and gas development. House Bill 439
appropriately removes this needless component from the
overall ACMP process.
The Alaska Coastal Management Program project approval
process is extremely complex, and in the short time I
have to address Chairman Ogan and this committee, I
cannot attempt to fully discuss its complexity.
However, although the following overview is
necessarily simplified, I assure you it is accurate in
characterization and sufficient to highlight Phillips'
concerns.
The ACMP is set out in Alaska Statutes, Title 46,
Chapter 40, and its implementing regulations appear at
6 AAC 50. The ACMP is primarily a procedural and not
a substantive process. For most projects, the state
Division of Governmental Coordination - or DGC - is
charged with coordinating, on behalf of the state, the
determination of whether or not a proposed project in
and around the state's coastal areas is consistent -
that is, in compliance with - the applicable standards
of the ACMP at 6 AAC 80 and ... the standards of the
applicable coastal district.
Now, during this coordinated review process each
local, state, and federal agency is not only involved
in helping DGC make the consistency determination, but
is also responsible for reviewing, analyzing, and
issuing their own numerous permits and authorizations.
Moreover, the public has an opportunity to be involved
in and comment on the ACMP consistency review and each
and every one of the agency permits.
Number 0534
MR. DONAJKOWSKI continued:
And it is here where the petition process, in our
view, is being manipulated and misused. If a single
individual living in the district where the project is
proposed submits comments to DGC during the public
comment period, and then the agency subsequently
issues a proposed determination that the project is
consistent, this lone individual has the right to
notify DGC of intent to petition the Coastal Policy
Council [CPC].
This single act - the act of notifying of intent to
petition - automatically extends the ... consistency
review period by up to a total of 50 days, which
includes 20 days for the petitioner to actually draft
their formal petition and then, if it's submitted,
another 30 days for the Coastal Policy Council to be
convened and make its decision.
Now, in this case, neither DGC nor the Coastal Policy
Council [gets] to review the merits of the notice of
petition or the petition itself. If the petitioner
meets certain basic requirements such as being a
citizen in the district and they submitted comments
during the public comment period, regardless of the
merits of those comments, the right to petition is
automatically granted.
Removal of the petition process will not decrease the
right of the public to provide comments on a project.
It will simply eliminate what is now a right to
needlessly delay a project. The specific
responsibility of the Coastal Policy Council is solely
to answer the question, "Did DGC fairly consider the
comments made by the petitioner during the public
process?" The CPC does not review or address the
merits of the petitioner's comments, just whether
[the] comment was considered.
Number 0703
MR. DONAJKOWSKI continued:
Now on to the specifics: one Kuparuk field
development project, drill site 3S, was delayed
through this process for 35 days, only ... to have
Phillips, our outside attorney, a representative from
the North Slope Borough, ... numerous agency
personnel, and the entire Coastal Policy Council show
up at the scheduled hearing, only to find out that the
petitioner had withdrawn the petition minutes before
we were to begin.
In addition to this needless delay of the project,
this resulted in several hundred hours of wasted
preparatory work done by DGC employees as well as
Phillips' own employees. And an entirely unrelated
project package was impacted for 15 days because DGC
staff needed to prepare for the Coastal Policy Council
hearing.
Number 0768
MR. DONAJKOWSKI continued:
Furthermore, four of Phillips' exploration permitting
packages, which also received proposed consistency
determinations, were similarly petitioned. In the one
case where the petitioner actually appeared, the
Coastal Policy Council ... unanimously dismissed that
petition. Two of the remaining three petitions were
withdrawn by the petitioner, and the last one was
dismissed because the actual petition itself was
submitted after the stated 20-day period had expired.
But even in this last case, a project which met the
state's test for consistency was delayed 20 days
merely through the submittal of comments and a notice
that a petition was going to be filed.
Exploratory drilling on the North Slope is conducted
during the few winter months when ice roads can be
used to mitigate impacts to tundra. As a consequence,
weather delays and uncertainties narrow that window of
opportunity. Consequently, the delays that are
brought about by this petition process can, in fact -
even with 10 to 15 days' delay - result in abandoning
a drilling program.
As mentioned above, the ACMP process and the various
agency permits required offer the public significant
opportunity to raise their substantive concerns. This
particular petition process, in our view, has no
constructive application. As I've described above,
its only use is as a tool to hold hostage responsible
projects that would develop the state's resources.
House Bill 439 appropriately does away with this tool.
Thank you for the opportunity to comment.
Number 0921
CHAIR OGAN asked how far inward coastal zone management reaches
from the shoreline.
MR. DONAJKOWSKI suggested DGC might be able to answer that. In
response to further questions, he said [Phillips] had "five
project packages - four permits submitted" that were impacted by
this specific petition process in about two months' time. He
also affirmed that recent North Slope weather trends have
[resulted in] ever-later opening of tundra access to build the
ice roads in order to get out to the projects.
CHAIR OGAN asked if permits to build ice roads involve a coastal
zone permit.
MR. DONAJKOWSKI said no, but added:
We are not going to spend a lot of money constructing
ice roads in anticipation of an uncertain outcome. We
already have considerable millions of dollars invested
upfront in planning and preparing for these projects.
To do more just puts more dollars at risk, and ...
really becomes a risk assessment, businesswise, to
say, "Do you want to start this work when you still
have the uncertainty of permit processes that may not,
in fact, allow you to capitalize on those
expenditures?" And, like ice roads, the dollars
you've spent simply melt away at the end of that
season.
Number 1007
CHAIR OGAN asked when [Phillips] can usually get out there and
have acceptable conditions for building ice roads.
MR. DONAJKOWSKI answered that it was January this year; in the
past, it has been as early as November. He noted that there are
other delay factors besides the weather [patterns], including
inclement weather. He said the permitting process is already
lengthy, and this [recent delay caused by the permitting
process] was unanticipated.
MR. DONAJKOWSKI highlighted the extensive period of analyzing
data from the previous year's work: a considerable amount of
seismic and exploration information has to be processed in order
to figure out where to put the next well and optimize the
success ratio. That can delay even initiating the permit
process, and the potential for "delay tactics" further hampers
the ability [to proceed].
Number 1234
REPRESENTATIVE JOULE asked whether passage of [HB 439] would in
any way hamper the ability of people to get their concerns
addressed.
MR. DONAJKOWSKI referred to his testimony and numerous avenues,
which he said he'd outlined, that are available to citizens and
agencies in order to comment, apart from this petition process.
REPRESENTATIVE JOULE inquired whether the answer was no, then.
MR. DONAJKOWSKI replied, "That's my answer, Mr. Chairman. It
would not hamper that."
Number 1281
CHAIR OGAN referred to Mr. Donajkowski's testimony regarding
perhaps hundreds of hours of staff time tied up. He asked how
much time and money it takes Phillips to go through this
process, prepare, and show up for the hearings ready to testify,
[even if the] issue is dropped.
MR. DONAJKOWSKI answered that he hadn't added up the dollars.
He acknowledged that the amount pales when compared to the
potential expenditure to do the work. He said it is certainly
worth the effort, but to do it for no purpose is clearly a waste
of valuable time. Mr. Donajkowski then commended DGC for doing
its homework during the ACMP process. He added, "That's what
gave us assurances that, in the end, these petitions couldn't
change the outcome, ... plus they certainly did a lot of effort
just preparing for the Coastal Policy Council. So I commend
Director [Patrick] Galvin and his staff for the work that they
did in that regard."
Number 1375
CHAIR OGAN asked how this is affecting the policy setters at
Phillips - specifically, the board of directors that is deciding
to invest in Alaska, and the senior management personnel. He
asked whether this [petition process] is having a dampening
effect on those decisions.
MR. DONAJKOWSKI answered:
If you look at your options here in Alaska and
opportunities elsewhere, throughout the world, and you
compare how much uncertainty you have before you can
even begin work, and the millions of dollars you have
to invest upfront before you begin that work, and that
you have to live with uncertainty right up until the
very last day that you have an opportunity to begin
that work, just due to weather conditions, it
obviously gives pause to deciding whether or not and
how much capital you're going to allocate to that
particular type of project.
Number 1464
CHAIR OGAN asked what the total dollar amount was for one
project delayed this year.
MR. DONAJKOWSKI deferred to Mr. Gallagher.
Number 1521
JERRY GALLAGHER (ph), Manager of Government and Community
Relations, Phillips Alaska, Inc., responded that tens of
millions of dollars of work was delayed this year, although in
the end it moved forward. He mentioned the importance of
continuing to explore, keeping delays to a minimum, and keeping
the regulatory process as predictable and straightforward as
possible.
CHAIR OGAN requested that some hard figures be provided either
in writing or at the next committee hearing.
Number 1581
REPRESENTATIVE JOULE asked, "Do you believe that the state is
providing adequate resources, in your experience with DGC, to
deal with the issues of permitting?"
MR. DONAJKOWSKI answered:
I believe so, if you keep the process efficient and
effective. Now, ... like I pointed out, they didn't
have the resources completely to deal with, in our
view, this issue, because we had DGC stop the clock
for other permits because, appropriately, they put
their personnel on this issue.
This is not something, I believe, that Director Galvin
and his staff can anticipate the need [for], to be
able to respond to this kind of activity. And so,
they're obviously not going to, I wouldn't think, be
able to budget or ... staff up for that kind of
activity. And I'm here to suggest that it's not money
well spent by the state, either, to have to put energy
into responding to ... this kind of effort that we
just saw, which really amounted to delay tactics, in
our view.
Number 1658
CHAIR OGAN asked Mr. Donajkowski, "Do you believe it takes [DGC]
away from other work and other permits as well, by tying up that
staff time?" He said he would ask the same question of DGC.
MR. DONAJKOWSKI answered, "From our perspective, that was our
experience, yes, that it did do exactly that."
Number 1675
REPRESENTATIVE FATE asked whether this legislation might reduce
the potential for litigation or "legal risk" or, in the
alternative, might actually raise that potential.
MR. DONAJKOWSKI acknowledged that it is more a question for
[Phillips'] legal counsel, but added:
Just from my experience, I don't ... see where it
creates any additional, or less, liability through the
process, and that's because I'm confident that the
opportunities to raise issues and deal with them
through the public comment period [are] appropriately
handled through the standard process. It's just this
petition piece that, again, as I said in my comments,
has no value other than to delay responsible projects.
I don't see it opening up the liability question.
Number 1750
JUDY BRADY, Executive Director, Alaska Oil and Gas Association
(AOGA), testified via teleconference, noting that AOGA is a
private, nonprofit trade association with member companies
representing oil and gas exploration, production,
transportation, refining, and marketing activities in Alaska.
Expressing AOGA's appreciation for the introduction of HB 439,
she addressed what AOGA hopes to accomplish with passage of the
bill. Ms. Brady said:
We are supportive of legislation that's very clear,
that's very focused on ... the petition process
itself. In the past, there [have] been two attempts
that I know of by the legislature to clarify and,
quote, "fix" the problems raised by the petition
process. Both times, groups have found ways around
legislative intent and ... managed to use the process
... as a delay tactic. So ... we're going to be very
focused on solving that issue this time. ...
In response to the question about what else can be
done, ... we are going to be concentrating over the
next few months [on] putting together ... a package of
things addressing permitting issues in this state so
that over the next two years, ... as the new
administration comes on, when the legislature says,
"What can we do to help," we will have some clear
ideas about how that could work. And we also intend
to work with other stakeholder groups so that this is
not ... as contentious as things have been in the
past, but as a way for all of us to move forward to
help the permitting process.
Number 1903
MS. BRADY offered some history, saying both the CPC itself and
this administration have made attempts to eliminate the petition
process. In 1984, when the CPC passed regulations creating the
consistency review process, it deleted the section of the
regulations that allowed petitions to the CPC; however, the
statutory language was left intact and some environmental groups
used that as the way to petition on "state action." She said
perhaps 15 attorney general's opinions related specifically to
"petitions and that whole issue."
MS. BRADY related her belief that in 1997 the Knowles
Administration, with SB 186, attempted to end the petition
process. Referring to when the CPC and DGC were implementing
regulations on the petition process in 1998, she said, "We
suggested that, in fact, if the fix they were trying to do at
the time didn't work and, in fact, ended in more petitions, that
[the] Coastal Policy Council and DGC invite discussion and
reconsideration of the need for the petition process, and if
they decided that change should have to be made, that ... we go
to the legislature together with that."
MS. BRADY informed the committee that AOGA's goal is to work
with the legislature and the administration in "fixing this
issue" - which through the years has caused confusion, hundreds
of thousands of hours of work, and hundreds of thousands of
dollars - once and for all. She said the state's system,
through the permitting system, the agencies, and the consistency
process itself, has multiple opportunities for individuals and
agencies to comment. Ms. Brady indicated Alaska is the only
state with both an elevation process and a petition process;
furthermore, there is an appeals [process] for each agency
decision. She added, "We already have a very complex process."
MS. BRADY explained that the petition process isn't considered
part of the Administrative [Procedure] Act; therefore, someone
can go directly to court. She remarked, "That's what the
Coastal Policy Council intended when they ... tried to eliminate
the petition process in the '80s." She concluded by saying
there have been consistent problems with the petition process,
which doesn't improve people's ability to get their day in court
or in front of an agency. She expressed hope that "this time we
can finally eliminate ... the need for future ... litigation or
attorney general opinions."
Number 2106
CHAIR OGAN asked about the process AOGA goes through. Calling
AOGA a "consensus organization," he offered his understanding
that if one member objects to a particular policy statement by
the organization, "it doesn't happen." He asked whether that is
a fair assessment.
MS. BRADY answered that [AOGA has] a committee-driven process.
She explained:
This proposal for this committee comes out of permit
streamlining. On the committee process, you need a
50-percent vote. This happened to be a unanimous
vote. And the further process is, if a company
objects, then they can ask for the board to take some
action. ...
The Alaska Oil and Gas Association is going to be
working again with you, and with the administration,
on probably final language, to make sure that everyone
is in agreement about how to move forward on this.
But we certainly do endorse, unanimously, the concept
that this has to be taken care of.
Number 2185
CHAIR OGAN said he'd been informed by people in the industry
that this is probably one of the strongest positions [AOGA] has
taken in quite some time.
MS. BRADY agreed, saying the concern about the permitting
process is high. There are new companies and interests, and
because of the short season on the North Slope, there is
continuing concern about a predictable process whereby someone
will know how long it will take to get a permit, what will be
required, and what the stipulations will be.
Number 2225
CHAIR OGAN requested confirmation that this hasn't been a
problem anywhere except the North Slope.
MS. BRADY answered that the permitting process is a statewide
issue. She added, "We ... had one early petition in Kenai, but
these have been mostly North Slope petitions."
CHAIR OGAN suggested it isn't quite as critical on the Kenai
[Peninsula], where the "weather windows" aren't as big an issue,
for example, although it might be just as frustrating.
MS. BRADY agreed but said she'd heard from, to her belief,
"every single one of the Cook Inlet companies who, watching what
happened to Phillips on this last round, are very committed to
... fixing this issue."
Number 2296
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce,
came forward to testify in support of HB 439, specifying that
her private, nonprofit organization represents approximately 700
businesses in Alaska that employ approximately 70,000
individuals. She agreed that the provision removed by HB 439
adds needless costs and delays to the permitting process. The
oil companies that are so involved in the permitting process
must compete globally, she said, emphasizing how vital these
projects are to the state. Ms. LaBolle said:
I was told by an executive of one company that the
permitting process alone in Alaska adds $500 million a
year to the cost of doing business in Alaska over that
of doing business in other places. And I thought that
was just an astronomical cost.
Now, of course, the permitting process is very
important, and it's very much needed. And no one is
questioning that. And by removing this provision, you
still have safeguards. You still have a consistency
review, and you still have a process by which the
council can be petitioned to determine whether or not
the coastal management program is being implemented,
enforced, and complied with.
This is only one extra, needless step that has been in
there, that has caused great problems for the oil
companies and could be applied needlessly in future
projects and at great cost to the State of Alaska.
Number 2431
REPRESENTATIVE FATE asked whether the $500 million additional
cost was in relation to other states or other areas globally.
MS. LaBOLLE said she didn't know.
Number 2462
PATRICK GALVIN, Director, Division of Governmental Coordination
(DGC), Office of the Governor, came forward to testify, noting
that DGC is charged with implementing the Alaska Coastal
Management Program. He offered some history of the petition
process:
As most of you probably know, the Alaska Coastal
Management Program is the state's response to the
federal Coastal Zone Management Act, which was passed
by Congress in 1972 and basically offered a deal to
coastal states, that if the states developed a coastal
plan that met the criteria that the federal government
established, ... the federal government would
basically waive portions of its sovereign immunity and
would agree to comply with the program in the
activities that it does as well as the permitting
decisions that it makes, and would abide by the rules
that the state established. And the federal
government would provide money to both develop the
program and to continue to implement it.
The state decided to take on that, and in the late
'70s developed the Alaska Coastal Management Program
and designed it, rather than having a centralized
structure - which was an option under the federal law
- [to] instead [have] what was basically a
decentralized structure, and put a lot of the power
that's in the program with the local governments and
with the local districts, for them to be able to both
develop their own plans and to have a strong hand in
how they are implemented and interpreted.
In order to continue to comply with the federal
requirement to show that the state still was able to
demonstrate that the plan as a whole was being
implemented according to the rules that were put into
place, the state needed to have a vehicle for ensuring
that implementation. And the petition process was
that vehicle.
At the time that the ... program was put into place,
there was no consistency review process envisioned.
The idea was that the program would be implemented
through the existing permitting decisions that each of
the state agencies and the local governments ... would
be doing independently, and that they would make a
consistency determination in conjunction with their
own permitting decision.
Within a few years, it ... became obvious to everyone
that that wasn't working, that we were getting
inconsistent decisions with regard to the same issues
of consistency from different agencies, and the state
needed to have a way to establish a single state
determination.
Number 2601
MR. GALVIN continued offering history:
So, in 1984, the coordinated consistency determination
was put into place. And in addition to doing that
single state consistency determination, it also
provided some level of coordination of the individual
permits. And so, as was indicated earlier by Mr.
Donajkowski, what DGC does is both coordinate the
consistency determination ... as well as coordinate
the individual agency permits that might be associated
with the project.
As Ms. Brady indicated, when that initial consistency
review process was put into place, there [were] no
project-specific petitions put into the regulations;
in fact, if her testimony is accurate, it was removed
deliberately by the Coastal Policy Council when those
were put into place. And it wasn't until later, in
the 1980s and early '90s, that there were petitions
filed under the statute that remained unchanged,
[that] allowed for petitions under the coastal
management program. And they were used to challenge
individual consistency determinations.
That raised a number of problems, both procedurally
with regard to how the Coastal Policy Council actually
hears those petitions - because nobody had really
thought about it before - and legally; there [were]
some due-process problems because of the other appeal
processes that were established in the rules.
Number 2684
MR. GALVIN continued:
And so in 1994 the legislature passed a bill that
created, basically, two petition processes: the so-
called (b)(1) petitions, which were designed for
individual project reviews and - as basically a
compromise when that bill was put together by a
workgroup - limited the scope of that review to the
standard of whether or not the comments of the
petitioner were fairly considered during the review.
And so, in essence, what the petition process is today
- and became with that legislation - was merely a
check on whether or not the process was fair and
whether or not, when the individual who submitted the
comments requested certain things to be looked at, as
part of the review, ... their comments [were]
considered as part of that review.
And when the Coastal Policy Council hears these
petitions, they are instructed and are limited to
strictly that review. They don't look at whether or
not the decision was right. They don't look at
whether or not the comments were appropriate and
should have been incorporated into the decision. The
question is whether or not they were considered as
part of the review.
Number 2763
MR. GALVIN continued:
Following this legislative change, there was again
some period of confusion over how the process would
work, and there [were] a number of frustrations that
developed. ... A few years ago, when the regulations
were finally put into place to establish a process for
dealing with petitions, at least the procedural
questions were resolved. And since then, we've had a
fairly straightforward process, but ... it's now an
extremely limited process in terms of what is actually
being reviewed and what function it's performing in
the entire realm of the permitting decision making
that's being done.
Number 2796
MR. GALVIN offered details relating to the current process:
And so, what we have now is a process where if a
member of the public is concerned about a particular
project, they submit comments, and those comments are
considered as part of the review. If they disagree
with the decision, they have the opportunity to appeal
that to court and to request that the decision itself
be reviewed and the court decide if it was an
appropriate decision.
If they are a citizen of the district in which the
project takes place and they submitted comments that
referenced the local plan - not the state standards,
but the local plan - then they have the opportunity to
submit these petitions. And when the petition is
filed, my division, as the staff to the Coastal Policy
Council, reviews the notice of petition and makes a
determination of whether or not they've met these
various criteria. And oftentimes - in fact, more
likely than not - one of the criteria is not met and
the ... notice of petition is rejected from the
outset.
If those criteria are met, then - as has been
referenced earlier - it begins a process that could
stretch outwards of 50 days, in which the Coastal
Policy Council then provides an opportunity for the
petitioner to submit the petition; DGC reviews the
petition for recommendation to the Coastal Policy
Council; the Coastal Policy Council is convened; we
hold the meeting.
And, by the way, the Coastal Policy Council is made up
of 15 members: 9 members are elected officials from
throughout the state; 6 are state officials. And
there is a great deal of coordination involved in just
bringing them together and scheduling a meeting when
we can get a quorum together.
Number 2890
MR. GALVIN continued:
And over the last two and a half fiscal years that
we've been tracking this, since the regulations were
put into place, we've had a total of 70 notices of
petition filed. Of those, 9 have been rejected ...
right from the outset - just the notice itself was
deficient, for some reason. Of the 8 remaining, 3
were withdrawn - those were the 3 that were withdrawn
this year - and 5 actually went to the Coastal Policy
Council, and all 5 were dismissed. There were no
remands back to the agency to reconsider. They were
all basically unsuccessful.
So, in light of that history, when we look at this
bill and what it does, we have to recognize that there
are members of the public who would like to have the
ability to appeal, through an administrative agency,
the decisions that that agency is making, rather than
having to go directly to court. This process, in my
opinion, does not provide that in its current form.
It, again, is a very limited review. It provides just
a very narrow evaluation of whether the process was
fair and has proven to basically confirm that, for the
most part, the process is fair, ... that the comments
are considered on a regular basis....
TAPE 02-10, SIDE B
Number 2957
MR. GALVIN referred to 1994 and an effort to bring a group
together to look at whether there are alternatives to provide
that vehicle for public participation in an appeal. He said
this current version isn't doing that, however. He told
members:
Therefore, this bill, which eliminates that, we do not
oppose, because we don't feel that there is anything
actually being lost. We do feel that there may be a
need to have a discussion with the network or the
group of folks that are involved in ... our program -
including industry, the conservation groups,
individuals who participate in our processes and local
governments - to see if there's another vehicle. But
we don't have the time, at this point in the session,
to do that.
So, again, in closing, given the current nature of the
petition process and the very limited effect that it
has on the process, and what has been discussed
earlier - the costs and time that's associated with
actually implementing it - we do not oppose this bill.
Number 2884
MR. GALVIN, in response to a question by Chair Ogan relating to
the number of required votes by the council, explained:
When the notice comes in, ... it doesn't go to the
council. It's basically a staff decision to evaluate
the notice, to determine whether or not it meets the
criteria to actually be heard by the council. And
that's the point, as I indicated, where a majority of
the petitions have failed and haven't actually come to
the council.
When the notice is sufficient and the petition then is
filed, it goes to the council. And it's a majority of
the council - a majority of the quorum - that would
vote.
Number 2834
MR. GALVIN, in response to further questions, specified that
there is only one Coastal Policy Council, which has 15 members.
Its public members are from different districts of the state.
CHAIR OGAN asked how far coastal zone management reaches into
the state, and whether it follows any particular geographical
features such as waterways.
MR. GALVIN answered that it depends on the districts, which have
been given discretion to propose how far inland they want the
coastal zone to reach. He said it generally follows the
coastline and then follows anadromous streams inland, since the
program recognizes anadromous fish as a coastal resource. In
certain districts, particularly in Western and Northern Alaska,
the coastal zone can reach more than 100 miles inland along
anadromous streams. He added, "Outside of the anadromous
streams, and in other places, the coastal zone is very narrow.
In Anchorage, it's fairly narrow. And in the Southeast, because
of the topography and because the elevation rises so quickly,
it's fairly close to the coast as well."
Number 2752
CHAIR OGAN asked how much staff time is involved with the
petition process, for example. He also inquired about the
fiscal note.
MR. GALVIN answered, "I think we estimated that - with one or
more of the petitions that actually reached the council and we
had to produce the analysis - it was upwards of [200] to 300
man-hours." In further response, he clarified that only two
petitions had reached the council this year, including the one
withdrawn the day of the hearing. With regard to the fiscal
note, he said [DGC] doesn't hire new staff for these. There is
no fiscal impact per se, although other project reviews are
delayed while staff members work on these petitions, which are a
priority.
Number 2584
REPRESENTATIVE JOULE asked whether the council itself had looked
at the bill and taken a position on it.
MR. GALVIN said no.
REPRESENTATIVE JOULE requested confirmation that this [bill]
won't diminish local governments' input into the process.
MR. GALVIN explained that local governments have a separate
appeal process, an "elevation" whereby they get a complete
review of the decision, rather than a limited one. Therefore,
local governments don't use the petition process.
Number 2574
REPRESENTATIVE JOULE asked whether Mr. Galvin foresees any
unintended consequences as a result of passing [HB 439].
MR. GALVIN referred to an earlier question with regard to
whether this will increase the amount of litigation. He said
some believe having this petition process "kind of takes the
steam off of somebody who might otherwise go to court, even if
the petition is dismissed." He added, however, "We haven't
necessarily seen that. We've seen projects that have been
petitioned, and even after the petition, it ends up in court.
So I think that's subject to debate. But there could be the ...
consequence of additional litigation."
REPRESENTATIVE JOULE asked whether, if someone does go to court,
the process would be longer than the current one.
MR. GALVIN explained that the main difference - a big one - is
that going to court doesn't usually involve an injunction to
stop the permits. The project therefore moves forward. For
example, there is still litigation with regard to whether
Northstar should be developed.
Number 2488
CHAIR OGAN surmised that there could be an injunction if there
were "serious merits to the case." He offered his own
experience that the granting of an injunction is usually a
"pretty good sign that somebody's got a good case."
MR. GALVIN concurred.
Number 2464
REPRESENTATIVE JOULE inquired on behalf of Representative Guess,
who was no longer present, about the number of petitions that
have been accepted.
MR. GALVIN answered that in the last two and a half years, five
[petitions] have gotten to the council; all were dismissed. He
also noted that what remains, since the bill targets strictly
the project-specific "(b)(1)" petitions, is the longstanding
ability to petition the Coastal Policy Council if somebody
believes there is a chronic failure to implement a local plan.
Therefore, citizens retain the ability to request that the CPC
look at whether a plan is being continually ignored in a
particular aspect, on a number of projects, and can ask the CPC
to take action in that regard. "But, historically, we've not
received a single one of those in the over-20-year history of
the program," he added.
Number 2387
CHAIR OGAN announced that the committee would meet February 26
and possibly move the bill at that time, depending on the amount
of public testimony. [HB 439 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Oil and Gas meeting was adjourned at 12:05
p.m. [For minutes on the overviews of Alberta Energy and
Anadarko, see the 10:05 a.m. minutes for this same date.]
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