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Court decision stalls Redoubt Best available technology court decision holds up Cook Inlet development; Forest Oil needs SB 343 on books within the month to get project permits in April Kristen Nelson PNA Editor-in-Chief
Senate Bill 343, “clarifying the term ‘best technology’ required for use in oil discharge prevention and contingency plans” and affirming existing Department of Environmental Conservation regulations defining ‘best technology’ is a fix required if Forest Oil Corp.’s Redoubt Shoal development in Cook Inlet is going to go forward this year.
That was the message Forest Oil’s Senior Vice President Gary Carlson delivered to Senate Resources March 4 during a hearing on SB 343.
A Feb. 1 Supreme Court ruling held two provisions of DEC’s regulations inconsistent with the Legislature’s intent, jeopardizing “timely issuance and new plans and timely renewal of existing plans,” according to the Senate Resources sponsor statement on the bill, introduced by the committee Feb. 27.
SB 343 affirms that DEC’s regulations meet legislative intent on best available technology and are consistent with the statute, the committee was told. DEC proposal Larry Dietrick, director of DEC’s Division Spill Prevention and Response told the committee that DEC has been working with the Department of Law on a remedy to the best available technology issue from the Supreme Court decision. At issue, he said, is the legislative intent for meeting the ‘best available technology’ statutory requirement.
The regulations implemented in 1997 were developed based on the Legislature’s enactment of what are “arguably the toughest response planning standards in the world” and DEC interpreted the statute to mean that meeting those standards also satisfies the ‘best available technology’ requirement “if the equipment is proven, reliable and appropriate for its intended use,” Dietrick said.
The court, he said, has invited the Legislature to clarify its intent.
DEC believes that legislation fixing this problem must be passed this session to ensure continued operation of Alaska facilities and eliminate any question of the validity of existing plan approvals made since 1997.
SB 343 “validates the interpretation made by the department in 1997 regulations,” he said, would validate plans approved under the 1997 regulations and would not require changes to the 1997 regulations. Groups want conference Both the Prince William Sound Regional Citizens Advisory Council and the Cook Inlet Regional Citizens Advisory Council — participants in DEC’s negotiated rulemaking — supported the legislation. But both also told the committee that a part of the regulations adopted provided for a conference every five years to look at best available technology. That conference has not yet been funded by the Legislature, they said, although it is in the governor’s budget. The five-year conferences would be funded half by the state and half by industry. The way the best available technology is defined in the regulations only make sense, the organizations said, if an event like the conference actually takes place and produces consensus on what best available technologies are.Industry supports bill Marilyn Crockett, deputy director of the Alaska Oil and Gas Association, said AOGA supports SB 343. More than 100 plans have been approved under the regulations developed in the one and a half year stakeholder process, she said. Crockett said the Supreme Court decision has “placed everyone from my membership and others in the regulated community to the department in an extremely tenuous position.” The decision has produced unnecessary delays and uncertainties both for companies seeking renewals of existing plans and those seeking new plan approval, she said.
SB 343, she said, provides the specific legislation for which the Supreme Court was looking. With this very limited amendment, “the legislature makes it clear that the regulatory approach taken by the department after extensive stakeholder deliberation meets the Legislature’s expectations when it vested this authority with the department,” she said.
Crockett also said she wanted to make it clear “that the only objective being sought by the Alaska Oil and Gas Association and its members is legislative affirmation of the rules that are in place today.” Project being held up “We are one of the companies caught in the middle of this dilemma,” Gary Carlson, senior vice president of Forest Oil Corp., told the committee. Carlson said Forest is trying to get approval of its contingency plan for its Redoubt Shoal project.
“We have invested significant capital to get to this point and have plans to invest up to $150 million on this project in 2002,” he said. Most of that money, Carlson said, will go to place the Redoubt Shoal field on production, and passing SB 343 “is important for the viability of this project.”
“The state of Alaska does have one of the most comprehensive oil spill prevention and response requirements in the world,” he said.
Forest Oil, he said, believes that Senate Bill 343 is necessary to make clear legislative intent and to support the Department of Environmental Conservation regulations now in place.
“In Forest Oil’s case, the Redoubt Shoal development phase, which includes facility pipeline installations and 300-plus jobs later this year, is in jeopardy without a quick resolution of this problem,” Carlson said.
Forest Oil has built best available technology into all aspects of Redoubt Shoal, he said, including state-of-the-art leak detection, materials and construction, facilities siting and innovative pipeline design.
“After more than three years in the permit process, we anticipated having all state and federal permits in place by early April,” he said. With best available technology requirements up in the air, Carlson, permitting rules are being changed in the middle of the process. The construction window is limited in Alaska, and “getting SB 343 on the books within a month’s time is critical to the commercial success of this project.” Response authority proposed The bill drew a different response from spill prevention and response activist Tom Lakosh, whose court suit resulted in a Feb. 1 Supreme Court decision overturning the definition of best available technology in DEC’s regulation.
Lakosh said the Supreme Court decision did not fix response problems in the state. What is needed, he told the committee, is giving DEC the power to form a response authority that would “conduct research to improve response capability under problematic conditions … and would develop a statewide system of public and private hazardous substance spill resources to cope with spills particularly when the private response community cannot meet strict regulatory requirements.”
This response authority would be similar such a body in the Federal Republic of Germany, Lakosh said.
He estimated that DEC would need $5 million for technical assessment and $25 million to start response depots. DEC would charge for services and the money would be repaid to the state once the response authority began collecting money for its services.
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