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Vol. 19, No. 11 Week of March 16, 2014
Providing coverage of Alaska and northern Canada's oil and gas industry

HB 77 re-emerges

Sponsors say changes to permit streamlining bill have addressed concerns

Alan Bailey

Petroleum News

The Parnell administration has revised House Bill 77, the controversial bill designed to streamline the permitting of resource development projects in the state. Following a storm of protest during last year’s legislative session, the bill was passed by the House but stalled in the Senate. On March 10 the administration submitted a revised version of the bill to the Legislature, with Wyn Menefee, chief of operations in the Division of Mining, Land and Water, reviewing the bill revisions in a meeting of the Senate Resources Committee.

Many features

Dubbed “The Silencing Alaskans Act” by an environmental lobby which has accused the state administration of trying to subvert the public comment process for permit approval, and slammed by some Native groups as undermining traditional rights to water use, the bill would allow the administration to issue general permits for some resource development activities, would make some changes to the law relating to appeals over agency permitting decisions and would also change the law relating to the reservation or sale of water in the state. Other components of the bill seek improved efficiency in processes such as state land leasing and sales.

“Since last year’s work on this bill we’ve had a lot of meetings with the public, with different interest groups,” Menefee told the Resources Committee. “Legislators and the Department (of Natural Resources) have reached out to the public and said ‘what are the concerns?’ We’ve worked with legislators to try to come up with the correct language to address the concerns that the public had.”

General permits

The bill, if passed, would allow oil companies to conduct certain activities, in exploration projects, for example, under the terms of a general permit, rather than having to go through the time-consuming process of applying for specific permits for specific activities, provided that the work being carried out falls within the general permit parameters. General permits are already in common use in, for example, the permitting of water discharges from industrial activities.

Critics of the bill say that a general permit could potentially give a company a blank check to carry out activities without adequate public oversight.

Menefee said that the new version of the bill addresses this concern by including language to prevent conflicts with other laws and by restricting the issuing of general permits to just those activities that may already be permitted under the terms of certain existing laws. The creation of a general permit will require public notice and comment, and will be appealable at the time it is issued. The state will not be allowed to issue a general permit for decisions relating to land easements; oil and gas or mineral leasing; or other disposals of state land. Neither will general permits be allowed for activities that may cause “significant or irreparable” harm to state land or resources. And general permits will be prohibited for activities inside state forests, state parks and state game refuges, or for activities associated with coal mining.

Previous opposition

Sen. Hollis French, D-Anchorage, said that this particular section of the bill had previously generated opposition from thousands of Alaskans.

“I’m just wondering whether the department is going to gain more than it loses by continuing to push this idea,” French said. “I just wonder whether it would be better to jettison the general permit and move on to the other reforms that the bill offers, and leave this sort of controversial hot, topic for another day.”

“It’s an efficiency measure,” Menefee responded. “We get repetitive requests for the same type of thing, that we always say yes and we put these parameters around that authorization … that’s a very good candidate for doing a general permit.”

Sen. Peter Micciche, R-Soldotna, said that he had taken notice of hundreds of comments expressing concerns about the previous version of the bill and that he thinks that the tightening of conditions under which general permits could be issued had addressed those concerns. He said that his understanding of the terms of the revised bill indicates that it would not be possible, for example, to issue a general permit for a major project, such as the proposed Pebble mine, a possibility that had concerned some critics of the bill.

“That is correct,” Menefee said.

Appeal of decisions

The section of HB 77 relating to appeals of state permitting decisions seeks to require people appealing a decision to provide information explaining how that decision negatively impacts them, with the standard for an appeal being “substantially and adversely affected” rather than “aggrieved,” as in the previous version of the bill, Menefee said. And people must be involved in the public comment process for the decision if they are to subsequently appeal the decision — the idea is to prevent last minute appeals by people who have not previously expressed concerns and thus given the state agency an opportunity to accommodate those concerns, he said.

Water reservations

One section of the bill that has raised hackles in some quarters relates to people’s ability to temporarily reserve the use of water for some purpose, such as ice road construction or a development project. Provisions in the bill are designed to prevent people using a water reservation as a tool to impede a project that needs water, Menefee explained.

The new version of the bill does allow anyone, including a federally recognized tribe, to apply for a water reservation, but with provisions such as a need for hydrologic data, to ensure that an application has a genuine intent. And the reservation, if granted, will go to the appropriate state agency, rather than to the person making the application. In that way a public agency will hold a reservation for a public resource, while the applicant will retain the right to appeal a reservation decision, Menefee said. Menefee later commented that under the current law the state has not issued any water reservations to individual people.

Sen. Lesil McGuire, R-Anchorage, commented that, whereas there are over zealous litigants who can impede resource development, there can also be over zealous corporations who might take advantage of the state’s water reservation laws and the possibility of using general permits that provide just one opportunity for people to testify. Alaskans are concerned about protection of the state’s environment, she said.

“There’s a whole lot to think about and I am deeply concerned,” McGuire said. “This senator sits here nervous about the fact that there could be an abuse of the process.”

Randy Bates from the Alaska Department of Fish and Game assured the committee that the bill does not impact protections for wildlife in the state and that, if the bill were enacted, Fish and Game would retain its separate and independent authority.

Public testimony on the bill was scheduled for March 12.

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