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AOGA says proposed ACMP regulations unclear, unfair, illegal Sealaska tells DGC in times of declining state revenues it is not good for state to volunteer to perform ‘costly bureaucratic reviews’ Steve Sutherlin PNA Managing Editor
In an unparalleled move, the 18 members of the Alaska Oil and Gas Association joined with other stakeholders to protest the state’s proposed Alaska Coastal Management Program regulations in a Dec. 13 letter to the state Division of Governmental Coordination. Dependent upon the agencies for permits — and therefore normally cautious about strenuously objecting to their proposals — the state’s oil and gas companies told DGC that the second draft of the ACMP regulations is unclear, undisciplined, unfair and illegal.
“Nothing less than Alaska’s investment and development future is at stake,” AOGA said in its cover letter.
AOGA contends the proposed regulations should, but do not, address four basic questions for every project applicant:
1. Does the ACMP apply to my project?
2. What information must I submit for my application to be complete?
3. What standards will be applied to the consistency review of my project?
4. How long will it take to obtain a consistency determination? No clear boundaries DGC’s proposed regulations create confusion about which projects in Alaska do or do not require an ACMP review, AOGA said, and they expand the reach of the ACMP to lands beyond the intent of the Legislature. A DGC employee told PNA in September that the agency wants all projects north of the Brooks Range to be subject to an ACMP review. Rather than addressing “direct and significant impacts” on coastal resources, as intended by the Legislature when the program was adopted, the language in the proposed regulations expands the program to include activity that “may affect any coastal use or resource,” or activity that “may have a reasonably foreseeable direct or indirect affect on any coastal uses or resources.” The DGC employee said even projects that were hundreds of miles from the coast or a river might be subject to an ACMP review because of a “possible indirect effect on coastal uses or resources.”
The state received numerous comments about how difficult it was to determine which projects would fall within the review area, Randy Bates, DGC project analyst told PNA recently..
“It’s a source of frustration for stakeholders,” Bates said. “There is a clear threshold, but not a clear boundary.”
AOGA said DGC is required by state law to identify “the boundaries of the coastal areas subject to the district coastal management program.”
In contrast, Washington state regulations clearly limit reviews to upland areas 200 feet landward from the edge of waters covered under its program. Agencies stop the clock on projects Another problem, AOGA said, was that it is impossible to determine how long the process will take.
“As currently drafted, the rules contain too many exceptions and loopholes that either stop the clock entirely or allow the schedule to be sequentially extended,” AOGA said. “Because the coordinating agency can unilaterally modify the schedule at nearly every step, the applicant is left with no meaningful ability to predict the amount of time that will be needed to complete the process.”
To illustrate the problem, AOGA notes the vast majority of pending ACMP consistency determinations for oil and gas exploration and development projects are on a “stopped consistency review clock.” PNA’s analysis of oil and gas project files shows that in the majority of cases the clock has been stopped by the state Department of Environmental Conservation. Illegal requirements on permits AOGA said the draft regulations would “institutionalize” illegal requirements known as “homeless stipulations” on permits for oil and gas projects.
The proposed regulations continue to allow state resource agencies to attach stipulations from the ACMP consistency determination as a requirement of permit approval, AOGA said. By this device, state agencies exceed the authority granted them by the Legislature.
AOGA said homeless stipulations impose new obligations on oil and gas projects, yet have no basis in statute or regulation and are therefore illegal.
Further, the proposed regulations delay state permits until after the consistency determination is final. Projects can be delayed by allowing DGC to impose conditions no agency is authorized to impose by attaching them as provisions of other state permits. Elevation and petition process — a morass AOGA member companies said they encounter major difficulties with the elevation and petition processes. The association suggests eliminating the current two-tiered elevation process.
An elevation occurs when an issue cannot be resolved at the staff level. If such a stalemate occurs an agency can “elevate” the issue to the appropriate directors of the resource agencies within the Department of Natural Resources, the Department of Fish and Game and DEC.
DGC coordinates the elevation. If, after a series of meetings between the directors, the issue remains unresolved, then the whole process begins again with an elevation of some or all of the issues to the resource agency commissioners.
AOGA believes the directors' level elevation is an unnecessary step in an already flawed process. Most of the issues that are elevated to directors are matters of policy and not fact or science. It is unusual for policy issues to find resolution at the director level; most elevations continue on to the commissioners. AOGA, not a proponent of the elevation process in any form, believes issues should be elevated only to commissioners. At least this eliminates one step that generally just wastes the time of the agencies and the applicants and provides little or no benefit.
Even with modification of elevations to a one-tiered process, procedures under the proposed regulations for conducting elevation meetings and petition hearings must be clarified, AOGA said.
In order to make sense of the proposed regulations, AOGA members attempted to prepare a detailed flow chart of the process, including timelines. The association said ambiguous and circular language made it impossible to develop a clear diagram that would show the required steps in the ACMP process.
In its comments, AOGA suggests that DGC attempt to create a flow chart of the permitting process under the proposed regulations, noting that many conflicts and complexities are brought to light by diagramming the process. Diverse interests, similar concerns Other stakeholders from around Alaska expressed concerns that often coincided with AOGA’s criticisms of the proposed regulations.
Sealaska Corp. comments mirrored concern about the effect of the regulations on economic development in the state.
“As we've stressed in the past, these are the most important procedural regulations in Alaska; they are complex; and every turn is fraught with the possibility of costly unintended consequences,” Sealaska said.
The Juneau-based Native regional corporation also addressed the practical need to limit the reach of the ACMP review to definable boundaries, as intended by the Legislature: “In these times of declining state revenues, it is not good government for the office of the Governor to volunteer to perform costly bureaucratic reviews of small projects that will only have minor and occasionally esoteric ‘effects’ on some coastal resource.”
Chugach Alaska Corp. said, “Ridding the draft regulations of ambiguities, unnecessary duplicitous reviews, permit conditions that agencies have no authority to enforce, and undefined timelines will do much to clarify the regulations…”
The Anchorage-based Native regional corporation said in order for DGC to attain its goals with the regulations, such as consensus building among stakeholders, a clear timeline for the review process must be established.
“In today’s world, we can expect virtually all projects to become controversial,” Chugach said. “In order for consensus building to work in these cases, definite deadlines must be established and responsibility clearly assigned.”
The Resource Development Council for Alaska said, “Developing a clear, well-organized, equitable framework for the ACMP will be critical to ensure Alaska's regulatory climate is one that does not unduly discourage private sector investment and economic development.”
The Alaska Miners Association said the ACMP affects not only “big” business, but small business as well.
“The gravity of these proposed regulations for the mining industry must not be underestimated,” the association said. “Many of our members are small businesses which do not have legal and permitting staff that can negotiate their way through these regulations. For all the regulated public, but especially for such small businesses, the ACMP regulations have historically been a major source of permitting difficulty and concern. The proposed regulations would both perpetuate the existing problems and even expand the problems for these small businesses.” Coastal Policy Council to review results According to Bates, the division has received many comments on the proposed regulations, and will take several months to review and summarize them before proceeding.
“We’ll take a hard look, and assuming we move forward, we’ll send them to the Coastal Policy Council within the next few months,” he said.
The Coastal Policy Council is charged with guiding the direction of the ACMP.
“We’re trying to boil down what the issues are, and what the biggest impediments are,” Bates said. “We’ll look at the comments and see if they preclude us from moving forward.”
Bates said DGC was actually trying to make the agency’s review process more predictable by clarifying its regulations. If the changes create more problems than they solve, the division might abandon the proposed revisions.
Initially, Bates said, it appears that some of the comments are based on problems with statutes, which can’t be changed by DGC, but must be addressed by the Legislature. For instance, the review processes and some of the appeal processes are codified by statute, he said.
“The Legislature must amend statutes, we’re the body amending regulations,” he said.
Bates said it has been 17 years since the regulations have been put in place. DGC began an assessment in the early 1990s to address concerns that have arisen over the years, and it was suggested that changes be made to Chapter 50 of the regulations, regarding the contingency review process. That led to the current draft process, which has been under way for two and one-half years, Bates said.
He said there has been a wide range of public involvement, and that DGC has had significant input from both industry and environmental interests. He said the division had gathered a meaningful picture of existing concerns.
“We may be able to move forward,” he said, “We’ll need the support of everybody involved.”
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