Legislature(2003 - 2004)

03/25/2003 01:41 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 74(RES) am                                                                                             
                                                                                                                                
     An Act extending the renewal period for oil discharge                                                                      
     prevention and contingency plans; and providing for an                                                                     
     effective date.                                                                                                            
                                                                                                                                
LARRY  DIETRICK,  DIRECTOR, SPILL  PREVENTION  AND  RESPONSE,                                                                   
DEPARTMENT OF  ENVIRONMENTAL CONSERVATION, stated  that SB 74                                                                   
would streamline  the permitting  process by lengthening  the                                                                   
time for renewal of oil discharge  prevention and contingency                                                                   
plans from three to five years.                                                                                                 
A five-year  renewal period would streamline  the contingency                                                                   
review  process  for  industry   while  maintaining  Alaska's                                                                   
strong  spill   prevention  and  response  standards.     Oil                                                                   
Discharge  Prevention   and  Contingency  Plans   are  public                                                                   
noticed and then  reviewed and approved by the  Department of                                                                   
Environmental Conservation.                                                                                                     
                                                                                                                                
Mr.  Dietrick continued,  the  Oil Discharge  Prevention  and                                                                   
Contingency   Plans  are  required   for  operators   of  oil                                                                   
terminals, refineries, crude oil  transmission pipelines, oil                                                                   
exploration and production facilities,  oil tank vessels, oil                                                                   
barges, non-tank vessels of over  400 gross tons and railroad                                                                   
tank cars.                                                                                                                      
                                                                                                                                
Mr. Dietrick emphasized that the  bill would provide multiple                                                                   
benefits from the proposed change:                                                                                              
                                                                                                                                
     ·         The bill furthers the goal of permit                                                                             
               streamlining  with  no loss  of  environmental                                                                   
               protection    and   complements    initiatives                                                                   
               currently  being undertaken by  the Department                                                                   
               to    shift    the    emphasis    away    from                                                                   
               the administrative    review   and    approval                                                                   
               process  to  field  verification  of  response                                                                   
               capability.                                                                                                      
                                                                                                                                
     ·         The bill would significantly reduce the                                                                          
               administrative   burden   on   the   regulated                                                                   
               community   and   shift  the   emphasis   from                                                                   
               paperwork to performance.                                                                                        
                                                                                                                                
     ·         The reduction in paperwork would increase the                                                                    
               ability  of operators  and  the Department  to                                                                   
               focus   on  spill   prevention  and   facility                                                                   
               operation.                                                                                                       
                                                                                                                                
     ·         The change would allow operators more time to                                                                    
               make  practical  enhancements  to their  spill                                                                   
               prevention and response capabilities.                                                                            
                                                                                                                                
     ·         The change would improve environmental                                                                           
               protection and  preparedness through increased                                                                   
               field   presence  and  the  ability   to  work                                                                   
               directly  with  operators to  ensure  response                                                                   
               readiness through  on-site facility and vessel                                                                   
               inspections, spill drills and exercises.                                                                         
                                                                                                                                
     ·         Finally, the change would make the State                                                                         
               renewal  cycle consistent  with the  five-year                                                                   
               renewal  cycle   for  the  federal  oil  spill                                                                   
               contingency  plans   required  under  the  Oil                                                                   
               Pollution  Act of  1990, as  well as those  of                                                                   
               other West Coast states.                                                                                         
                                                                                                                                
Co-Chair Harris  clarified that  the legislation  proposes to                                                                   
change the  time period for  the contingency plan  from three                                                                   
to  five  years.    He  referenced   the  zero  fiscal  note,                                                                   
commenting  that  the  review  and  approval  process  should                                                                   
consume  less  time  for  the  Department  given  the  longer                                                                   
extension.   Co-Chair Harris thought that  information should                                                                   
reduce costs to the Department.                                                                                                 
                                                                                                                                
Mr.  Dietrick responded  that  the Department  had looked  at                                                                   
that  closely, however,  the  trade off  was  a reduction  in                                                                   
litigation  which  the Department  presently  is  under.   He                                                                   
emphasized  the  "extraordinary"   workload  assumed  by  the                                                                   
Department.    Additionally,  there could  be  a  fundamental                                                                   
shift in  field verification.   The intent  was not  to lower                                                                   
the standard  of protection but  rather to make a  shift from                                                                   
the time spent on paperwork to  the time spent with operators                                                                   
working on the  standards.  He continued, the  focus would be                                                                   
on exercising  drills with additional time  guaranteeing that                                                                   
the readiness is maintained.                                                                                                    
                                                                                                                                
Co-Chair  Harris  reiterated  that  the intent  was  only  to                                                                   
extend  the time  period with  no regulatory  function.   Mr.                                                                   
Dietrick acknowledged  that was correct and  that there would                                                                   
be  no  other   change  in  the  statutory   requirements  or                                                                   
lessening  of any  of  the current  environmental  protection                                                                   
measures.                                                                                                                       
                                                                                                                                
Co-Chair  Harris asked  if any  comments  had been  submitted                                                                   
from local regional citizen advisory  councils.  Mr. Dietrick                                                                   
advised  that  the Prince  William  Sound  Regional  Citizens                                                                   
Advisory  Committee  had  provided a  letter  dated  February                                                                   
26th,  2003.  (Copy on  File).    He  added that  Cook  Inlet                                                                   
Regional  Citizens   Advisory  Committee  had   not  provided                                                                   
testimony  or comments  to the Department  to date,  however,                                                                   
understood that they had indicated three points of concern:                                                                     
                                                                                                                                
     ·         Extending the time frame;                                                                                        
     ·         Reducing the frequency of the technology                                                                         
               reviews; and                                                                                                     
     ·         Reducing agency and plan familiarization with                                                                    
               the contingency plans.                                                                                           
                                                                                                                                
Representative  Hawker   questioned  the  context   of  these                                                                   
contingency plans  and who would be impacted  by the changes.                                                                   
Mr. Dietrick responded that the  categories of facilities are                                                                   
the same categories  regulated under current  statute.  Under                                                                   
that  statute,  they  are  required  to  have  oil  discharge                                                                   
prevention contingency  plans with  the thresholds  varying a                                                                   
little.    Generally  speaking,  if  there  is  a  crude  oil                                                                   
terminal  with a  total volume  of over  5,000 barrels,  they                                                                   
then are required to submit a plan.                                                                                             
                                                                                                                                
Representative   Stoltze    questioned   if    the   proposed                                                                   
legislation  would include  railroad tankers,  of which  some                                                                   
pass  through  some  of  his  neighborhoods.    Mr.  Dietrick                                                                   
advised  that  this  plan  is not  required  for  the  Alaska                                                                   
Railroad.                                                                                                                       
                                                                                                                                
MARILYN  CROCKET,  (TESTIFIED   VIA  TELECONFERENCE),  DEPUTY                                                                   
DIRECTOR, ALASKA  OIL AND GAS ASSOCIATION  (AOGA), ANCHORAGE,                                                                   
testified that  AOGA is a  trade association whose  17 member                                                                   
companies   account  for   the  majority   of  oil   and  gas                                                                   
exploration,    development,   production,    transportation,                                                                   
refining and marketing activities in Alaska.                                                                                    
                                                                                                                                
Every  AOGA   member  conducting  activities  in   Alaska  is                                                                   
required  to have  an Oil  Spill  Prevention and  Contingency                                                                   
Plan (or  C-Plan) approved  and in place.    Therefore,  AOGA                                                                   
has  a  significant  interest  in SB74,  and  encourages  the                                                                   
Committee to report it out.                                                                                                     
                                                                                                                                
Ms. Crocket stated  that AOGA spent a considerable  amount of                                                                   
time over the past 12 months identifying  permitting programs                                                                   
that were in  need of updating and streamlining.   Initially,                                                                   
AOGA adopted a  principle to guide them through  the process.                                                                   
That principle reads:                                                                                                           
                                                                                                                                
     "To accomplish updates and streamlining without                                                                            
     compromising   environmental    protection   or   safety                                                                   
     standards".                                                                                                                
                                                                                                                                
Ms. Crocket commented  that SB 74 fits perfectly  within that                                                                   
principle.   The bill  would extend the  renewal cycle  for C                                                                   
Plans from the  current period of three years  to five years,                                                                   
the  cycle required  by the  federal  government, west  coast                                                                   
states and other oil producing states.                                                                                          
                                                                                                                                
She  added  that  preparation  and processing  of  a  renewal                                                                   
application  is an  expensive  endeavor.   Renewal costs  can                                                                   
average  between $60,000  and $100,000  dollars for just  the                                                                   
renewal.     Additionally,  the  renewal  process   is  time-                                                                   
intensive.    Experience  has  shown  that  for  some  plans,                                                                   
approvals  can average  360  days, essentially  meaning  that                                                                   
once a renewal  is complete, the work must begin  on the next                                                                   
renewal.                                                                                                                        
                                                                                                                                
Ms. Crocket  pointed out  that it  is important to  recognize                                                                   
what the purpose of the C Plan  serves.  It is a "blueprint",                                                                   
describing  how  an operator  responds.    The proof  of  the                                                                   
effectiveness of the plan is whether  the response identified                                                                   
in the Plan  can be delivered as promised.   Demonstration of                                                                   
effectiveness  has been  accomplished through  drills.   That                                                                   
area should  be the largest  benefit of the extended  renewal                                                                   
cycle,   shifting   the  focus   away   from   administrative                                                                   
processing to field performance.                                                                                                
                                                                                                                                
Representative  Stoltze MOVED  to AMEND the  bill on  Page 2,                                                                   
Line 2,  deleting "five years"  and inserting  "three years".                                                                   
Co-Chair Williams OBJECTED for the purpose of discussion.                                                                       
                                                                                                                                
Mr. Dietrick explained  that there is one renewal  time frame                                                                   
set in  statute that applies to  all facilities.   The change                                                                   
from three  to five years  would need  to apply to  all other                                                                   
facilities.  Under  the current bill, if the  change is made,                                                                   
it would apply to all categories.                                                                                               
                                                                                                                                
Co-Chair Harris asked if Representative  Stoltze's intent was                                                                   
that the  Alaska Railroad  be required to  go through  a full                                                                   
compliance review  on oil discharge every three  years, while                                                                   
other facilities  covered  by the legislation  would  then be                                                                   
every five years.  Mr. Dietrick thought that was correct.                                                                       
                                                                                                                                
Co-Chair  Harris asked  if  the Department  of  Environmental                                                                   
Conservation provides  reviews of existing  contingency plans                                                                   
on a  year-to-year basis.   Mr.  Dietrick responded  that the                                                                   
Department  has  looked  at  the  process  for  renewals  and                                                                   
updates currently in the Alaska  Statutes.  In 1990, when the                                                                   
Legislature   made  the  updates,   they  did  provide   many                                                                   
mechanisms  in  Statute that  spell  out an  "evergreen  type                                                                   
process"   with  a  requirement   for  non-notification   for                                                                   
readiness.   If at  any time,  the capability is  diminished,                                                                   
they would be required to immediately  notify the Department.                                                                   
The Legislature had built in a  strong continuous process for                                                                   
the notification including routine  plan updates.  The intent                                                                   
of  the years  involved supercedes  the fact  that there  are                                                                   
strong  mechanisms in  place to  provide  for the  continuous                                                                   
update and refreshing of the plan.                                                                                              
                                                                                                                                
Co-Chair Harris asked  what would be the "down  side" for the                                                                   
State  in implementing  three rather  than five  years.   Mr.                                                                   
Dietrick observed  that the renewal process itself  is not as                                                                   
important  as  the  ability  to   routinely  check  the  test                                                                   
capability base for inspection  as well as increased emphasis                                                                   
on prevention.   With  the mechanisms  currently in  statute,                                                                   
the Department believes that the State could go to a five-                                                                      
year plan and  not sacrifice anything while at  the same time                                                                   
provide greater efficiency in reducing paperwork.                                                                               
                                                                                                                                
Representative  Stoltze   thought  that  the   amendment  was                                                                   
arbitrary, noting  that many people  in his district  live on                                                                   
the  railroad line.    He identified  the  need  to make  the                                                                   
Railroad more responsive to the public.                                                                                         
                                                                                                                                
Representative Hawker  voiced his support for  the concept of                                                                   
the  amendment.  He  noted  that  he  had  received  comments                                                                   
regarding the  non-responsiveness of the Alaska  Railroad and                                                                   
that they  do not act as a  "team-player".  He noted  that he                                                                   
would not favor passing the amendment  at this time, however,                                                                   
suggested   that   further  consideration   regarding   these                                                                   
concerns be brought forward.                                                                                                    
                                                                                                                                
Representative  Stoltze  WITHDREW  the  MOTION to  adopt  the                                                                   
amendment.                                                                                                                      
                                                                                                                                
Co-Chair  Harris  echoed concerns  voiced  by  Representative                                                                   
Stoltze, agreeing that they would be addressed later.                                                                           
                                                                                                                                
Representative Foster  MOVED to report CS SB 74  (RES) am out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS SB  74 (RES)am was  reported out of  Committee with  a "do                                                                   
pass"  recommendation and  with zero  fiscal note  #1 by  the                                                                   
Department of Environmental Conservation.                                                                                       
                                                                                                                                

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