1:41:11 PM CO-CHAIR EISCHEID announced that the first order of business would be HOUSE BILL NO. 366, "An Act relating to the use of heavy petroleum fuel oil as a marine fuel; relating to the duties of the Department of Environmental Conservation; and providing for an effective date." 1:42:00 PM CO-CHAIR CARRICK moved to adopt CS for HB 366, Version G. CO-CHAIR EISCHEID objected for the purpose of discussion. 1:42:40 PM }REPRESENTATIVE SARA HANNAN* Alaska State Legislature* Juneau, Alaska* As prime sponsor, presented HB 366.{ as prime sponsor, presented HB 366. She deferred to staff to present summary of changes. 1:43:09 PM }HUNTER MEACHUM* Staff to Rep. Hannan* City & State* { presented the summary of changes in CS. 1:43:53 PM REPRESENTATIVE G. NELSON asked for definition MS. MEACHUM clarified that CS would replace "vessel" with "large commercial passenger vessel" 1:44:47 PM CO-CHAIR EISCHEID removed his objection REPRESENTATIVE MCCABE objected He explained his objection. Expressed concern with targeting the cruise ship industry, which brings millions of dollars to Southeast Alaska. 1:45:55 PM REPRESENTATIVE G. NELSON echoed REPRESENTATIVE MCCABE comments, and asked for further clarification regarding the change in "vessel" definition REPRESENTATIVE HANNAN explained the reasoning... CO-CHAIR EISCHEID clarified... REPRESENTATIVE HANNAN "large commercial passenger vessel" has at least 250 paying passengers qualifies REPRESENTATIVE MCCABE asked about hours spent REPRESENTATIVE HANNAN emissions control area in Southeast and Southcentral Alaska and will follow up... 1:49:46 PM CO-CHAIR CARRICK CS reflects original intention of the bill sponsor and that is why the committee would like to adopt it first. REPRESENTATIVE MCCABE maintained objection... roll call passed! adopted! 1:51:17 PM REPRESENTATIVE HANNAN, as prime sponsor, presented the sponsor statement for HB 366, Version G [hard copy included in the committee file], which read as follows [original punctuation provided]: HB 366 proposes to restrict large commercial passenger vessels from using heavy petroleum fuel oil (HFO) in Alaska waters. HFO is a byproduct of the oil refining process. It is commonly referred to as "bunker fuel" and is dense, viscous, and contains high concentrations of toxic pollutants that have climate change implications and pose serious risks to marine ecosystems and human health. The overwhelming majority of HFO used in Alaska comes from large cruise ships equipped with exhaust scrubber systems, which are required when using HFO to meet both the 2015 North American Emission Control Area requirements and the International Maritime Organization's (IMO) global sulfur limits implemented in 2020. Although these systems allow vessels to work around emission standards, none of them eliminate the serious harm caused by using HFO. Open-loop scrubbers mix toxic exhaust with seawater and then discharge that mixture into our waters. Every large cruise ship calling on Alaska ports already has the capability to operate using alternative fuels such as marine gas oil (MGO). Many vessels including several large cruise ships, small cruise ships, and the Alaska Marine Highway ferries already use cleaner alternative fuels. MGO is a low-sulfur distillate fuel and does not need to be pre-heated to be pumped and burned. It is widely available in Alaska and along global navigational routes. According to a 2024 economic report prepared by Energy and Environmental Research Associates, LLC., requiring large cruise operators to switch to MGO amounts to approximately $3.50 per day per passenger or a 2.1 percent increase in daily fuel costs. Passage of this important legislation will help to protect and sustain our ways of life, fisheries, livelihoods, and the pristine natural environment unique to our state. I would be grateful for your support of HB 366. 1:54:29 PM MS. MEACHUM, on behalf of Representative Hannan, prime sponsor, gave the sectional analysis for HB 366, Version G [hard copy included in the committee file], which read as follows [original punctuation provided]: Sec. 1: AS 30 is amended by adding Chapter 35 on Marine Fuel.   AS 30.35.010: Prohibits the use of heavy petroleum fuel oil in an auxiliary engine or main engine on a large commercial passenger vessel operating within the navigable waters of the United States within the State of Alaska, the waters of the Alexander Archipelago, and within the Kachemak Bay National Estuarine Research Reserve.   AS 30.35.020: The heavy petroleum fuel oil restrictions do not apply to a large commercial passenger vessel during an ocean-going voyage that consists of continuous and expeditious navigation through applicable waters for the purpose of traversing the applicable waters without entering navigable river or waterways within the state or an arm of the sea or ocean that expends inland to meet the mouth of a river. The prohibition also does not apply to a large commercial passenger vessel using heavy petroleum fuel oil in an emergency, to avoid imminent emergency, or for the purpose of rendering assistance to a person, vessel, or aircraft in danger or distress.   AS 30.35.030: The Department of Environmental Conservation is granted the authority to issue fines that a person may be required to pay for operating a large commercial passenger vessel using heavy petroleum fuel oil in an auxiliary engine or main engine.   AS. 30.35.050: Defines the following:   1. Applicable waters means the waters of the Alexander Archipelago and the navigable waters of the United States within the State of Alaska and within the Kachemak Bay National Estuarine Research Reserve.   2. Heavy petroleum fuel oil means any marine fuel that has a viscosity greater than 380 centistokes or a sulfur content that exceeds 0.1 percent by weight.   3. Large Commercial Passenger Vessel means a commercial passenger vessel that provides overnight accommodations for 250 or more passengers for hire, determined with reference to the number of lower berths. Sec. 2: AS 46.03.020(15): Amends the powers of the Department of Environmental Conservation so that it can monitor, observe, and record data and information related to large commercial passenger vessels in applicable waters.   Sec. 3: Amends uncodified law by adding a section to require the Department of Environmental Conservation to report to the legislature detailing implementation of section 1.   Sec. 4: Amends uncodified law to allow for the Department of Environmental Conservation to exempt a large commercial passenger vessel operating before January 1, 2030, from the heavy petroleum fuel oil requirements laid out in section 1 if at the time section 1 takes effect, the large commercial passenger vessel is not equipped to convert to using an alternative fuel source.   Sec. 5: Amends uncodified law to allow for the Department of Environmental Conservation to adopt regulations necessary to implement the heavy petroleum fuel oil restrictions.   Sec. 6: Section 5 takes effect immediately.   Sec. 7: Sections 1-4 take effect January 1, 2027. 1:58:39 PM CO-CHAIR EISCHEID announced invited testimony. 1:59:03 PM }DR. MORGAN POWERS, Environmental Consultant* Fjord & Fish Sciences* Anchorage, Alaska* Testified in support of HB 366.{ she described her experience growing up in the aftermath of the Exon Valdez oil spill in southcentral Alaska. She described her work and, based on the science she studies, testified in support of HB 366. She described the short-term and long-term impacts of heavy fuel oil on coastlines. She explained that although lighter?? fuels still have negative environmental impacts, a spill could be addressed more effectively and quickly. scrubber discharge effects... more... 2:04:55 PM REPRESENTATIVE MCCABE population impact on SE AK marine life due to scrubber discharge DR. POWERS stated that there have been no studies in southeast alaska, but there is in washington... and baltic sea... REPRESENTATIVE MCCABE asked about scrubber discharge versus oil spills DR. POWERS stated that crude oil and heavy fuel oil are rather similar, but crude oil is more viscous. Meanwhile, scrubber discharge also contains a toxic mixture of... 2:08:34 PM CO-CHAIR EISCHEID DR. POWERS, in response to a question from described the process of biomagnification and explained that not all contaminants are digested in the same way. she stated that there are hydro-carbons, potentially toxic, in fish and marine mammals across Southeast Alaska waters. 2:11:14 PM REPRESENTATIVE ST. CLAIR DR. POWERS REPRESENTATIVE HANNAN stated that the EPA regulates scrubber wastewater, but calls for scrubber constituents, such as cruise ship cpmanies, to report their own data to the EPA REPRESENTATIVE ST. CLAIR REPRESENTATIVE HANNAN stated that state DEC does not monitor scrubber exhaust, but... 2:13:52 PM REPRESENTATIVE STUTES asked about the availability between the two types of fuel. and cost comparison. REPRESENTATIVE HANNAN in all ports that cruise ships depart from, (including Vancouver...) have access to both types of fuels... she listed the three cruise ships that exclusively utilize the lighter fuel she will follow up with the cost difference REPRESENTATIVE STUTES asked about the cost of conversion REPRESENTATIVE HANNAN stated that there is no conversion cost 2:17:01 PM }LINDA BEHNKEM, Executive Director* Alaska Longline Fisherman's Association* Sitka, Alaska* { She described the membership of her association, many of whom live and work in Southeast Alaska HFO is full of toxins and has known toxic impacts to marine life and human health. use of HFOs is illogical for this industry at best Alaskans consume much more seafood than the rest of the country, placing them at elevated risk of cancers, respiratory disease, and other illnesses she emphasized that the reputation of Alaskan seafood coming from "cool, clean waters" cannot last much longer if toxic pollutants continue to pollute its waterways. she confirmed that the Alaska State Legislature has the power to regulate the fuels that are burned in Alaska's waterways. She urged the committee to support HB 366. 2:21:35 PM REPRESENTATIVE STUTES MS. BEHNKEM clarified $3.50, not $35o per day??? 2:22:10 PM CO-CHAIR EISCHEID MS. BEHNKEM clarified ... REPRESENTATIVE MCCABE clarified that there are both open loop and closed loop scrubber systems. 2:23:31 PM }EMILY EDENSHAW, CEO, Ketchikan Indian Community* Ketchikan, Alaska* { Ketchikan expected to have more than 2 million visitors this summer. She shared her professional and cultural history. she emphasized that there must be a balance in cultural tourism KIC is the second largest tribe in Alaska and one of the biggest employers in Ketchikan HB 366 would directly impact the health and well-being of KIC members, whose diets and cultural practices rely on the health of both the land and sea. she emphasized the contaminants that enter the water, also enter Ketchikan's food system she said that HB 366 presents a clear and actionable policy she said that HB 366 is not an "anti-tourism" bill, but is "pro- Alaska." she disagreed with the narrative that HB 366 would be "singling out the cruise ship industry," but would set a standard that reflects the value of the resources at stake. cleaner fuels already exist, and many vessels are already transitioning to them around the world. first, Alaska lacks oversight... second, tried to address this issue at the tribal level, but individual tribes lack the resources to achieve the impact they need to see third, need for meaningful partnership fourth, need to address cumulative impacts she suggested... expressed hope to one day have as many traditional canoes in Southeast Alaska waters as there are cruise ships. 2:37:49 PM REPRESENTATIVE ST. CLAIR, for DEC, asked about scrubber standards 2:38:22 PM }JASON OLDS* Director of Air Quality, Alaska Dept. of Environmental Conservation* City & State* { two kinds of scrubber discharge, air emissions open and closed loop scrubbers... sulfur is not destroyed in the combustion... 2:40:03 PM GENE MCCABE* Director, Division of Water, DEC* City & State* { there is an EPA standard for scrubber discharge and for reporting frequency for those with a scrubber permit the data that is collected is available online 2:40:59 PM CO-CHAIR CARRICK asked about how other communities MS. MEACHUM stated that she would follow up with the sulfur limits that other states and countries have implemented but then shared limits set by... the international maritime organization north american emission control area 2:43:12 PM REPRESENTATIVE MCCABE MGO is roughly 35 to 50 percent more expensive than bunker sea? asked about the indeterminate fiscal note MR. OLDS stated that it was based off the broader scope of HB 366 prior to adopting the CS... will follow up with a fiscal note that applies to the new scope of large commercial passenger vessels. REPRESENTATIVE MCCABE REPRESENTATIVE HANNAN 2:46:00 PM REPRESENTATIVE STUTES asked about the different types of scrubbers REPRESENTATIVE HANNAN open and closed loop scrubbers, one is water discharge, one is air discharge MS. MEACHUM addressed concerns with both types of scrubbers... REPRESENTATIVE STUTES REPRESENTATIVE HANNAN confirmed that HB 366 would eliminate the need for scrubbers, by prohibiting bunker fuel 2:48:35 PM REPRESENTATIVE HANNAN offered closing statements... 2:49:27 PM The committee took an at-ease from 2:49 p.m. to 2:53 p.m.