04/06/2005 08:30 AM House RULES
| Audio | Topic |
|---|---|
| Start | |
| HB35 | |
| HB197 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| HB 35 | |||
| HB 197 | |||
ALASKA STATE LEGISLATURE
HOUSE RULES STANDING COMMITTEE
April 6, 2005
8:39 a.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative John Coghill, Vice Chair
Representative John Harris
Representative Vic Kohring
Representative Lesil McGuire
Representative Ethan Berkowitz
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 35
"An Act extending the termination date of the State Board of
Registration for Architects, Engineers, and Land Surveyors; and
providing for an effective date."
- MOVED HB 35 OUT OF COMMITTEE
HOUSE BILL NO. 197
"An Act exempting certain natural gas exploration and production
facilities from oil discharge prevention and contingency plans
and proof of financial responsibility, and amending the powers
and duties of the Alaska Oil and Gas Conservation Commission
with respect to those plans; and providing for an effective
date."
- MOVED CSHB 197(RLS) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 35
SHORT TITLE: EXTEND BD ARCHITECTS/ENGINEERS/SURVEYORS
SPONSOR(S): REPRESENTATIVE(S) KOHRING
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) L&C, FIN
01/26/05 (H) L&C AT 3:15 PM CAPITOL 17
01/26/05 (H) Scheduled But Not Heard
01/31/05 (H) L&C AT 3:15 PM CAPITOL 17
01/31/05 (H) Moved Out of Committee
01/31/05 (H) MINUTE(L&C)
02/02/05 (H) L&C RPT 6DP
02/02/05 (H) DP: LYNN, KOTT, LEDOUX, GUTTENBERG,
ROKEBERG, ANDERSON
02/28/05 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/28/05 (H) Heard & Held
02/28/05 (H) MINUTE(FIN)
03/01/05 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/01/05 (H) Moved CSHB 35(FIN) Out of Committee
03/01/05 (H) MINUTE(FIN)
03/02/05 (H) FIN RPT CS(FIN) NT 4DP 1DNP 4NR
03/02/05 (H) DP: HAWKER, FOSTER, MOSES, CROFT;
03/02/05 (H) DNP: STOLTZE;
03/02/05 (H) NR: JOULE, WEYHRAUCH, MEYER, CHENAULT
04/06/05 (H) RLS AT 8:30 AM CAPITOL 106
BILL: HB 197
SHORT TITLE: OIL SPILL EXEMPTIONS FOR GAS WELLS
SPONSOR(S): OIL & GAS
03/03/05 (H) READ THE FIRST TIME - REFERRALS
03/03/05 (H) O&G, RES
03/15/05 (H) O&G AT 5:00 PM CAPITOL 124
03/15/05 (H) Moved Out of Committee
03/15/05 (H) MINUTE(O&G)
03/16/05 (H) O&G RPT 5DP 1NR
03/16/05 (H) DP: SAMUELS, GARDNER, DAHLSTROM,
ROKEBERG, KOHRING;
03/16/05 (H) NR: KERTTULA
03/21/05 (H) RES AT 1:00 PM CAPITOL 124
03/21/05 (H) Heard & Held
03/21/05 (H) MINUTE(RES)
03/23/05 (H) RES AT 1:00 PM CAPITOL 124
03/23/05 (H) Moved CSHB 197(RES) Out of Committee
03/23/05 (H) MINUTE(RES)
03/29/05 (H) RES RPT CS(RES) 2DP 3NR 2AM
03/29/05 (H) DP: ELKINS, SEATON;
03/29/05 (H) NR: OLSON, KAPSNER, LEDOUX;
03/29/05 (H) AM: GATTO, SAMUELS
04/06/05 (H) RLS AT 8:30 AM CAPITOL 106
WITNESS REGISTER
LARRY DIETRICK, Director
Division of Spill Prevention & Response
Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 197, answered
questions.
ACTION NARRATIVE
CHAIR NORMAN ROKEBERG called the House Rules Standing Committee
meeting to order at 8:39:22 AM. Representatives Rokeberg,
Harris, Coghill, Kohring, and McGuire were present at the call
to order. Representative Berkowitz arrived as the meeting was
in progress.
HB 35-EXTEND BD ARCHITECTS/ENGINEERS/SURVEYORS
8:39:46 AM
CHAIR ROKEBERG announced that the first order of business would
be HOUSE BILL NO. 35, "An Act extending the termination date of
the State Board of Registration for Architects, Engineers, and
Land Surveyors; and providing for an effective date."
8:39:50 AM
REPRESENTATIVE KOHRING explained that HB 35 extends the State
Board of Registration for Architects, Engineers, and Land
Surveyors to 2009. Based on a recent audit from the Legislative
Audit Division there is a compelling reason to extend this
board. In the House Finance Committee, the position landscape
architect was added as a voting member upon the request of the
[board]. However, since that time [the board] has decided to
return to the current statute, which specifies 10 members and
doesn't allow the landscape architect to vote. The feeling was
that there aren't enough landscape architects in the state to
warrant full voting membership.
8:41:57 AM
REPRESENTATIVE HARRIS asked if Representative Kohring was
offering an amendment to that effect.
REPRESENTATIVE KOHRING said that he would be happy to offer the
amendment at the appropriate time.
8:42:15 AM
REPRESENTATIVE COGHILL inquired as to why landscape architects
were included as a voting member.
REPRESENTATIVE KOHRING recalled that in the House Finance
Committee it was felt that the landscape architect industry has
evolved to the point at which there are enough people in the
industry to be a player in the process, and therefore have an
equivalent position as other members on the board. However,
there was testimony, including from Representative Holm who is
in the industry, that there aren't enough landscape architects
in the industry to be a full voting member of the board.
8:43:45 AM
CHAIR ROKEBERG recalled that about six to eight years ago,
landscape architects were added to the board and there was a
substantial controversy at that time. The legislature allowed
the landscape architects to be a nonvoting member of the board.
This has been an ongoing controversy, he noted.
8:44:46 AM
REPRESENTATIVE KOHRING moved that the committee adopt Amendment
1, labeled 24-LS0273\G.1, Bannister, 4/2/05, which read:
Page 1, lines 2 - 3:
Delete "relating to the membership of the State
Board of Registration for Architects, Engineers, and
Land Surveyors;"
Page 1, line 9, through page 2, line 17:
Delete all material.
Renumber the following bill section accordingly.
REPRESENTATIVE HARRIS objected.
REPRESENTATIVE KOHRING specified that Amendment 1 would allow
the landscape architect to remain on the board, although it
would remove the landscape architect's voting ability.
8:45:40 AM
REPRESENTATIVE KOHRING withdrew his motion to adopt Amendment 1.
8:45:58 AM
REPRESENTATIVE KOHRING moved to adopt HB 35, Version 24-LS0273\A
as the working document.
REPRESENTATIVE MCGUIRE objected, and requested that someone from
the State Board of Registration for Architects, Engineers, and
Land Surveyors come by to discuss this more. She then withdrew
her objection.
REPRESENTATIVE KOHRING said he would make arrangements for such
a visit with a member of the board.
REPRESENTATIVE ROKEBERG requested that Representative Kohring
obtain a letter from the Professional Design Council in order to
allay concerns.
REPRESENTATIVE HARRIS requested a letter from the landscape
architects because audit recommendation 3 specifies that the
legislature should consider making the landscape architect
member a voting member.
[Although it was not formally announced, the committee treated
HB 35 as adopted and before it.]
The committee took an at-ease from 8:48 a.m. to 8:49 a.m.
8:50:15 AM
REPRESENTATIVE HARRIS moved to report HB 35, Version 24-
LS0273\A, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, HB 35
was reported from the House Rules Standing Committee.
HB 197-OIL SPILL EXEMPTIONS FOR GAS WELLS
CHAIR ROKEBERG announced that the final order of business would
be HOUSE BILL NO. 197, "An Act exempting certain natural gas
exploration and production facilities from oil discharge
prevention and contingency plans and proof of financial
responsibility, and amending the powers and duties of the Alaska
Oil and Gas Conservation Commission with respect to those plans;
and providing for an effective date."
8:50:28 AM
REPRESENTATIVE KOHRING related that HB 197 is supported by the
administration as well as the oil and gas industry. This
legislation, he explained, provides an exemption for oil spill
contingency plans (C-Plan) for natural gas exploration or
development facilities. The aforementioned facilities are
exempt from putting forth C-Plans, which can be expensive and
time consuming, when there is no potential for oil to be found
during the drilling of natural gas. However, he recalled that
in the House Resources Standing Committee there was the desire
to provide greater clarity with the legislation's language in
order to focus on exploration facilities that relate only to
natural gas. Therefore, the added language [on lines 14-15] of
page 3 of the proposed committee substitute (CS) provides that
desired clarification.
8:52:09 AM
REPRESENTATIVE KOHRING moved to adopt CSHB 197, Version 24-
LS0664\Y, Chenoweth, 3/31/05, as the working document.
REPRESENTATIVES MCGUIRE and HARRIS objected.
REPRESENTATIVE KOHRING, in response to Chair Rokeberg, specified
that Version Y includes the language of the version reported
from the House Resources Standing Committee with the additional
clarification [provided on page 3, lines 14-15].
8:54:01 AM
REPRESENTATIVE HARRIS requested that Mr. Dietrick review the
changes from the House Resources Standing Committee's version
and Version Y.
8:54:27 AM
LARRY DIETRICK, Director, Division of Spill Prevention &
Response, Department of Environmental Conservation (DEC),
explained that on page 3, line 13, of CSHB 197(RES) referred to
"refined petroleum products", which was deleted in the last
amendment. However, the definition of crude oil is also used on
line 20. The effect of taking "refined petroleum products" out
of the definition, but leaving it on line 20, basically lowers
the threshold for when oil terminal facilities would have to
obtain a C-Plan from the current 10,000 barrels to any amount.
The aforementioned is not the intent. Therefore, Version Y
eliminates both definitions and makes it clear that the
exemption only applies to natural gas facilities.
REPRESENTATIVE HARRIS surmised then that this legislation does
not impact any crude oil facility.
MR. DIETRICK replied yes, and opined that Section 4 of Version Y
makes it clear by eliminating the definitions for crude oil and
refined natural gas. He highlighted page 3, line 14, where it
says "mean a platform, facility, or structure that, except for
storage of refined petroleum products in a quantity that does
not exceed 10,000 barrels,". Therefore, the exemptions [in
Version Y] only apply to natural gas.
REPRESENTATIVE HARRIS requested a description of a 10,000 barrel
refinery in Alaska.
MR. DIETRICK specified that the definition is for an oil
terminal, for which a C-Plan is required when the combined
storage at the oil terminal is over 10,000 barrels, which
amounts to 420,000 gallons. Such facilities are large
facilities and wouldn't include most of the smaller facilities
in rural Alaska.
8:57:29 AM
CHAIR ROKEBERG surmised then that the 10,000 barrel threshold is
currently in law. He further surmised that this legislation is
intended for any facility that has refined products for use on
its site.
MR. DIETRICK agreed. He reiterated that [CSHB 197(RES)]
would've effectively lowered the threshold "from 10,000 barrels
for any amount" and thus a C-Plan would be required. The
aforementioned wasn't the department's intent, he said.
8:59:21 AM
REPRESENTATIVE BERKOWITZ inquired as to the break point for the
number of platforms, facilities, or structures that are impacted
by increasing the threshold to 10,000 barrels.
MR. DIETRICK informed the committee that current statute
requires that oil terminals with storage volume of over 5,000
barrels of crude are required to have a C-Plan and those oil
facilities with over 10,000 barrels of crude are required to
have a C-Plan. This legislation wouldn't change the
aforementioned.
REPRESENTATIVE BERKOWITZ inquired as to how many facilities are
impacted by this proposed change in statute.
MR. DIETRICK answered that he doesn't believe this legislation
will impact any existing facilities. This legislation merely
ensures that gas drilling in the future that doesn't encounter
oil, as determined by Alaska Oil and Gas Conservation Commission
(AOGCC), isn't required to have C-Plans unless the facilities
are also storing refined products over 10,000 barrels.
9:01:13 AM
REPRESENTATIVE BERKOWITZ commented that 10,000 barrels is a lot.
He opined that no matter what type of facility, any facility
with over 10,000 barrels needs a spill plan.
MR. DIETRICK reiterated that facilities with over 10,000 barrels
have to have a C-Plan and that will not change under this
legislation.
REPRESENTATIVE BERKOWITZ surmised that a facility with 5,000
barrels, which is a lot of oil, wouldn't have to have a C-Plan.
MR. DIETRICK agreed.
9:01:49 AM
CHAIR ROKEBERG inquired as to how this legislation would impact
a Cook Inlet gas platform.
MR. DIETRICK answered that he didn't believe it would impact
such facilities at all. He specified that it would impact
future drilling for gas. The legislation clarified that if an
entity is drilling for gas and upon review and evaluation by the
AOGCC, it determines no oil will be associated with that
drilling, then no contingency plan is required. However, if the
AOGCC determines that oil is likely to be encountered during
that drilling such that the well will include oil and gas, then
a C-Plan will be required.
CHAIR ROKEBERG asked if a gas production platform in Cook Inlet
would have less than 10,000 barrels of refined product.
MR. DIETRICK replied yes, most platforms in the Inlet do have
less than 10,000 barrels. In further response to Chair
Rokeberg, Mr. Dietrick explained that when an operator applies
to drill, the operator must apply for a permit from the AOGCC.
If, upon AOGCC's review of a proposed gas well, it's determined
that no oil will be encountered, no contingency plan will be
required. However, if the well was being drilled for crude oil
or if AOGCC determines an operator will encounter crude oil,
then a contingency plan would be required.
CHAIR ROKEBERG inquired as to what would occur if it's a wildcat
driller or frontier exploration. He asked if [AOGCC] is only
reviewing seismic data when obtaining permits.
MR. DIETRICK specified that AOGCC has the expertise, with its
reservoir engineers, and the technical capability to make the
assessment whether oil will be present. Mr. Dietrick said that
he couldn't think of a case in which the AOGCC missed the mark
on that. However, if the AOGCC missed the mark and oil was
found, a contingency plan would be required, albeit later in the
process.
9:05:20 AM
REPRESENTATIVE BERKOWITZ commented that he wasn't sure whether,
even if the full strictures of a C-Plan are removed, there's
still some oversight for a facility with 9,000 barrels on site.
MR. DIETRICK explained that current statutes define the
threshold at which facilities have to have contingency plans for
exploration and gas facilities, pipelines, railroad, tank
vessels, oil barges, and oil terminals. In the case of oil
terminals, the threshold is that which has been under discussion
today. The notion is that entities above the specified
threshold have to take steps to prepare a plan so that there is
certainty that the entity has the resources and equipment to be
able to respond and contain.
REPRESENTATIVE BERKOWITZ asked if there is any treatment plan or
requirement for handling and storage of [crude oil].
MR. DIETRICK informed the committee that there is an
Environmental Protection Agency (EPA) spill prevention,
containment, and counter measure plan that may impose some
requirements. In further response to Representative Berkowitz,
Mr. Dietrick confirmed that there are federal requirements for
facilities storing less than 10,000 barrels on site. He
explained that the federal requirements basically require that a
plan for containment/control be prepared and signed by a
registered engineer, although it's not required to be submitted
to the federal government for review and approval.
9:08:04 AM
REPRESENTATIVE COGHILL recalled setting up small fuel facilities
in which there was between 500-500,000 gallon capacity. He
further recalled setting up containment barriers and signing off
on an action plan for spills. Therefore, he recalled that there
was some regulation on both the state and federal government
side.
MR. DIETRICK stated that from the perspective of the state and
Title 46, an entity wouldn't be required to do [secondary
containment]. However, the federal EPA Spill Prevention,
Control and Countermeasures Plan (SPCC) does apply and require
secondary containment. Furthermore, it isn't uncommon for oil
and gas lease sales or other operators using state or federal
lands to have similar requirements as land use stipulations to
the operations being conducted on public lands.
9:09:23 AM
CHAIR ROKEBERG surmised that the intent of this legislation is
to correct a situation in which [House Bill 531 of the Twenty-
Third Alaska State Legislature] made an error in defining to
what these plans apply. Therefore, this legislation basically
returns to the status quo prior to [House Bill 531].
REPRESENTATIVE KOHRING replied yes.
CHAIR ROKEBERG related his understanding that if it's the type
of well or formation for which the AOGCC is suspicious that oil
would be encountered, a [C-Plan] would be required. However, if
[the AOGCC] determines that no oil will be encountered, then no
[C-Plan] will be required.
MR. DIETRICK agreed with Chair Rokeberg's understanding, and
added that there was no intent to change the thresholds for any
other facilities. The legislation simply clarifies that a pure
gas well wouldn't require a C-Plan. This legislation doesn't
adjust any of the other thresholds in any way, shape, or form.
9:11:50 AM
REPRESENTATIVE BERKOWITZ surmised that he could store 10,000
barrels in his backyard and there would be no requirements
beyond the federal requirements.
MR. DIETRICK replied yes. He related that when the thresholds
were set, the state was looking to require preparedness and
contingency planning of large facilities because the legislature
at the time was concerned with the possibility of large spills.
To date, the [legislature] hasn't opted to target smaller
facilities and place the burden on those smaller operators in
the state.
9:12:56 AM
CHAIR ROKEBERG asked if DEC looks at gas service stations.
MR. DIETRICK recalled in 1988 the EPA passed requirements to
remove underground storage tanks that were larger than 660
gallons, which were largely associated with service stations.
The 10-year timeframe for which all leaky underground storage
tanks had to be upgraded, removed, or pulled ended in 1998. The
legislature recognized the burden and passed a financial
assistance program. He informed the committee that originally
there were about 7,000 underground storage tanks subject to the
federal requirements in 1988. About 6,000 have been removed,
upgraded, or closed, and are now in compliance with the federal
rules.
9:14:18 AM
REPRESENTATIVE MCGUIRE pointed out that at times when the
legislature attempts to correct a portion of statute, the
underlying statute is brought to attention. She characterized
the aforementioned as a good thing because it forces the
legislature to reflect on past decisions. Representative
McGuire inquired as to whether there have been any documented
spills [at facilities] below the 10,000 barrel threshold. She
also inquired as to whether the department has reviewed the
possibility of smaller facilities having perhaps a modified
contingency plan that would be less onerous.
MR. DIETRICK informed the committee that the predominant number
of spills are from smaller facilities without contingency plans.
The department receives approximately 2,000 spill reports a
year. With regard to those facilities that are regulated and
are required to have state C-Plans, there has been an
approximately 33 percent reduction in the number of spills from
facilities with contingency plans. He characterized the
aforementioned as a credit to the large operators. With regard
to whether these smaller facilities should be addressed, he
reminded the committee of the leaky underground storage tank,
land use stipulations, and EPA SPCC rules that can apply to
these smaller facilities. Furthermore, fire prevention rules
often impact how smaller facilities are designed or operated.
Mr. Dietrick said that whether the legislature wants to lower
the C-Plan regulation or have an intermediate plan [for the
smaller facilities] is a policy call.
REPRESENTATIVE MCGUIRE related her belief that the 33 percent
reduction in the number of spills of those required to have a C-
Plan seems to illustrate that some part of the aforementioned is
working. Furthermore, the leaking underground storage tank
rules seem to deal with the location of the tank. However, she
expressed interest in how to contain a spill quickly while
having the least impact on the environment.
MR. DIETRICK explained that if there is a spill in a facility
without a contingency plan, separate statutes impose
responsibility on any operator of a facility that has a spill to
immediately contain, control, and remove the spill. For such
situations there was the adoption, in the earlier 1990s, of an
incident command system. Therefore, when there is a spill at a
facility without a C-Plan, the Coast Guard, the EPA, and the
state is ramped up and provides the capability to immediately
respond and assist the operator. Furthermore, the legislature
has established a $50 million spill response account as a cash
reserve for assistance in the aforementioned type of situations.
However, the spiller still remains financially responsible.
9:20:38 AM
CHAIR ROKEBERG pointed out that many villages in Alaska have
fuel storage tank farms, and asked whether those tank farms are
required to have spill contingency plans.
MR. DIETRICK replied that the EPA SPCC Plan is the primary plan
that applies to these tank farms; most tank farms in rural
Alaska are below the 10,000 barrel threshold set by the state.
He noted that there is a cost component to C-Plans, which is
probably why the state volume thresholds were set at the current
level.
CHAIR ROKEBERG asked if DEC enforces the EPA standards.
MR. DIETRICK responded that the SPCC Plan is not one of the
federal programs that has been delegated to DEC. He remarked
that the EPA will occasionally hire a contractor to check
facilities to ensure that they have SPCC Plans.
9:22:34 AM
REPRESENTATIVE HARRIS commented that the tanks he has seen in
rural Alaska either are double-walled tanks or are located
within a containment area, although there may not be an actual
written C-Plan for the facility.
MR. DIETRICK replied that this is correct. He stated:
Virtually all new facilities are being built to new
standards now, so even the ones that the Denali
Commission is working on [are] being built to
standards now that require secondary containment....
There's corrosion control, leak detection, welding
requirements, all kinds of specifications now that new
facilities are built to. Even the underground storage
tanks [UST] are built now to new standards. ... They
have both design requirements and monitoring and
inspection now the service station operators have to
carry out.
9:24:01 AM
REPRESENTATIVE BERKOWITZ commented that perhaps the state should
assert primacy over the smaller facilities.
9:24:34 AM
CHAIR ROKEBERG asked how much it would cost to develop a C-Plan.
MR. DIETRICK answered that the cost depends upon the size and
complexity of the facility. He estimated that typically it
would cost $5,000 to secure a consultant to put together a C-
Plan. However, beyond those preparation costs are the
additional costs from associated operations and inspections,
which are ongoing operating costs.
9:25:16 AM
REPRESENTATIVE COGHILL remarked that the storage facilities are
usually near water, so the Corps of Engineers and the EPA are
both involved. He asked, "What type of facility under 10,000
barrels that's drilling for gas would anticipate keeping a
storage anywhere near 10,000 barrels on a continuing basis?"
MR. DIETRICK replied that it would be the exception to have an
oil and gas drilling operation that would also have on-site
storage of over 10,000 barrels [of petroleum]; he surmised that
there are probably none. He noted that the stored petroleum is
usually refined product that is used to run diesel generators.
REPRESENTATIVE COGHILL commented that gas-drilling operators
would probably try to move the gas off site even if they had the
storage capability on site. He opined that [10,000 barrels] is
a good size limit for drilling operations.
9:27:41 AM
CHAIR ROKEBERG remarked, "As a commercial real estate broker and
as a member of the Alaskan business community, I don't believe
that we are short on enforcing spill cleanups." He surmised
that the intention of state and federal requirements are not to
put undue burden [on industry] but to make sure that large
project activities are duly permitted.
9:28:22 AM
REPRESENTATIVE COGHILL moved to report CSHB 197, Version 24-
LS0664\Y, Chenoweth, 3/31/05, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 197(RLS) was reported from the House Rules
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 9:28:44 AM.
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