SENATE BILL NO. 299 "An Act relating to the treatment of well test flares, nonroad engines, and aggregated fuel burning equipment associated with nonroad engines under the state's air quality control program; defining 'stationary source' for purposes of the state's air quality program." SENATOR LOREN LEMAN was invited to join the committee to speak to this bill, which he was the sponsor. His testimony follows: "Mr. Chairman, committee members, SB 299 amends Alaska's air quality control statutes to clarify that non-road engines are mobile sources and are not to be regulated as though they are stationary facilities. In Section One, the bill also provides guidance on the treatment of well test flares, which is an event that occurs for a short time after the completion of each well. Section Two adds the EPA and state adopted regulatory definition of non-road engines to Alaskan statute. So operators and owners will have the same understanding at the state level that they do at the federal level of what a non-road engine is. In addition, the bill adds the federal definition of stationary source." "Some have asked why this bill is necessary and I would like to think that it wouldn't be necessary. I think back in history, five years ago, Mr. Chairman, I served with the Senate President and with former Senator Zharoff on a subcommittee where we worked through the Federal Clean Air Act and how implementation at the state level - what would be necessary to implement that act. We agreed with the department at that time that the issue of mobile sources was one that would need to be worked out. It has been five years since we had those subcommittee meetings and slightly over four years since the effective date of the statute that was passed by the Legislature. I believe that has been sufficient time to work things out. Unfortunately, although some issues have been worked out this issue is one that has not been. It appears now that the DEC intends to go beyond the minimum set under the Federal Clean Air Act." "I'll just note that at most there are 20 rigs working on the North Slope and Cook Inlet according to information that I have been given. Drilling rigs are in place an average of seven to ten days. I think one of the things - I know Mr. Chairman, that you were in the Resources Committee when we went through this - one of the things that this committee would be interested in looking at is the fiscal note, which I find interesting that they are projecting that it's going to cost $83,000 not to issue ten permits. I think the committee can conclude probably similarly to what I have that this is probably another attempt to add costs when the department doesn't agree with a bill." "They're already putting out regulations - in fact they have proposed regulation out now. They are suggesting this is going to cost them even more to not implement this bill." "I think I'll close at least with a simple analogy of what it is we're talking about. Let's say that I have my house, which is a stationary facility. It operates year round twenty-four hours a day. I have a furnace in the house that is operating at least most of the time, certainly most of the time in the winter. Let's say that because of that this house needs a permit because I heat my house with fuel. Then I go hire my neighbor's kid to mow the lawn with a lawnmower. According to the way the department is determining it, I have to include that lawnmower in the house permit as if it is mowing twenty-four hours a day, seven days a week, 365 days a year. In reality we all know that event is a very short event that takes place and is completed. Certainly that event of the lawnmowing doesn't impact the operation of my house. But it could, according to the permit and their interpretation of the impact of how warm I keep my house. That may be a simple analogy and its one that small compared to facilities on the slope, but its one that I think we can understand." "In questioning before the Resources Committee I asked the department if they have any hard evidence of ambient air quality problems on the North Slope. They said they may have some modeling but nothing in terms of evidence. We're not talking about a non-attainment area - an area that's not meeting the requirements of the Clean Air Act. I believe that this bill - I would have liked to have dealt with this in a different way but since we have not yet been able to - this bill is necessary I believe to implement at least what our intentions were in 1993 when we passed the original bill." The committee had no questions or comments for Senator Leman. Co-Chair Sharp asked a representative from the Department of Environmental Conservation to respond and give the department's recommendation on the bill. AL EWING the Deputy Commissioner came to the table, introduced himself and testified as follows: "Governor Knowles has been very clear in word and deed, that Alaska is open for business. The area-wide oil and gas leases on the Kenai Peninsula, in Cook Inlet and on the North Slope, his actions to cause renewed leasing at the National Petroleum Reserve are illustrations of his commitment. It has been equally clear that development in Alaska must be done right from an environmental perspective. We have many illustrations of how that commitment is being kept as well. These two guiding principles, being open for business and doing it right, go hand in hand. Neither can endure for long without the other." "SB 299 is the exact opposite of doing it right. If enacted, it would prohibit regulation of oil drilling rigs, which are significant sources of air pollution. Additionally, because of the imprecise wording of the bill, it can be interpreted to prohibit regulation of a wide range of significant sources of air pollution throughout the state. Even if it's interpretation could be limited to oil drilling rigs, it would be unacceptable to the administration and I am confident it would also be unacceptable to the people living, working and playing on the Kenai Peninsula, in Cook Inlet, in the village of Nuiqsut and more generally on the North Slope." "Air pollution standards are designed to protect human health and the environment. They are not limited in their scope to protection of people who live in urban areas. All Alaskans have a right to clean air to breathe." "I would like to share with you a quote from a letter sent last year to Mr. Frank Brown, Vice President of Arco Alaska. The letter was from Benjamin Nageak, Mayor of the North Slope Borough." "A quote from this letter follows. 'There is significant concerns regarding air pollution impacts to the health of the Nuiqsut people. There is an increasing incidence of respiratory problems in Nuiqsut residents and the dark or yellow cloud often seen over Prudoe is now sometimes seen extending to Nuiqsut. In view of this, we are very worried that added air pollution from the alpine development (processing plants, various emissions, etc.) will cause even more problems.'" "The North Slope, the Kenai Peninsula and Cook Inlet are designated unclassifiable areas for the pollutants of particular concern (sulfur dioxide, oxides of nitrogen that are emitted by oil drilling rigs.) We believe that these areas do currently comply with air quality standards but we have no data to confirm that belief. However, state of the art air quality models tell us that if oil drilling rigs are allowed to operate unregulated, they will in many cases, cause violations of clean air standards." "The industry tells us we shouldn't regulate these rigs until we can confirm that there are air quality standard violations. The law tells us we have a responsibility to prevent violations of air quality standards. I think that is what the people who live, work and play in these areas expect as well. In my judgement, it would be very unwise to wait until the health and welfare of Alaskans is adversely impacted before taking action." "We understand that oil drilling rigs are mobile and that they need the flexibility to move quickly from site to site. We also understand that they need flexibility in how they operate. Commissioner Brown and I spent a day on the North Slope recently to get a first hand view of these rigs and how they operate." "We've been working with the industry for the past three years to design regulations that would provide flexibility and necessary air quality controls. Each proposal has been rejected by the drillers as being unsatisfactory. Now we understand why. Their solution is no regulation." "We are prepared to continue working with the industry to find a workable solution. But any solution must be acceptable not only to the industry, but also to the people who work, play and most importantly, live in and subsist off the natural resources of impacted areas. Any solution must also result in compliance with air quality standards." "We are given a variety of reasons why these rigs shouldn't be regulated. We are told they don't emit enough pollution to be a problem. The fact is a single rig can emit as much pollution as more than 100 city buses operating in a single very crowded intersection. That is not an insignificant amount of pollution as anyone who has gotten stuck behind a city bus can attest. Once again, state of the art air quality models not surprisingly predict violations on air quality standards if these rigs are allowed to operate without controls." "We are told federal rules don't require these sources to be regulated. Well, because the Arco Warthog project was offshore, it was permitted by the federal government. Let me assure you there has been no non-road engine in the State Of Alaska that has ever been regulated by the state to the degree the drilling rig on the Warthog project was regulated. They required use of .06 percent diesel fuel - that's sulfur content and established an exclusionary zone around the project to prevent public exposure to air pollutants expected to exceed air quality standards. And remember, this was an offshore project." "We are told that other drillers in other states aren't regulated. We've not gone and done a broad survey to see what other states are doing, because frankly we are not looking for the lowest common denominator. Our objective is to maintain clean air in ways that are consistent with the laws of the land and with common sense." "In conversation with air program managers of other states, we find that drilling rigs and other non-road engines are using low sulfur fuel of .05 percent because that is what is available in every other state except Alaska. If we were using .05 percent sulfur fuel in Alaska, drilling rigs would be insignificant sources of SO2 and would not require regulation for that pollutant. I believe that drilling rigs in other states are complying with best available technology - that's BAT standards. These BAT standards are designed to control NOx emissions. If drilling rigs were complying with BAT standards in Alaska, they would be insignificant sources of NOx also. I'm sure if we looked we could find drilling rigs in some states not using low sulfur fuel and not complying with BAT standards and not otherwise being regulated. But I would not find that a compelling reason to make that our standard in Alaska." "We are also told that rigs are constantly moving and consequently couldn't be much of a problem for very long even if standards were being violated. We understand that drilling rigs generally move around a lot. But we also note that some rigs remain on a site for extended periods of time, sometimes for a year or more. Mobility though doesn't seem like very good justification for allowing violations of air quality standards. We have all seen the beater car going down the road spewing clouds of blue smoke as it goes. I don't know about you, but while I'm glad to see it go, the fact that its moving doesn't make me feel a whole lot better." "We are told we use too many conservative functions and our models don't accurately predict what happens in the real world. Our models are the best available in the world. The assumptions we use are standard assumptions spelled out in law and used throughout the country. We hope to be able to do ambient air quality monitoring in the future to assess air quality conditions and trends on the North Slope and elsewhere in the state. That would cost money that we don't currently have. In the meantime, we will use the best tools we have - the model." "In summary, for all the reasons outlined, we are strongly opposed to SB 299. It is a major threat to the air quality of Alaska, it would put our citizens and our environment at risk, it is the opposite of doing it right and we believe it is correctly being labeled the dirty air bill. This concludes my testimony, I'll be happy to respond to questions." Senator Phillips looked in his packet of information for resolutions from the North Slope Borough, the Mat-Su Borough or the Kenai Peninsula Borough in support of the Administration's position. Had they passed any such resolutions, he asked. Mr. Ewing reminded the senator he just quoted a letter from the North Slope Borough. He doubted whether the boroughs were even aware the pending legislation was being considered. Senator Phillips countered that the deputy commissioner reported to be protecting their interests and he was interested in actual evidence that the boroughs agreed with the department's opinion. Mr. Ewing suggested the best way to get input would be to gather borough representatives at the committee table to hear first-hand. He said his office had not been out garnering support. Co-Chair Sharp had a question relating to the modeling. He asked if DEC had any indications that at the locations where oil drilling was occurring, air quality was anywhere close to non-attainment levels required by the state. Mr. Ewing believed that the areas where drilling would be taking place was complying with the standards. He warned, the models predicted that these areas would not be in attainment if the rigs were allowed to operate without some control of the sulfur content in the fuel. Co-Chair Sharp pointed out that the rigs already were operating and were in compliance. Mr. Ewing argued that was because the department was able to permit and regulate the operations. Under the new law, permitting and putting limitations on operations would no longer be allowed. Co-Chair Sharp again asked if the air quality standards were anywhere near non-attainment or did the department monitor to ensure they didn't reach those levels. Mr. Ewing replied there was no ambient monitoring being done in any of the areas at the time. Therefore, he could not answer the question, just offer his best professional judgement, which was that the standards were being met and could be met so long as the limitations were in place. Co-Chair Sharp wanted to know how the department knew the permitting was working if there was no monitoring. Mr. Ewing referred to the limitation of the sulfur content allowed in fuel. They were able to use models to predict the amount of emissions based on the amount of sulfur in the fuel. Co-Chair Sharp asked if low-sulfur fuel was available in the State Of Alaska or was it shipped in. Mr. Ewing said there was varying levels of sulfur content fuel within the state and some of it was shipped in. In the case of the Warthog project, the fuel was brought from the Northwest Territory. Senator Donley admitted environmental science was not an area of his expertise. He asked Mr. Ewing what was his background. Mr. Ewing spoke of his 25 years working in the environmental field in air and water quality and other related areas. Senator Donley wanted to know if he held a technical degree. Mr. Ewing responded that he did not possess such a degree, his qualifications were through his experience plus other departmental employees who did have specific degrees. Senator Donley asked what were the standards the department was trying to enforce. Mr. Ewing referred to the Federal Clean Air Act standards. Senator Donley wanted to know if Mr. Ewing knew and could explain those standards to him. Mr. Ewing offered other staff who could. Senator Donley asked if the standards were universally accepted as being necessary. Mr. Ewing qualified that there were probably no scientific standards that were accepted unanimously throughout the world. Generally, the standards being discussed here did have wide acceptance. They had gone through the rule-making process, were subjected to peer review and had the basis of the best information available, he stated. Senator Donley asked how large a group disagreed with these standards. Were there scientific articles claiming these particular standards may not be the best, not necessary or possibly overly restrictive, he wondered. Mr. Ewing responded that depended on what he was looking for. If he wanted to make a case for tighter standards, he could find support; if he wanted less restrictive standards he could find support for that also. What he was trying to say, was through the process, they had arrived at these standards, which were national standards set to protect human health. Senator Donley wanted to know how once the national standards were established by the federal government, how were the standards tested for compliance. He referred to carbon monoxide monitoring done in a busy intersection in Anchorage, which were to establish standards for the entire city. Wasn't there an issue with how the standards were administered, he questioned. Mr. Ewing admitted that had been the argument used by industry and others to grant the state the authority to oversee monitoring. This would allow flexibility. He reminded the committee of the federal oversight on the Warthog project and the tight controls placed on that project. He felt the federal government was more restrictive then necessary. What the state offered in recent years was more flexible approaches to regulating sulfur dioxide as related to the rigs. He emphasized they could provide flexibility but having no standard and ignoring pollution was not a solution. Senator Donley spoke of the Truckers Association and other business association complaints regarding air quality in the Anchorage area and asked why DEC hadn't responded to them. Mr. Ewing pointed out these were different situations. The current topic was non-road engines. He did say the department had proved flexible in the Anchorage and Fairbanks areas with regard to the automobile issues. While they may not have been far enough for some people, they did provide balance and worked within the federal guidelines. Senator Donley felt that the issues were related in that the claim of flexibility was in question. Mr. Ewing disagreed, saying DEC was very flexible, perhaps not to the degree the senator wanted for the trucking industry and again the oil drilling industry in this case, but overall balance was achieved. There was further debate on the air quality standards and the trucking industry. Mr. Ewing concluded that DEC could not swing entirely to meet the demands of one particular interest, leaving other interests unrepresented. Senator Donley agreed but felt Mr. Ewing was exaggerating. Mr. Ewing stated that the department in every case listened to all arguments and tried to make a reasonable judgement. He felt that in Senator Donley's case a fair judgement had been made, but if the senator disagreed, they could discuss the matter further at another time. Senator Parnell recalled intentions voiced several years ago by the state to conform to federal standards, but not go beyond. He then referred to Mr. Ewing's comment on regulating drilling rigs as a mobile source as required under federal law. He asked Mr. Ewing where that information came from. Mr. Ewing clarified non-road engines were not mobile sources under the Clean Air Act. Mobile sources were things like automobiles and things that moved around continually, he explained. Drilling rigs were non- road engines that did move around, but fell under a different definition under the Clean Air Act. He continued, telling the committee DEC was instructed they did not have to regulate drilling rigs as stationary sources, but they did have to maintain ambient air quality standards. This meant that when in an area with clean air, the requirements of prevention of deterioration came into play. Any source with the potential to emit pollution that could put the air quality over the standard, must be regulated, he finished. He conceded that people were often confused when they read they didn't need a Title 5 permit - or stationary source permit. Often they would assume that meant they did not have to comply with the clean air standards. That was not the case, he stressed. Senator Parnell inquired as to the classification of the North Slope area. Mr. Ewing responded the North Slope was a non-classifiable area according to the information they had available. They believed it to be in attainment, but could not confirm. Senator Parnell asked, if DEC were to classify the North Slope area emissions as coming from stationary sources versus non-road engines, what approximate percentages would be made up of non-road sources. Mr. Ewing reminded the senator he did not have any hard data. He outlined the process when an operator wished to permit a particular site. The department would compile a list of all the significant sources on that site and create a model, which would tell them what to expect as far as ambient air quality. This was a process they did on every site that was proposed for a permit. Senator Parnell again attempted to get an approximation of the percentage of non-road engine emissions. Would it be 50 percent or 90 percent, he wondered. Mr. Ewing responded that it depended on the site and the time. He estimated that some of the time the non-road engine percentage would be close to 100. Senator Parnell asked if the measurements were taken from the drilling rig or from the entire area. Mr. Ewing replied that they measured the particular site. He explained that if there were a drilling site where oil development was being done, close to 100 percent of emission would be coming from the drilling rig itself. Senator Parnell then referred to the North Slope Borough mayor's comments on the cloud over Nuiqsut and asked Mr. Ewing to explain. Mr. Ewing stipulated that the situation was not one DEC had documented, but it sounded like the classic cloud formation that would come from SO2 and similar types of emissions. He expanded saying, that type of formation would not be expected on the North Slope because it usually required intense sunlight for the chemical reaction to occur. However, even in the absence of the intense sunlight they were getting reports of observations of the cloud formations. He stated the department could not confirm the cloud was a result of activity on the North Slope or that it was blown in from Asia, he speculated it was probably from a combination of the two. Senator Parnell questioned if DEC had any hard data this phenomenon caused or could cause federal ambient standards violations. Mr. Ewing replied that the only way to evaluate future air quality conditions in a situation where a permit was being considered was to use a modeling technique. He stressed that an operation could not be measured before it began and the permitting stage took place before operations could begin. He said there was nothing unusual about this. Co-Chair Sharp opened the meeting to public testimony. First to testify was BRIAN PETTY, Senior Vice President of Governmental Affairs for the International Association of Drilling Contractors via teleconference from Washington D.C. After a short introduction of himself and his organization, he spoke to the legislation. "...I am here today to support Senator Leman's well crafted bill, SB 299. IADC, as Deputy Commissioner Ewing properly pointed out, has been frustrated in coming to terms with ADEC on a rational approach to our problem. That problem being the business of regulating or not regulating drilling rigs working in Alaska." "IADC has been engaged here in Washington with the EPA from early days. After the 1990 Clean Air Act amendments were passed, we were invited in by the EPA to become part of their E&P oil and gas cluster - meeting as early as 1993 to discuss ways of defining properly, non-road engines, stationary sources and the whole gamut of issues that come up in oil and gas activities, especially from the exploration side. I might add that those meetings were attended widely by the EPA including their solid waste and water branches. Those discussions evolved further into active dialog with EPA contractors focusing on the air regulations in Annarbor, Michigan and in Research Triangle, North Carolina." "The culmination of that long process is represented in the direct final rule that EPA put out just at the end of December last entitled Control of Air Pollution Emission Standards for the New Non-road Compression Engines at or below 37 Kilowatts. We have, at IADC, been attempting to encourage ADEC to understand the dimension of the federal regulations and fact that those federal regulations do not require the inclusion of non-road engines or mobile sources under Title 5. And that the states in fact are totally authorized to exclude them as is the case with a number of oil patch states all over in this country including Colorado, which in matters environmental is no slouch as many of you know. Colorado expressly exempts drilling rig engines from its permitting requirements. That state takes a back seat to none in terms of considering its pristine environment because of its high value it accords its tourism industry. I would add that there are substantial number of rigs working there - quite a few more than are working in Alaska as a matter of fact." "This pattern follows in states Montana, North Dakota, Kansas, New Mexico, Oklahoma and Wyoming. In Texas there is a separate regime but it comes to the same result. Drilling rigs are not considered stationary sources for permitting purposes. So what is being ventured by ADEC, is absolutely unique and in ways radical because it deviates from established patterns in mature dialog and a mature regime that began with a process here in Washington after the Clean Air Act amendments were passed." "IADC, in its international dimension, has information drawn from environmental regulators all over the world. We've been an association for sixty years. We are very, very sensitive to the need for preserving safety and environmental mitigation in our operations. As a consequence we are very concerned and alarmed by the direction the ADEC is taking in Alaska because it threatens to be an eccentric result that could have the affect of shutting in a lot of production and certainly exploration in Alaska, which of course is a vital industry in that state. That is why I was asked to come in today to just point out the importance of this to the international association and to illustrate the depth and length of time we have been spending with our engineers and our company engineers engaged in active dialog with EPA engineers for example." "Our efforts at ADEC go back to about August of 1996 when our representatives met with representatives of ADEC in Juneau. At that time those ADEC representatives conceded the point that drilling rigs were in fact mobile sources in their use of non-road engines. We were dismayed when in early 1997; ADEC seemed to reverse itself. There was a request by ADEC for us to produce questions, which they agreed to answer promptly. That request was April. We did not get an answer until late October and that was only after another letter asking ADEC to come forward with some justification for their modeling and some explanation why the State Of Alaska should venture off into an entirely new area of what was an established national norm." "As a consequence IADC finds itself today completely frustrated moving any further with ADEC because ADEC seems predisposed to venturing a rule that would consider drilling rigs essentially stationary sources. As a consequence the Legislation as drafted is very carefully aligned with that of existing federal law and its interpretation judicially and we think its a prudent step that will not make one whit of difference in terms of damaging Alaska's environment but will have a lot to do with the preservation of a vital oil and gas industry in the state." There were no questions from committee members and Co-Chair Sharp called upon the next person to testify. RUSS DOUGLAS came to the table and introduced himself as a representative of the International Association of Drilling Contractors- Alaska Chapter. Accompanying Mr. Douglas was KYLE PARKER, also from the AK Chapter of IADC. Mr. Parker acted as the primary speaker and his testimony was as follows. "I'd like to start off today just by responding to three of the points which Deputy Commission Ewing stressed at some length here to the committee." "First off, I'd like to respond to his suggestion that for three years they have been actively pursuing a solution to this problem with us. That frankly is just not the case. We have a letter, and I believe it's in your committee packets, from July 24, 1997 signed by Michael Conway who's Acting Director of the Air Section down at DEC, wherein he says that the department is committed to working a longer term solution to this issue with all interested parties by establishing and leading a work group. Nothing - no work group was ever formed following that July 24th letter. As of March 12th of this year, nothing had been done by DEC to move forward in forming a work group to work with industry. So Deputy Commissioner Ewing's suggestion that there's been an active effort on their behalf to work with industry in solving this and that we've rejected their proposed solutions is just not the case." "Recently they did come out with a draft proposed regulations, which were presented to us. These proposed regulations are a form of the California Rig Registration Program. Industry did respond to him that we did not believe that was the right solution for Alaska. We are not opposed - we have not been opposed to sitting down and working with the department on developing a solution. We have, I believe been very open to working with them over the last three years and as recently as March 25th, we had sent this letter to Commissioner Brown, and I have a copy here for each of the committee members, wherein we take the position with this recently proposed workgroup that we would be pleased to have a opportunity to work in a workgroup format with the regulators in developing some form of a solution. But from our perspective, the DEC isn't willing to step back and take a look to see whether first of all there's a problem here. As a matter of fact, at that meeting, one of the representatives from industry suggested that DEC stand down from its aggressive regulation of drilling rigs and give industry the time to work with DEC to develop the facts so we know what the reality is on the North Slope. We will then develop an appropriate regulatory framework for mobile sources of emissions. But Deputy Commissioner Ewing at that point said no, we don't have the flexibility to do anything but regulate emissions from drilling rigs. That's all detailed in your letter." "So please note that industry has been very willing to work this issue. We've been working it for over three years now with them and frankly we've been frustrated at every turn in our negotiations with them." "So our solution, as the deputy commissioner said - he said that our solution is no regulation - that is not in fact the case. We have been willing to sit down and work with them on an appropriate regulatory framework. That's not happened." "The second point is that the deputy commission suggests that rigs are not regulated. In fact engines on drilling rigs - engines on all mobile sources are regulated. They are manufactured to standards that are established by the federal government. This is the point of our legislation. The federal government recognizes that you regulate stationary sources of emissions and mobile sources of emission differently. The appropriate places to regulate mobile sources of emissions is at the manufacturing stage where the engines are manufactured and you put appropriate technologies on at that point. Stationary sources, you can add things like scrubbers, higher stacks, pollution collectors - those types of technologies. Adding those to a mobile source, you lose mobility." "Finally, and Russ Douglas will address this at length a bit more, Deputy Commissioner Ewing started out by saying that rigs are a significant source of emissions on the North Slope. Well we in the industry have taken the time to develop some of the numbers and I'll let Mr. Douglas speak to that." Mr. Douglas began speaking. "My evaluation has been just to make essentially look at some of the permits on the North Slope and these are the stationary permits. The level of emissions from those bigger facilities - the production facilities, the central compression plant are normally much greater than the emissions from any drilling rig. There are a limited number of... Tape #106 Side B "...from my evaluation. I've looked at the comparison and most of them are in the range of ten percent or less in terms of the contribution of drilling rigs if a drilling rig were to be on the facility." "In addition those 20 rigs, not all of the 20 rigs are running totally on diesel. There are some that are run on gas - or there's one that is run on gas. Several have capability to be run electricity, if available can be powered by that electricity. That further reduces the amount of actual emissions from drilling rigs from measures that have been taken by the drilling industry." "Another point I would like to address is the question about ambient monitoring on the slope. There was a program begun in 1986 by the Prudo Bay unit operators to monitor air quality. They've established three stations at APAD, at the Gathering Center One and at the Central Compression Plant and they monitored emissions for quite a while. I believe this was in conjunction with the DEC. Then the program - or at least from the DEC standpoint, was discontinued but the Prudoe Bay unit operators decided they would proceed with it. So they are monitoring to date. The IADC is in the process of obtaining that data. But since it is by the Prudoe Bay unit operators now it has to be requested and approved by all the unit operators before they can release that data. I've been assured by my contact at BP who runs the program that the data show there is no increasing air quality detriment at this point in time." "I would also like to add that Alpine, Arco with their Alpine project, has agreed to a monitoring station at their facility in regard to the Nuiqsut concerns. So they have agreed to monitor the air out there as well." Senator Adams asked that with the passage of this legislation, could IADC guarantee there would be no pollution in the North Slope that could affect the safety of the workers in the North Slope. Would they be willing to share their data with the communities in the affected area, he inquired. Mr. Parker responded they would be happy to share the analysis that was still ongoing as well as the numbers that were in the current permits and how the drilling rigs compared in terms of the percentage of emissions. He assured the committee he would get a copy of that information to them. He admitted there could be no guarantee against emissions on the North Slope. That was part of the ongoing operations, both in the stationary facilities working to collect and separate the oil and the drilling rigs discussed at this meeting. Senator Adams suggested this was just a facade created by the oil companies. Mr. Parker responded saying that industry deserved credit in recent years for modifying power sources on the rigs. Rigs on the North Slope were turning to electrical generation and less diesel fuel was being burned. He spoke of other modifications to convert rigs to natural gas operation. He stressed that this bill was not a license to pollute. Senator Parnell referred to pollution in his district in Anchorage. He stated the issue at hand was not the emissions, but the permit. Mr. Parker testified in response to Mr. Ewing's earlier comments relating to federal compliance and DEC's failure to research other state's handling of the drilling rig emissions. Mr. Parker attested that DEC had actually looked at what California was doing to regulate the non-road engines. Mr. Parker alluded that California was not the ideal comparison for Alaska's situation. This concluded public testimony on the bill. Senator Phillips offered a motion to move from committee SB 299 with accompanying fiscal note. Senator Adams objected. Co-Chair Sharp voiced concerns with the fiscal note, saying he didn't understand why the department claimed to need more funds to not issue permits. He felt this bill should save them money. Senator Pearce joined the discussion on the fiscal note. She read accompanying comments on the note relating to no change in staff workload and pointed out the request for an additional staff position. She suggested that because the bill was in the Senate Finance Committee, they had the authority to change the fiscal note. She expressed a desire to write a new fiscal note eliminating the new staff position. Co-Chair Sharp supported this idea. He felt the department was already making regulation changes the way they wanted, so he didn't know how it would require more staff to not do those changes. He declared the personal service line item should be zero. Senator Pearce added the Department of Law review would be applicable. She stated for the record the changes to be made to the DEC fiscal note, eliminating the personal services monies and the travel expenses for the would-be created position. Senator Phillips amended his motion to accommodate, noting the total amount for the fiscal note would be $11,600. Senator Adams asked for clarification on what would be included in the revised fiscal note. Senator Phillips responded that what was left was funding for Department of Law review, advertising, public hearings and publication of new regulations. Senator Phillips asked Senator Adams if the North Slope Borough had passed a resolution opposing this legislation. Senator Adams noted the letter from the mayor. He maintained his objection. Senator Donley pointed out information in the file in support of the legislation. He wanted to know if there was a position paper from the department, stating their opinion in writing. Co-Chair Sharp was only aware of oral statements made in the Resources Committee and here. Senator Donley said he found the backup papers in the file supporting the bill to be very persuasive. Co-Chair Sharp asked for roll call to be taken on the motion. The vote was 6-1; Senator Adams cast the lone nay vote.