HOUSE SPECIAL COMMITTEE ON OIL & GAS March 1, 1993 5:00 p.m. MEMBERS PRESENT Representative Joe Green, Chairman Representative Pete Kott, Vice Chairman Representative Harley Olberg Representative Gary Davis Representative Jerry Sanders Representative Joe Sitton MEMBERS ABSENT Representative Jerry Mackie COMMITTEE CALENDAR Presentation by Alaska Clean Seas WITNESS REGISTER Norman Ingram, General Manager Alaska Clean Seas 12350 Industry Way, Suite 202 Anchorage, Alaska 99516 POSITION STATEMENT: Provided background on Alaska Clean Seas Dennis D. Rome, Commander United States Coast Guard Marine Safety Office 2760 Sherwood Lane, Suite 2A Juneau, Alaska 99801 POSITION STATEMENT: Gave the Coast Guard's perspective on burns ACTION NARRATIVE Tape 93-07, Side A Number 000 CHAIRMAN JOE GREEN called the meeting to order at 5:05 p.m., members present were Representatives Green, Olberg, Davis, Sanders, and Sitton. He introduced Norman Ingram from Alaska Clean Seas to give a presentation on a proposal showing the potential for correcting major oil spills on water. Number 030 NORMAN INGRAM, GENERAL MANAGER, ALASKA CLEAN SEAS (ACS), passed around a brief background summary of ACS and directed committee members to Page 3. He stated ACS was a non-profit oil spill response cooperative formed in 1979 as an equipment only co-op, which was reorganized in 1990, with an expanded mandate to cover response and include the onshore areas on the North Slope in addition to the Beaufort Sea, which was the original area. The ACS currently have 10 member companies. Three companies have dropped out in the past year: Marathon, Shell, and AMOCO (who no longer have any activities on the North Slope), he added. MR. INGRAM pointed out that on the North Slope no matter how small the operation, the individual operator had equipment and resources available to address any problem that might happen, and they have the ability to call on ACS. He directed members to Page 6 of the handout which showed the hands-on personnel available on any particular day was 230 people on-site at all times, with a supplemental from the North Slope available within 24 hours. He stated the Auxiliary Contract Response Team had been tested on an unannounced basis one year ago, and there were 756 people on-scene when the drill was closed after approximately 9.5 hours. MR. INGRAM stated the next four pages of the handout were a detailed inventory of the equipment, including the traditional items: Boom, boat, skimmers, etc., along with some of the items that were not as obvious, such as wildlife rehabilitation equipment and, most importantly, telecommunications equipment. He stated ACS currently had an inventory which had a replacement cost in excess of $2 million and telecommunications was a tremendous asset. He stated ACS worked with the state of Alaska and the Division of Telecommunications in establishing compatibility. MR. INGRAM further stated the summary level of equipment in total on the Slope included about 360,000 feet of boom, 84 vessels, and about 200 skimmers. The Beaufort Sea was an extremely shallow sea and so the biggest challenge they had was having vessels that could operate in that shallow water, he added. Number 163 CHAIRMAN GREEN asked if it was fair to say that equipment could be moved from the North Slope to Prince William Sound, or vice versa, within a 24 hour period. Number 165 MR. INGRAM replied in the affirmative. He stated many of the member companies were common with many of the people who might have a problem in Prince William Sound. He advised that ACS had participated in 10 actual events in 1992, seven of which were off the North Slope, in assisting and sometimes just consulting. One was as far away as Africa where there was a major tanker incident in which the Coast Guard Strike Team called on input from ACS, where in-situ burning was being considered. He stated ACS had a fairly active training program and have provided 17,500 man hours of training in the past year, which was the equivalent of providing about 430 people with a full week of training. MR. INGRAM continued to say that the final element goes back to the ability to utilize resource equipment to the assistance of others. He said, "The issue of liability and, to a certain extent, compensation, are very critical issues and we have determined for a non-member company we are not in a position to carry out the types of financial legal checks in the midst of an emergency, as to whether or not we could work with such a group. Therefore, we have determined that we would only be able to respond to a non-member company upon request by, or under contract with, either the state of Alaska or the federal government." MR. INGRAM stated they had presented a contract to the state of Alaska in August, 1992, and have been working intensively with the state, to try to put that contract in place before an emergency happened rather than wishing they had after the fact. On the Federal side, ACS anticipated having the contract in place by this coming summer (1993), through the U.S. Coast Guard, he said, and noted ACS was working closely with other groups, both the Cook Inlet Group in Alaska and some of the co-ops on the west coast. Number 240 MR. INGRAM said, "Part of this has been cleared by the fact that the federal government either has become, or is literally, within the next week or so, about to become a member of the CISPRI Organization in Cook Inlet." This is with respect to the Defense Fuel Supply Service, which brings fuel up and down Cook Inlet in fairly large quantities for Ft. Richardson and Elmendorf Air Force Base. The ACS needs a response contractor, and have approached CISPRI and worked out indemnification language that both sides can live with, he added. Number 267 CHAIRMAN GREEN asked who became the incident commander in the case of a major spill. Number 271 MR. INGRAM replied that ACS' view in all cases was that they were part of the unified command team. He said, "We have federal, state, and local communities and the responsible party working together as a team. If we were called in either by the state or federal government, under contract with them, we would be a part of their team, which I would like to think would be working cooperatively with the responsible party. If one of their member companies were involved, we would be coming in as part of their team, but in any case we would be seeking to work as one team." Number 287 REPRESENTATIVE GARY DAVIS asked how they would handle materials such as absorbent rags, boom, and whatever bulk oil might be picked up from the spill. Number 292 MR. INGRAM said the North Slope area provided the ability to recycle any oil which was picked up and reuse the oil and have it go to market. He added that in terms of material, there were a couple of possibilities. One was incineration, or if it was material that was not contaminated and could be cleaned up then it could go to the landfill. If it contained hazardous waste it would have to go outside the state (to a Class I disposal site). Number 308 MR. INGRAM stated ACS was the only cooperative in North America with a research and development program, and focused attention on those things which were unique to the Arctic and sub-Arctic. One of those things was in-situ burning. He said, "As the name implies, if you have a spill you burn the oil in place, particularly if it is on the water prior to it spreading too far. You may have to contain it with special fire resistant boom to keep the thickness necessary (to ignite a burn). There are some restrictions on this, the biggest one is time. You have a very limited window of time when you can burn the oil. Oil will naturally try to thin out and you must have a minimum thickness." MR. INGRAM continued, "The chemical dispersants which are out there have not proven themselves to be particularly effective in cold water situations." He disclosed in 1992, ACS made an attempt to carry out a much needed, lengthy offshore burn test in the Beaufort Sea that got wide support both from the local communities, government agencies and environmental advocacy groups. One agency which did not get into step was the Environmental Protection Agency (EPA). As a result of this, the permits which were necessary to carry out the task had not been granted. MR. INGRAM added that in the aftermath of this disappointment, ACS have pursued this option and in doing so, reached some agreement with their Russian counterpart, the Marine Pollution Control and Salvage Administration, who proposed working with ACS in a burn test which would replicate the plan for the Beaufort Sea, but in Eastern Russian waters. "Recognizing a lot of hurdles obviously, we were nevertheless pleased and honored to have this request from the Coast Guard to assist them," he said. He then passed out the ACS summary plan. MR. INGRAM stated this plan would release approximately 1,000 barrels over a five hour period at a rate of about 200 barrels per hour. The release would be made in a controlled fashion. There would be scientific measurements taken prior to the ignition of the crude. Crude oil has emissions that come off naturally, and it is important to compare those with the smoke after a burn takes place. During this time the release vessel, and the containment boom, would be moving through the oil at approximately half a knot and there would be a full backup system in place. MR. INGRAM directed committee members to Page 17 of his handout and stated there was a representation of how the flotilla might look with the release vessel and backup equipment. He stated this test would involve the University of Alaska, specialized equipment from the University of Washington, which was the same team who did the monitoring for the National Oceanic and Atmospheric Administration (NOAA), in the aftermath of the Kuwait oil fires, teams from the NOAA HAZ-MAT (hazardous material) Team and from the National Institute of Standard Testing. He said, "The Russians have proposed a location about as far away as you can get, 60 miles east of Vladivostok, and about 15 miles offshore." Number 448 REPRESENTATIVE DAVIS asked about the reason for the site selection. Number 449 MR. INGRAM felt the site was convenient. He noted the Vladivostok area had a huge marine base. Number 453 REPRESENTATIVE JOE SITTON asked if the Japanese had expressed any interest. MR. INGRAM said the Japanese have had some casual interest, but ACS had not pursued them too hard. He advised that quite a bit of the equipment, especially the specialized equipment, came from the North Slope and would be used over there. The U.S. Coast Guard identified a 378 foot-cutter from Honolulu, which would be assigned to the project and would be the command and control vessel. This test was proposed for late July, 1993. Funding was a significant challenge and ACS has been asked by the Coast Guard to manage and carry out the details of the test, he disclosed. MR. INGRAM approximated the total cost of the test, including the research and development components and the ultimate reporting to be $3 million, and proposed that funding for this be supported equally on a partnership basis between the U.S. Federal Government, the State of Alaska, and industry. He stated the State of Alaska, certainly more than any other state in the United States, had more application here because of the remote nature of Alaska. Number 487 REPRESENTATIVE JERRY SANDERS asked if a test this far south would have results pertinent to what would happen on the North Slope. Number 490 MR. INGRAM understood the sea conditions and temperature were pretty similar and the issue of temperature was one of the least important factors. In-situ burnings have been carried out at -40 degrees on the North Slope, he pointed out, so temperature was not a factor as long as an initial heat source could be generated for ignition. It was preferable not to have ice simply because it would be an inconvenience since transition would occur approximately three miles during the four to five hour period and having to navigate around or through ice would detract from the ability to maximize the scientific gain. He disclosed the Russians had been given a list of the criteria that the ACS was trying to achieve. Number 508 REPRESENTATIVE SANDERS did not understand how the test could be effective because the ice was an inconvenience. If there was a real oil spill, there would be a whole lot of inconvenience, he declared. Number 510 MR. INGRAM clarified it was an inconvenience in terms of carrying out the test and trying to gain scientific knowledge from it. In fact, he added, ice was a challenge no matter when you worked with it, however, it did have one considerable advantage in that it holds the oil. He advised that experiments in Canada had shown you could get away without using containment boom in ice because the oil would be held by the ice. It was a legitimate question that needed to be tried and tested, he said, and added "Some of this we have done, and some work we are doing with the Norwegians will do this as well." Number 528 CHAIRMAN GREEN added the majority of offshore drilling in Alaska had been done during solid ice coverage, because the regulatory agencies concurred with Mr. Ingram's statements above. Number 533 REPRESENTATIVE SITTON stated there was a time line on the funding question and wondered if Mr. Ingram had any sense of the legislators' leadership about their commitment to the state's thirty-three percent. Number 536 MR. INGRAM said the reaction from the administration and, in general, from the legislature, and certainly from the Senate Oil and Gas Committee meeting the previous week, had been very favorable. He stated that many people were aware and very supportive of the test from the work done in 1992 in the Beaufort Sea. Funds have been specifically targeted from the restitution fund of the Exxon Valdez. In their request for support they targeted this on both the state and federal side, he added, and in the overall funding, the federal funding, in essence, was in place for their share and the industry's was also substantially in place. Number 552 REPRESENTATIVE SITTON asked if they wanted to get started and just hope we catch up. Number 553 MR. INGRAM said, "It may be that way regarding the expenditure side, but if the full funding is not in place by the go-no-go date, at the end of March, then the project will be cancelled, as the one in 1992 with the EPA." Number 558 REPRESENTATIVE SITTON asked Chairman Green what kind of latitude the Governor's office had on this kind of expenditure, since the legislature could not act this quickly. Number 560 CHAIRMAN GREEN said, "It would be faster to have the Governor act, however, $1 million would be tough." He hoped to get a recommendation from the committee to add $1 million to the $35 million Exxon fund in time to meet this commitment. "This does not mean the spill drill would be done the end of March, just the commitment of funds, and the spill drill would be done in the summer," he clarified. Number 576 REPRESENTATIVE SITTON asked how the Senate Oil and Gas Committee felt about that. Number 577 CHAIRMAN GREEN said he did not witness that meeting, but it was his understanding the Senate Oil and Gas Committee was in agreement. MR. INGRAM stated the Senate Oil & Gas Committee was very supportive and had indicated they would also move forward with support for the test. He advised of his meeting with the administration and felt members of the administration were supportive. He said, "The bottom line is there is an opportunity here, as there was last year." He found it commendable that the Coast Guard continued to push this for the range of reasons that the Russians were interested in doing this, and thought it should be obvious that one of the things they were not putting into this was any funding; but it was recognized they were fairly strapped in that regard. MR. INGRAM said, "They are taking the risk, they are providing the ballpark. This is not a technology that they have looked to in the past, they see a lot of potential for it. They are quite well equipped in some other regards in terms of oil spill equipment. Some of the big units in Prince William Sound were in Vladivostok before they were in the United States. This is an opportunity they presented to us and we are giving it full thrust at the moment and we hope it comes out favorably." Number 605 CHAIRMAN GREEN understood the information to be gained from this would be a matter of public record, and would be available to the Russians, the state, industry, and ACS. He asked if there was any chance, barring a catastrophe, that if the state went along with this and committed $1 million, it might end up costing $5-7 million more. Number 614 MR. INGRAM stated liability was a real issue. He said, "The liability resides with the co-sponsors, which is the U.S. Coast Guard and the Russian Marine Pollution Control and Salvage Administration. The request is up to a maximum of $1 million from the State of Alaska." Number 625 CHAIRMAN GREEN asked where they planned to get the oil that would be used. Number 629 MR. INGRAM hoped to use North Slope crude. "However, Vladivostok is a very long way away and we need to look at the benefits of using North Slope crude versus a Russian crude we could get with somewhat the same characteristics," he said. Number 639 REPRESENTATIVE SITTON asked if the EPA had objected in 1992, or if they dragged their feet. Number 641 MR. INGRAM felt the EPA was extremely supportive at the local level in Alaska, but the problem seemed to happen in Washington D.C. where it got bogged down. His sense was if they had to do it over, they would have handled it very differently. In essence what happened was that the clock expired, he believed. REPRESENTATIVE SITTON stated that perhaps Alaska would have its own EPA region before long and could then get better responses. Number 654 MR. INGRAM stated they have formally requested the support of a wide range of groups, including the North Slope Borough. One very important group that has been asked for support was the Alaska Regional Response Team, co-chaired by the EPA and the Coast Guard. He understood this support was forthcoming. Number 662 REPRESENTATIVE SANDERS found it hard to believe that crude behaved the same way in an arctic environment as it would behave down there. Number 668 MR. INGRAM stated no two spills were identical, but one could look at the characteristics. He said, "Sea temperature does not vary that much, really you are looking at measurable and controllable changes. One of the issues we will look at is water column sampling, and that is part of the reason for moving through the water. Very little oil sinks and the residue from previous testing is very much a 'taffy-like' material. Oil shrinks in the same way plastic shrinks, so you have a black plastic like material that you can lift with your hands and pull apart." Number 696 REPRESENTATIVE SANDERS asked if there would be more viscosity if it was colder, so if it worked here it would work better in the north. Number 697 MR. INGRAM stated one of the benefits of the cold environment was that it inhibited the extent to which evaporation took place. He said, "In extremely cold climates you tend to get a seal formed over the top layer of oil. The area north of the Brooks Range is the only area in the United States that has conditional pre-approval in-situ burning." TAPE 93-07, SIDE B Number 000 MR. INGRAM stated in a newsletter there was a story about a road tanker spill in the Brooks Range, which was a fuel hauler, the tanker flipped over, spilled 8,000 gallons of arctic grade diesel and the solution that was used to address this response in a very remote, steep terrain area, was to burn it. The burn took place about 20 hours after the spill and was very effective. Number 034 REPRESENTATIVE SITTON stated that there was a lot said during the Valdez Spill about the cold water effects on the clean-up. Number 039 MR. INGRAM stated there was a short burn test carried out in the aftermath of the Exxon Valdez about 40 hours after the spill. There were about 30,000 gallons that were burned off in about an hour. Number 049 DENNIS D. ROME, COMMANDER, UNITED STATES COAST GUARD, stated 40 hours after the Exxon Valdez oil spill a fire started that burned 15,000 to 30,000 gallons in a period of 55 minutes. The down side of that was no attention was being paid to the wind, which drove some of the debris into the village of Tatitlek. The two factors that would affect a burn were the temperature, and the physical sea conditions, he added. Number 121 CHAIRMAN GREEN asked if the Coast Guard cutter would be the command vessel. Number 131 COMMANDER ROME replied in the affirmative. He said this offered a variety of things, like showing the flags in Russian water, which had a positive benefit for the Coast Guard. He stated the Coast Guard planned to get interpreters and as much of the Russian delegation on board the vessel as possible and show them the technology. Number 142 CHAIRMAN GREEN asked if the Coast Guard would be the incident command or ACS would actually carry out the operation and backup operation. Number 151 MR. INGRAM stated the project manager almost certainly would come through ACS, but would take program direction from the joint U.S. sponsor team, which meant they would ultimately be taking direction from the U.S. Coast Guard. COMMANDER ROME added the basis for this was a signed agreement between the U.S. and the USSR which allowed a mechanism for each party to assume responsibility for paying their bills. He said, "If we spill oil in Russian waters then technically it is our responsibility that it gets cleaned up." Number 177 CHAIRMAN GREEN asked if this test would be done during the day and video taped for review. COMMANDER ROME replied in the affirmative. Number 188 REPRESENTATIVE SITTON felt all the questions about who was in charge were very important because during the Valdez Oil Spill the President of the United States had to step in and say that the Coast Guard was in charge. Number 196 MR. INGRAM stated a program like this had a very significant safety element. He said, "The folks from their organization who will be over there are a very well drilled, trained, confident group and they will be in charge of when we burn - when we do not burn." Number 206 COMMANDER ROME stated the Coast Guard came out with a statement that they would be participating in a unified command structure with the state agency. He said, "There are no time lines for decisions, but if you cannot reach a consensus then it is a responsibility of the Coast Guard to direct what is going to go on." Number 227 REPRESENTATIVE SITTON stated there were a couple of suitable Universities and Canadians. Number 229 MR. INGRAM stated there were excellent folks, particularly the folks at the University of Alaska. Number 238 CHAIRMAN GREEN stated the $3 million commitment to the project would be needed prior to the end of March, but if it was a no-go situation, the state would not lose any money. Number 251 MR. INGRAM stated the U.S. Coast Guard and the Alaska Clean Seas have agreed to carry the burden of this into April, 1993, in case they get into a situation like the one in 1992, and if this project does not go ahead then no one else would contribute. The issue of the go-no-go time frame was quite critical. The time frame at the end of March happened to be convenient in the sense the big oil spill conference held every two years was held in Tampa at the end of March. The Russian delegation will be over for that and plans were already in place for some sort of an agreement ceremony on April 2, then, interestingly enough, the Russian group was coming to Alaska and would participate in the Valdez exercise the first week in April, he noted. Number 277 REPRESENTATIVE SITTON asked if the Governor could spend $838,000 promoting the development of the Arctic National Wildlife Refuge without legislative approval, how come one million dollars could not be given to ACS to let them have the go ahead. He said, "Obviously he has discretionary latitude in that range of figures." CHAIRMAN GREEN was not sure, but thought so. Number 291 REPRESENTATIVE SITTON stated that was $838,000 which the Governor just wrote a check for. Number 298 CHAIRMAN GREEN stated that was a good point and asked if it was the consensus of the committee to get a letter to that effect to the Governor; that the committee had reviewed this process, supported it and certainly felt funding should come from the Exxon settlement so it would not cost the people of the state anything. Number 304 REPRESENTATIVE SITTON MOVED to send a letter to the Governor as suggested by the Chair. Number 307 CHAIRMAN GREEN asked if there were any objections. Hearing none he promised to draft a letter to the Governor. He stated the main concern he had was to the benefit of the people in the state. Number 312 REPRESENTATIVE SITTON endorsed the Chair's comment, and voiced his concern about the time line. Number 314 CHAIRMAN GREEN stated this was very critical. He asked for any other questions. Number 319 MR. INGRAM stated it was his intent to show a five minute video of in-situ burning, but could not get a hold of a VCR. ANNOUNCEMENT Number 338 CHAIRMAN GREEN announced there would be a joint oil and gas committee meeting in the Butrovich Room with Julian Darley, President of BP. ADJOURNMENT The meeting was adjourned at 6:10 p.m.