03/14/2016 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska Oil and Gas Conservation Commission (aogcc) | |
| SB163 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 163 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 14, 2016
3:47 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Peter Micciche
Senator Bert Stedman
Senator Bill Stoltze
MEMBERS ABSENT
Senator Bill Wielechowski
COMMITTEE CALENDAR
OVERVIEW: ALASKA OIL AND GAS CONSERVATION COMMISSION (AOGCC)
- HEARD
SENATE BILL NO. 163
"An Act relating to the nomination and designation of state
water as outstanding national resource water; and providing for
an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 163
SHORT TITLE: NATL. RES. WATER NOMINATION/DESIGNATION
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/29/16 (S) READ THE FIRST TIME - REFERRALS
01/29/16 (S) RES, FIN
02/15/16 (S) RES AT 3:30 PM BUTROVICH 205
02/15/16 (S) Heard & Held
02/15/16 (S) MINUTE(RES)
03/07/16 (S) RES AT 4:30 PM BUTROVICH 205
03/07/16 (S) Heard & Held
03/07/16 (S) MINUTE(RES)
03/14/16 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
KATHY FOERSTER, Chair
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, Alaska
POSITION STATEMENT: Presented an overview of the Alaska Oil and
Gas Conservation Commission (AOGCC).
RAYMOND SENSMEIER, Council Member
Yakutat Tlingit Tribe
Yakutat, Alaska
POSITION STATEMENT: Commented on SB 163.
DEBRA SCHNABEL, Executive Director
Haines Chamber of Commerce
Haines, Alaska
POSITION STATEMENT: Commented on SB 163.
LOUIE FLORA, Legislative Liaison
Alaska Center for the Environment (ACE) and Alaska Conservation
Voters (ACV), Juneau, Alaska
POSITION STATEMENT: Opposed SB 163 as written.
DEANTHA CROCKETT, Executive Director
Alaska Miners Association (AMA)
Anchorage, Alaska
POSITION STATEMENT: Supported SB 163.
ACTION NARRATIVE
3:47:23 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:47 p.m. Present at the call to
order were Senators Coghill and Chair Giessel. She expected a
quorum as the meeting goes on.
3:48:07 PM
SENATOR COSTELLO joined the committee.
^Overview: Alaska Oil and Gas Conservation Commission (AOGCC)
Overview: Alaska Oil and Gas Conservation Commission (AOGCC)
3:48:18 PM
CHAIR GIESSEL announced the first order of business would be an
Alaska Oil and Gas Conservation Commission overview. She noted
that the commission has been in existence since before statehood
and invited Ms. Foerster to make the presentation.
3:49:02 PM
KATHY FOERSTER, Chair, Alaska Oil and Gas Conservation
Commission (AOGCC), Anchorage, Alaska, introduced herself via
teleconference.
3:49:25 PM
SENATOR STOLTZE joined the committee.
MS. FOERSTER said the AOGCC is responsible for ensuring
protection of fresh groundwater and correlative rights,
protection of human health and safety in the operations they
oversee, greater hydrocarbon recovery, and prevention of
hydrocarbon waste. By statute there are three commissioners: one
must be a petroleum geologist (Dan Seamount), one must be a
petroleum engineer (herself), and third commissioner must have
training and experience relevant to the oil and gas industry,
and that seat has been vacant for about one year.
She said people often get the AOGCC confused with the Department
of Natural Resources (DNR) that as the state's landowner
representative, it is their job to ensure the state's resources
are developed for the maximum benefit of the state. AOGCC
regulates the industry everywhere throughout the state doing the
five things she mentioned earlier.
3:51:06 PM
SENATOR STEDMAN joined the committee.
She said the AOGCC gives the state no greater standing than
anybody else, because the department has to come before the
commission sometimes in adjudications. Also, for that reason the
AOGCC is an independent agency. Once the governor appoints a
commissioner he can only be removed for cause.
3:51:52 PM
The AOGCC provides regulatory oversight in Cook Inlet, on the
North Slope, and in other remote areas of the state. New
operators and changes of operators kept them pretty busy in
2015. They tried to take advantage of the industry downturn to
fill their critical vacancies along with implementing hydraulic
fracking regulations and subjecting them to federal review,
working with the Bureau of Land Management (BLM) on Legacy well
cleanup, and providing gas offtake allowables for Prudhoe Bay
and Point Thomson for major North Slope gas sales.
3:53:15 PM
MS. FOERSTER said that although Cook Inlet activity slowed,
North Slope activity remained high. BP and ConocoPhillips
continued their workovers and drillings. Hilcorp took over
operatorship of Milne Point and fixed a lot of broken wells. She
was anxious about all the activity because it takes a lot of
time to assure that drilling is done right.
In 2016 with continuing low oil prices, there has been a
slowdown in exploration activity, but drilling and well work
continue at a healthy pace. Having said that, BP recently
announced that they are going from six to two rigs and she
expects other operators will slow down as well.
Some new activities are going to happen, she said, but probably
at a cautious pace. BlueCrest and Furie will pursue developments
at Cosmopolitan and Kitchen Lights in Cook Inlet. Armstrong will
be doing something with the Repsol discovery on the North Slope,
but she didn't know what the activities would look like and said
it depends heavily on oil price.
3:54:37 PM
She said AOGCC has always had a tough time filling its
engineering and inspector vacancies because they compete with
the industry that they regulate for the same talent pool.
However, a silver lining to the downturn cloud is that some good
people have been freed up and the inspector and engineering
vacancies have been filled. One inspector retired earlier this
year and they were considering whether or not to replace him,
but will wait and see what happens with industry activity. If
Cook Inlet activity remains low, they won't have enough for that
person to do. They have three people on the North Slope at all
times and the only other vacancy is for the public commissioner.
MS. FOERSTER said the commission spent a lot of time over the
last few years updating hydraulic fracturing regulations, making
them easier for people to find and understand. After a number of
hearings they feel they "have landed on a very good set of
regulations." She explained that with all the bad press
fracturing has been receiving in the last few years, the feds
have been threatening to take over in any state that cannot
demonstrate it has adequate regulations in place. That was one
of the drivers behind updating those regulations. There were
also technological advances. Implementing these regulations
seems to be going well and they make sure that all goes well and
will adjust them as needed.
A nationally recognized organization did a complete review of
the hydraulic fracking regulations and gave them "really good
marks," which will help stave off federal overreach. The feds
have announced they will regulate hydraulic fracking on federal
lands, which impacts Greater Moose's Tooth, but they will try to
work with the Bureau of Land Management (BLM) folks to try to
get primacy or something that will allow AOGCC to do the
regulations.
3:57:32 PM
SENATOR MICCICHE joined the committee.
MS. FOERSTER said the BLM is in the process of spending the $50
million that Congress allocated to them to clean up the Legacy
Wells. At the end of this season they will have the worst
"stinkers" cleaned up with one exception, which has mainly
surface problems. The good news is that they started working on
the "Whistling Well" that has been leaking hydrocarbon gas for
years and were able to seal the leak in the initial prep work,
so it is no longer leaking, which makes plugging it safer and
less complicated.
3:58:41 PM
She thought they were all aware of what they decided for North
Slope gas offtake allowables and skipped to the summary of
rulings saying she would be happy to answer questions on any of
those. She added that some triggers in the rulings allow review
of progress in several areas. If the progress isn't made, they
will revisit the rulings.
Point Thomson cycling startup will start soon, she said, and
that will give them adequate information to affirm their
decision to allow Point Thomson gas to be sold.
4:00:17 PM
MS. FOERSTER said staffing the AOGCC is important. It has a
small and highly technical staff that makes important geologic
and engineering decisions every day. Each day they have to
answer questions such as: Is the proposed procedure for drilling
this well safe? Does it use good oil field practices to ensure
that hydrocarbons won't be wasted and people and the environment
won't be in danger? Will this production plan ensure greater
ultimate recovery of the valuable oil/gas and thermal resources
it aims to extract? Will operation of this well in this manner
create a threat to fresh ground waters? Will the proposed
variance from our rules still meet the protection requirements
intended?
She said being fully staffed with engineers, geologists, and
field inspectors is critical to addressing all of the issues
they face daily in a timely fashion and ensuring that they are
answering all the questions properly. The statute provides that
the AOGCC has three commissioners with diverse and relevant
qualifications. As commissioners, they make the final decision
on all of those questions and that is why one of them must be an
experienced petroleum geologist, one must be an experienced
petroleum engineer and the third must have knowledge and skills
relevant to the oil and gas industry, and specifically to the
parts of that industry that the AOGCC regulates.
MS. FOERSTER said their public seat has been vacant for over one
year, and while she and Dan Seamount have continued to run the
commission without the third member, it has not been easy and
some of their critical work has been slowed. When they are
delayed the industry is delayed and when the industry is
delayed, revenues to the State of Alaska are delayed. A quorum
of two commissioners is required for every decision. With only
two commissioners in place, whenever one of them is gone the
commission cannot act. Therefore, both she and Mr. Seamount do
everything they can to remain accessible even when they are
away. For example, while arranging and attending her mother's
funeral in Texas, she was responding to many phone calls and
emails so that commission work could continue. Since she wrote
this up, Mr. Seamount's mom passed away and he had to do
commission work while at her death bed with her. While he was
out with her, she had to postpone a hearing that was critical to
Hilcorp in a decision that would allow or not allow them to move
forward on some important well work.
4:02:59 PM
As another example, they have a pending adjudication request
before them that the operators requested they don't conduct
without a third commissioner. They do everything they can to
honor reasonable requests relative to due process, so that
decision has been delayed for a year now.
On a positive note, Ms. Foerster said, she and Mr. Seamount tend
to see eye to eye, so they haven't had any disputes with just
the two of them making decisions, but a fresh set of eyes would
provide a perspective they are missing. She is "the baby" in the
group and she has been there 11 years. Mr. Seamount's term
expires in less than one year. The statutes stagger their terms
so that one goes every two years. That is specifically so that
they will never fall below two commissioners, which would render
them incapable of acting on anything that comes before them, and
so that they are not training two new people at once. And as
time ticks along, they are at increased risk of having those
problems.
4:04:05 PM
CHAIR GIESSEL asked if she thought the skill set required of the
commissioner is very high.
MS. FOERSTER answered yes. She explained that a lot of people
know something about the oil and gas industry, but it really
needs to be something that is relevant to what the commission
does. Last year a great guy was nominated, but he didn't know
anything about what they do. That puts a strain on the staff and
other commissioners and makes it difficult for him to make
meaningful decisions.
CHAIR GIESSEL asked if the individual should have "down-hole"
experience.
MS. FOERSTER answered yes, that and/or relevant oil and gas law
experience. It might be an attorney in the private sector who
represents a lot of oil and gas companies, and he wouldn't have
down-hole experience, but he would hit the ground contributing,
because he would be able to help with all their legal questions.
CHAIR GIESSEL asked if this is a full time job.
MS. FOERSTER answered yes.
CHAIR GIESSEL asked if consequently it is a paid position.
MS. FOERSTER answered yes.
CHAIR GIESSEL said she knows the governor is diligently looking
for someone to fill that empty seat.
SENATOR MICCICHE asked if the exposure of having an
inexperienced commissioner is that they would be relatively
easier to convince to make a decision that is not in the best
interests of the state.
MS. FOERSTER answered yes. An inexperienced commissioner would
also slow the staff down in making recommendations and
evaluating things.
SENATOR MICCICHE asked if the staff shortages had caused a
backlog.
4:08:07 PM
MS. FOERSTER answered because of the industry slow-down they
were able to fill the one engineering position with a fellow who
has hit the ground contributing in a big way. The last inspector
vacancy was filled late last year, but unfortunately one of
their experienced inspectors retired early this year. However,
with the slow-down in work they are keeping up. She said they
will take a hard look at whether that that ninth inspector
vacancy should be filled right now, because oil prices will
rebound and things will get busy eventually.
CHAIR GIESSEL, finding no further questions, thanked Ms.
Foerster for paying attention to cost savings and updating the
committee on the commission's work.
SB 163-NATL. RES. WATER NOMINATION/DESIGNATION
4:09:34 PM
CHAIR GIESSEL announced consideration of SB 163. She limited
testimony to about 10 minutes per group.
4:10:00 PM
RAYMOND SENSMEIER, Council Member, Yakutat Tlingit Tribe,
Yakutat, Alaska, said he was born and raised in Yakutat and
thanked them for this time "to speak from my heart" on behalf of
the Tier 3 status of the forelands of Yakutat. He represents
Yakutat on the Transboundary Commission and said that many mines
in Canada are at the headwaters of fishing rivers; one is the
Alsek, which is 40 miles from Yakutat. The forelands, according
to scientists, Park Service and Alaska Department of Fish and
Game (ADF&G), is the "most pristine, cleanest waters of
drinkable water quality in Alaska and the nation."
He said there are approximately 90 streams with all five species
of salmon, char, cut throat, hooligan, seals and sea lions. This
area is covered with old village sites, old summer fish camps,
shaman's graves, and the bones of his ancestors. There is no
controversy involved in claiming this status.
MR. SENSMEIER digressed saying he is a veteran and asked if
there were any other veterans in the house. A number of people
stood.
CHAIR GIESSEL thanked them for their service.
MR. SENSMEIER said he served two tours in Vietnam; it haunts him
still and he suffers from PTSD. He is now fighting for his
country once again. Two men in a foxhole ask each other: Do we
have your back? The people in Yakutat have the same plea. He
asked that everyone today put their minds together and see what
life they can make for their children.
4:15:00 PM
CHAIR GIESSEL thanked Mr. Sensmeier for his testimony and
recognized Representative Kreiss-Tomkins present in the
audience.
4:15:27 PM
DEBRA SCHNABEL, Executive Director, Haines Chamber of Commerce,
Haines, Alaska, said the mission of the Greater Haines Chamber
of Commerce is promotion of economic growth that contributes
positively to the quality of life in Haines. A household survey
undertaken in 2011 by the McDowell Group as a basis for
developing their 2025 Comprehensive Plan concluded that 72
percent of Haines' residents rate quality of life as high.
Sixty-six percent named natural beauty and outdoor opportunities
as what they like most about Haines. The following is a summary
of her comments:
Haines is a community in transition. Their century-
long economic history includes simultaneous operation
of four salmon canneries, growth and the demise of
Porcupine (a mining town supporting over 5,000
people), simultaneous operation of two sawmills
manufacturing wood products for export, and a cruise
ship schedule that brought three to four vessels into
port weekly seasonally. So, Haines is a typical
Alaskan community that has prospered or not depending
on resource extraction, technological overhauls,
global market conditions, and politics. Today's
demographics describe a community of retirees,
craftspeople who renovate or construct their homes,
small business entrepreneurs, tour operators,
fishermen and health care providers.
Much of Haines' economic history has been decided by
the state because of land-granting by the state for
funding the Mental Health Trust and the University of
Alaska. The state owns and manages 32 percent of all
land in the Haines Borough. The Haines State Forest
and the Chilkat Bald Eagle Preserve fill out the
inventory. The Haines' State Forest, once an economic
engine for defining the timber industry, is now being
defunded by the state. The Chilkat Bald Eagle Preserve
is still an economic development opportunity with 77
percent of respondents supporting increased commercial
use. To the extent that their economy is still
resource dependent, the Chilkat River is the lifeblood
of commerce.
The Chamber views the nomination of the Chilkat River
as a Tier 3, outstanding national resource water, as
specified in 40 C.F.R. Part 131.12 as a strategy to
direct energy away from mineral resource development
in the tributaries of the Chilkat River and to focus
energy on preservation of wild salmon stock for
subsistence and commercial use in the development of
recreational tourism. It is the politics of defining
quality of life.
Some would say that a Tier 3 designation is necessary
to preserve cultural values including subsistence
lifestyles, necessary to preserve wild stock salmon
fisheries, necessary to maintain a semblance of
pristineness that attracts photographers, artists and
tourists seeking wilderness recreation. Those would
say it is necessary because it is impossible to
otherwise guarantee that there will never be a mishap,
an accident that could introduce toxins or pollutants
in the river, that it is impossible for a mining
operation to create a method of waste disposal that
would not pollute ground water or tributary or the
Chilkat River directly. Those who support a Tier 3
designation can envision a healthy economy that
restricts large scale resource extraction to fisheries
and an economy built on tourism.
4:19:30 PM
Those who do not support a Tier 3 designation believe
that traditional resource development undertaken with
modern methods and under the scrutiny of state
agencies responsible for protecting the state's waters
do not threaten water quality. They also think that a
mining operation, specifically, the Palmer Deposit, is
the sort of economic development that would improve
quality of life because it would create jobs and open
up more land. These people believe that there is
adequate regulation in place to preserve water quality
in the Chilkat River. Those who oppose a Tier 3
designation see it as an imposition on their lifestyle
and a threat to potentially meaningful economic
development.
In the 2011 survey, more than 50 percent of households
supported potential economic development opportunities
utilizing agriculture (95 percent) value-added wood
products (92pc), winter tourism (83 percent),
promotion of the Chilkat Bald Eagle Preserve (77
percent) and large scale timber harvesting (65
percent). Fifty percent of households supported large
scale mining such as the Constantine Mineral deposit
in the Chilkat Valley, the Palmer Project.
Being for or against Tier 3 for economic reasons is
only one aspect of this issue. The issue is more
broadly political. Some think it would take government
regulation of local life too far. We have been told at
a Q&A session held by the Department of Environmental
Conservation (DEC) in Haines on February 22 that any
activity currently undertaken in state waters would be
allowed to continue, but there is concern that a Tier
3 designation would prohibit infrastructure
development that may be deemed important to the
support of subsistence lifestyles and outdoor
recreation such as boat launches, docks, and operation
of machines that raise turbidity levels in the river.
MS. SCHNABEL said the political aspects of the proposed process
for designation of Tier 3 designation as outlined in SB 163 is
of concern to her membership according to a recent survey.
Governor Walker's assessment of "far-reaching
consequences" for economic development supports his
opinion that the basis for Tier 3 designation ought to
be political and not scientific. As written, SB 163
calls for legislative action on the designation.
Membership favors slightly a scientific basis, because
they realize that votes on issues affecting local
economies can easily be traded among legislators with
different constituent loyalties.
Another concern about SB 163 is the provision that any
single resident may nominate a Tier 3 designation.
Generally, consideration of a designation of far-
reaching consequence out to have a larger political
buy-in at the time of application. It needs scientific
buy-in and nominating applications must be vetted.
4:23:01 PM
In considering the process for designating state
waters as an outstanding national water resource, the
Chamber looks to the State Constitution, Article 8,
Natural Resources. The legislature has constitutional
authority for utilization, development and
conservation of all natural resources including water,
which is subject to appropriation, with priority to
prior rights and preference among beneficial uses and
the general preservation of fish and wildlife.
Constitutionally, the legislature may provide for the
administration and preservation of special use sites
for the use, enjoyment and welfare of the people as it
did with the formation of the Chilkat Bald Eagle
Preserve. The Constitution also provides that mineral
rights hold a priority right for extraction.
Nature offers us phenomenal choices that require good
judgement and a crystal ball. Decisions have
consequences. Reflecting on the potential impact of a
Tier 3 designation seems similar to the impact that
consideration of habitat for various species of
wildlife had in the management of our national
forests. A Tier 3 designation would change the course
of economic development for Haines, but in what
direction and characterization remains the purview of
those who remain to accept that challenge.
CHAIR GIESSEL asked when the DEC did their briefing if they
talked about the impact a Tier 3 designation would have on
fishing and use of boats in the river.
MS. SCHNABEL answered that she wasn't present for first 15
minutes and it was a question and answer briefing, but the DEC
representative did a very good job of maintaining that because
they didn't have any scientific baseline data about this entire
river system there were no answers at this time.
4:25:56 PM
CHAIR GIESSEL said the survey results were interesting.
MS. SCHNABEL explained that she was talking about two surveys.
One was the household survey done by McDowell group for 2011
about the broad questions of where they want the economy to go.
The Chamber survey was specific to the Tier 3 designation.
CHAIR GIESSEL went with the second survey and asked if 29
percent of the Chamber members supported the legislature making
that decision and 40 percent favored the administration, implied
that they thought the DEC bureaucracy would be less political,
because their decision would be based on science. She added that
many on the Resource Committee base their evaluation of the
things that come before them on the data and the science that is
presented.
MS. SCHNABEL noted that SB 163 provides for the development of a
process and it's hard to know how seriously that would be taken,
because she has heard that DEC is thinking of only collecting
the nominations and putting them forward to the legislature
without vetting the application or creating baseline data for
consideration. People are highly concerned about a political
body making such important decisions.
CHAIR GIESSEL said the committee is looking at the process
language carefully.
4:29:01 PM
SENATOR MICCICHE noted that a majority didn't favor a Tier 3
designation, but thought that the administration would be a
better choice than the legislature. He asked if her question
explained some sort of a process, because if the designation
decision would go to a commissioner, it would likely have a
scientific basis. However, the commissioner is appointed by a
governor who has very real political ties. In a legislative body
political feelings can be averaged out. If a body of water
shouldn't be designated, it shouldn't really matter which body
makes the decision. Commissioners can fluctuate dramatically.
MS. SCHNABEL said the Chamber survey followed the February 22
meeting when DEC information on existing regulations was
distributed. Haines has a section of citizenry who believe there
is a lot of exchanging of votes in the legislative process.
SENATOR MICCICHE said that may happen with some lower level
things, but it is less likely to occur on important issues, and
it can happen on both sides. He personally feels that a really
sound process would be the data processed by the administration
and forwarded to the legislature. That is generally how they
make most key decisions and he has a tendency to believe the
process works.
MS. SCHNABEL said she would take that information back with her.
CHAIR GIESSEL said she appreciated that comment and had never
traded a vote in her six years in the legislature. "I vote on
what I believe is the best thing for our state as a lifelong
Alaskan," she said.
4:33:34 PM
SENATOR STOLTZE commented that he was just confused about the
political judgment in Haines after 2012.
4:33:56 PM
LOUIE FLORA, Legislative Liaison, Alaska Center for the
Environment (ACE) and Alaska Conservation Voters (ACV), Juneau,
Alaska, read from prepared text opposing SB 163 as written. He
appreciated all the hard work that all legislators are doing
this year on the fiscal dilemma.
He said ACE/ACV supports a clear and transparent process to
designate Outstanding National Resource Water (ONRW). They
support an inclusive process that highlights local input that
creates compromise and a working relationship between
stakeholders. They are disappointed that Governor Walker would
see fit, out of all the options, to punt this Tier 3
determination responsibility to the legislature. Establishing
the legislature as the final arbiter of this big decision puts a
lot of pressure on committee chairs and individual legislators.
It also places the designation in a kind of chutes and ladders
game which some people and groups are better equipped to play
than others.
The primary problem that they see with having the legislature
making the final Tier 3 designation is that it creates a white
hot political debate, instead of a stakeholder discussion.
Additionally, a 90-day session is dominated by generally one,
two, or three major issues and may not provide enough time to
fully and fairly vet and decide on a Tier 3 nomination.
The DEC, with input from ADFG and DNR would yield better results
for Alaska in the long run and would foster better public
dialogue. The Office of the Governor is powerful enough to
absorb the shock of opposition from whomever is opposed to the
final outcome.
It is their understanding that all the western states have
adopted some method of designating Tier 3 waters as required by
the Clean Water Act, but only a small handful of states put the
onus of approving a Tier 3 designation on the state legislature.
Some western states like Montana that require legislative
approval of Tier 3 also automatically designate all waters in
national parks and protected areas as Tier 3 waters. Idaho
requires legislative approval and has no Tier 3 waters. Other
western states like Wyoming, Washington and Oregon leave the
designation process up to their equivalent of a DEC. Per capita,
there is a larger constituency for salmon and clean water in
Alaska than any other state in the Lower 48. So comparisons to
any of these states are tough.
MR. FLORA said ACE/ACV recognizes that a Tier 3 designation
might seem awkward in Alaska that has a superabundance of high
value rivers, wetlands, lakes and streams. However, there are
numerous reasons why it's important to have a science-based,
transparent and inclusive ONRW process that allows Alaskans to
seek Tier 3 protections for important waterbodies. For one
thing, the planet keeps breaking records; 2015 was the hottest
year in recorded history. January 2016 was the warmest January
in human record. Climate change is likely going to change a lot
of things for water in Alaska. Perhaps the stress of low snow
pack and increasing water temperature on our fish habitat will
engender more and more pressure to protect fish habitat from
additional stressors. At some point, likely soon, a whole lot of
people might be looking for a whole lot of answers on how to
protect our fish. A science-based determination process may be
more appropriate than a legislative process as people begin to
examine and judge the impacts of climate change on all of our
waters.
4:38:52 PM
It is conceivable though that Alaskans will submit applications
to protect waterbodies as a response to perceived policy and
decision making shortcomings. Of course everyone has their own
view of whether the balance is tilted too far one way or the
other. ACE/ACV believes that many current permitting processes
have structural deficiencies that prevent compromise or that
adequately protect our fish and water, such that ONRW
designation may be sought.
For example, since losing the Coastal Zone Management Program
which brought Alaskans to the table in major permit reviews,
there is no ability to comment on temporary water use permits
which are used as a proxy for major industrial water rights.
Public interest litigation has been stripped to bare bones and
public comment on oil and gas leasing has been consolidated.
Reasonable water quality measures to prohibit wastewater mixing
zones in salmon spawning habitat has been halted, the citizens
initiative to make cruise ships not dump sewage into state
waters has been rolled back. There is no requirement for
interagency consultation on major water withdrawal permits and
there is no law on the books to prevent dewatering of a salmon
stream.
MR. FLORA continued that under the Clean Water Act, the state is
not required to designate Tier 3 waters, it is only required to
have a process in place for citizens to make nominations. There
are various options for what that process could look like.
ACE/ACV does not think that a legislative process is the right
one for Alaska. SB 163 is merely a path to more shrill debate.
Alaska is uniquely dependent on fish and clean water so there is
going to be a lot of noise surrounding this issue.
There is obviously an interest in the legislature in mitigating
against Tier 3 nominations. Instead of creating a process where
Tier 3 nominations dominate the legislative conversation, the
Walker Administration should use the tools at its disposal to
build a public conversation around why Alaskans would seek Tier
3 nominations in the first place.
To summarize in closing, he said, Alaska is overdue for the
adoption of a clear, inclusive, science-based ONRW process.
While there is no requirement to designate waters, only to have
a process, whatever process is adopted should be workable for
the people of Alaska, and allow them to make nominations and
have the nominations considered. The decision should be science-
based, inclusive, and transparent. ACE/ACV believes that the
process that makes the most sense is to have DEC, the agency
with the water quality and permitting expertise, be in charge of
the decision.
SENATOR STOLTZE recalled that the governor suggested that the
legislative branch make the designations and he assumed that DEC
would be responsible for making the policy recommendations. DEC
Commissioner Hartig has been at the helm through three
administrations and has helped direct a lot of that traffic that
has been so inimical in Alaska. And he asked: "Why would you
want to trust a dirty guy like him?"
MR. FLORA replied that the commissioner has a long familiarity
with the process and he could create a fair process for
analyzing Tier 3 water nominations working with the
administration. Part of the issue now is that Alaskans didn't
know about Tier 3 waters before the governor introduced this
bill. Using science and having stakeholder involvement builds a
lot more cooperation and can bring Alaskans together in a larger
way than a potentially partisan legislative debate.
4:43:28 PM
SENATOR MICCICHE said in looking at the list of designated
waters in western states, the State of California is arguably
the most environmentally active state in the union and it has
only two bodies of water designated as Tier 3. California has a
robust process; it has a state agency or ten for just about
every decision that has to be made.
He struggles with Mr. Flora's logic, because he envisions a
process where DEC and DNR make a recommendation to the
legislature, a body that changes slowly but is relatively
consistent. The body has been deliberative even if they don't
all agree with every decision. But there is really the potential
for dramatic swings in the administration: you have no idea who
the next governor will be.
SENATOR MICCICHE opined that the beauty of our system is that if
legislators are not responsive, they often go away and get
replaced with other legislators that are more responsive. He was
open to discussing these things, but he didn't follow Mr.
Flora's logic. He hoped that if there is a waterway that should
be designated as Tier 3 that it would be successful with the
legislature. If it shouldn't be, neither the department nor the
legislature would likely support it either way.
4:46:25 PM
DEANTHA CROCKETT, Executive Director, Alaska Miners Association
(AMA), Anchorage, Alaska, said they support SB 163. She said SB
163 addresses the process in which an outstanding national
resource water (ONRW) is designated.
The Federal Clean Water Act includes antidegradation
rules, the most stringent of which is called "Tier 3."
Any waterbody that is designated as an ONRW would fall
under Tier 3 rules and cannot be degraded beyond the
baseline conditions. This means that any new
activities or expansion of existing activities on the
waterbody that would change the water quality in any
way would be prohibited, even if the discharge could
prove it meets applicable water quality standards and
fully protects fish, aquatic life and other water
uses. To this end, I have a white paper that outlines
the implications of a Tier 3 designation on watershed
uses that I will submit with my testimony today.
Designation of an ONRW and subsequent Tier 3 water
protection would, without doubt, be a barrier to
resource development, economic development and some
crucial municipal projects. Conceptually, the AMA
would prefer that the State of Alaska request that
Alaska be exempted from the provisions within the
Clean Water Act that requires the state to have a
designation process in place. However, it may not be
possible to secure this exemption and in that case,
AMA believes the best avenue the state can establish a
process is one in which waterbodies can be nominated
for ONRW designation through an act of the
legislature. Therefore, we support the passage of SB
163 this session, provided amendments are made to
ensure the process is credible and done in a way that
truly evaluates waterbodies with science and data
prior to the pursuit of a designation.
While there may be cases in which nomination of an
ONRW is warranted, AMA believes the process and any
designation could be used by some anti-development
individuals or organizations to stop responsible
development projects. To prevent this process from
being used as a tool to stop the next mine, timber
sale, fish processing plant, or oil and gas
development, we propose the following amendments:
4:50:02 PM
1. A nomination can't be enacted unless the legislature confirms
the designation.
2. The nomination should be specific to sections of water and
can't go further or be applied to any waters outside the
intended ONRW designation area.
3. Language should be included to provide the ability for DEC to
reject nominations that fail to satisfy specific criteria and
requirements for information that the department would establish
in regulation. Vetting is a good word to use for this process.
She read suggested criteria that was in a March 4 letter for any
nomination. Information that proves the waterbody has
exceptional unique characteristics relative to other state of
Alaska waters including:
- being in pristine condition, largely absent of human sources
of degradation,
-being of exceptional ecological, economical or recreational
physical appearance,
-being exceptional or rare example of its type,
-accompanied by data that demonstrates these criteria.
Further she suggested that DEC shall conduct a completeness
review of all applications and be able to request additional
information as necessary to process it even if it necessitates
the nomination being held over to the next nomination period as
outlined in the bill. DEC should have ability to require
reimbursement for processing applications including the required
evaluations and reports. DEC shall begin processing the
application after a satisfactory reimbursable services agreement
has been received from the applicant.
DNR shall prepare a report evaluating the land use implications
of any waterbody proposed for Tier 3 nomination that DEC submits
to the legislature. It shall include the social and economic
impacts arising out of the changes as a result of the
designation. Before preparing the report DNR shall also enter
into a satisfactory reimbursable service agreement with the
applicant.
4:52:52 PM
Finally, she said, DEC's final evaluations and determinations
and findings regarding a waterbody or segment shall constitute a
final department decision that could be administratively
appealed. The department shall not forward any waterbody
nomination to the legislature until all administrative and
judicial appeals have been resolved. And should there be an
administrative and/or judicial appeal, the decisions and records
of that should be forwarded to the legislature at the time of
decision.
MS. CROCKETT said a fourth proposed change is to organize a
timeline in which DEC collects nominations and forwards them to
the legislature. Suggested language states within 10 days after
the convening of each legislature the commissioner shall
transmit to the legislature for consideration a list of
nominations and related material that were received by the
department within the 24-month period preceding September 1 of
the previous year.
Nominations of ONRW waters should be done constructively.
Therefore AMA believes the agency should start each nomination
period with a clean slate ensuring that previously nominated
waters that the legislature declined to act on aren't forwarded
to the legislature repeatedly. Requiring new nominations every
two years will help to mitigate both duplicative and outdated
nominations of waters already having been addressed as being
inappropriate for designation.
A list of nominations should only be forwarded to the
legislature once per session. Nominations received by the agency
after the September 1 deadline should be considered in the
nomination period for the following legislature.
Her last recommendation for SB 163 is that language be included
that provides a mechanism in which the process can be reversed
if the stream no longer needs Tier 3 protection. Ms. Crockett
said an ONRW designation shouldn't be a final decision; it
should be made only if absolutely necessary with the goal of
restoring the waterbody to a condition in which multiple uses
can return to it. DEC and perhaps the legislature will need the
authority and process to change a designation if and when
applicable.
She concluded saying that even with their lengthy comments and
suggestions, AMA believes that SB 163 is the start of a good
bill with the potential of being good policy for Alaska.
4:55:37 PM
SENATOR MICCICHE commented on the legislature versus
administration discussion that Idaho has no ONRWs. Montana has a
Board of Environmental Review and has designated waters of the
National Parks and Federal Wilderness Areas but no Tier 3
waters. Oregon and Washington both have an administrative
process and both are more environmentally active on water
quality than folks in Alaska. Neither has a single Tier 3
waterbody in their states. Wyoming seems to be the only western
state that has an Environmental Quality Control Council
appointed by the governor that has 15 other waters plus adjacent
wetlands that have been designated other than National Parks and
Wilderness Areas. It's interesting, because nothing today
prohibits DEC from designating Tier 3 waters and nothing
indicates that more waters would be designated under a board
process in western states. He wondered what the Governor's
thought process was.
CHAIR GIESSEL said DEC opined that Article 8 of the Constitution
says the legislature shall provide for the "utilization,
development, and conservation of all natural resources falling
into the state including land and waters." Therefore she
believed that was the foundation on which the governor opines
that it falls under legislative authority.
SENATOR STOLTZE commented that there were some assertions that
the legislature is a partisan political body and asked if the
commissioner would talk about the governor's motivation before
the bill leaves committee.
CHAIR GIESSEL said "absolutely."
5:00:41 PM
Finding no further business to come before the committee, Chair
Giessel adjourned the Senate Resources Committee meeting at 5:00
p.m.