Legislature(2011 - 2012)BUTROVICH 205

02/04/2011 03:30 PM Senate RESOURCES


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03:33:59 PM Start
03:34:40 PM Presentation: Department of Environmental Conservation Overview
05:07:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Larry Hartig, Commissioner, TELECONFERENCED
Department of Environmental Conservation
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                        February 4, 2011                                                                                        
                           3:33 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Thomas Wagoner, Co-Chair                                                                                                
Senator Joe Paskvan, Co-Chair - via teleconference                                                                              
Senator Bill Wielechowski, Vice Chair - via teleconference                                                                      
Senator Bert Stedman                                                                                                            
Senator Hollis French                                                                                                           
Senator Gary Stevens                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lesil McGuire                                                                                                           
                                                                                                                              
OTHER LEGISTORS PRESENT                                                                                                       
                                                                                                                                
Senator Cathy Giessel                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: DEPARTMENT OF ENVIRONMENTAL CONSERVATION OVERVIEW                                                                 
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LARRY HARTIG, Commissioner                                                                                                      
Department of Environmental Conservation (DEC)                                                                                  
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Presented Department of Environmental                                                                     
Conservation (DEC) overview.                                                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:33:59 PM                                                                                                                    
CO-CHAIR  THOMAS  WAGONER  called the  Senate  Resources  Standing                                                            
Committee meeting  to order  at 3:33 p.m.  Present at the  call to                                                              
order  were Senators  Stedman, French,  and  Co-Chair Wagoner.  He                                                              
noted  that Senator  Wielechowski  and  Co-Chair  Paskvan will  be                                                              
calling in.                                                                                                                     
                                                                                                                                
3:34:40 PM                                                                                                                    
                                                                                                                                
^Presentation: Department of Environmental Conservation Overview                                                                
Presentation: Department of Environmental Conservation Overview                                                             
                                                                                                                                
CO-CHAIR  WAGONER   announced  the  Department   of  Environmental                                                              
Conservation overview as the only order of business today.                                                                      
                                                                                                                                
3:34:55 PM                                                                                                                    
LARRY   HARTIG,   Commissioner,    Department   of   Environmental                                                              
Conservation  (DEC),  introduced his  staff  in the  audience  and                                                              
said he would  talk about some of the department's  challenges and                                                              
some of  the successes  that they  have not  quite met  yet. DEC's                                                              
mission  is to  protect human  health and  the environment.  These                                                              
two things  are connected;  protecting the  environment is  always                                                              
connected to human  health. Also, he said, DEC  is a science-based                                                              
process-driven  agency;  all  their   decisions  fulfilling  their                                                              
mission are science-based.                                                                                                      
                                                                                                                                
3:39:01 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
                                                                                                                                
3:39:11 PM                                                                                                                    
COMMISSIONER  HARTIG said  many  of their  duties and  authorities                                                              
are  set  out  in   Title  46  and  Title  44,   Chapter  46,  and                                                              
regulations    in   18.80(c).    But   also,    many   of    their                                                              
responsibilities  and functions come  from federal law  (the Clean                                                              
Air Act,  the Clean Water  Act, the Safe  Drinking Water  Act, the                                                              
Circle of  Superfund, Oil  Pollution Act, and  more), and  much of                                                              
their  funding   is  federal  money.   With  that   funding  comes                                                              
oversight by the  Environmental Protection Agency  (EPA) and other                                                              
agencies. He and  his directors interact daily  with primarily the                                                              
EPA on  regulatory programs and  on-shore spill response  and with                                                              
the US Coast Guard for off shore spills.                                                                                        
                                                                                                                                
He  explained that  the way  they carry  out their  mission is  by                                                              
developing  standards. In  protecting human  health, whether  it's                                                              
the  air  or  water  or  the  food,   they  develop  science-based                                                              
standards that  are meant to assure  that water, air, and  food is                                                              
clean and safe  for humans. For instance, the  standards for water                                                              
quality took  four to five  years to develop  and get  approved by                                                              
the EPA. The public  has four or five processes for  comment to go                                                              
through  a proposed  standard and  go  through an  appeal if  they                                                              
don't like  it, but  once those standards  are developed  they are                                                              
used in  the permits.  For instance,  how much  mercury can  be in                                                              
the  water  and  still  be considered  safe  for  fish  and  human                                                              
consumption.  So, when  they look  at a  discharge, they  consider                                                              
how  much is  in the  water already  from  other dischargers,  how                                                              
much   occurs  naturally,   and   what   will  be   the   ultimate                                                              
concentration,  and then  they have  to decide  how often  it will                                                              
get monitored, etc.                                                                                                             
                                                                                                                                
3:42:51 PM                                                                                                                    
If  they   are  not   achieving  compliance,   depending   on  the                                                              
situation,  they  may  try  working  on  "compliance  assistance,"                                                              
particularly  if it's somebody  new or a  small community  that is                                                              
trying to  achieve a good  result. On the  other hand,  if someone                                                              
is a repeat  offender, they can  do "high level"  enforcement. The                                                              
work with  the Attorney General's  Office and can bring  civil and                                                              
even criminal charges.                                                                                                          
                                                                                                                                
COMMISSIONER HARTIG  said they respond  to oil spills  and protect                                                              
food  safety. DEC  also operates  the  State Environmental  Health                                                              
Lab that is  in Anchorage on Tudor  Road next to the  Human Health                                                              
Lab. This  lab is where the  state veterinarian who works  for DEC                                                              
is housed. It does a lot of work with animals.                                                                                  
                                                                                                                                
He  said  DEC  regulates  pesticides  and does  a  lot  of  public                                                              
outreach  and education,  even though  there is  less money  to do                                                              
it.  Probably  one  of  the  most  important  things  they  do  is                                                              
interact  with  the  EPA  federal requirements  so  they  work  in                                                              
Alaska, particularly rural Alaska.                                                                                              
                                                                                                                                
3:45:53 PM                                                                                                                    
The DEC has  five divisions. The Division of  Administration: does                                                              
contracting,   procurement,  budget   assistance,  limited   human                                                              
resource  work, and  houses the  environmental  crimes unit.  This                                                              
unit  has three  investigators  -  two criminal  investigators  in                                                              
Fairbanks  and one  civil  investigator  in Anchorage.  They  work                                                              
closely  with   the  Attorney  General's  Office   to  investigate                                                              
potential and more  severe violations that could  result in either                                                              
civil  or  criminal  counts.  They  also  work  closely  with  the                                                              
federal agencies:  US Department of Justice and  the US Attorney's                                                              
Office on joint investigations.                                                                                                 
                                                                                                                                
The four  other divisions are  Air Quality, Environmental  Health,                                                              
Spill Prevention and Response, and Water Quality.                                                                               
                                                                                                                                
3:47:11 PM                                                                                                                    
COMMISSIONER  HARTIG  began with  the  Air Quality  Division,  and                                                              
said  unlike the  other programs,  the permitting  program in  the                                                              
Air  Quality Division  is  largely supported  by  fees, a  federal                                                              
requirement. So,  these tend to be more complicated  and expensive                                                              
for people  to develop.  It's a  smaller division,  but its  rules                                                              
are from  the more  complicated areas  of environmental  law. They                                                              
regulate "point sources"  (out of the stack emissions)  as well as                                                              
"non-point  sources," road  vehicles, fugitive  dust, things  like                                                              
fine particulate  matter  in Fairbanks and  discharges from  power                                                              
plants,  and  get  involved  in   auto  emissions.  Fairbanks  and                                                              
Anchorage used to  have carbon monoxide programs,  and fortunately                                                              
both programs  were so  successful, largely  because the  cars are                                                              
cleaner these  days, that both programs  have either gone  away or                                                              
are going away.                                                                                                                 
                                                                                                                                
He  said the  Air  Permits Program  in  the Air  Quality  Division                                                              
issues three  types of  permits: the  construction permits  (Title                                                              
1) and  these are largely  based on federal  law and are  the most                                                              
complicated to  write. The next kinds  of permits are the  Title 5                                                              
(operating  permits) that  brings all  the different  requirements                                                              
relating  to air  emissions into  one operating  permit. They  get                                                              
renewed  every five  years and  these are  for larger  facilities.                                                              
Smaller  facilities  that  want  to  avoid  the  more  complicated                                                              
requirements  under Title  1 or Title  5 permits  can get  a minor                                                              
permit  and try  to limit  their emissions  and thus  not hit  the                                                              
more complicated federal levels.                                                                                                
                                                                                                                                
3:50:20 PM                                                                                                                    
COMMISSIONER HARTIG  said several new  EPA rules have come  out on                                                              
green house  gases and  one is a  reporting rule requiring  larger                                                              
facilities,  those  that  emit  more  green  house  gas  emissions                                                              
(primarily carbon  dioxide), to monitor  those and report  them to                                                              
EPA. That  program is run by  EPA, although DEC collects  the data                                                              
and will  use it when  they write  permits. Second,  though, which                                                              
started  in  January  and  is more  important  to  the  state,  is                                                              
regulating  the  larger  emitting  facilities for  COThey     must                                                              
                                                     2.                                                                         
apply "best available  control technology" to limit  the amount of                                                              
their carbon emissions.  So when the division writes  a new permit                                                              
to a  facility that needs a  Title 1 or  Title 5 permit he  has to                                                              
evaluate  what   technology  they  are  using  to   control  their                                                              
emissions of  carbon dioxide.  When they look  at that,  they look                                                              
at  economic  environmental,  energy  use  and  other  factors  to                                                              
determine  whether they  are meeting  the  best available  control                                                              
technology  standard.  There  isn't  a written  standard  at  this                                                              
point.                                                                                                                          
                                                                                                                                
Another  challenge is  the Fairbanks  Air  Quality. Fugitive  dust                                                              
results from  open air  operations. For example,  a large  pile of                                                              
coal  that sets  out and  it dries  and  the wind  blows the  dust                                                              
around. He said  they are getting more and more  complaints in the                                                              
state  about  two  types  of  fugitive   dust  emissions;  one  is                                                              
material  handling these  piles of  coal and  other material  like                                                              
that and  the other  is abrasive  blasting like  sand blasting  of                                                              
boat hulls  and bridges and  that sort of  thing. So, they  are in                                                              
the  process  of coming  up  with  regulations that  will  control                                                              
those.                                                                                                                          
                                                                                                                                
COMMISSIONER  HARTIG  said gas  line  permitting  and North  Slope                                                              
Cumulative Air  Quality are somewhat  inter-related. On  the North                                                              
Slope historically  when new facilities were being  developed that                                                              
would have  air emissions  they would be  permitted and  looked at                                                              
separately.  Now because  of the  number of  facilities up  there,                                                              
the  cumulative  impacts  have   to  be  considered.  So,  if  the                                                              
cumulative  amount of  particulate  pollutants  reaches a  certain                                                              
level,  that will  stop  development. So,  it's  important to  get                                                              
ahead  of  that and  track  the  emissions,  model them  and  make                                                              
predictions.                                                                                                                    
                                                                                                                                
3:54:34 PM                                                                                                                    
Gasline  permitting: It  is important  to be  doing this  modeling                                                              
and  data   collecting  now,   because  permitting   these  larger                                                              
facilities require  at least  a year's worth  of air  quality data                                                              
looking at  all the  different conditions on  an annual  basis. He                                                              
recalled  that  AGIA   talks  about  permits  in   2014;  so  that                                                              
permitting effort would have to occur by 2012/13 - now.                                                                         
                                                                                                                                
3:55:19 PM                                                                                                                    
COMMISSIONER  HARTIG  explained  that  the  EPA  has  set  various                                                              
national, human,  health-based, air  quality standards.  When this                                                              
occurs  they look  at  the entire  population  - children,  people                                                              
with asthma, pregnant  women, and older folks.  Recently, they set                                                              
an air  quality standard  for fine  particulates at PM2.5  microns                                                              
for a  24 hour  period. These  really small  particulates  can get                                                              
deep  into lungs  and  cause respiratory  problems,  which can  be                                                              
severe. This  standard is  not being  met in Fairbanks,  primarily                                                              
because PM2.5  mainly arises  from the burning  of wood  and other                                                              
hydrocarbon  fuels. Around  the time  that EPA  set this  standard                                                              
was when  home heating and  diesel fuel prices  shot up. A  lot of                                                              
people in Fairbanks  were turning to wood for heat  and power, and                                                              
there was no way  to stop it. So, Fairbanks has  a "non-attainment                                                              
area" under  the Clean Air Act,  the state is required  to come up                                                              
with a  plan to bring  them into attainment.  That plan has  to be                                                              
in place and approved  by EPA by December 2012, and  then there is                                                              
a compliance  deadline  of 2014.  No one  believes that  Fairbanks                                                              
will be  able to come  back into compliance  by 2014, but  as long                                                              
as the steps  are being taken,  that deadline can be  extended. He                                                              
emphasized  the  bottom  line  is  not  just  complying  with  the                                                              
federal requirement, but about protecting human health, too.                                                                    
                                                                                                                                
He explained  that the state has  the responsibility of  coming up                                                              
with this  attainment plan.  DEC has an  MOU with Fairbanks  North                                                              
Star Borough  where  they would  take the lead  in developing  the                                                              
plan,  working with  the  community, and  they  would provide  the                                                              
technical support  and expertise to  help inform that  plan. Also,                                                              
EPA  has  been  heavily  involved  and  cooperative  in  providing                                                              
information to  help the community  develop this plan.  The bottom                                                              
line is this  is difficult for  the community of Fairbanks  and he                                                              
didn't think  it would be solved  within the next 10 years.  It is                                                              
important when asking  people to change the way they  do things to                                                              
be able  to demonstrate  that whatever  they  do will actually  be                                                              
worth  the  sacrifice  in  terms  of air  quality  that  would  be                                                              
achieved.                                                                                                                       
                                                                                                                                
3:59:58 PM                                                                                                                    
CO-CHAIR  WAGONER asked  if Fairbanks  is the  only place  that is                                                              
having that size of particulate matter problem.                                                                                 
                                                                                                                                
COMMISSIONER HARTIG answered  that it is the only  area that is at                                                              
non-attainment  right now, but  other areas  are close.  Juneau is                                                              
close  to non-attainment  in  the  Mendenhall Valley.  Juneau  has                                                              
been proactive  by having  non-burn days when  the air  quality is                                                              
below  a  certain  level.  It  is  more  difficult  for  Fairbanks                                                              
because it  is colder.  EPA is considering  whether to  lower this                                                              
PM2.5 standard  and will make a  decision next summer.  If they do                                                              
that, Fairbanks would be back in and maybe Mat-Su Valley.                                                                       
                                                                                                                                
CO-CHAIR  WAGONER  said  the  reason he  asked  that  question  is                                                              
because he  represents one  place that burns  a lot of  beach coal                                                              
for  home heating  when  it gets  really cold.  He  was sure  that                                                              
causes  a lot  of particulate  matter, and  he asked  if there  is                                                              
going to be a standard that has a certain number of days.                                                                       
                                                                                                                                
COMMISSIONER HARTIG  answered that there may be  areas within that                                                              
area where  the air quality  is not being  met. But that  does not                                                              
mean  that they  entire  county  or borough  would  be labeled  as                                                              
such.                                                                                                                           
                                                                                                                                
4:02:35 PM                                                                                                                    
SENATOR  FRENCH  asked if  North  Pole  is also  a  non-attainment                                                              
area.                                                                                                                           
                                                                                                                                
COMMISSIONER  HARTIG  answered  yes.  This  is not  easy  for  the                                                              
residents  who are  trying  to keep  their  fuel  costs down.  The                                                              
community's reaction  to this initiative was not  well received. A                                                              
citizen's initiative  was passed  last summer  that took  away the                                                              
borough's  ability  to regulated  home  heating fuel  devices  and                                                              
that has  "put the monkey  on the state's  back" as  the regulator                                                              
for  individual  stoves  and  boilers. The  borough  is  trying  a                                                              
voluntary educational  approach  with a grant  of $1 million  from                                                              
the federal  Department of  Energy and they  are changing  out the                                                              
more dirty  stoves to cleaner burning  stoves, using dry  wood and                                                              
dampering  for a  more  efficient burn.  They  are having  success                                                              
there and it will  go a long ways to curing the  problem, but they                                                              
don't  anticipate  getting  them   into  total  attainment.  Other                                                              
sacrifices will  have to be  made. The  problem they are  going to                                                              
run into is they  are going to run out of the $1  million and they                                                              
need another $4 million  to get to all the rest  of the stoves and                                                              
boilers  they want  to change out.  They are  searching for  state                                                              
help and federal grant money as well.                                                                                           
                                                                                                                                
CO-CHAIR  WAGONER  asked what  types  of  stoves and  boilers  the                                                              
residents are replacing the current units with.                                                                                 
                                                                                                                                
COMMISSIONER HARTIG  answered that it is a combination  of things.                                                              
Wood  pellet stoves  are being  used and  they are  trying to  use                                                              
more  modern and  fuel-efficient  stoves. He  would  follow up  on                                                              
that.                                                                                                                           
                                                                                                                                
4:06:31 PM                                                                                                                    
COMMISSIONER  HARTIG   explained  that  even  if   individuals  in                                                              
Fairbanks have clean  burning stoves it won't necessarily  help if                                                              
they  use  wet  wood.  One of  their  challenges  is  getting  the                                                              
quantity of  wood they  need and  having a place  to dry  it. They                                                              
have been  having discussion with  the Division of  Forestry about                                                              
the  Tanana Valley  Forest;  the  problem with  that  is that  the                                                              
forest is far  from town and it's  difficult for them  to get wood                                                              
there. But the idea would be to trade out wet wood for dry wood.                                                                
                                                                                                                                
4:08:04 PM                                                                                                                    
SENATOR STEDMAN  said that it seems  the solution to  this problem                                                              
is to gasify Fairbanks  and not use wood burning  stoves. He asked                                                              
what percentage of  the Fairbanks they need to get  on natural gas                                                              
or propane to alleviate the problem.                                                                                            
                                                                                                                                
COMMISSIONER  HARTIG answered that  is what  the mayor  and people                                                              
would like  to do. They do import  some natural gas, and  they are                                                              
looking at every  which way to get more in. This  is a longer term                                                              
solution. The 2012  deadline for the attainment plant  and 2014 to                                                              
be able to demonstrate  you're going to get there  with reasonable                                                              
progress  means  they  can't  wait   10  years  for  a  gas  line.                                                              
Whatever  they do would  be an  interim solution.  He thought  the                                                              
EPA would  work with  them if it  looked like  they would  get the                                                              
gas.                                                                                                                            
                                                                                                                                
SENATOR  STEDMAN  asked  the commissioner  to  clarify  what  will                                                              
happen to the  Fairbanks community should it chose  to ignore this                                                              
initiative.                                                                                                                     
                                                                                                                                
COMMISSIONER  HARTIG  answered three  things.  The  state has  the                                                              
responsibility  to write  the attainment  plan, otherwise  the EPA                                                              
will write  it. If they didn't comply  with the plan,  the EPA can                                                              
limit the  federal highway funds  coming to the state  (which they                                                              
have done  in other states),  and particularly to  that community;                                                              
second,  the  new larger  facilities  that  who need  air  permits                                                              
would  have  a  more difficult  time  getting  them;  lastly,  any                                                              
federal projects  would have to show  that they are not  adding to                                                              
the issue. It would stifle economic development.                                                                                
                                                                                                                                
4:11:49 PM                                                                                                                    
COMMISSIONER HARTIG  said that they  are trying to develop  a plan                                                              
with the  community  to find out  where the  most PM2.5  emissions                                                              
are coming from and figure out what options make the most sense.                                                                
                                                                                                                                
4:12:38 PM                                                                                                                    
He said  the Environmental  Health Division  is probably  the most                                                              
diverse  and  the  largest.  It includes  such  things  as  public                                                              
drinking water system  oversight and regulation largely  driven by                                                              
federal  law called  "public drinking  water  rules." These  rules                                                              
might limit  things such as total  coli form bacteria  and require                                                              
purifications standards  for ground or surface water.  There could                                                              
be  a particular  type  of bacteria  that  could  come of  concern                                                              
nationally and  they would  issue a rule  on how to  address that,                                                              
for instance.  Again,  these rules  either fit  well in Alaska  or                                                              
they are  very tough to administer  particularly out in  the rural                                                              
communities; they're  costly because  they are a  relatively small                                                              
group  of  rate   payers.  DEC  works  very  closely   with  these                                                              
communities.  If   the  state  does  not  maintain   primacy  with                                                              
drinking water compliance, than the EPA would do so.                                                                            
                                                                                                                                
The  division does  pesticide control,  and writes  an average  of                                                              
five  permits  a  year  mainly  for  state  agencies  because  any                                                              
application  of  pesticides  by  a  state  agency  on  state  land                                                              
requires a  permit. If it  impacts water,  a permit would  have to                                                              
be issued  for that. These permits  can be very  controversial. He                                                              
assured  the committee  the permits  are  very science-based  they                                                              
work closely with  the EPA in deciding what pesticides  to use and                                                              
how they should be applied.                                                                                                     
                                                                                                                                
He  said Solid  Waste Management  is another  program DEC  covers.                                                              
These are areas  from an unregulated dump in a  rural community to                                                              
an Anchorage  land fill. They  also have the Environmental  Health                                                              
Laboratory.  DEC  does testing  of  chemical samples,  animal  and                                                              
fish tissue, animal  necropsies. They monitor outbreak  of disease                                                              
in the  animal populations  and work with  Fish and Game  or other                                                              
veterinarians  around the  state to investigate.  It is  important                                                              
to watch this, because  it can affect the health  of other animals                                                              
as well as jump  from the animal population to  commercial animals                                                              
or to  humans. The  lab tested  Avian flu  for instance  when that                                                              
was a big  issue. He said the  Lab also looks for  contaminants in                                                              
the environment and  they monitor fish tissue that  ADF&G sends in                                                              
from around  the state.  This is important  for the  reputation of                                                              
the  Alaska  Seafood  and Marketing  Industry,  because  in  other                                                              
states before  they allow Alaskan  products to come in,  they want                                                              
lab certification that it is free of contaminants.                                                                              
                                                                                                                                
4:17:23 PM                                                                                                                    
COMMISSIONER  HARTIG   said  one   of  the  challenges   that  the                                                              
Environmental Health  Division has is  the inspection of  food. In                                                              
most states  it is run  by the counties.  In Alaska  that wouldn't                                                              
work.  Anchorage   is  the  only  community  that   runs  its  own                                                              
restaurant inspection  program; Fairbanks  and Juneau rely  on the                                                              
state to do  it. It is very  difficult to get inspectors  out into                                                              
rural Alaska to  investigate. The recommended rate  of inspections                                                              
of more high risk  restaurants is twice a year,  rural Alaska gets                                                              
it  once every  four years.  They try  to deal  with other  things                                                              
like inspection  programs and food handler  certification programs                                                              
that provide  another level  of safety;  however, they  fall short                                                              
with inspections.                                                                                                               
                                                                                                                                
Another challenge  is the solid  waste landfills in  rural Alaska.                                                              
The  Denali  Commission,  the  EPA,   and  the  US  Department  of                                                              
Agriculture can  fund landfill  work, but it  just falls  down the                                                              
list  of things.  Because  even though  these  projects could  get                                                              
funded through  the Village  Safe Water Program,  they are  not as                                                              
high a priority as drinking water or waste water treatment.                                                                     
                                                                                                                                
He said  the department does  paralytic shellfish  poisoning (PSP)                                                              
testing for  the growing shellfish  industry in Alaska.  This last                                                              
summer a  couple of recreational users  got sick from PSP  and had                                                              
one fatality in  Alaska. So, they are looking at  what can be done                                                              
for  the  recreational users.  They  have  come  up with  a  pilot                                                              
program  for  $400,000  that would  work  with  local  communities                                                              
where  they  would  collect  the  samples and  send  them  to  the                                                              
Environmental Health  Lab. They would  run the PSP tests,  send it                                                              
back to  the community  and then the  local government  could post                                                              
the  results. If  there was  a problem  they could  work with  the                                                              
State  Human Health  People  to evaluate  the  results and  advise                                                              
people on  the risk. There  currently is no recreational  testing.                                                              
He stressed  that the  Environmental Health  Lab is not  competing                                                              
with  private industry.  The commercial  people don't  want to  do                                                              
the  type  of  tests  they are  doing,  because  it's  either  not                                                              
profitable because  there is  not enough of  that kind of  work or                                                              
its cutting edge equipment and/or methodologies.                                                                                
                                                                                                                                
4:21:17 PM                                                                                                                    
He said regulation  of food safety is one of  the initiatives that                                                              
can be put in  the "challenged" category, and they  are working on                                                              
where  to  draw that  line.  They  don't  want to  regulate  small                                                              
charity events like potlucks.                                                                                                   
                                                                                                                                
CO-CHAIR  WAGONER  asked  if  someone  in  Ketchikan  was  raising                                                              
oysters,  do they have  to take  their samples  and send  them all                                                              
the way to Anchorage. Did the UAS do testing at one time?                                                                       
                                                                                                                                
COMMISSIONER  HARTIG answered that  he would  have to get  back to                                                              
him on  that. He said  there are two  different kinds  of growers,                                                              
those  that  farm  and  those  that   collect  in  the  wild.  The                                                              
department would  go out and  do sampling  in that area  for those                                                              
that collect  in the wild; it  would have to be  sampled regularly                                                              
because with  PSP you  can sample  in an area  for years  and it's                                                              
clean, but  then come back the next  time and have PSP.  It's hard                                                              
to  predict.  They  are  working   on  developing  an  alternative                                                              
methodology where  sampling could be simplified to  make it easier                                                              
to operate in the  field. But it needs to be  approved by the Food                                                              
and   Drug  Administration.   PSP   testing   is  fairly   heavily                                                              
subsidized  by the  state  recognizing  it is  a  new and  growing                                                              
industry where the tests are complicated and expensive.                                                                         
                                                                                                                                
4:24:10 PM                                                                                                                    
The  Spill  Prevention  and  Response  Division  (SPAR)  tries  to                                                              
initially prevent  spills and  if a  spill happens, they  respond.                                                              
Core service  is emergency  response and not  to just oil,  but to                                                              
other hazardous substances.  The Hazmat Program is  usually run at                                                              
a  local   level  and  the   department  provides   oversight  and                                                              
coordination with  the fire department  and such. They  have their                                                              
Industry  Preparedness  Program with  people  who  try to  prevent                                                              
spills. State law  requires having plans on how  they will prevent                                                              
and  respond if  there  is a  spill. Those  "C-plans"  have to  be                                                              
submitted  to DEC for  approval and  have to  go through  a public                                                              
review and comment  period, an appeal process, and  all the larger                                                              
plans get  appealed. Once  a company  is approved  it has  to have                                                              
the  resources in  place to  comply with  that plan  and do  spill                                                              
drills and other  drills, both announced an unannounced.  The next                                                              
step is  if something goes  wrong and there  is a spill,  then the                                                              
Prevention  and Energy  Response  Program  (PERP) people  respond.                                                              
Before the  Big Gulf spill people  didn't realize that  the person                                                              
who  caused the  spill  has to  respond  to it.  The  government's                                                              
responsibility is  to provide the  oversight and to make  sure the                                                              
person is responsible  and their contractors respond.  If they are                                                              
incapable of mounting  the response and slow in  mounting it, then                                                              
the government  will  step in with  its resources,  "but we  don't                                                              
have a standing army of spill responders."                                                                                      
                                                                                                                                
SENATOR   FRENCH   said  he   was   curious  about   this   year's                                                              
supplemental  that has to  do with the  comprehensive oil  and gas                                                              
infrastructure  risk assessment  that was  funded with $5  million                                                              
in  2007.  This  year  because  of  a  change  in  the  scope  and                                                              
methodology,  DEC  is  talking  about giving  back  some  of  this                                                              
money. The  note says: "The  result of  the study was  confined to                                                              
the  North  Slope  and  did  not   include  the  level  of  detail                                                              
initially envisioned."                                                                                                          
                                                                                                                                
4:28:06 PM                                                                                                                    
COMMISSIONER HARTIG said  he would come back to that,  and went to                                                              
detail  the  Contaminated  Site  Program  where  the  PERP  people                                                              
assess what  is causing  a spill  and then  put together  a health                                                              
safety response.  Once the  emergency issues  are taken  care, the                                                              
loose  contamination has  to  be cleaned  up.  Clean up  standards                                                              
have to set up and those plans have to be approved.                                                                             
                                                                                                                                
CO-CHAIR WAGONER asked where the abandoned drums are located.                                                                   
                                                                                                                                
COMMISSIONER  HARTIG guessed  it was  an old  military site,  Sand                                                              
Point.  He  said  several  abandoned   military  sites  have  been                                                              
identified for  contamination review and  are being taken  care of                                                              
one by one, and good progress is being made.                                                                                    
                                                                                                                                
He touched  on the  declining prevention  account fund  that helps                                                              
fund the  day to day  operations of SPAR.  He explained  that most                                                              
of SPAR's  operating budget comes  from the Response Fund  that is                                                              
the  nickel a  barrel tax  (the  470 Fund).  It is  broken into  a                                                              
Spill Prevention  Account and a  Response Account.  The Prevention                                                              
Account gets  4 cents and  the Response  Account gets 1  cent. The                                                              
Prevention account  helps fund the  day to day operations  of SPAR                                                              
- the  people that  review and approve  the C-plans.  The Response                                                              
Account has  $50 million  and that  1 cent kicks  in when  it goes                                                              
below  that. When  they respond  to a  spill they  try to  recover                                                              
costs from  the person who  is responsible  for it. That  would go                                                              
into  a mitigation  account  and  the legislature  would  consider                                                              
appropriating that back into the Response Fund to make it whole.                                                                
                                                                                                                                
All of  this is based  on production,  the commissioner  said, and                                                              
with production  declining it means  the amount going in  is going                                                              
down to  the tune  of 6 percent  a year. Over  the past  few years                                                              
the nickel/barrel fund  is in the red, but it has  been made up by                                                              
the fund's historic  surplus. SPAR will be completely  in the red,                                                              
however, by 2014.                                                                                                               
                                                                                                                                
4:33:18 PM                                                                                                                    
Another  challenge is  changing conditions  on the  North Slope  -                                                              
aging   infrastructure,   declining   production,  talk   of   OCS                                                              
development,  extended-reach drilling  on BP's  Liberty Project  -                                                              
and the possibility  of more challenging operating  conditions. As                                                              
they saw  a couple of  weeks ago because  of the incident  at Pump                                                              
Station 1, they  had very limited time to bring that  line back up                                                              
before it froze.                                                                                                                
                                                                                                                                
Under  Initiatives,   they   are  trying   to  identify   all  the                                                              
historical   contaminated  sites   in  the   area  for   potential                                                              
construction.  They have also  been working  with the  Coast Guard                                                              
on  the Aleutian  Island Risk  Assessment with  monies taken  from                                                              
the Selendang  Ayu criminal settlement.  More and more  traffic is                                                              
going through the  Aleutian Island area, and upgrades  in tracking                                                              
ships as well  as having access to their information  and adequate                                                              
tow ropes to keep  them off reefs may help provide  a template for                                                              
other  areas in  Alaska that  are  beginning to  see more  traffic                                                              
like   the  Bering   Straits  going   north  -   because  of   OCS                                                              
development.                                                                                                                    
                                                                                                                                
4:39:15 PM                                                                                                                    
Deepwater  Horizon   Lessons  and   Risk  Assessment   Work  Plan:                                                              
Jurisdiction:  It's difficult  to  understand a  lot of  different                                                              
agencies regulate  oil spills. Commissioner Hartig  explained what                                                              
pipelines are regulated  by DEC and which are  regulated federally                                                              
- the gather  center at Pump  Station 1 (crude oil  pipeline). DEC                                                              
has some  jurisdiction over leak  detection requirements  on TAPS.                                                              
The feds  don't regulate flow lines;  in fact, Alaska is  the only                                                              
state that regulates flow lines. Two spills happened in 2006.                                                                   
                                                                                                                                
SENATOR FRENCH  asked if the one  in August was the  largest spill                                                              
in the North Slope's history.                                                                                                   
                                                                                                                                
COMMISSIONER  HARTIG answered  yes;  the leaks  occurred on  crude                                                              
oil  pipelines. Many  of  the questions  from  the legislature  he                                                              
received  after  this  spill  is  what DEC  is  doing  to  prevent                                                              
another  one. So,  they  proposed an  Alaska  risk assessment  ($5                                                              
million  capital appropriation)  that  would be  divided into  two                                                              
phases. The  first phase  would get  nationally known  contractors                                                              
to  design  the  assessment  and   then  go  out  to  the  public,                                                              
industry,  and the  National Academy  of Science  and ask  them to                                                              
review that  methodology for all  TAPS facilities. They  came back                                                              
with a  detailed look  at all  the risks  associated with  all the                                                              
facilities, but  it would go way  beyond $5 million and  could not                                                              
be implemented  very easily. However, alternatives  were suggested                                                              
like  statistical analysis  looking for  trends. That  information                                                              
was pulled  together in  a risk study  for continuing  North Slope                                                              
operations that  was reviewed by  an expert panel  of consultants.                                                              
They identified  the  flow lines  that DEC was  regulating  as the                                                              
biggest risk.                                                                                                                   
                                                                                                                                
4:46:08 PM                                                                                                                    
SENATOR  FRENCH asked  for clarification  on which  flow lines  he                                                              
meant  - the  ones  downstream of  the  gathering  centers or  the                                                              
three-phase upstream flow lines to the wellhead.                                                                                
                                                                                                                                
COMMISSIONER  HARTIG   answered  that  they  identified   that  in                                                              
general it's  both pipelines -  the crude oil transmission  lines,                                                              
the  flow lines,  the  facility  and all  the  different types  of                                                              
pipe.                                                                                                                           
                                                                                                                                
COMMISSIONER  HARTIG explained  that he  included everything  from                                                              
the  wellhead   at  Pump  Station   1  to  the   gathering  center                                                              
(regulated by the feds). If it is a pipeline it is riskier.                                                                     
                                                                                                                                
SENATOR  STEDMAN  asked  him  to   wrap  his  information  in  his                                                              
presentation over  the amount of  reconditioning or  rebuilding of                                                              
line segments that have been done the last few years.                                                                           
                                                                                                                                
COMMISSIONER HARTIG  replied that he  does not have  those figures                                                              
with him, but will  get them to him. He continued  with the Alaska                                                              
Risk Assessment.  Of the  pipelines, the  most risky subset  would                                                              
be the three  phase lines, not the  flow lines. Prior  to the this                                                              
risk  assessment DEC  had already  done  a number  of things:  put                                                              
together  regulations  for  flow  lines, got  the  information  on                                                              
corrosion  and monitoring  control programs,  did an inventory  of                                                              
all  the  lines   and  triaged  the  most  high   risk  ones,  did                                                              
engineering  reviews of the  more high-risk  lines looking  at the                                                              
actual data  from the  companies, and  did field inspections.  So,                                                              
when  the  risk  assessment  identified  the  flow  lines  as  the                                                              
highest risk  areas, they had an  expert panel come up  with their                                                              
recommendations  for mitigation  measures  beyond  what they  were                                                              
already   doing.  It  looked   at  a   standardized  approach   to                                                              
evaluating  spills and  collecting data  on them  in a  systematic                                                              
way  that  would  also  trigger  a  deeper  analysis  (root  cause                                                              
analysis) into all  the root causes of a spill. It  also looked at                                                              
coming  up with key  indicators  that should  be tracked in  these                                                              
pipelines that would  give early indication of  corrosion or other                                                              
problems,  and a  way of  reporting those  to the  agency, so  the                                                              
public  would also  have that  information. This  report has  been                                                              
published and  they are now in  the process of  implementing these                                                              
changes.                                                                                                                        
                                                                                                                                
COMMISSIONER  HARTIG  mentioned  another  way to  regulate  is  by                                                              
looking at  a company's  management and  risk control  systems. At                                                              
this time,  DEC has  not gone  to this  kind of safety  management                                                              
system, but they  are looking at it. It is being  used more by the                                                              
federal  agencies, and  the state  doesn't want  to have  anything                                                              
that is inconsistent  with that. He said they also  put together a                                                              
GIS  data  base  of  the pipeline  inventory,  so  issues  can  be                                                              
identified in future  spills. There are still a few  items left to                                                              
finish the risk assessment.                                                                                                     
                                                                                                                                
Several years ago  they got a $240,000 appropriation  for a marine                                                              
traffic  risk assessment  for Cook  Inlet.  This is  not just  for                                                              
Tesoro and  its crude  oil operations  but as  they bring  in more                                                              
aviation gas for  the International Airport. They  worry about the                                                              
ice conditions  and tides et  cetera. The  money was enough  for a                                                              
work plan,  but it  wasn't enough to  execute the risk  assessment                                                              
itself.                                                                                                                         
                                                                                                                                
4:56:12 PM                                                                                                                    
The  Water Division,  Facilities Section,  of the  DEC makes  sure                                                              
that the  water you drink  is safe, but  it also makes  sure those                                                              
who are  operating water facilities  are doing their job.  They do                                                              
not  just  regulate  these  facilities,  they  run  projects.  The                                                              
Village Safe  Water Program  is for communities  of 600  people or                                                              
less is in  this section and  the department does grants  on water                                                              
and  sewer projects.  Those grants  are 75  percent federal  money                                                              
coming  from  EPA  or the  US  Department  of  Agriculture,  Rural                                                              
Development Program,  with a 25 percent general fund  match by the                                                              
state.  When this program  was started  about  30 years ago,  less                                                              
than 50 percent  of communities in  rural Alaska had this  kind of                                                              
service;  now it's  closer to  90 percent.  The biggest  challenge                                                              
for that  program is  money. He said  federal funding  has decline                                                              
by  40   percent  in   the  last  seven   years,  which   means  a                                                              
corresponding  40 percent  drop on  the state  match. So,  as they                                                              
get  to  the last  10  percent,  those  are  the harder  to  serve                                                              
communities  with  water  issues  or permafrost.  In  addition  to                                                              
this, there  are facilities that  have been running for  30 years,                                                              
so  facilities need  to be  upgraded and/or  replaced or  replaced                                                              
because the community is growing.                                                                                               
                                                                                                                                
The Facilities  Program has the  Municipal Grant and  Loan program                                                              
for the  larger communities.  It is primarily  a loan  program and                                                              
primarily state  funded. The state puts  up a match and  if you're                                                              
community  is larger  your match  has to  be larger.  If they  can                                                              
find  federal  money  that  can  be  used  for  their  match,  but                                                              
typically it is  local money. Typically is has been  $23 million a                                                              
year, but  this year in the  governor's proposed budget  it is $20                                                              
million.                                                                                                                        
                                                                                                                                
COMMISSIONER HARTIG  explained the way  the program works  is they                                                              
solicit applications  in  the fall, they  have published  criteria                                                              
where the  projects are  ranked, and  then they  give the  list to                                                              
the legislature.                                                                                                                
                                                                                                                                
The biggest  challenge is the  declining federal money.  Each year                                                              
they  go through  the  same  cycle and  in  some years  people  do                                                              
better  than  others. It  depends  on  who  applies and  what  the                                                              
products are.  In some instances  a project just won't  ever score                                                              
well  but it  is  really a  legitimate  needed  project. And  then                                                              
there would be  an opportunity to do an appropriation  outside the                                                              
Municipal  Loan  Program for  that.  DEC  would  be called  on  to                                                              
advise  the  governor  about  a   potential  veto  and  weigh  the                                                              
importance  of the  project. This  program  is highly  at risk  of                                                              
going  away because  it's too much  of an  Alaskan earmark.  There                                                              
are other federal  loan programs, but those don't work  as well on                                                              
the  smaller communities;  and he  emphasized  that he  saw a  40-                                                              
percent cut  on those by the  new Republican House that  is coming                                                              
into power now.                                                                                                                 
                                                                                                                                
5:02:01 PM                                                                                                                    
The  other  side  the water  quality  programs  is  setting  water                                                              
quality  standards  -  how  to  protect  the  uses  of  water  for                                                              
recreation,  for  drinking,  for  use by  fish  or  aquatic  life,                                                              
fishing, and  boating. They  also look at  what kind  of treatment                                                              
technology can achieve;  whatever of those is  more stringent that                                                              
is what they apply in writing a permit.                                                                                         
                                                                                                                                
The challenges  for the Water  Division are largely  the declining                                                              
federal   funding  in  the   Village  Safe   Water  Program,   the                                                              
incredible  backlog   of  permits  as  EPA  transfers   the  Water                                                              
Permitting Program  to DEC, and new requirements  being imposed by                                                              
the EPA for these permits over which they have veto authority.                                                                  
                                                                                                                                
5:05:12 PM                                                                                                                    
CO-CHAIR  WAGONER  asked if  his  department had  drafted  nuc1ear                                                              
energy regulations as outlined in SB 220.                                                                                       
                                                                                                                                
COMMISSIONER HARTIG  answered they had  not yet done so,  but they                                                              
also had  not received  any applications.  Other states  are going                                                              
through the  same thing right now,  and their plan is  to see what                                                              
they  are  coming up  with.  If  he  saw any  movement  towards  a                                                              
nuclear facility he would speed that up.                                                                                        
                                                                                                                                
CO-CHAIR PASKVAN  thanked the commissioner  for responding  to the                                                              
request that  he provide  in-depth information  on the  challenges                                                              
that the department was facing in particular parts of the state.                                                                
                                                                                                                                
SENATOR WIELECHOWSKI  said he would like to see at  some point any                                                              
recommendations  the  commissioner  had  on funding  for  the  Oil                                                              
Spill Response  and Prevention Fund.  He also wanted to  hear more                                                              
about the  transition from  federal oversight  to state  oversight                                                              
under the Clean  Water Act. He said he would submit  his questions                                                              
in writing.                                                                                                                     
                                                                                                                                
5:07:49 PM                                                                                                                    
CO-CHAIR  WAGONER found  no further  testimony  and adjourned  the                                                              
meeting at 5:07 p.m.                                                                                                            

Document Name Date/Time Subjects
DEC Overview (S) RES.pdf SRES 2/4/2011 3:30:00 PM