Legislature(2009 - 2010)
04/13/2010 05:08 PM Senate CRA
| Audio | Topic |
|---|---|
| Start | |
| Informational Hearing: Arctic Industrial Activity & Prevention Systems | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 13, 2010
5:08 p.m.
MEMBERS PRESENT
Senator Donald Olson, Chair
Senator Joe Thomas, Vice Chair
Senator Hollis French
Senator Linda Menard
MEMBERS ABSENT
Senator Albert Kookesh
COMMITTEE CALENDAR
INFORMATIONAL HEARING: ARCTIC INDUSTRIAL ACTIVITY & PREVENTION
SYSTEMS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
EDWARD S. ITTA, mayor
North Slope Borough
Barrow, AK
POSITION STATEMENT: Spoke in support of compulsory marine
pilotage in the arctic.
CAPTAIN CALLUM FINLAYSON, regional marine manager
Shell Oil Company
New Orleans, LA
POSITION STATEMENT: Spoke in opposition to compulsory marine
pilotage in the arctic.
CURTIS THAYER, deputy commissioner
Department of Commerce, Community and Economic Development
(DCCED)
And chairman,
Alaska Board of Marine Pilots
Anchorage, AK
POSITION STATEMENT: Testified that the board does not have the
needed information to make a decision about how to move forward
in mitigating environmental risk for the increased arctic
traffic.
CLAYTON DIMOND, deputy director
American Pilots Association (APA),
Washington D.C.
POSITION STATEMENT: Spoke in support of compulsory marine
pilotage in the arctic.
SHIRLEY MCCOURT, mayor
Unalaska, AK
POSITION STATEMENT: Spoke in support of compulsory marine
pilotage in the arctic.
PETE GARAY, president
Alaska Marine Pilots (AMP)
Dutch Harbor, AK
POSITION STATEMENT: Spoke in support of compulsory marine
pilotage in the arctic.
ACTION NARRATIVE
5:08:45 PM
CHAIR DONALD OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 5:08 p.m. Present
at the call to order were Senators Thomas, Menard, and Olson.
^INFORMATIONAL HEARING: ARCTIC INDUSTRIAL ACTIVITY & PREVENTION
SYSTEMS
5:09:03 PM
CHAIR OLSON announced the first order of business to come before
the committee was an informational hearing on Arctic Industrial
Activity and Prevention Systems. The invited speakers represent
a range of positions on whether marine transportation in the
Arctic Ocean should be subject to compulsory marine pilotage.
The shrinking polar ice cap and warming Arctic Ocean are opening
new commercial activity in the area. Going between Asia and
Europe through arctic waters cuts off up to eight days on
shipping times and saves millions in freight costs. As ice
recedes, new offshore oil and gas potential is exposed. New
fisheries are possible as species migrate north into warming
waters. A Northwest Passage will also entice cruise ships and
tourism. Requiring state licensed marine pilots on certain
commercial ships is a precautionary measure used in other
regions. These pilots report to the state instead of the
operating companies. Marine pilots are required in other Alaskan
waters and an debate is underway as to whether this requirement
should extend to the arctic.
CHAIR OLSON recognized Senator French as joining the meeting.
EDWARD S. ITTA, mayor, North Slope Borough, said he cannot see
why the state would not require state licensed marine pilots in
the arctic. Marine pilotage is required in all other Alaska
coastal areas; every coastal state in the U.S. requires marine
pilotage in some circumstances. It is a basic safety measure
used to protect coastal waters. The requirement only applies to
certain big vessels and when ships come to ports and harbors and
in ship to ship activities.
5:12:29 PM
Some ship to ship activities take place beyond the state's three
mile limit which is why federal law allows the state to assert
its pilotage authority beyond three miles. He questioned why
Alaska would abandon the opportunity to take control in federal
waters; if it does not, no oversight will be in place.
A pilot that works for Shell or another company is beholden to
that company; a state license pilot reports to the state and is
an independent set of eyes and skills. They have handled all
cruise ship traffic and traffic to and from the Red Dog Mine.
They have more arctic experience than any other marine pilots in
America. As the oil industry ramps up, the Alaska marine pilots
can expand their skills in ice infested waters.
5:15:01 PM
Now is the time to instigate the safety precautions. It will not
happen later. The state is taking no action to provide basic
safety in the Arctic Ocean. We are about to allow the oil
industry a lower safety standard than mining or cruising even
though its operations are riskier. Although Governor Parnell
said he would not sacrifice one resource for another, his
administration is considering sacrificing a safety standard that
works everywhere else in Alaska and in other U.S. coastal areas.
If not required in the Arctic, Alaskans will make a big
sacrifice they do not want to make.
SENATOR THOMAS asked if the proposal is to do what is done in
Prince William Sound.
MR. ITTA replied yes, it is modeled after that system.
SENATOR THOMAS asked if the proposal is similar to Canada's
policy.
MR. ITTA replied yes, the concept is similar.
5:17:44 PM
CHAIR OLSON asked Mr. Itta he fears happening the most.
MR. ITTA replied that the biggest fear is oil spills which are
caused by the transport of oil in tankers.
CHAIR OLSON asked where the closest oil spill response team is.
MR. ITTA replied that Alaska Clean Seas is in Prudhoe Bay with
limited equipment. For a major spill, the nearest response would
probably come from Unalaska, thousands of miles away.
CAPTAIN CALLUM FINLAYSON, regional marine manager, Shell Oil
Company, said he is accountable for marine activities in Alaska,
down through the Gulf of Mexico and beyond. He questioned the
accuracy of Mayor Itta's earlier statement that federal law
allows the extension of compulsory marine pilotage.
CHAIR OLSON said he thinks Mr. Itta was referring to state law.
MR. FINLAYSON said a letter from the U.S. Coast Guard addresses
the legal issues quite clearly. Pilots are a necessary, added-
value resource when it comes to managing marine risk for vessels
coming in and out of port. The risks off-shore are different and
are managed differently.
5:21:51 PM
He showed a slide depicting where the two main areas of
operations are going to be in the Beaufort and Chukchi Seas.
Operations between vessels will be taking place this year, and
possibly one off-shore rig. Dutch Harbor and Nome will be the
primary ports used and pilots will be used in both harbors. Rig
moves, done by specialist vessels, resupplying and research will
be the main marine activities. General cargo, water, fuel and
people will be carried.
MR. FINLAYSON's next slide addressed agency involvement. The
marine industry is heavily regulated. The regulatory body in the
marine sector is the U.S. Coast Guard. The International
Maritime Organization sets legislation from an international
perspective. Approximately 26 vessels are anticipated to be in
the region in 2010. Weather and ice-forecasting have been the
focus of much investment so far. Comprehensive oil spill
response plans are in place with about 11 of the 26 ships
dedicated as resources for oil spill response.
5:25:28 PM
SENATOR FRENCH asked who will be piloting the 26 vessels.
MR. FINLAYSON replied that the 26 vessels will have their own
vessel master on board and a number will also have ice advisors.
SENATOR FRENCH asked if activities such as docking or refueling
take place with the same people at the helm.
MR. FINLAYSON replied yes.
SENATOR FRENCH asked if the masters and ice advisors are
Alaskans.
MR. FINLAYSON replied some of them are Alaskans. He said a good
number of the vessels are American.
SENATOR FRENCH asked where the vessels come from.
MR. FINLAYSON replied that the majority are U.S. flag ships,
including some supply ships from Louisiana. Some are foreign
ships, such as a Russian ice management vessel. He noted some
smaller, locally owned vessels are also present.
5:27:57 PM
CHAIR OLSON asked what Mr. Finlayson meant by locally owned.
MR. FINLAYSON replied locally owned Alaskan vessels that have
been chartered to support activities.
He went on to a slide about risk prevention. The first layer is
planning and risk assessment. Procedures and standards are then
developed. For example, any vessel transferring fuel to a rig
must be dynamically positioned and follow procedures for coming
in close proximity to the rig. On-site mechanical barriers, oil
spill equipment, are on board the vessel Nanuq. Should barriers
fail, on-site responses are prepared and contingency plans
exist.
5:30:37 PM
MR. FINLAYSON showed another slide on ice-forecasting. He noted
he would welcome the opportunity to provide deeper insight. The
next slide addressed mitigation which can be broken down to
people, processes and equipment. "People" does not include
pilots. When the theatre includes ice management, risk is
mitigated through ice advisors. The introduction of pilots, who
currently do not have experience and competency in the area,
adds another interface and increases the risk.
5:33:27 PM
Shell extensively audits the companies that own the vessels and
every vessel is strictly inspected. Vessels follow a deep
technical dynamic positioning assurance process.
CHAIR OLSON interjected, saying the hearing is for information
related to marine pilots. He asked for the relevant information
and a summary.
MR. FINLAYSON said the content of the slides was meant to
demonstrate that the risk is being mitigated through alternative
means, not using marine pilots.
SENATOR FRENCH said his concern is that Mr. Finlayson, his
pilots and masters, have not operated in this ocean.
MR. FINLAYSON interjected that some of them have.
SENATOR FRENCH said the Arctic Ocean is unforgiving of error. An
error will cause Shell enormously bad consequences and be even
worse for local people. Having an Alaskan pilot seems to be a
small insurance policy and offers assurance to the people of
Alaska. He is surprised Shell has not embraced this.
5:36:46 PM
MR. FINLAYSON said the masters that Shell has on ice management
vessels are experienced ice masters. Some masters, and all ice
advisors, have worked in the area previously.
CHAIR OLSON asked if they have worked both in the Beaufort and
Chukchi Seas.
MR. FINLAYSON replied yes.
CHAIR OLSON asked, "always as Shell employees?"
MR. FINLAYSON replied no, not always as Shell employees.
CURTIS THAYER, deputy commissioner, Department of Commerce,
Community and Economic Development (DCCED), said he was
appointed chairman of the Alaska Board of Marine Pilots in
January 2010. The board provides for the maintenance of
efficient, competent pilotage services on the inland and coastal
waters, to ensure the protection of shipping, safety of human
life and property and protection of the marine environment.
At a January 2008 board meeting, Alaska Marine Pilots (AMP)
addressed the protection of arctic waters, compulsory pilotage
and adoption of an ice regime in the arctic. Mr. Thayer
summarized the topics that the presenter covered. AMP submitted
draft regulations to the board that would extend the state's
compulsory pilotage area 200 miles into the Beaufort and Chukchi
Seas. All foreign flagged vessels would be required to employ an
Alaska marine pilot. The proposed mandatory pilotage regulations
have gone through many drafts and have been put out for public
comment. In the April 2009 board meeting, it was suggested that
a record, based on findings, could help defend such far reaching
regulations. An attempt was made to solicit these findings from
stakeholders but did not succeed and the proposed regulations
were withdrawn.
5:40:16 PM
The board is greatly concerned that any current traffic, future
resource development and maritime activity in arctic waters be
carried out by professionals with the training and experience
required to provide the highest level of safety to the
environment and coastal communities. The board does not possess
all the information needed to make a decision about how to move
forward in mitigating environmental risk for arctic traffic. The
jurisdiction of the Board of Marine Pilots, outside of the three
mile limit, is still unknown. Traditionally the US Coast Guard
is in charge of safety, navigation and the licensing of maritime
professionals in open waters around the U.S.
5:43:01 PM
In an April 2008 letter to the state, the Coast Guard expressed
concerned about the impact of state regulation on the principles
of domestic and customary international laws of navigation, on
which vital U.S. national security and economic industry depend.
Mr. Thayer said he plans to prepare a list of questions for
board approval which will be presented to the Attorney General
(AG) to help delineate a clear legal path as the state designs
guidelines to safely take us into the future.
SENATOR THOMAS asked if any previous work had been done on this
by Mr. Thayer's predecessors.
MR. THAYER replied that no pending regulations or action on
arctic pilotage is before the board. He reiterated that the
board previously drafted regulations which were withdrawn.
SENATOR FRENCH asked what the administration's plan is for
overseeing activity to ensure the integrity of our waters in the
absence of marine pilots.
MR. THAYER replied that there is no activity for marine pilots.
The board needs to ask the AG about its jurisdiction beyond
three miles.
SENATOR FRENCH said drill ships are coming into the Beaufort and
Chukchi Seas this year. He repeated his question about the
administration's plan concerning who is observing activity and
ensuring protection. He hopes the administration is as
aggressive at asserting its domain in these waters as it has
been in other conflicts with the federal government.
5:45:47 PM
MR. THAYER replied that he would have to get back to Senator
French with the position from the state. The Board of Marine
Pilots has nothing pending before it and does not have the
jurisdiction to put pilots on the boats.
SENATOR FRENCH asked what Mr. Thayer thinks should happen.
MR. THAYER replied by reiterating that the board needs to find
out what its legal jurisdiction is. The board has jurisdiction
within three miles of shore and, in some cases, between 6 and 9
miles of shore. Two-hundred miles off-shore is federal waters.
SENATOR FRENCH said the state should take a proactive stance,
assert its right to marine pilots and let Shell Oil Company sue
and say the state does not have [jurisdiction]. He commented
that Shell would be hesitant to take such action. Most Alaskans
would support the state taking on this role.
MR. THAYER responded that exchanges with the Coast Guard, who
currently has jurisdiction, began about a month ago to establish
where their jurisdiction ends and the state's begins and what
oversight process they want to see in place.
5:47:57 PM
SENATOR FRENCH asked where the closest Coast Guard base is.
MR. THAYER replied that the Coast Guard does fly-overs out of
Kodiak.
SENATOR FRENCH asked how many days it takes to get a boat from
Kodiak to these waters.
MR. THAYER replied that this concern has been discussed with the
Coast Guard. Necessary ports for staging for off-shore response
are not available.
CHAIR OLSON referred to Mr. Thayer's earlier comment that no
activity is going on in the Arctic Ocean. He believes a number
of cruise ships have come through the Northwest Passage.
MR. THAYER replied that some activity has taken place but no
off-shore drilling.
CHAIR OLSON asked if the department is in favor of having marine
pilots on board the 26 vessels, some of which are foreign
flagged.
MR. THAYER replied by reiterating that the board is trying to
determine their jurisdiction beyond three miles.
CHAIR OLSON said, "So you are not in favor of it."
MR. THAYER said the board has not taken a position.
5:49:48 PM
CLAYTON DIMOND, deputy director, American Pilots Association
(APA), Washington D.C., gave some details of his background and
the APA. The APA supports the committee's exploration of
expanding Alaska's compulsory pilot requirements to the newly
opened arctic waters. The pilot system is one of state
regulation and responsibility and the state can adjust its
pilotage to changing developments.
5:52:09 PM
Compulsory state pilotage is often considered to be the most
effective form of navigation safety regulation. A state pilot
exercises judgment independently from the economic interests of
the ship owners and operators, answers only to the state and has
the sole objective of protecting the waters. In an effective
compulsory pilot system, pilots must be available at all times,
to all ships required to have a pilot, equally. Pilot
associations must maintain training programs, dispatch services,
rotation systems and all needed equipment. It will take some
time to put a professional ice pilot infrastructure in place.
Alaska should explore exercising the fullest extent of their
pollution prevention and marine safety authority and the
compulsory pilotage system is the most viable, effective
mechanism to do so. A compulsory pilotage system would ensure
that pilots are US citizens subject to state oversight, are true
local navigation experts and are accountable only to the
citizens of Alaska.
5:55:09 PM
It is established, beyond question, that a state can extend
jurisdiction as far as necessary to achieve the objective of its
piloting system. This was confirmed by a 2002 U.S. Fifth Circuit
court decision which stated that the geographic reach of a
state's pilot jurisdiction is neither limited to three miles nor
preempted by federal law. This decision sites several other
decisions by the U.S. Supreme Court and other federal courts and
recognizes a states broad authority to regulate pilotage. A
state's authority absolutely includes jurisdiction to extend
compulsory pilotage well beyond three miles.
SENATOR THOMAS asked how long it would take a current pilot
serving on a ship for Shell to have the same requirements as are
being asked for.
MR. DIMOND deferred to Captain Garay.
5:57:22 PM
SENATOR FRENCH asked Mr. Dimond to email the legal citation
regarding the Fifth Circuit case that he mentioned.
MR. DIMOND responded that he will do so.
CHAIR OLSON asked if it was an appellate court level ruling.
MR. DIMOND replied that it was the U.S. Fifth Circuit.
SHIRLEY MCCOURT, mayor, Unalaska, said she will speak about her
experience with pilots in Aleutian region, which is also a
National Maritime Refuge. If Alaska pilots are not involved in
the movement of larger vessels, safety in the port is
compromised. She noted, however, that most oil spills in the
Aleutian region in the last 20 years have come from fishing
vessels. She hopes the committee will consider what the pilots
themselves have to say and their experience. A pilot's sole
focus on board a vessel is that vessel.
6:00:27 PM
Pilots in Unalaska are part of the community; the area is their
backyard and they know in detail. Pilots have the information to
keep things safe without stifling the economic pace.
CHAIR OLSON said it sounds like she is in favor of marine pilots
and he asked for an example of a pilot preventing a disaster.
MS. MCCOURT replied that she serves on the advisory panel of
Aleutian Island Risk Assessment and vessels spill oil for many
reasons. The situation depends on the experience and training of
the crew and whether the ship is in good working order. The
trampers and freighters are the primary "problem children."
Pilotage is important; she is not sure that every vessel needs a
pilot on board but she would certainly be concerned about drill
rigs and fueling ships.
6:03:03 PM
PETE GARAY, president, Alaska Marine Pilots (AMP), gave some of
his personal background, including 20 years of piloting
experience from Kodiak through the Aleutians and up to the
Canadian arctic border. Compulsory marine pilotage is the
preventative system and tool that should be employed to protect
the arctic from inherent risks associated with commercial
shipping. AMP believes the state should implement compulsory
pilotage in the Arctic Ocean and stands ready to help the
administration implement a system of pilotage.
6:06:00 PM
Implementing and developing a system of pilotage will not be
easy. The system must be unconventional because area is
unconventional. The system works best when industry and pilots
cooperate and communicate; that is not the case right now. He
quoted Mr. Finlayson saying, "Pilots increase the risk in this
theatre of operations." Considering how far apart industry and
pilots are, he is unsure how to meet in the middle. Safety is an
issue that compulsory pilots cannot compromise on.
6:08:45 PM
AMP believes that having a mechanism in place to protect life,
property and the marine environment, without compromise, is a
system that will benefit everyone. He noted this issue is about
more than ice; many issues will have to be mitigated.
SENATOR THOMAS asked what it would take for existing pilots to
get up to speed and receive the required certifications.
MR. GARAY said it took him 15 years; there is no shortcut.
SENATOR THOMAS said he assumes current pilots and masters have
some training already and asked if a reevaluation would be
needed to determine what they need to become accredited.
MR. GARAY that everyone is wrestling with what new accreditation
and licensing standards need to be put in place for ice
conditions. He cannot say how long that will take. Ships are
going to show up next summer and absent any safety net in place,
the state risks a lot.
6:11:51 PM
SENATOR MENARD asked Alaska has a current pilot shortage.
MR. GARAY replied, "not yet."
SENATOR MENARD asked if enough highly licensed pilots could
help.
MR. GARAY replied that the process will be gradual. He envisions
posting one or two pilots in the arctic to act as a scout, to
participate in the "epicenters of activity" as exploration moves
forward. This is already done in Western Alaska including in
Bristol Bay and Kodiak. For example, a pilot could be on board
the tanker that is going into arctic waters this summer - for
entry and exit and accommodating the whale hunt. That pilot
would get familiar with the other vessels and masters.
6:14:03 PM
He noted that Canadian ice advisors are highly skilled but most
are retired and will leave soon; training more pilots takes
time. Sending a pilot up now will create a blueprint of the
needs. Trying to put something in place after everything is up
and running is not going to happen. He reiterated that the
system will need to be unconventional.
6:16:52 PM
CHAIR OLSON commented that all Alaskan's want to see successful
development that is responsible and all options for operations
in the Arctic Ocean.
6:17:20 PM
CHAIR OLSON, seeing no further business to come before the
committee, adjourned the meeting at 6:17 p.m.
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