Legislature(1995 - 1996)

03/01/1995 08:10 AM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 1, 1995                                         
                           8:10 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative Bill Williams, Co-Chairman                                     
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative John Davies                                                    
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
 Representative Eileen MacLean                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Ramona Barnes                                                  
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HB 128:  "An Act establishing an exemption to the requirement of              
          obtaining a waste disposal permit for certain activities             
          that yield water and waste material discharges ancillary             
          to those activities."                                                
                                                                               
          PASSED CSSSHB 128(RES) OUT OF COMMITTEE                              
                                                                               
 HB 107:  "An Act relating to restrictions attached to certain                 
          commercial fisheries limited entry permits."                         
                                                                               
          PASSED CSHB 107(FSH) OUT OF COMMITTEE                                
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JACK PHELPS, Aide                                                             
 Representative Bill Williams                                                  
 State Capitol, Room 128                                                       
 Juneau, AK   99801                                                            
 Phone:  465-3424                                                              
 POSITION STATEMENT:  Prime Sponsor HB 128                                     
                                                                               
 DEENA HENKINS, Section Chief                                                  
 Drinking Water & Wastewater Section                                           
 Alaska Department of Environmental Conservation                               
 410 Willoughby                                                                
 Juneau, AK   99801                                                            
 Phone:  465-5300                                                              
 POSITION STATEMENT:  Answered questions on HB 128                             
                                                                               
 DAVE JOHNSTON, Chairman                                                       
 Alaska Oil & Gas Conservation Commission                                      
 3001 Porcupine Drive                                                          
 Anchorage, AK   99501                                                         
 Phone:  279-1433                                                              
 POSITION STATEMENT:  Supported HB 128                                         
                                                                               
 GERON BRUCE, Legislative Liaison                                              
 Alaska Department of Fish and Game                                            
 P.O. Box 25526                                                                
 Juneau, AK   99811-5526                                                       
 Phone:  465-4100                                                              
 POSITION STATEMENT:  Commented on fiscal note                                 
                                                                               
 NEIL MACKINNON, Representative                                                
 Alaska Minerals Commission                                                    
 1114 Glacier Avenue                                                           
 Juneau, AK   99801                                                            
 Phone:  586-1254                                                              
 POSITION STATEMENT:  Supported HB 128                                         
                                                                               
 PATRICIA BERG, Representative                                                 
 ARCO Alaska                                                                   
 P.O. Box 100360                                                               
 Anchorage, AK   99510                                                         
 Phone:  265-6878                                                              
 POSITION STATEMENT:  Supported HB 128                                         
                                                                               
 MOLLY SHERMAN, Representative                                                 
 Alaska Environmental Lobby                                                    
 P.O. Box 22151                                                                
 Juneau, AK   99802                                                            
 Phone:  463-3366                                                              
 POSITION STATEMENT:  Opposed HB 128                                           
                                                                               
 TROY REINHART, Employee Relations & Public Affairs Manager                    
 Ketchikan Pulp Company                                                        
 P.O. Box 6600                                                                 
 Ketchikan, AK   99901                                                         
 Phone:  225-2151                                                              
 POSITION STATEMENT:  Supported HB 128                                         
                                                                               
 REPRESENTATIVE BEN GRUSSENDORF                                                
 State Capitol, Room 415                                                       
 Juneau, AK   99801                                                            
 Phone:  465-3824                                                              
 POSITION STATEMENT:  Prime Sponsor HB 107                                     
                                                                               
 FRANK HOMAN, Commissioner                                                     
 Commercial Fisheries Entry Commission                                         
 8800 Glacier Highway                                                          
 Juneau, AK   99801                                                            
 Phone:  789-6160                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 BILL FLOR, President                                                          
 Southeast Dungeness Crab Association                                          
 P.O. Box 262                                                                  
 Petersburg, AK   99833                                                        
 Phone:  772-3829                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 BETH FLOR                                                                     
 P.O. Box 262                                                                  
 Petersburg, AK   99833                                                        
 Phone:  772-3829                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 SCOTT CROSS                                                                   
 P.O. Box 1575                                                                 
 Petersburg, AK   99833                                                        
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 ANDY WRIGHT                                                                   
 P.O. Box 1432                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-9233                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 MARK JENSEN                                                                   
 P.O. Box 457                                                                  
 Petersburg, AK   99833                                                        
 Phone:  772-3316                                                              
 POSITION STATEMENT:  Voiced concerns with HB 107 language                     
                                                                               
 LADD NORHEIM                                                                  
 P.O. Box 935                                                                  
 Petersburg, AK   99833                                                        
 Phone:  772-3671                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 DAVE BEEBE                                                                    
 P.O. Box 148                                                                  
 Petersburg, AK   99833                                                        
 Phone:  772-3357                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 SHERRI WOHLHUETTER                                                            
 P.O. Box 1312                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-9248                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 ROCKY LITTLETON                                                               
 P.O. Box 1373                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-4521                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 MICHAEL SHELDON                                                               
 P.O. Box 1288                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-3746                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 DENNIS ONEAL                                                                  
 P.O. Box 1083                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-3982                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 GWYNNE SHORT                                                                  
 P.O. Box 1224                                                                 
 Petersburg, AK   99833                                                        
 Phone:  772-3585                                                              
 POSITION STATEMENT:  Supported HB 107                                         
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 128                                                               
 SHORT TITLE: WASTE DISPOSAL PERMIT EXEMPTION                                  
 SPONSOR(S): REPRESENTATIVE(S) WILLIAMS,Kott,Toohey,Green,Kelly                
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 01/27/95       156    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/27/95       156    (H)   RESOURCES                                         
 01/27/95       163    (H)   COSPONSOR(S): KOTT, TOOHEY                        
 02/08/95       271    (H)   SPONSOR SUBSTITUTE INTRODUCED-REFERRALS           
 02/08/95       271    (H)   RES                                               
 02/20/95       425    (H)   COSPONSOR(S): GREEN                               
 02/20/95              (H)   RES AT 08:00 AM CAPITOL 124                       
 02/20/95              (H)   MINUTE(RES)                                       
 02/22/95       456    (H)   COSPONSOR(S): KELLY                               
 03/01/95              (H)   RES AT 08:00 AM CAPITOL 124                       
                                                                               
 BILL:  HB 107                                                               
 SHORT TITLE: RESTRICTED LIMITED ENTRY PERMITS                                 
 SPONSOR(S): REPRESENTATIVE(S) GRUSSENDORF                                     
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 01/20/95       102    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/20/95       102    (H)   FSH, RES                                          
 02/08/95              (H)   FSH AT 05:00 PM CAPITOL 124                       
 02/08/95              (H)   MINUTE(FSH)                                       
 02/10/95       299    (H)   FSH RPT  CS(FSH) 1DP 4NR                          
 02/10/95       300    (H)   DP: ELTON                                         
 02/10/95       300    (H)   NR: G.DAVIS, OGAN, MOSES, AUSTERMAN               
 02/10/95       300    (H)   ZERO FISCAL NOTE (ADFG) 2/10/95                   
 03/01/95              (H)   RES AT 08:00 AM CAPITOL 124                       
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-26, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Resources Committee was called to order by Co-Chairman              
 Williams at 8:10 a.m.  Members present at the call to order were              
 Representatives Green, Williams, Austerman, Davies, Kott, and                 
 Nicholia.  Members absent were Representatives Ogan, Barnes, and              
 MacLean.                                                                      
                                                                               
 CO-CHAIRMAN BILL WILLIAMS announced there was a quorum present.               
 HRES - 03/01/95                                                               
 HB 128 - WASTE DISPOSAL PERMIT EXEMPTION                                     
                                                                               
 CO-CHAIRMAN WILLIAMS told committee members they have a proposed             
 committee substitute, version R, dated February 23, 1995, in their            
 packets.                                                                      
                                                                               
 REPRESENTATIVE PETE KOTT made a MOTION to ADOPT CSSSHB 128(RES).              
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there were any objections.  Hearing             
 none, the MOTION PASSED.                                                      
                                                                               
 Number 030                                                                   
                                                                               
 JACK PHELPS, AIDE, REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR,              
 stated CSSSHB 128(RES) represents the changes discussed at the last           
 hearing on HB 128.  He requested committee members to look at page            
 2, lines 13-16.  He said the previous draft of HB 128 had a                   
 definition of hazardous waste drawn from Title 46.  The problem               
 identified at that time was that the Alaska Oil and Gas                       
 Conservation Commission (AOGCC) utilized the federal definition for           
 hazardous waste found in 40 C.F.R., Part 261, in regulating                   
 activities in the oil patch.  He noted the definition of hazardous            
 waste in the Department of Environment Conservation's (DEC)                   
 statutes is a short paragraph.  The definition under the                      
 Environmental Protection Agency (EPA) is 80 plus pages.  Therefore,           
 it was deemed appropriate by all concerned to use the federal                 
 definition of hazardous waste in CSSSHB 128(RES).  He pointed out             
 there is a precedent in statute for using the federal definition in           
 Alaska statutes for hazardous waste.                                          
                                                                               
 MR. PHELPS stated the other change in the committee substitute is             
 on page 3, line 17.  He noted this part of the bill was added at              
 the request of DEC to allow them to continue to regulate excavation           
 dewatering activities.  He said this section was added prior to the           
 previous draft but groundwater had not been included.  This                   
 committee substitute includes the term groundwater.                           
                                                                               
 MR. PHELPS identified another change which was suggested and that             
 change is reflected in the amendment R.1 in committee member's                
 folders.  He said when it was decided to transfer the annular                 
 disposal authority from DEC to AOGCC, the bill was drafted to deal            
 with oil or gas wells on the oil patch.  It was recently pointed              
 out that in the production facilities there are water producing               
 wells and water reinjection wells as part of the Enhanced Oil                 
 Recovery Program.  He stated it did not seem appropriate to leave             
 those out of the loop.  Therefore, it was suggested that amendment            
 R.1 add those as well so it would be certain that AOGCC would have            
 the authority to regulate all of the annular pumping on the slope.            
 He explained amendment R.l adds those water wells which are                   
 associated with oil well activity in the oil patch.                           
                                                                               
 Number 140                                                                    
                                                                               
 REPRESENTATIVE JOE GREEN made a MOTION to ADOPT AMENDMENT R.1.                
 Page 2, lines 11-12:  Delete "the disposal, in the annular space of           
 an oil or gas well, of drilling mud, cuttings, and nonhazardous               
 drilling operation wastes;" and insert "the disposal of drilling              
 mud, cuttings, and nonhazardous drilling operation wastes in the              
 annular space of an oil or gas well or in the annular space of a              
 water well associated with oil or gas exploration and production;"            
 Page 2, line 19: Delete "an oil or gas" and insert "a."                       
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there were any objections.  Hearing             
 none, the MOTION PASSED.                                                      
                                                                               
 MR. PHELPS stated there has been interest raised in how the                   
 excavation dewatering portion might affect certain activities.  He            
 said it might be appropriate to question DEC on how those might               
 affect certain activities, particularly reserve pits on the North             
 Slope.                                                                        
                                                                               
 Number 173                                                                    
                                                                               
 DEENA HENKINS, SECTION CHIEF, DRINKING WATER & WASTEWATER SECTION,            
 DEC, stated she would be happy to answer questions.                           
                                                                               
 CO-CHAIRMAN WILLIAMS asked if CSSSHB 128(RES) were to pass into law           
 as it currently reads, would the draft general permit regarding               
 drilling wastes, currently out for public comment, no longer be               
 necessary.                                                                    
                                                                               
 MS. HENKINS replied yes, that would be her interpretation.                    
                                                                               
 CO-CHAIRMAN WILLIAMS questioned if this bill were to pass in its              
 current form, does she know of any human health risks, or specific,           
 quantifiable environmental pollution problems that would go                   
 unregulated.                                                                  
                                                                               
 MS. HENKINS stated she is not aware of complaints or problems with            
 the type of activities the bill describes.  She felt the department           
 would have other recourses to deal with these kind of wastes if a             
 problem was discovered.  For example, if wastes were causing a                
 health hazard, that would presumably meet the definition of                   
 pollution which is prohibited in statute.                                     
                                                                               
 CO-CHAIRMAN WILLIAMS noted the department might not be able to take           
 an official position for or against HB 128, but asked Ms. Henkins             
 to tell the committee, given the current state of knowledge about             
 the activities covered under this exemption, if the bill would pose           
 any significant difficulties in carrying out the department's legal           
 responsibility to protect the environment.                                    
                                                                               
 MS. HENKINS replied no.                                                       
                                                                               
 Number 221                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS referred to Section 3 of CSSSHB 128(RES) and             
 noted at the department's request, the language regarding                     
 excavation dewatering was included.  He said in the oil patch,                
 there are reserve pits which were formerly used to contain drilling           
 wastes and are permitted under federal National Pollutant Discharge           
 Elimination System (NPDES) provisions, which DEC certifies.  He               
 stated those drilling wastes are now ground and reinjected into the           
 formation and the industry's practice is to empty and clean the               
 pits and re-vegetate them.  He noted they do leave a hollow in the            
 ground and sometimes accumulate runoff.  He asked how DEC would               
 treat post grind and inject abandoned reserve pits in light of the            
 excavation dewatering provisions of CSSSHB 128(RES).  He wondered             
 if DEC would require new permits if these pits had to be dewatered.           
                                                                               
 MS. HENKINS said she is not familiar with dewatering reserve pits             
 but felt if there were any contaminants in the water in the reserve           
 pit and the water was being discharged to land or surface waters,             
 the department would want to permit that activity.  She stated that           
 what the department is most commonly dealing with is muddy water              
 from an excavation.                                                           
                                                                               
 CO-CHAIRMAN WILLIAMS noted for the record that Representatives                
 MACLEAN and OGAN had joined the committee.                                    
                                                                               
 Number 262                                                                    
                                                                               
 REPRESENTATIVE IRENE NICHOLIA asked if CSSSHB 128(RES) would have             
 a negative impact on fish spawning streams.                                   
                                                                               
 MS. HENKINS replied it will not.  She said point source discharges            
 to any surface water would still require a permit.  If a non-point            
 source discharge was causing a violation of DEC's water quality               
 standards, the department could take action.  She noted the Alaska            
 Department of Fish and Game (ADF&G) could also require a Title 16             
 permit if an activity was affecting anadromous waters in their                
 jurisdiction.                                                                 
                                                                               
 Number 284                                                                    
                                                                               
 DAVE JOHNSTON, CHAIRMAN, AOGCC, expressed support of CSSSHB
 128(RES).  He stated AOGCC has authority, in its statutes AS                  
 31.05.030, to regulate the disposal of oil field wastes.  He said             
 CSSSHB 128(RES) would remove the dual jurisdiction and permitting             
 authority over this activity currently existing between the DEC and           
 the AOGCC.  The activity is similar to the Underground Injection              
 Control (UIC) Program which is mandated under the federal Safe                
 Drinking Water Act that AOGCC administers.  He noted the state,               
 through AOGCC, acquired primacy for the UIC Program in 1986.  The             
 UIC Program differs from the Annular Disposal Program in that the             
 UIC Program was set up to control the injection of production                 
 wastes on a large scale, and the Annualar Disposal Program was                
 originally conceived as an exemption to the UIC Program to allow              
 the disposal of wastes associated with the drilling of one well               
 only.                                                                         
                                                                               
 MR. JOHNSTON stated those who set up the UIC Program originally did           
 not feel it would make sense to require a dedicated injection well            
 to be drilled solely to take wastes from one exploratory well.                
 Therefore, it was decided that the Annular Disposal Program was not           
 something subject to UIC jurisdiction.  He noted because of AOGCC's           
 statutory authority, that does remove the commission from the                 
 regulation of the disposal of oil field wastes in the annular space           
 of the well.                                                                  
                                                                               
 MR. JOHNSTON said the Interstate Oil and Gas Compact Commission in            
 1992, made the recommendation that the Annular Disposal Program be            
 turned over to AOGCC.  That recommendation was made because in the            
 wisdom of the people reviewing the program, who were from various             
 other states, saw that the AOGCC had the expertise and knowledge to           
 properly manage this program.  The annular disposal of mud and                
 cuttings, etc., is an activity which takes place many thousands of            
 feet below ground.  He stressed AOGCC understands that environment,           
 whereas DEC does not have nearly the expertise when it comes to               
 understanding things like confining zones, receiving zones, well              
 construction, etc.  He stated CSSSHB 128(RES) will not                        
 significantly add to AOGCC's existing burden it has under the UIC             
 Program.  The AOGCC encourages the legislature of pass CSSSHB
 128(RES).                                                                     
                                                                               
 Number 351                                                                    
                                                                               
 REPRESENTATIVE EILEEN MACLEAN asked what is done with mud drillings           
 when wastes are disposed.                                                     
                                                                               
 MR. JOHNSTON replied currently the mud and cuttings can be disposed           
 of in two ways which reflects a change within the past two years.             
 He said these mud and cuttings previously went to reserve pits                
 where they sat for quite a long time.  He stated AOGCC is in the              
 process of closing out those reserve pits.  He stressed the                   
 preferred alternative is below ground injection.  The injection               
 zones on the North Slope are 3,000 to 5,000 feet below the surface.           
 The confinement of those injection materials are ensured by enuring           
 that proper confining zones exist above where the oil field wastes            
 are placed so they cannot migrate to the surface again.  He noted             
 when looking at confining zones, AOGCC looks for thick layers of              
 shale or some impermeable barrier to flow.                                    
                                                                               
 REPRESENTATIVE MACLEAN asked what CSSSHB 128(RES) would do.                   
                                                                               
 MR. JOHNSTON stated this bill would remove dual jurisdiction                  
 currently existing between the AOGCC and DEC.  Both agencies                  
 currently have a piece of this annular disposal issue.  AOGCC has             
 looked at it as an issue associated with drilling safety,                     
 protecting the integrity of the well, etc.  DEC has looked at it              
 more from the standpoint of what the waste material is.  He noted             
 there is no argument between the two agencies over the process.               
 The process of annular disposal has proven to be a very good                  
 process to dispose of the wastes permanently in a manner that                 
 protects the environment.  He stressed he could not think of any              
 better alternative than the underground injection of this waste.              
                                                                               
 Number 393                                                                    
                                                                               
 REPRESENTATIVE SCOTT OGAN asked what is the annular space of an oil           
 or gas well.                                                                  
                                                                               
 MR. JOHNSTON replied the annular space is the space between the               
 earth and the casing put into that boring or it is the space                  
 between two strings of casing.  For example, when a well is drilled           
 there will be a surface casing string in the area of 13 and five-             
 eighths inches in diameter.  A smaller production string of about             
 nine and five eighths inches in diameter runs down inside that                
 surface string.  The space between the two is the annular space.              
 Fluid is put down that space until it reaches a receiving zone that           
 is below the bottom of the surface string.  He explained the                  
 surface string goes down between 2,000 and 4,000 feet and is                  
 cemented in place.  The annular space between the surface string              
 and the rock formation is cemented to the surface.  Wastes are put            
 down the annular space between the production casing and the                  
 surface casing.  The wastes travel down the annular space and go              
 out into the receiving formation at the base of the bottom of the             
 surface casing.                                                               
                                                                               
 REPRESENTATIVE OGAN clarified the disposal zone is a porous rock              
 formation.                                                                    
                                                                               
 MR. JOHNSTON stated porous sandstone is involved and gravity and              
 pressure is used.  He said mud and cuttings involve a lot of weight           
 which tend to push the wastes out into the formation but pressure             
 is also added.                                                                
                                                                               
 Number 430                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS said in light of the discussion with Ms.                 
 Henkins regarding reserve pits in the oil patch, he asked Mr.                 
 Johnston to make comments on reserve pits that might help the                 
 committee understand the permits and safeguards that govern this              
 activity.                                                                     
                                                                               
 MR. JOHNSTON stated the AOGCC has always looked at reserve pits               
 more as the prerogative of the DEC since it is an activity                    
 associated with the surface.  AOGCC's focus is more on the                    
 subsurface environment.  He said AOGCC's regulations briefly talk             
 to reserve pits.  He noted there are people who believe the AOGCC             
 should take a larger role in reserve pits but there is a point                
 reached where it does not make sense to have this dual jurisdiction           
 all the time.  He stressed AOGCC has backed off the reserve pit               
 issue and has allowed DEC more of a say in that issue.  Again, it             
 is something the commission could step into and direct additional             
 attention.                                                                    
                                                                               
 Number 457                                                                    
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN asked Mr. Johnston to explain the               
 reserve pits.  He wondered if the pits are capped off.                        
                                                                               
 MR. JOHNSTON responded there are a number of generations of reserve           
 pits which have existed over a number of years.  More recently, as            
 people became more knowledgeable about wastes, the construction has           
 reflected that wisdom with permeability barriers, etc.  He noted              
 that some of the reserve pits, particularly those on the Kenai                
 Peninsula, are difficult to find.  Generally, reserve pits were               
 covered over and forgotten.  Today, those old reserve pits are                
 being reopened and the mud and cuttings are being disposed of                 
 through an injection type program.  He noted that wells on the                
 North Slope are being drilled without reserve pits and stressed               
 this is where the Annular Disposal Program has become much more               
 important.                                                                    
                                                                               
 Number 497                                                                    
                                                                               
 REPRESENTATIVE JOHN DAVIES noted on page 2, line 30 and page 3,               
 line 11, there is the phrase "established industry procedures".  He           
 wondered if Mr. Johnston, as a regulator, is comfortable with such            
 a phrase.  He asked if there are established industry procedures.             
                                                                               
 MR. JOHNSTON stated AOGCC refers quite often to good engineering              
 practices, good oil field practices, etc.  He said established                
 industry procedures may be different to different companies.  He              
 felt good engineering practices, or recognized engineering                    
 practices might be better.  He felt if engineers are talked to,               
 there would be a consensus on what these things are.  He noted it             
 is similar to the phrase, "a good citizen."  He pointed out the               
 phrase is an intangible and is subject to debate.                             
                                                                               
 Number 530                                                                    
                                                                               
 GERON BRUCE, LEGISLATIVE LIAISON, ADF&G, told committee members               
 they have a fiscal note which was prepared by the department for              
 the first version of the bill.  He said the department was not                
 aware, until recently, of the work being done to modify the bill.             
 He stated he did receive a copy of CSSSHB 128(RES) the day before             
 and had faxed it to the department staff in Fairbanks.  Based on              
 their review, the department believes the fiscal note should be               
 revised to reflect a zero fiscal note.                                        
                                                                               
 REPRESENTATIVE DAVIES asked Mr. Bruce to highlight the changes                
 between the original bill and the committee substitute which                  
 resulted in less activity on the part of the department.                      
                                                                               
 MR. BRUCE stated the changes clarify that the intent of the bill is           
 to address the question of the duplication of efforts between the             
 AOGCC and DEC on the specific matter of the disposal of wastes                
 associated with oil drillings.  He noted that DEC's other                     
 responsibilities on water quality will not be affected and will               
 continue to do the things that the department depends on them to              
 do.  He explained the original fiscal note was based on the                   
 assumption that DEC would not do some of the things they are                  
 currently doing in regard to ensuring that water quality standards            
 are adequate for the protection of fish and wildlife.                         
                                                                               
 REPRESENTATIVE DAVIES clarified that ADF&G is comfortable that DEC            
 is going to continue to do those things related to habitat                    
 protection, which allows the department to have a zero fiscal note.           
                                                                               
 MR. BRUCE stated that is correct.  DEC will continue to do things             
 that ensure water quality which are important for fish and wildlife           
 habitat.  He noted CSSSHB 128(RES) does not affect ADF&G's                    
 responsibilities regarding the protection of fish and wildlife                
 habitat.                                                                      
                                                                               
 Number 572                                                                    
                                                                               
 NEIL MACKINNON, REPRESENTATIVE, ALASKA MINERALS COMMISSION (AMC),             
 stated AMC supports CSSSHB 128(RES).  He said this law was applied            
 for the first time last year, specifically in the case of the Echo            
 Bay Mine drilling project.  He told committee members about delays            
 in several projects.  He pointed out there is no other place where            
 it is required to permit the discharge from a mining drill hole in            
 the exploration stage.                                                        
                                                                               
 REPRESENTATIVE MACLEAN wondered what is currently done with wastes.           
                                                                               
 MR. MACKINNON said the drilling waste is mostly water, which is               
 used to cool the bits, and rock cuttings.  The water flows out into           
 a return tank which is recirculated and put back down the hole.  He           
 stated last year a sand centrifuge was used to pull the sand out              
 which is put on the ground.                                                   
                                                                               
 Number 606                                                                    
                                                                               
 PATRICIA BERG, REPRESENTATIVE, ARCO ALASKA, stated ARCO Alaska                
 supports HB 128, supports using the federal definition of hazardous           
 waste, and supports the amendment just adopted.  Previously, ARCO             
 Alaska had concerns about Section 3 (B) to unintentionally include            
 reserve pits which had been excavated with the drilling wastes                
 ground and injected back down into the hole.  She said what remains           
 is an empty reserve pit.  She stated based on Ms. Henkins'                    
 testimony, ARCO Alaska has no further concerns.  She explained the            
 intent of that section is for construction sites not for cleaned              
 and abandoned reserve pits.                                                   
                                                                               
 MOLLY SHERMAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL),              
 stated AEL is always in support of things which streamline                    
 government efficiency and costs less.  She said she has been                  
 involved in exploration drilling with reconnaissance crews as a               
 field cook and many of the places she has been they firmly believe            
 in conscientious business and environmental practices.  She noted             
 they fulfill their contracts with vigor and as economically viable            
 as possible.  They are conscientious people who love to work                  
 outside, relish the risk and extreme conditions, and love Alaska.             
                                                                               
 MS. SHERMAN said AEL's intent is not to shut down drilling                    
 operations or to objectively oppose the bill.  She stressed AEL's             
 concerns regard safeguards and abuses where practices are not                 
 established.  AEL feels there is a critical flaw in the last half             
 of CSSSHB 128(RES) as there is not a cohesive set of standards.               
 She stressed that issue needs to be addressed.  She noted often the           
 drilling sites are in remote areas and in many places there are               
 pits involved.  She expressed concern about clean up and                      
 reclamation.  If not mandated, she felt there should be established           
 reclamation standards set up.  She stressed it is not difficult to            
 rake an area and reseed it.                                                   
                                                                               
 Number 660                                                                    
                                                                               
 TROY REINHART, EMPLOYEE RELATIONS & PUBLIC AFFAIRS MANAGER,                   
 KETCHIKAN PULP COMPANY (KPC), stated KPC supports CSSSHB 128(RES).            
 KPC does considerable drilling to develop rock pits and to build              
 roads under best management practices.  He noted that currently               
 there are not any regulatory incentives in place which also protect           
 the environment.  He stressed if a permitting process is started,             
 it would impact KPC's operations.  He pointed out currently there             
 is not a chance for an exemption for minimal activities that                  
 involve drilling to place charges or drilling to build logging                
 roads and develop rock pits.  He stressed KPC takes all the                   
 safeguards in place to ensure that water used in drilling                     
 operations do not get discharged in streams.                                  
                                                                               
                                                                               
 TAPE 95-26, SIDE B                                                            
 Number 000                                                                    
                                                                               
 REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 128(RES) on               
 page 2, lines 29 and 30, and page 3, line 11, eliminating the words           
 "established industry procedures" and substituting the words                  
 "recognized engineering practice."                                            
                                                                               
 CO-CHAIRMAN WILLIAMS OBJECTED for the purpose of discussion.                  
                                                                               
 REPRESENTATIVE DAVIES felt the amendment provides a middle ground.            
 He said the other option is to require state guidelines.  He                  
 expressed concern the notion of established industry procedures is            
 perhaps vague.  He stated the phrase "recognized engineering                  
 practice" would be more focused and a less elusive concept for                
 something which is intangible.                                                
                                                                               
 CO-CHAIRMAN GREEN wondered if the amendment would require an                  
 established definition of what "recognized engineering practices"             
 are.  He expressed concern about leaving something vague where                
 there is not a track record.  He said recognized engineering                  
 practices could come from various sources that could compete with             
 one another.                                                                  
                                                                               
 Number 073                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked if established industry procedures             
 or recognized engineering practices are written.                              
                                                                               
 REPRESENTATIVE DAVIES stated he is not an expert.  He stressed the            
 whole concept being dealt with is intangible and there are no                 
 written procedures and that concerns him.  He said there probably             
 is no singular volume that can be used to find established industry           
 procedures or recognized engineering practices.  On the other hand,           
 he felt the engineering practice is a professional area which is              
 somewhat removed from a particular industry.  He noted in most                
 engineering fields, there are many publications which do not exist            
 in the same way for industry procedures.  He pointed out his                  
 amendment is still an intangible concept but would take it one step           
 less removed from intangible.                                                 
                                                                               
 CO-CHAIRMAN WILLIAMS suggested the committee pass out the bill as             
 it is and then he and Representative Davies can discuss his                   
 concerns.  He noted if they agree one way or the other, perhaps               
 Representative Davies can offer an amendment on the floor.                    
                                                                               
 REPRESENTATIVE DAVIES WITHDREW his MOTION.                                    
                                                                               
 REPRESENTATIVE AUSTERMAN made a MOTION to MOVE CSSSHB 128(RES),               
 with accompanying zero fiscal notes, out of committee with                    
 individual recommendations.                                                   
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there were any objections.  Hearing             
 none, the MOTION PASSED.                                                      
 Number 150                                                                    
 HRES - 03/01/95                                                               
 HB 107 - RESTRICTED LIMITED ENTRY PERMITS                                   
                                                                               
 REPRESENTATIVE BEN GRUSSENDORF, PRIME SPONSOR, stated HB 107 came             
 from a moratorium situation.  He said about three years ago there             
 were concerns about the pressures on the dungeness crab stock and             
 the sustainability of the stock while deriving income off of it.              
 The Commercial Fisheries Entry Commission (CFEC) was given the tool           
 for a moratorium.  During that moratorium, the CFEC and people in             
 the fisheries have been looking at the crab questions and have come           
 to the conclusion that it is in the best interest of the stock to             
 enter into some form of limited entry in the dungeness crab                   
 fishery, in Southeast, to protect the stock.                                  
                                                                               
 REPRESENTATIVE GRUSSENDORF stated HB 107 addresses the issue and              
 gives the CFEC the ability to determine a plan to limit the pots,             
 etc., but stressed HB 107 does not address any specific plan.  HB
 107 simply authorizes the CFEC to do it.  He stressed HB 107 does             
 not affect the ability of the Board of Fish to make their                     
 decisions.  He explained what HB 107 will do is bring people into             
 the dungeness crab fisheries at their historical level of                     
 participation.                                                                
                                                                               
 FRANK HOMAN, COMMISSIONER, CFEC, stated CFEC supports HB 107.  He             
 said HB 107 is a continuation of an earlier effort to look for a              
 solution in the crab fishery.  He noted in the crab fishery, there            
 is a great diversity of effort levels and establishing a limited              
 entry program similar to the current salmon industry would allow              
 that effort level to increase significantly, which is not a good              
 conservation measure but rather is counter-productive to the                  
 resource.  He explained HB 107 would allow a variation to the                 
 typical limited entry system in that the CFEC could keep the effort           
 level at its current capacity by restricting the permits to some              
 historical level of effort.                                                   
                                                                               
 MR. HOMAN told committee members that currently there are                     
 approximately 45,000 pots in Southeast.  If the current system was            
 continued, there would be about 300 permits issued in the fishery             
 and each permit could fish 300 pots each, raising the effort level            
 to 90,000 pots over time.  For that reason, the CFEC has been                 
 reluctant to give the traditional limited entry to the crab fishery           
 and has been searching for the last three years to determine                  
 another effort restriction.  He felt HB 107 is something which can            
 be worked with to keep the fishery at its current level with its              
 participants, while preserving the resource.                                  
                                                                               
 Number 276                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS stated there are probably fishermen concerned            
 about not being able to get 200 or 300 pots at a time.  For                   
 example, if his son wanted to start fishing but is only fishing 75            
 or 100 pots, he asked how he would get up to 300 pots to make the             
 fishing viable for him.                                                       
                                                                               
 MR. HOMAN responded a proportional pot limit on a permit means the            
 fishery would be similar to what it is today.  For example, if                
 someone was fishing 100 pots, they could continue to fish 100 pots;           
 those who are fishing 300 pots could continue to fish 300 pots.  He           
 said if the 100 pot permit was sold, a 300 pot permit could be                
 purchased, which allows people with 100 pot permits to move up and            
 also allows new entrants to come in at a lower level.                         
                                                                               
 Number 306                                                                    
                                                                               
 REPRESENTATIVE DAVIES clarified if a 100 pot permit was sold, a 300           
 pot permit could be purchased.                                                
                                                                               
 MR. HOMAN said all the permits, at whatever pot level allowed,                
 would be transferrable permits, so they could be bought and sold.             
 He stressed that would depend, however, on whether or not a permit            
 was available.                                                                
                                                                               
 REPRESENTATIVE DAVIES clarified that in Mr. Homan's example there             
 would have to be two permits available.                                       
                                                                               
 MR. HOMAN replied that was correct.                                           
                                                                               
 REPRESENTATIVE AUSTERMAN asked how many permits can a person hold.            
                                                                               
 MR. HOMAN stated a person can hold one permit in each fishery under           
 the current system.                                                           
                                                                               
 REPRESENTATIVE AUSTERMAN clarified a person could not fish 600 pots           
 with two permits.                                                             
                                                                               
 MR. HOMAN responded that would not be allowed.                                
                                                                               
 REPRESENTATIVE OGAN made a MOTION to ADOPT CSHB 107(FSH).                     
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there were any objections.  Hearing             
 none, the MOTION PASSED.                                                      
                                                                               
 Number 332                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS wondered how the amount of gear each fisherman           
 is using can be verified.                                                     
                                                                               
 MR. HOMAN stated that is an issue which the CFEC has to give more             
 analysis to.  He said the CFEC will need to review catch histories,           
 harvest levels and the number of pots claimed on registration forms           
 to determine a ratio or formula.  He noted the CFEC would work with           
 biologists on the issue.  He pointed out the CFEC has all of the              
 harvest fish tickets from the past, so they know what each                    
 individual harvest level has been.                                            
                                                                               
 CO-CHAIRMAN GREEN said if the point is reached where there is over            
 fishing with the number of pots allowed and there had to be a                 
 cutback, he wondered how that cutback would happen.                           
                                                                               
 MR. HOMAN stated the crab fishery in Southeast is now under a                 
 moratorium.  He said the CFEC does not have the ability to change             
 the pot level as that is a Board of Fisheries decision.                       
                                                                               
 CO-CHAIRMAN GREEN asked if that is a total for all of the fishery.            
                                                                               
 MR. HOMAN replied that was correct--it is not an individual or                
 group total.  He said one of the difficulties which has arisen is             
 the Board of Fisheries only meets about every three years on these            
 issues.  He stated HB 107 says the CFEC can use the maximum allowed           
 by the Board of Fisheries and can issue permits based on a                    
 proportion of that maximum.                                                   
                                                                               
 Number 385                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN clarified if there is a drop in the number           
 of sustainable crab that can be taken, at some point in time there            
 is a limitation put on by ADF&G in regard to the time frames of               
 fishing so the amount of the crab catch can be controlled.                    
                                                                               
 MR. HOMAN explained the department can adjust seasons, limits,                
 sexes and sizes.                                                              
                                                                               
 Number 405                                                                    
                                                                               
 BILL FLOR, PRESIDENT, SOUTHEAST DUNGENESS CRAB ASSOCIATION (SEDCA),           
 urged committee members to support HB 107.  He said HB 107 is part            
 of continuing process, since 1984, to achieve a protection of the             
 crab resource in Southeast.  He stressed that resource does need              
 some protection.  He stated the problem with the traditional                  
 limited entry is the fleet is so diverse--not everyone fishes the             
 full 300 pot limit and many people fish on the weekends with very             
 few pots.  He pointed out if a traditional limited entry was                  
 created, the potential for growth in the number of pots would                 
 increase dramatically.                                                        
                                                                               
 MR. FLOR said in 1991, SEDCA came to the legislature and presented            
 the problem and a moratorium on the crab fishery was passed so the            
 fishery could be studied.  He noted the CFEC held hearings in the             
 fall and went to all of the Southeast communities.  The Southeast             
 fleet was fairly united in creating a tiered system, even though              
 many other ideas were discussed.  He stressed the tiered system               
 seemed fair, the diversity of the fleet would be grandfathered in             
 as it exists now, and it is a fairly simple plan.                             
                                                                               
 Number 437                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked if the moratorium was just on the              
 Southeast crab fishery.                                                       
                                                                               
 MR. FLOR replied it was.                                                      
                                                                               
 REPRESENTATIVE AUSTERMAN clarified HB 107 reflects statewide.                 
                                                                               
 MR. FLOR said it does.                                                        
                                                                               
 BETH FLOR, PETERSBURG, testified via teleconference and stated she            
 is in favor of HB 107.  She felt HB 107 will enable CFEC to design            
 specific limited entry programs that will solve many problems for             
 resource conservation, as well as provide equitable levels of                 
 participation.                                                                
                                                                               
 SCOTT CROSS, PETERSBURG, testified via teleconference, expressing             
 support for HB 107.  He said it is quite clear the traditional                
 limited entry will not work for the dungeness crab fishery.  He               
 stated if the moratorium is allowed to expire, there will be a big            
 impact.  He noted other fisheries are breaking new ground and                 
 moving towards a less derby-style fishery and there is an                     
 opportunity to do the same in the dungeness crab fishery.  He said            
 this will help the value of the crab, as well as the safety of the            
 fishermen.                                                                    
                                                                               
 ANDY WRIGHT, PETERSBURG, testified via teleconference and expressed           
 support for HB 107.                                                           
                                                                               
 MARK JENSEN, PETERSBURG, testified via teleconference and said he             
 would support a bill that would get a limited entry type program              
 going.  He stated he does not agree with the wording in HB 107,               
 especially not being able to change a permit.  He felt if he has a            
 permit for 100 pots and another person is going to sell their 100             
 pot permit, he should be able to buy another permit.  He said when            
 the moratorium bill was passed, it provided for research of the               
 crab stocks and to his knowledge, that has never been done except             
 for dock surveys.                                                             
                                                                               
 Number 489                                                                    
                                                                               
 REPRESENTATIVE MACLEAN asked Mr. Jensen to explain his first                  
 opposition to HB 107.                                                         
                                                                               
 MR. JENSEN said if a person originally receives 100 pots, he cannot           
 add to that number of pots unless he sells his permit and buys                
 another permit.  He stated he did not understand why, if a person             
 originally got a permit for 100 pots, he could not buy another 100            
 pot permit.                                                                   
                                                                               
 REPRESENTATIVE OGAN stated the committee substitute for HB 107 took           
 care of that issue.  He noted the original bill said, "The fishing            
 capacity allowed under an entry permit may not be changed after the           
 permit is issued."  He explained in the committee substitute that             
 language was deleted.                                                         
                                                                               
 MR. JENSEN said that would alleviate the problem.  He expressed               
 concern also on the fact that many people show 300 pots on their              
 registration when, in fact, they are not fishing that many pots.              
 He felt using the registration criteria would not be realistic                
 information for the program.  He noted also if someone has a bad              
 year, that could affect the criteria used for the program.                    
                                                                               
 Number 520                                                                    
                                                                               
 MR. HOMAN stated what Mr. Jensen is talking about is a provision              
 which was looked at during the public hearing process and it was              
 called a stackable provision where a person could consolidate                 
 permits.  He said there is difficulty with that provision in the              
 current system in that permits are limited to one permit per                  
 fishery.  He noted to accommodate a stackable system, there would             
 be a need to consolidate permits which is a difficult thing to                
 incorporate into the CFEC's current system because it does not                
 occur anywhere else.  He felt it would be a very complicated                  
 provision to incorporate at this time but is something which could            
 be looked at in the future.  He stressed CFEC does not want to do             
 anything to jeopardize any of the other existing limited entry                
 fisheries by having a provision that could consolidate permits.               
                                                                               
 MR. HOMAN noted the CFEC is currently faced with a court case                 
 called the Johns case which says a fishery can become too exclusive           
 by a reduction in the number of permits.  He said if it gets to a             
 point where the court would declare the fishery too exclusive, new            
 permits would have to be issued in that fishery.  He stated that is           
 why the stackable provision was not pursued.                                  
                                                                               
 Number 544                                                                    
                                                                               
 LADD NORHEIM, PETERSBURG, testified via teleconference and                    
 expressed support for HB 107.  He expressed concern about the                 
 viability of the crab fishery and felt HB 107 will help keep the              
 fishery at a viable level.  He stated he likes HB 107 because it              
 gives a kid out of high school the opportunity to buy a small pot             
 permit on which he could build.                                               
                                                                               
 DAVE BEEBE, PETERSBURG, testified via teleconference and expressed            
 support for HB 107.  He stated his main concern is the direction of           
 the fisheries in the Pacific Northwest and those fishermen moving             
 into Southeast Alaska.                                                        
                                                                               
 SHERRI WOHLHUETTER, PETERSBURG, testified via teleconference and              
 said she is strongly in favor of HB 107.  She stated HB 107 will              
 give the CFEC a responsible management tool for the crab resource             
 which is crucial for the longevity of this resource.  She stressed            
 if the resource is not managed responsibly, it will not be                    
 available for anyone.                                                         
                                                                               
 ROCKY LITTLETON, PETERSBURG, testified via teleconference and                 
 expressed support for HB 107.                                                 
                                                                               
 MICHAEL SHELDON, PETERSBURG, testified via teleconference and                 
 expressed support for HB 107 because he is concerned that the                 
 California, Oregon and Washington fleet plan to come up and fish              
 the fishery.  He stated if the fishery is allowed to be accessed by           
 a wide open fishery, the production will be hampered.  He said he             
 would like to see his son get a chance to get into the fishery.               
                                                                               
 DENNIS ONEAL, PETERSBURG, testified via teleconference and                    
 expressed support for HB 107.                                                 
                                                                               
 GWYNNE SHORT, PETERSBURG, testified via teleconference and stated             
 her husband, Joe Short, has been in the fisheries for 15 years.               
 They both support HB 107.                                                     
                                                                               
 TAPE 95-27, SIDE A                                                            
 Number 000                                                                    
                                                                               
 MR. BRUCE stated the department supports HB 107.  He recalled that            
 earlier testimony in the fisheries committee indicated the bill was           
 not needed from a biological standpoint.  He clarified the                    
 department's biologists believe HB 107 does have biological                   
 benefits for protecting the crab stocks from over-exploitation.               
                                                                               
 REPRESENTATIVE AUSTERMAN asked someone to explain the committee               
 substitute.                                                                   
                                                                               
 MR. HOMAN said the committee substitute removes one sentence from             
 the original bill.  He stated in the original bill on page 2, lines           
 22 and 23, there was reference that the permit could not be changed           
 after it has been issued.  He noted the Attorney General's Office             
 was somewhat concerned that reference may indicate some restriction           
 on the Board of Fisheries.  He stressed the Board of Fisheries                
 still has the final authority on the maximum numbers of pots.                 
                                                                               
 Number 045                                                                    
 REPRESENTATIVE DAVIES made a MOTION to MOVE CSHB 107(FSH) with                
 accompanying zero fiscal note out of committee with individual                
 recommendations.                                                              
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there were any objections.  Hearing             
 none, the MOTION PASSED.                                                      
                                                                               
 CO-CHAIRMAN WILLIAMS announced that the committee was going to hear           
 HB 170 again but due to time, it will be taken up again on Monday,            
 March 6.                                                                      
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House Resources            
 Committee, Co-Chairman Williams adjourned the meeting at 9:35 a.m.            
                                                                               

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