Legislature(2003 - 2004)
03/25/2003 01:41 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.