[Senate Hearing 106-952]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-952
 
   BILL TO ESTABLISH REGION 11 OF THE ENVIRONMENTAL PROTECTION AGENCY
=======================================================================


                                HEARING

                               BEFORE THE

                              COMMITTEE ON

                      ENVIRONMENT AND PUBLIC WORKS

                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 6, 2000
                               __________

                                   ON

                                S. 1311

  A BILL TO DIRECT THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION 
    AGENCY TO ESTABLISH AN ELEVENTH REGION OF THE ENVIRONMENTAL PROTECTION 
    AGENCY, COMPRISED SOLELY OF THE STATE OF ALASKA

  Printed for the use of the Committee on Environment and Public Works








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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED SIXTH CONGRESS
                             second session
                   BOB SMITH, New Hampshire, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma            DANIEL PATRICK MOYNIHAN, New York
CRAIG THOMAS, Wyoming                FRANK R. LAUTENBERG, New Jersey
CHRISTOPHER S. BOND, Missouri        HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio            BOB GRAHAM, Florida
MICHAEL D. CRAPO, Idaho              JOSEPH I. LIEBERMAN, Connecticut
ROBERT F. BENNETT, Utah              BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas          RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island
                      Dave Conover, Staff Director
                  Tom Sliter, Minority Staff Director

                                  (ii)

  












                            C O N T E N T S

                              ----------                              
                                                                   Page

                              JUNE 6, 2000
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     2
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....     1

                               WITNESSES

Brown, Michele D., Commissioner, Alaska Department of 
  Environmental Conservation.....................................    14
    Prepared statement...........................................    42
    Responses to additional questions from Senator Smith.........    48
Diaz, Romulo L., Jr., Assistant Administrator for Administration 
  and Resources Management, Environmental Protection Agency......    12
    Prepared statement...........................................    37
    Responses to additional questions from Senator Smith.........    40
Freeman, Ken, executive director, Resource Development Council...    17
    Prepared statement...........................................    51
Murkowski, Hon. Frank, U.S. Senator from the State of Alaska.....     3
    Administrative order, EPA Administrator William K. Reilly....     5
    Prepared statement...........................................    36

                          ADDITIONAL MATERIAL

Statement, Melanie L. Griffin, director, Lands Protection 
  Programs, Sierra Club..........................................    54
Text of S. 1311, A bill to direct the Administrator of the 
  Envronmental Protection Agency to establish an eleventh region 
  of the Environmental Protection Agency, comprised solely of the 
  State of Alaska................................................    56

                                 (iii)

  










   BILL TO ESTABLISH REGION 11 OF THE ENVIRONMENTAL PROTECTION AGENCY

                              ----------                              


                         TUESDAY, JUNE 6, 2000

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
406, Senate Dirksen Building, Hon. Bob Smith (chairman of the 
committee) presiding.
    Present: Senators Smith and Baucus.

             OPENING STATEMENT OF HON. BOB SMITH, 
          U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE

    Senator Smith. The committee will come to order.
    Good morning, Senator Murkowski. I'll have a very brief 
opening remark, then Senator Baucus may have a comment, then, 
we'll turn to you, Senator Murkowski.
    Today, we will address the topic as to whether the EPA 
should establish a separate region known as Region 11 for the 
State of Alaska. That question is before us in the form of a 
bill, S. 1311, which was introduced by our colleague, Senator 
Frank Murkowski of Alaska. The bill, S. 1311, would direct the 
EPA to create a separate region for Alaska and to place a 
regional office in Alaska, and would authorize such funding as 
necessary to achieve that goal.
    The bill stems from and reflects a longstanding interest on 
the part of both Senators Murkowski and Stevens to see the 
adoption of a separate region, EPA region, for their home 
State. Several years ago, this subject was addressed in a 
different context. Section 522 of the Department of VA and 
Housing and Urban Development Independent Agencies 
Appropriations Act of 1992, fiscal year 1992, authorized the 
creation of a separate EPA region for Alaska.
    And on the last day of the Bush administration, EPA 
Administrator William Reilly signed an administrative order 
exercising that authority and creating a separate Alaska 
district. However, the Clinton administration never implemented 
that order, and Alaska today is still part of EPA Region 10. So 
in my discussions and questions with the administration, we'd 
like to focus a little bit on that as to what the rationale for 
that is.
    With that in mind, let me turn for a moment to Senator 
Baucus, if you have any opening remarks.
    [Prepared statement of Senator Smith follows:]
    Statement of Senator Bob Smith, U.S. Senator from the State of 
                             New Hampshire
    Good morning. Today, we will address the following topic: Should 
the EPA establish a separate region--a Region 11--for the State of 
Alaska? That question is before us in the form of a bill--S. 1311--that 
was introduced by our colleague Senator Murkowski from Alaska. Senate 
bill 1311 would direct the Environmental Protection Agency to create a 
separate region for Alaska and would authorize such funding as is 
necessary to achieve that goal.
    This bill stems from and reflects a longstanding interest on the 
part of Senators Murkowski and Stevens to see to the adoption of a 
separate EPA region for their home State. Several years ago, for 
example, this subject was addressed in a different context. Section 522 
of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act for Fiscal 
Year 1992, authorized the creation of a separate EPA region for Alaska. 
On the last day of the Bush administration, EPA Administrator William 
Reilly signed an administrative order exercising that authority and 
creating a separate Alaska district. The Clinton administration did not 
implement that order, however, and Alaska today, is still part of EPA 
Region 10.
    There are several arguments on each side of this issue. We have 
before us the written statements of today's witnesses, and we will hear 
from those witnesses, their testimony pro and con, on this bill. Rather 
than now summarize their positions, I will let the witnesses themselves 
make their own statements.
    But out of respect for our colleague from Alaska, I will note that 
perhaps the most often-advanced argument in favor of this proposal is 
that the uniqueness of Alaska militates in favor of treating that State 
as a separate EPA region. In that regard, American author Jack London 
once made two points that undergird the argument advanced by our 
colleague--first, that Alaska is a unique land and, second, that, only 
by being willing to adapt to those features of Alaska that render it 
unique, can a person truly come to understand what it means to be an 
Alaskan. Let me read a quote from Jack London that makes those points 
[``In a Far Country'' (1899), reprinted in The Portable Jack London 11-
12 (Earle Labor ed. 1994)]:

          When a man journeys into a far country, he must be prepared 
        to forget many of the things that he has learned, and to 
        acquire such customs as are inherent with existence in the new 
        land; he must abandon the old ideals and the old gods, and 
        oftentimes he must reverse the very codes by which his conduct 
        has hitherto been shaped. To those who have the protean 
        facility of adaptability, the novelty of such change may even 
        be a source of pleasure; but to those who happen to be hardened 
        to the ruts in which they were created, the pressure of the 
        altered environment is unbearable, and they chafe in body and 
        spirit under the new restrictions which they do not understand. 
        This chafing is bound to act and react, producing divers evils 
        and leading to various misfortunes. It were better for the man 
        who cannot fit himself to the new grove to return to his own 
        country; if he delay too long, he will surely die.
          The man who turns his back upon the comforts of an elder 
        civilization, to face the savage youth, the primordial 
        simplicity of the North, may estimate success at an inverse 
        ratio to the quantity and quality of his hopelessly fixed 
        habits. He will soon discover, if he be a fit candidate, that 
        the material habits are the less important. *  *  * For the 
        courtesies of ordinary life, he must substitute unselfishness, 
        forbearance, and tolerance. Thus, and only thus, can he gain 
        that pearl of great price--true comradeship. *  *  *

    With all that in mind, let me thank our colleague Senator Murkowski 
for being here today to speak on behalf of his bill. Senator Murkowski, 
you have the floor.

             OPENING STATEMENT OF HON. MAX BAUCUS, 
             U.S. SENATOR FROM THE STATE OF MONTANA

    Senator Baucus. Thank you very much, Mr. Chairman.
    Mr. Chairman, I join you, I'm sure, in sympathizing with 
the Senator from Alaska over his concerns, that is, a State 
that's so far away from any of the regional offices of EPA, let 
alone Washington, DC. I must say, we share some of the same 
concerns in our State. We may not be as large as Alaska or as 
sparsely populated or as far away.
    But the fact is, we are a large State and we are sparsely 
populated, and in our case, the Federal Government owns about a 
third, close to a third of our total land area. So to put it 
lightly, the Federal Government has a very strong influence on 
our State. And that's particularly true in western Montana, 
where there are a lot of conflicts, natural resource conflicts.
    I must say, too, just to give an example, that decisions 
that affect Montana are made as far away as either Washington, 
DC. or a distant regional office. EPA, for example, which very 
much affects Montana, is in Denver. The Bonneville Power 
Administration is in Portland. The National Marine Fisheries 
Service, which determines what must be done to recover salmon, 
is in Seattle. The Corps of Engineers, which affects our State 
dramatically, is in Omaha.
    So we often feel that these offices make decisions that 
don't take adequate account of Montana's interest, whether it's 
BPA considering the great effects of a small aluminum plant in 
Columbia Falls, MT, or the Army Corps of Engineers favoring 
downstream over upstream interest on the Missouri River. So I 
share Senator Murkowski's frustration with the way this system 
works, or the way it sometimes doesn't work.
    However, I must say I'm a little bit concerned about a 
proposal to create a separate region for one State. First of 
all, in this case, it would be costly. It would also give 
special treatment to a single State over all the other States. 
And it may raise concerns from the other States in Region 10 
where they might get short shrift. And by creating a full blown 
11th EPA region for a single State, we also have to face the 
question of balance, that is, balance between the goals on the 
one hand of maintaining a national system of environmental laws 
and on the other hand, being sensitive to local concerns.
    Now that we have regional offices that affect several 
States at a time, I think we do strike that balance. Certainly 
the question is raised when the single EPA office, a single 
regional office, is responsible for only one State.
    So, I, at this point, Mr. Chairman, am somewhat skeptical 
about S. 1311. It may be a more radical approach than is 
necessary to strike the balance. But that said, I deeply 
appreciate the presence and the testimony of Senator Murkowski, 
and will listen very closely to what he has to say.
    Senator Smith. Senator Murkowski, the floor is yours. 
Welcome.

STATEMENT OF HON. FRANK MURKOWSKI, U.S. SENATOR FROM THE STATE 
                           OF ALASKA

    Senator Murkowski. Thank you very much, Mr. Chairman, 
Senator Baucus. It's a pleasure to be here. I spent a good deal 
of time in this committee back in 1981 and 1982, wrestling with 
problems that you're still wrestling with today.
    Thanks for scheduling this hearing. As you know, this has 
been on our list for some time. Senator Stevens and I 
introduced the language to establish an EPA region in Alaska. 
Now, a legitimate question has been asked, ``Why does Alaska 
need a separate region?'' Our State is 65 percent owned by the 
Federal Government. We have less than 1 percent of our land 
mass that's privately owned. The native regional corporations 
were given a settlement in our State, and that settlement 
resulted in 40 million acres of land being transferred to them.
    But part of the answer really lies in the uniqueness of our 
ecosystem and the extent of the piece of real estate known as 
Alaska. We have about 365 million acres, about 586,000 square 
miles. I don't see anybody from Texas here, so I won't offend 
anybody if I remind you that it's 2\1/2\ times the size of 
Texas, a little more than 63 times the size of New Hampshire, 
Mr. Chairman. We have about 2,400 miles from east to west, and 
about 1,400 miles north to south.
    I used to run a financial institution in our State. And we 
ran it through four time zones. Trying to balance in one area 
and communicate to another was a problem. So we'd usually 
balance the next day. We have 170 million acres of wetlands, 
that's 65 million acres more than the combined total of 
wetlands in all of the other 49 States. We have a coastline 
larger than the rest of the Nation combined, approximately 
47,300 miles of coastline. We have 3 million lakes larger than 
20 acres. We have ecosystems ranging from an arctic desert to 
temperate rainforest, including ecosystems that are found 
nowhere else in the United States.
    In addition, Alaska is more ecologically diverse than any 
other State. And for the last 40 years, the energy wealth of 
North America has been coming from Alaska, and primarily that 
area that's unique, because it's north of the Arctic Circle. 
It's been supplying nearly 25 percent of the total oil produced 
in this country, and the gas reserves are estimated to be 
somewhere in the area of 40 to 70 trillion cubic feet of gas. 
And the question of the marketing of the gas is a challenge 
that's before the State and before the Nation and will be 
before the EPA.
    Now, that's why virtually every other Federal agency, and I 
would encourage Senator Baucus to reflect on this, every other 
Federal agency with environmental or conservation 
responsibilities has a region distinct in Alaska. That includes 
the National Park Service, that includes the Fish and Wildlife 
Service, the Bureau of Land Management, the Forest Service, the 
Geological Survey, the Bureau of Indian Affairs, the Mineral 
Management Services and the Bureau of Mines. Those have been 
located in Alaska because of the uniqueness of the stewardship 
associated with the Federal agencies and their oversight 
responsibilities.
    Even the Federal Aviation Administration has a region 
comprised only of Alaska. Moreover, the Coast Guard and the 
Army Corps of Engineers have distinct district offices that are 
in Alaska, and specifically devoted to Alaskan issues.
    Congress has already recognized the merits of an Alaska 
region for the Environmental Protection Agency. In the fiscal 
year 1992, the VA-HUD appropriations bill, at that time 
Congress authorized the President to establish an eleventh 
region of EPA consisting solely of the State of Alaska. An 
administrative order to that effect was signed by EPA 
Administrator William K. Reilly, as the chairman mentioned, in 
January 1993. Unfortunately, the order was not carried through.
    I would ask that a copy of the signed order be included in 
the hearing record today.
    Senator Smith. Without objection, it will be included.
    [The information referred to follows:]

                      U.S. Environmental Protection Agency,
                                                    Washington, DC.

                          ADMINISTRATIVE ORDER

    By the authority vested in me as Administrator of the United States 
Environmental Protection Agency in section 3, Reorganization Plan 3 of 
1970, 5 U.S.C.A. App. 1 (Supp. 1992), and as authorized in Section 522 
of the HUD-VA-Independent Agencies Appropriations Act for fiscal year 
1992, Pub. L. No. 102-139, 105 Stat. 736, 781; it is hereby ordered:
    Section 1. Establishment of Region XI. There is hereby established 
Region XI of the United States Environmental Agency, which shall 
consist solely of the State of Alaska.
    Section 2. Transfer of reassignment of resources and designation of 
Regional Office and Regional Administrator. The determination of 
records, property, personnel, and positions, and unexpended balances of 
appropriations that relate to the functions transferred, reassigned, or 
redelegated by this order, and the designation of a Regional Office and 
Acting Regional Administrator will be made by subsequent order.
    Section 3. Effective data. The provisions of this administrative 
order are effective immediately.

    Dated this 20th day of January, 1993.
                                         William K. Reilly,
               Administrator, U.S. Environmental Protection Agency.

    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Chairman, I know from my service on this committee when 
I first came to the Senate, and as you know from your 
leadership on environmental issues, environmental protection is 
a complex undertaking. One-size-fits-all approaches cannot be 
written in Washington or Seattle and necessarily applied in our 
State of Alaska. Bringing the regulator closer to the problem 
yields better discussions, more effective and thoughtful 
regulation.
    One of the uniquenesses of our State is we have seasonal 
activities, just as you have in Montana, Senator Baucus. It is 
as a consequence very easy for the EPA administrators to 
reflect on their deliberations and simply put something off for 
a month or two which costs us a whole year, because if we lose 
a construction season, we've lost a year.
    Furthermore, the distance from Seattle to Anchorage is 
about 1,200 miles. So by the EPA traversing back and forth, 
they buildup substantial air miles and they're good for the 
hotels and restaurants in Anchorage, AK, but it's not like they 
live there, send their children to school, relate and get an 
understanding of the uniqueness of our State.
    As I have indicated, over 65 percent of Alaska is 
controlled and owned by the Federal Government. Most EPA 
activities directed at Alaska require coordination with Federal 
land managers who are headquartered in Alaska. That's the other 
land areas, the Forest Service, the Park Service, BLM and so 
forth.
    Other benefits that we expect from this legislation include 
reduced number of appeals and adjudications, reduced travel 
between Seattle and Alaska. And I might add, a 1,200 mile trip 
takes all day. Better service to the public, lower cost. Now, 
while EPA may disagree, the last time we asked the Alaska 
Department of Environmental Conservation to perform an analysis 
of the budgetary impacts of an Alaska region EPA office, they 
projected a modest savings to the taxpayer. I ask that the 
materials related to the cost be included in the record at this 
time.
    Senator Smith. Without objection. 
    
    
    
    
    Senator Murkowski. Thank you, Mr. Chairman.
    I want to leave you with just a few examples of what 
happens when good intentions in the EPA Seattle office go awry 
in Alaska. In the regulation of mining operations, EPA sought 
to require operators to reduce arsenic discharges to a level 
below, below the naturally occurring ambient levels. They were 
apparently unaware that the high level of mineralization in 
many areas of Alaska caused some streams to have naturally high 
levels occurring of contaminants associated with arsenic.
    If you fill your canteen from a stream and later dump the 
portion you did not drink back into the stream, you're 
violating an EPA standard.
    Here's another example. When EPA insisted that Fairbanks, 
which happens to be my hometown, uses MBTE as an oxygenate for 
motor fuels, nobody really understood what happened when MBTE 
volatized in extremely cold air inversions, such as our 40 
below zero temperatures, exposing humans directly to the 
chemical. Well, let me tell you what happened. People started 
to get sick, complaining of headaches, nausea and dizziness. 
I've had pictures of some of these people, and you can readily 
see the reaction.
    For far too long, EPA's distant Seattle office regarded the 
health complaints of Fairbanks residents as little more than 
grumbling of a few crackpots and refused to grant a waiver. 
Many months later, after being confronted with hard evidence of 
sickness, EPA did grant a waiver. How much more quickly that 
waiver might have been done and how many fewer Alaskans might 
have not gotten sick if EPA had a regional office in Alaska.
    Well, today, Fairbanks is a non-attainment area for carbon 
monoxide by virtue of the arctic air inversion that occurs 
several times a year. Seattle has never experienced a true 
arctic air inversion and never will. So it doesn't surprise me 
that the EPA regional office hasn't come to terms with the best 
way to help Fairbanks solve its problems. Instead of 
considering the unique situation that Fairbanks is in, the EPA 
started the sanction clock.
    Well, in Nome where I visited this last weekend, in the 
village of Elg, the EPA wants the smokestacks in Nome on the 
power plant to be raised to better dissipate emissions. Now, 
according to the Federal Aviation Administration, doing so 
would interfere with the landing patterns and require costly 
realignment of the runways at Nome's airport, which would 
largely be undertaken at Federal expense.
    Is this a cost-effective solution? Well, of course not. But 
it's easy to see how this can happen if EPA is sitting in 
Seattle, calling shots without coordinating with the FAA which 
has its regional headquarters in Anchorage.
    Another example, and this is relatively humorous, is the 
Anchorage waste water treatment plant. EPA requires both 
primary and secondary treatment waste water to address elevated 
levels of biological oxygen demand, that's BOD, a measure of 
microable activity in waste water. When Anchorage only had 
primary treatment, the tidal action of the inlet, that's 30 
feet of tidal action twice a day, some of the most extreme in 
the world, I might add, next to the Bay of Fundy, coupled with 
the low BOD levels in Anchorage waste water, argued against the 
need for expensive secondary treatment to lower the BOD 
readings.
    But the EPA determined that Anchorage still needed 
secondary treatment, notwithstanding the low BOD reading and 
the tidal action of the inlet. In order for Anchorage to have a 
sufficient amount of BOD to address, it contacted a fish 
processor to dump some fish waste into the discharge to raise 
the BOD of the effluent, in order that the secondary treatment 
could lower it.
    In Fairbanks, we had an occasion where the bus barn, where 
they park the buses, they were removing the snow, putting them 
in the back area and the back area was determined to be a 
wetland. The placement of the snow in the wetland was a 
violation of EPA regulations. Those came out of Seattle as 
well.
    So in conclusions, Mr. Chairman, I would ask this committee 
to move our legislation that directs the establishment of an 
Alaska region. Because again, many of the activities are unique 
to Alaska. For example, we're the only State in the Union with 
permafrost. We have about 70 percent of our State covered with 
permafrost. The uniqueness of that with any activity associated 
with oil, gas and mineral exploration is indeed unique. We have 
the dynamics of scouring ice on our coastlines, and the 
realization that we're attempting to build pipelines to develop 
oil and gas.
    These are all unique to no other region but Alaska. And as 
a consequence, to the concern from my friend from Montana, who 
is concerned legitimately about why Alaska, I would simply 
refer to the other agencies that have seen fit, because of 
their stewardship responsibility and uniqueness of our State, 
that it's much more effective and more practical to have an 
agency in our State. It reduces the transportation costs of 
people traveling 1,200 miles almost on a continuous basis and 
provides the expertise where it belongs in the area where the 
development is concentrated.
    I'd be happy to respond to any of your questions, and 
again, I would encourage your favorable consideration.
    Senator Smith. Thank you very much, Senator Murkowski.
    I just have one question. It may be better put to 
Commissioner Brown or Director Freeman, and I can ask that when 
they come up. But as I read the Reilly order in January 1993, 
just prior to President Bush leaving office, it says,

    Reilly responding to President's Bush's order, it's hereby 
ordered,

and then the second paragraph of that,

that the transfer, reassignment of resources and designation of 
regional office and regional administrator, the determination 
of records, property, personnel, positions and unexpended 
balances of appropriations that relate to the functions 
transferred, reassigned, etc., to the regional office in 
Alaska.

    I guess I would be interested in what transpired in Alaska 
once that happened. I'm assuming that after that order was 
signed, the anticipation was that you were going to have a 
regional office. Yet, when President Clinton came in, that was 
not executed.
    Did something happen in Alaska? Were decisions made? Were 
preparations made to open offices or to do things in 
anticipation based on that order?
    Senator Murkowski. Well, there was nothing extraordinary 
that happened associated with the order. Senator Stevens and I 
lobbied the effort through the previous administration and very 
frankly, it just got lost in the dying days of that 
administration and was never effected. I'm not aware of any 
particular incident. I think there were a lot of priorities, as 
there usually is when an administration is about to go out. And 
this one fell in the crack.
    I guess I have no explanation for why.
    Senator Smith. I don't have any further questions. Do you, 
Senator Baucus?
    Senator Baucus. Just a couple, Frank, and I understand the 
concern, believe me. Some of the agencies you mentioned have 
field offices, not regional offices, in Alaska. In addition, 
they're basically land resource agencies which have a little 
bit different mission than the EPA.
    But I guess the main point, the main question here 
obviously is, is responsiveness and balance. Those are the two 
most salient questions here. To me, it's not easy. For example, 
in Montana, we have the largest Superfund site in the Nation.
    Senator Murkowski. The largest what?
    Senator Baucus. The largest Superfund site in the Nation, 
by far. We don't have a regional office in Montana. There's a 
State office which deals with it. There is a little bit of 
tension, as one would expect. My guess is there would be 
tension even if there were a regional office in Montana. 
Because obviously the issues are Federal and State, regardless 
of where the regional office is.
    We also in Montana have a huge asbestos problem. A couple 
hundred people have died. Several hundred are infected by 
asbestosis, or mesophilioma, or some form of asbestos-related 
disease. It's huge. This is a massive problem that's affecting 
not only Libby, MT, but many parts of this country.
    EPA has sent to Montana, to Libby, several personnel. They 
have done a terrific job, EPA personnel. The people in Montana, 
Libby, MT, particularly, have nothing but praise for EPA, the 
way EPA has handled this. EPA has sent a very good person, 
onsite person, his name is Paul Paranard.
    I've got to tell you, I wish that everybody in the country, 
who sometimes criticizes the Federal Government, would meet 
Paul Paranard. This guy is one of the most special persons I've 
ever met in any capacity anywhere. He's a basic, down to Earth 
kind of a guy. We had a hearing there just last week. This is 
typical of Paul. He comes in his jeans and kind of a black tee-
shirt. He's got a ring in his ear. He's just a basic guy, but 
he is so smart. He is so responsive, he listens so much to 
people and he's moving things so quickly.
    We've got a couple sites that are already on the schedule 
to be cleaned up in a very short period of time since he's been 
there. One's a nursery, a tree nursery, another is a lumber 
yard. The main point being that there's no magic formula here. 
Sometimes EPA is handling things quite well and sometimes it's 
not.
    But the only point I want to make is, in this case, EPA is 
handling a very, very, very difficult State and national 
problem without a regional office in Montana. People are OK, 
they're happy. It's just a slight concern that my folks in 
Montana are going to think, ``Well, gee, Alaska gets one, why 
don't we in Montana.'' I'm going to run into that in spades. As 
I mentioned, there are just lots of EPA issues in Montana. I 
mentioned just two. There are many, many others. EPA is very 
prevalent in Montana.
    There's also a slight question, that has to be raised, by 
looking at the various regions. You know, Florida is not very 
much like Kentucky, yet EPA handles both. One could argue 
Florida should have its own regional office. Maybe Kentucky 
should have its own regional office. Same thing with the region 
that includes Texas, Louisiana, and I think New Mexico are in 
the same region. Some people in Louisiana may think, gee, our 
State's a lot different than New Mexico, and vice versa. Why 
shouldn't we have our own regional offices?
    I guess the only point I'm making is I very much sympathize 
with what your concern is, because Alaska is considerably 
farther away. But I don't know that necessarily, a regional 
office is going to solve the problem here. It's really kind of 
a guess as to what the problem is. If the problem is the way 
EPA is administering the statutes in Alaska, there are ways to 
skin that cat, have hearings in Alaska, as I've had in Montana. 
Lots of EPA hearings in Montana. And I call EPA personnel, they 
come to Montana. It's very good for them, it's very good for 
us. And it works.
    So all I'm saying, Senator, is I deeply, deeply appreciate 
your concern. But I don't know that it's necessarily the right 
public policy for the country. But I certainly will listen to 
the testimony very carefully.
    Senator Murkowski. Well, thank you. Obviously, I don't have 
much time left to convince you. But I would like to remind you 
that all the Interior offices, the BLM, the Park Service, are 
full regional offices, with a full regional administrator, I 
might add. Forest Service, full regional offices. They are not 
sub-regional offices.
    I've been criticized in my State for, as you know, the EPA 
is not necessarily the most popular agency in many regards. 
They have a job to do, and I've been criticized for suggesting 
that there should be a regional office in my State. I 
understand and appreciate that criticism, but the reality is 
that we live under the law of the land. But if the law of the 
land is interpreted in an environment that is substantially 
removed from the circumstances associated with the uniqueness 
of our area, you spoke of your concern over your Superfund 
site. You spoke of your concern over asbestos problems.
    It's my hope, as you know, we became a State in 1959, we're 
relatively new. It's my hope that by having the EPA establish a 
regional office, we will not be confronted with the problems 
associated in your State or other States that have Superfund 
sites.
    Now, the uniqueness is the technological application 
associated with a 65 percent of the area's permafrost. You say 
you can do the same thing in Kentucky that you can do in 
Florida relative to an EPA region. But our State's the only one 
with permafrost. Our State's the only one producing volumes of 
oil. And like any other area, only the uniqueness is it's not 
like Texas, it's in the Arctic. The engineering technology is 
entirely different. The movement of ice on our coastlines, we 
have scouring. How do you put--these are all unique to Alaska 
and as a consequence, I think, deserve consideration.
    We talk about the role of EPA in Alaska. It's a developing 
role. We spent $9 billion, the largest construction project in 
the history of North America, was that oil pipeline. Senator 
Baucus, you were here, you were aware of what was going on.
    Senator Baucus. I was up there twice.
    Senator Murkowski. Yes. It was one of the more significant 
engineering events ever to occur. We're talking about putting a 
gas line in. We're talking about $10 billion to $14 billion. 
These are things that are not happening anywhere else in Region 
10. They're going to happen in Alaska. Justification for EPA is 
to ensure that we don't have happen in Alaska what happened in 
Montana.
    Senator Baucus. What--wait a minute. Whoa, Senator----
    Senator Murkowski. I'm talking about your Superfund site, 
I'm talking about your asbestos.
    Senator Baucus. No, no.
    Senator Murkowski. If we have EPA in our State managing, we 
won't have these problems.
    Senator Baucus. Frank, in all respect, that's irrelevant. 
Because, because----
    Senator Murkowski. Well, history has a way of repeating 
itself. What comes around goes around.
    Senator Baucus. I'm just saying, the asbestos problem, the 
problem there is, we found the problem, and EPA is doing a 
great job at managing the cleanup.
    Senator Murkowski. I'm sure they are. We want EPA to do a 
great job in our State as well.
    Senator Smith. I think one other point that needs to be 
made, too, this is not simply the case of a Senator making a 
request for something in his State. This has gone through the 
legislative process, has gone to the President's desk for 
signature, although it was not a mandatory action. Then it was 
supposedly implemented and has not been. We will hear from the 
next panel as to perhaps why that would be the case.
    In any case, we can all agree that William Seward made a 
good investment, otherwise we'd be dealing with the Russians 
now.
    Senator Murkowski. Well, we're ready to buy it back any 
time. Thank you, gentlemen.
    Senator Smith. Thank you.
    If the next panel would please come up. The Honorable 
Romulo Diaz, Assistant Administrator of Administration and 
Resources Management, EPA; The Honorable Michele Brown, 
Commissioner, Alaska Department of Environmental Conservation; 
and Mr. Ken Freeman, the Executive Director of the Alaska 
Resource Development Council. Welcome. We're glad to have you 
here.
    Let's start with Mr. Diaz. Your comments will be made part 
of the record, and if you can summarize in a few minutes, we'd 
appreciate that.

 STATEMENT OF ROMULO L. DIAZ, JR., ASSISTANT ADMINISTRATOR FOR 
    ADMINISTRATION AND RESOURCES MANAGEMENT, ENVIRONMENTAL 
                       PROTECTION AGENCY

    Mr. Diaz. Thank you, Mr. Chairman.
    Mr. Chairman and members of the committee, I am Romulo L. 
Diaz, Jr., EPA's Assistant Administrator for Administration and 
Resources Management. I am pleased to appear before you to 
present the Agency's views on S. 1311, a bill to create a 
separate EPA region for Alaska.
    I would like to begin by providing a brief history of the 
efforts to establish an eleventh EPA region in Alaska. In 1990, 
then-Governor Walter Hickel called upon the EPA Administrator, 
William Reilly, to create a separate regional office for 
Alaska. In response to the request by the Governor and Senators 
Stevens and Murkowski, as well as the concerns expressed by the 
delegations of potentially affected States, EPA undertook a 
study of the ``Implications of Establishing a Regional Office 
in and for Alaska.''
    This study, which was completed in 1992, concluded that the 
proposed new region would not be cost effective and outlined 
alternative approaches to meeting the concerns of Alaska's 
elected officials. In January 1993, then-President Bush signed 
a memorandum ordering Administrator Reilly to establish Region 
11. On January 20, 1993, Administrator Reilly signed an 
administrative order establishing the new region, subject to 
implementation steps necessary for such a reorganization.
    Following careful consideration by the incoming 
administration, EPA believed that the concerns expressed by 
Alaska officials, industry and environmental groups, 
particularly in light of the 1992 Alaska study, could be more 
effectively and efficiently satisfied through a variety of 
other means. These included better collaboration with the State 
in developing program priorities, improving program delivery 
strategies, and better deployment of EPA resources in the 
State.
    Let me review just a few of the ways that EPA today 
demonstrates its commitment to one of this Nation's most 
geographically diverse areas. EPA's Alaska operations office is 
unique among EPA's State organizations. With 39 employees, it 
is the largest of any EPA State-based operation and is 
responsible for on-the-ground implementation of EPA programs in 
the State. In addition to administering some programs directly, 
the Operations Office provides technical assistance to help 
State, local and Tribal governments in administering delegated 
programs.
    An essential element to EPA and Alaskan cooperation is the 
2-year partnership agreement that integrates federally-funded 
programs administered by EPA with related programs funded by 
the State and by other Federal agencies. The recently revised 
agreement contains mutually determined priorities to achieve 
environmental goals and gives the State maximum flexibility to 
address its specific needs while maintaining a core level of 
environmental protection.
    Let me just give a few examples to illustrate this 
flexibility. In light of the State's unique geographical, 
meteorological, air quality and economic factors, EPA has 
granted Alaska an exemption from meeting the current sulfur 
standard for highway diesel fuel. To help Alaskan rural 
communities, EPA has provided in excess of $100 million since 
1995 for construction of drinking water and wastewater 
facilities. In addition, a Rural Sanitation Coordinator and 
staff in the Alaska Operations Office works directly with 
Native Villages and with State agencies to provide rural 
sanitation services.
    EPA and the Corps of Engineers have worked to develop a 
wetlands permitting process that takes into account the State's 
highly diverse environmental, economic, and geographical 
conditions. The Operations Office director is authorized to 
approve wetlands permits for Alaska, which is itself unique 
within EPA.
    A number of measures point to the success of EPA's efforts. 
For example, major NPDES permit backlogs for municipal 
discharges, mining, pulp and seafood operations have been 
reduced from 69 percent in 1996 to 21 percent in March 2000, 
and are expected to be further reduced by the end of this 
calendar year. Over the past 7 years, EPA has listened to the 
concerns expressed by Alaskan officials. Although there is 
always room for improvement, much progress, we believe, has 
been made, and we remain committed to addressing Alaska's 
unique needs in cost-effective ways that recognize 
environmental and public health needs.
    On behalf of the Environmental Protection Agency, I pledge 
that we will continue to work with this committee as well as 
the State of Alaska and others to consider additional cost-
effective ways to better serve the environment and the people 
of Alaska. Thank you for the opportunity to appear before you 
today, and I'd be pleased to answer any questions you might 
have.
    Senator Smith. Thank you, Mr. Diaz.
    Commissioner Brown, welcome.

STATEMENT OF MICHELE D. BROWN, COMMISSIONER, ALASKA DEPARTMENT 
                 OF ENVIRONMENTAL CONSERVATION

    Ms. Brown. Thank you, Mr. Chairman, Senator. I am Michele 
Brown, Commissioner of the Alaska Department of Environmental 
Conservation. On behalf of Governor Tony Knowles, I thank you 
for allowing me to come here and state the State of Alaska's 
support for the bill before you.
    Alaska is not just our treasure, it's a national treasure. 
You have participated in the debates over opening the Arctic 
National Wildlife Refuge and the timber harvest levels in the 
Tongass National Forest. There is great passion in those 
debates, as you certainly experienced. That's because Alaska is 
a proud symbol of environmental purity for America. It should 
also be America's model for environmental management. Yet the 
Federal agency charged with environmental management has only a 
meager presence in Alaska.
    A lot has changed since 1970, when the EPA regional 
structure was set up. We were only 10 years into statehood 
then. A lot has changed since then. Today, our issues range 
from addressing Third World sanitation conditions in hundreds 
of inaccessible villages to regulating the country's most 
complex oil development, transportation and production system, 
one which yields 20 percent of the domestic oil production.
    The issues range from protecting the water quality of our 
massive coastline that produces and processes over 50 percent 
of the U.S.'s seafood while regulating the discharges from the 
U.S.'s largest zinc and silver mines and the highest production 
placer gold and tin mines. Issues range from generating 
electricity from diesel engines, because there is no other 
available power source for all of our villages and most of our 
industrial activity, while assuring air quality for two-thirds 
of the U.S. national parklands, the largest State park system 
in the United States and the largest U.S. national forest.
    We also have to do this while we preserve the vistas and 
the fresh air quality for the millions of tourists who visit 
Alaska every year. All this needs to be done over a land base 
that's 20 percent of the United States.
    There's a map in your packet that shows the State of Alaska 
superimposed on the rest of the country and the blue is Region 
10. As you can see from this map, we extend from the Canadian 
border down to southern California and from Tennessee to Texas, 
even not including the chain.
    Senator Murkowski has given you a lot of the overwhelming 
statistics about our size and complexity. I would just like to 
mention in addition that we share no border with another State, 
and at our closest point, we're 2\1/2\ miles from Russia.
    As Senator Murkowski pointed out, virtually all the 
pertinent Federal agencies do have regional offices in Alaska, 
and those are not just land management agencies. They're also 
those that have regulatory protection programs, such as NOAA, 
the Corps of Engineers and MMS. It's EPA alone that tries to 
provide this management from Seattle with a core and small 
staff in Alaska.
    I'm not here to criticize EPA. We have worked on a number 
of issues productively. But I'd like to highlight a serious 
problem in allocation of resources and attention. I'd like to 
give you four brief reasons why I think the current regional 
structure isn't working, and some examples. First, is Alaska's 
environment needs more effective management. Despite efforts by 
Region 10 to be responsive, we've seen that managing for 
results isn't working from the Seattle office. EPA's Alaska 
office is a minimal presence and does not really have a key 
voice on issues. My staff and I spend 90 percent of our time 
dealing with either Seattle or Washington, DC, on our key 
Alaska issues.
    The performance partnership agreement has unfortunately not 
been a big success in Alaska, and we've had a very hard time 
reaching a meeting of minds on priority of issues. Seattle 
staff, despite their best efforts, often do not understand the 
conditions in Alaska. Lacking any sense of the big picture of 
all the issues there, they merely tackle what shows up on their 
desk. Lacking an understanding of the on-the-ground conditions, 
they adhere to one-size-fits-all solutions. This can often lead 
to a lot of time and energy without producing environmental 
results.
    I would like to give you one example. Thousands of 
migratory birds are dying year after year in a wetlands estuary 
just outside of Anchorage. It was contaminated by the Army's 
use of phosphorus in its weapons. Two-thirds of Alaska, by the 
way, is owned and managed by the Federal Government. Much of it 
does have residual contamination.
    But EPA, the fellow Federal agency with the clout to 
address this, isn't working on this issue. Instead, less than 
15 miles away, the Anchorage sewer treatment plant that Senator 
Murkowski mentioned, we've been going through 3 years of 
paperwork to try to renew its permit, because there is some so-
called pollution in the discharge.
    Well, that pollution is due to trace metals and high 
sediments from naturally occurring conditions from glacier 
runoff. So although we've spent countless hours on this permit, 
we're not going to see any improvement in water quality when 
it's said and done. But the wetlands issue just up the road is 
being ignored.
    Senator Murkowski mentioned to you the situation we had 
with the arsenic standard. Although we were able to address 
that, I'd like to point out it took 4 years to address that. 
Many large and small mines were delayed while that was being 
addressed. The ones that were able to proceed had to spend an 
inordinate amount of money with paperwork to be able to proceed 
in light of this unreasonable standard.
    The point in this particular issue is that we want and we 
need effective management. We don't want relaxed standards. We 
don't want to escape from requirements. But we also don't want 
to go through a lot of pointless exercises that aren't bringing 
about environmental improvements.
    The second reason is that we believe EPA's investment in 
Alaska's public health infrastructure needs to fit arctic 
conditions, not the conditions in the rest of the country. EPA 
has a large role in our rural public health infrastructure. 
This infrastructure is very difficult, because there are no 
roads between the villages, transportation corridors are only 
available when the rivers aren't frozen, and the system's 
design and operation must meet extreme arctic engineering 
requirements.
    EPA has been very supportive in terms of funding, but its 
numerous management requirements and funding requirements need 
more attention to Alaska's specific conditions. They also need 
to integrate this effort with the other Federal agencies that 
are working in this field. We need a master plan where housing 
development, energy improvements, sewage lagoons and water and 
sewer systems are all coordinated, so that you don't have 
different pieces of a system being built in different villages 
at the same time.
    All of those other agencies working in this field have 
positions in Alaska, have regional offices in Alaska, EPA does 
not.
    The third reason is that tribal relations in Alaska are 
very complex. We have a cultural diversity unlike any other 
area, 17 percent native population with 5 distinct groups. We 
have unique government to government relationships. Because one 
half of the tribes in this country, 228, are located in Alaska. 
Yet only one has a reservation land base.
    EPA is developing government to government tribal policy 
out of Seattle in a way that may make sense for tribes with 
reservations, but is very difficult in Alaska. For instance, 
EPA has provided construction funding to help fill, this will 
illustrate both the last two points, they provided construction 
funding to help fulfill the desperate need for safe drinking 
water systems for thousands of public water systems that serve 
very small communities. The average income in these communities 
is $13,000. There's no real good economic base.
    Once a system is built, it has to be owned and operated and 
managed by a local government, a tribal entity or a non-profit. 
That's hard enough to do in this economic structure under the 
best of circumstances. But it's made much more difficult when 
EPA requires that there be constant testing for contaminants 
that have never been found in Alaska, or where we have to 
repeatedly fly samples to a lab because arbitrary sample 
holding times cannot be met due to weather or distance in 
flying the samples.
    The situation is even further complicated when EPA's tribal 
office passes funds to tribal entities to begin development of 
new water systems. These are in communities where often there 
is a local government already struggling to operate a water 
system, and the result is you have two water systems competing 
for ratepayers in a town of a couple hundred people.
    The fourth and final reason I'd like to raise to you is 
that arctic contamination is becoming a serious threat to 
Alaska's ecosystem and the people who rely on those resources. 
The Arctic is a sink, and it's capturing chemicals coming from 
Russia and Asia. Heavy metals and persistent organic pollutants 
are concentrating into the Arctic, and they persist longer in 
the Arctic. These chemicals accumulate in the ecosystem and in 
particular in the fatty tissue in animals. They are threatening 
subsistence food, the seafood trade and traditional ways of 
life.
    EPA is participating in this arctic research and 
contamination management, but in a very fractured and 
uncoordinated fashion. Having a regional focus on this issue 
would greatly assist the State Department as it develops 
treaties on these contaminants.
    I know that although we can give you good reasons for why 
there should be a region, it has to be cost effective, and it 
cannot reduce the resources available to other States. Given 
the analysis that EPA prepared the last time around, we believe 
that a thoughtful and gradual transition, especially one that 
focuses on a core task analysis, could basically use Alaska's 
proportionate share of Region 10 resources and not hurt the 
other Region 10 States.
    Senator Baucus. Mr. Chairman, I've noticed the red light's 
been on about 5 minutes, and I have to leave this somewhat 
soon, and I'd like to listen to the other witnesses, just so we 
have an expeditious hearing.
    Senator Smith. Go ahead and finish.
    Ms. Brown. I'm sorry.
    I just want to say, we want and need a true partner to help 
us manage Alaska's resources and America's national treasure.
    Thank you.

    STATEMENT OF KEN FREEMAN, EXECUTIVE DIRECTOR, RESOURCE 
                      DEVELOPMENT COUNCIL

    Mr. Freeman. Mr. Chairman, Senator Baucus, thank you. Good 
morning. For the record, my name is Ken Freeman. I serve as 
executive director of the Resource Development Council for 
Alaska, commonly known as RDC.
    I'm here today to express RDC support for S. 1311. RDC is 
an Alaska statewide organization consisting of all resource 
sectors including oil and gas, mining, fisheries, tourism and 
forestry. Our membership also includes business associations, 
labor unions, native corporations, local governments and 
hundreds of individuals. Our purpose is to encourage a strong, 
diversified private sector in the State and expand our economic 
base through the responsible development of our natural 
resources.
    Historically, RDC has supported the creation of an EPA 
regional office focusing exclusively on Alaska, and there is 
consensus among our members on the merits of establishing an 
EPA region specific to our State. Alaska has always provided 
unique challenges for both industry and regulators, because of 
our vast physical dimensions and our uniqueness. I won't go 
into detail, Senator Murkowski and Commissioner Brown, I think, 
gave you an idea of how large the State is and how different we 
are. But special circumstances truly do present special 
problems that demonstrate the need for an EPA region for 
Alaska.
    Oil production from Alaska accounts for nearly 20 percent 
of all the oil produced in the United States, as Commissioner 
Brown mentioned. Yet Alaska is the only State within the EPA 
region that has oil and gas exploration and production. Given 
the importance of Alaska oil to the Nation's energy security, 
it's imperative that agencies have an in-depth understanding of 
oil and gas exploration and production operations. 
Specifically, operations conducted in extreme arctic 
conditions.
    Although Alaska is large in size, its small population and 
industries, and as such, the focus of Region 10 employees' 
expertise oftentimes is on industries and conditions in the 
Pacific Northwest, not on upstream oil and gas operations and 
certainly not on operations conducted in extreme arctic 
conditions. While EPA does have much appreciated staff based in 
Anchorage, decisions vital to Alaska's environment and economy 
are largely driven by Region 10's Seattle headquarters.
    A good example of why a new Alaska EPA region is needed 
comes from the timber industry. At issue is recent permitting 
for a general permit on log transfer facilities known as LTFs. 
There was a huge and unnecessary amount of time that was 
required to work through this process. Region 10 regulators 
from Seattle do not fully understand the unique challenges 
proposed by the remoteness of Alaska, or the isolation of the 
LTFs. Regulators requested street addresses and towns of the 
LTFs, they asked for road directions to the sites. They didn't 
understand that these facilities were located far from local 
communities, that there were no roads, no services, no 
infrastructure, just remote isolated wilderness accessible only 
by aircraft or boat.
    It took permittees months to get all the logistical issues 
resolved, and the permittees noted that Region 10 regulators 
shows little trust for those in Alaska they were regulating, 
and did not have a reasonable understanding of sense of 
magnitude of Alaska, its remoteness or unique circumstances.
    A current issue making headlines in Alaska is the State's 
rights in respect to its air permitting program. Alaska cannot 
administer a viable air permitting program if EPA Region 10's 
office in Seattle continues to summarily overrule carefully 
made decisions that take into account Alaska's unique 
circumstances. The Alaska Department of Environmental 
Conservation has appealed a recent order by EPA prohibiting the 
issuance of prevention of significant deterioration permits, 
known as PSDs, for a diesel generator at the Red Dog Mine in 
northwest Alaska. This permit is vital and necessary to Komiko, 
Alaska's operations at this, the largest deposit of zinc in the 
world. The generator will have a negligible environmental 
impact.
    DEC has an EPA-approved State program for issuing these 
types of permits. This approved program gives DEC full 
permitting and discretionary authority over the PSD permits for 
the State of Alaska.
    Our members across Alaska from resource developers to local 
communities need to be able to rely on DEC's decisions on air 
permits and be able to proceed based upon those decisions. The 
EPA Region 10 action at Red Dog is alarming because of the harm 
it may cause our members in planning for new or modified air 
permitting to meet their needs. Permittees unsure of the 
reliability of the State's process will wonder if EPA's Seattle 
office can nullify a permit at any time, thus delaying projects 
until appropriate authority has been defined.
    If EPA has the authority to summarily overrule DEC's permit 
decisions and demand additional measures beyond what has been 
determined sufficient, then our members in effect would be 
forced to permit their project a second time through EPA. I 
don't believe this is the goal.
    This issue is not only a battle between agencies on Clean 
Air Act jurisdiction, but it shows once again how a distant EPA 
office does not fully understand Alaska's circumstances. The 
Red Dog Mine sits in complete isolation, far removed from any 
community. It is not connected to Alaska's road system, and 
there are no air quality concerns, especially given its 
location.
    A new Region 11 office could go further than a local branch 
office with limited latitude, staffing and capabilities in 
overcoming these challenges and developing a much needed 
northern arctic expertise and wetlands management, permafrost, 
ice fog, NPDES permitting, background levels of metals and 
other issues. A Region 11 office could better respond to 
Alaska's special problems with Alaska's solutions, and the 
establishment of an EPA region specific to our State would be a 
major step toward achieving the goal of ensuring that Federal 
regulations applied in Alaska reflect Alaska realities.
    Concluding, I would just like to commend Commissioner Brown 
and the Alaska Department of Environmental Conservation. I 
think what we have in Alaska is an agency that aggressively 
works to protect the environment, but at the same time, does 
allow flexibility in the regulatory regime through zones of 
deposits, mixing zones and site specific criteria. This is, I 
think, a great example of a State agency that works well with 
industry, and again also stringently protects the environment. 
I think at the end of the day, it would be great to have an EPA 
regional office that could respond in the same way.
    Thank you, Mr. Chairman, Senator. I would be pleased to 
respond to questions.
    Senator Smith. Thank you very much, Mr. Freeman. I know 
both you and Ms. Brown traveled a long way to be here, and we 
appreciate your testimony.
    Let me start with you, Mr. Diaz. On the issue that we've 
all discussed already about the Presidential order to 
Administrator Reilly in mid-January, just prior to President 
Bush leaving office, it's my understanding that OGC, the Office 
of the General Counsel, has told the Administrator that 
reversing that order would require the written approval of the 
President. Is that EPA's position?
    Mr. Diaz. I don't know what the Office of General Counsel 
might have stated to the Administrator on that particular 
point. But I think the situation as I have been advised by the 
Office of General Counsel at EPA is that the order by both the 
President and former Administrator Reilly were not self-
executing, that there was not a legal obligation for the 
implementation of those decisions.
    Senator Smith. Right. But is it the EPA's position that the 
President, that it would take the written approval of the 
President not to execute it? Is that the EPA's position, yes or 
no?
    Mr. Diaz. The position of the agency is that they were not 
self-executing, that we were not under an obligation to 
implement them. Technically, I understand that those actions 
remain on the books and have not been rescinded.
    Senator Smith. President Clinton has never revoked the 
order, has he? He's never revoked the Reilly order?
    Mr. Diaz. To the best of my understanding, the Reilly order 
has not been rescinded. But I think it's important, Mr. 
Chairman, that we focus on the fact that the priorities that 
were raised at the time to Administrator Reilly and to 
President Bush by the Alaskan officials and by others including 
environmentalists, and the Pacific Northwest delegation 
members, have been addressed in terms of the priorities 
established to meet the needs of Alaska.
    Senator Smith. OK, but I'm just trying to clarify where we 
are here. It's my understanding that the Office of General 
Counsel has told the Administrator of EPA that in order for 
that order not to be implemented that the President would have 
to so indicate, in other words, he would have to have his 
written approval, the President would have to issue his written 
approval of that order. That is, as I've understood, is the 
position of the Administrator.
    Now, as I understand it, President Clinton has not revoked 
that order. He's not taken any formal action to revoke what 
happened, yet he's not implemented it either. So he's not done 
either.
    Mr. Diaz. Let me, if I may, Mr. Chairman, try to be a 
little bit more direct.
    Senator Smith. Who made the determination not to implement 
the order? Who indicated? We had an order, President Clinton 
takes office in January 1993, he's got an order before him to 
create Region 11. All I'm asking you is, who made the 
determination not to implement it? President Clinton never made 
a written approval or disapproval. So who issued the order not 
to implement the action of the President and the former 
Administrator?
    Mr. Diaz. To the best of my knowledge, no order was issued 
indicating that the Reilly administrative order not be 
implemented. The information, the counsel that I have received 
from EPA's Office of General Counsel, is that we were not under 
an obligation to implement the decision by President Bush or 
Administrator Reilly. Technically, those decisions remain on 
the books. They have not been rescinded.
    But we have not, I'm not aware of any counsel by the EPA 
Office of General Counsel which suggests that we have an 
obligation to implement in the absence of a decision to 
rescind.
    Senator Smith. Well, OK, I don't want to argue it. But I 
want to get clarification on that. Because it's my information 
that OGC has told the Administrator that reversing the order 
would require the written approval of the President, written 
approval of the President. The President has in effect reversed 
the order, because he hasn't implemented it. That's been 7 
years ago.
    So I just want to get for the record somewhere some 
clarification on what OGC said or didn't say. But it's my 
understanding that they've told the Administrator, I don't know 
if there's a document so indicating or not, and if they have, 
then the President needs to either implement this or rescind it 
by some written document. To the best of my knowledge, that has 
not been done. Neither has been done.
    So basically he's ignored the act of Congress and the law.
    Mr. Diaz. I think, Mr. Chairman, we have met the priorities 
that have been raised to the agency's attention with regard to 
the concerns of Alaska. But I would be pleased to provide for 
the record information with regard to the question that you 
raised.
    [Additional information follows:]

    A June 23, 1993 document supplied to the committee 
entitled, ``Region XI Approaches to Closure,'' states in the 
Background section, ``The 12th floor has been told by OGC that 
reversing the order establishing Region XI will require the 
written approval of the President.'' The Office of General 
Counsel (OGC) did not prepare the June 23, 1993 document. OGC 
has been unable to locate any memoranda which would verify the 
advice represented in this June 23, 1993 document. After 
informally consulting with the Office of Legal Counsel (OLC), 
Department of Justice, it is OGC's understanding that only the 
President can rescind a Presidential memorandum but that it 
does not have to be rescinded in writing.

    Senator Smith. Yes, I would like that clarified. Thank you.
    Mr. Baucus.
    Senator Baucus. Thank you, Mr. Chairman.
    First, I might say with respect to the orders, there are 
other documents and there are other statements of documents 
that frankly cloud the whole issue here, and that could be 
probably be brought out at a later time. But it's not as clear 
as has been somewhat indicated here.
    Ms. Brown, you've heard Mr. Diaz say all the things EPA is 
now doing to help. He listed some things, better collaboration, 
exemption of the sulfur diesel fuel, he mentioned the $100 
million water facilities, wetlands permits for Alaska only, and 
I forgot something that was delayed, the 69 percent down to 29 
percent lower rate, I mean, is that accurate? Is it better? 
Your reaction and Mr. Freeman's, just general reaction to the 
progress and the cooperative efforts that EPA has made.
    Ms. Brown. Thank you, Senator.
    We have had good cooperation with EPA. But it requires a 
lot of work. We have to elevate issues to the senior management 
to get the attention, because staff----
    Senator Baucus. Now, when you say senior management, what 
level?
    Ms. Brown. Of Region 10. What Alaska would like is not to 
be in the position of having to seek exemptions and waivers for 
things that don't make sense, but to be part of the initial reg 
making process, so that alternative compliance, if it's 
necessary, so that we achieve the same goal but through a 
different way, can be worked out in the course of the regs, 
rather than seeking exemptions later or coming even before you 
to look for exemptions. We think it would be a lot less time 
consuming and a lot more productive if we could get those 
issues resolved sooner rather than later.
    Senator Baucus. Mr. Freeman, do you have a reaction to what 
Mr. Diaz said?
    Mr. Freeman. Thank you. I think most of our members have a 
very good working relationship with the EPA officials in the 
State of Alaska. But unfortunately, most of the time, the 
decisions are made in Seattle. I think Commissioner Brown 
brought up an interesting point when she mentioned that nearly 
all of her time and staff's time deals with the Seattle office. 
I think that this is clearly an indication that the majority of 
decisions are made in Region 10.
    I think EPA has done a lot. But I don't think anything 
could be done other than having a Region 11 that would really 
get to the heart of the issue here.
    Senator Baucus. Well, I must say that we have the same 
problem in Montana, that, often, when you want something done, 
you've got to go to Denver, you've got to go to the regional 
office. I do it myself, I just call up Denver. I appreciate 
that and I understand that.
    I don't know if that necessarily solves the issue before us 
here, because one could say, ``Gee, there should be a regional 
office in Anchorage or Fairbanks or wherever so you don't have 
to go so far.'' On the other hand, every State could make that 
argument, too, as we in Montana face the same situation that 
Alaska does.
    Mr. Diaz, I suppose one possible solution here is more 
delegation of authority to the various States divisions, rather 
than, from the regional office. You have heard their 
testimonies. What about it? It sounds like sometimes EPA is not 
as responsive as it should be.
    Mr. Diaz. As I said, I think, in my opening statement, 
there are certainly areas where I think we can always make 
cost-effective improvements. But the reality is that the 
delegations and the authorities of the Alaska Operations Office 
are real, and as I mentioned, a particular example, we're 
unique in the EPA system, the Alaska Operations Office director 
is authorized to sign wetlands permits and to initiate any 
raising of concerns about those permits on his own volition. 
That is unique within EPA.
    Senator Baucus. I suppose that helps? It doesn't solve the 
problem, but I suppose it helps?
    What about the migratory birds dying, this 3-year delay? 
I'm not very familiar with that issue, are you? Can you shed 
some light on that?
    Mr. Diaz. I am not personally aware of that issue. I 
understand that there are concerns with regard to the waste 
treatment facility. I'd be more than happy to take a look into 
it and provide that information for the record.
    [Additional information follows:]

                            migratory birds
    Concern: Dead migratory birds were discovered at Eagle River Flats 
and EPA has not acted to discover the cause.
    Region X response: Eagle River Flats, north of the City of 
Anchorage, is located on Fort Richardson Army Base Artillery Range, an 
active artillery range. In the 1980s, dead migratory waterfowl were 
discovered in the Knik Arm of Cook Inlet. There was no apparent cause 
of death. EPA worked with other State and Federal agencies to determine 
that the cause of death was white phosphorus from artillery rounds and 
bombs that had been dropped since WWII. Once the agent was identified, 
development of methods for clean-up and remediation began.
    The fact that the range is active and contains many rounds of 
unexploded ordnance presents the greatest obstacle to site clean-up. 
Work has progressed with the development of remediation methods such as 
a specially built armored dredge that can withstand a direct explosion 
while dredging material contaminated by white phosphorus. The 
``hottest'' spots containing white phosphorus have been or are now 
being remediated, and the number of waterfowl deaths has dropped 
drastically.

    Senator Baucus. You mentioned, Ms. Brown, EPA requiring 
testing for contaminants that don't exist in Alaska. Is that 
pre- or post-1996? Because we changed, as you know, the Safe 
Drinking Water in 1996 to hopefully deal with that problem, 
which is a national problem, and that was a statutory problem, 
more than it was a delegation problem. Are you talking about 
problems that even exist with the reform of the Safe Drinking 
Water Act and if so, could you give an example, please?
    Ms. Brown. Yes, it does still exist. It's a number of 
pesticides, in particular, that have never been used in Alaska 
that we still have to test----
    Senator Baucus. Oh, pesticides.
    Ms. Brown. Yes. We were able to work out a waiver system so 
that we could apply for waivers on behalf of the small 
communities. But again, it was a labor intensive process to 
deal----
    Senator Baucus. What would happen if EPA would make a--
really go full bore, and say, ``Boy, we're going to show you 
Alaskans that we really care, we're there?'' Now, there's a 
Federal statute, and there's State concerns, local concerns. If 
they were to do that, why wouldn't that solve the problem? 
Because your argument is that you need a regional office for 
that to happen.
    Ms. Brown. Do you mean if they were to use the operations 
office?
    Senator Baucus. Yes, the operations in the current 
structure.
    Ms. Brown. Because where the management decisions are 
happening are still in Seattle. That's where you have to go 
through weighing all the other Pacific Northwest priorities. 
The Alaska operations office can raise a point, but it tends to 
get lost.
    Senator Baucus. Yes, I guess there's no easy answer here. 
This guy I mentioned, Paul Paranard, he is delegated immense 
authority with this asbestos problem in Libby, MT. He's from 
Denver. They sent him out. Probably because he's such a good 
guy, they dispatch him other parts, you know, where he's 
needed.
    All I'm suggesting is that, I don't know, maybe you do need 
a regional office, maybe you don't. But it just--so many of 
these issues can be resolved just with a lot of cooperation and 
good faith efforts on both sides. I do think, Mr. Diaz, 
sometimes it is true that EPA, my experience in Montana, seems 
a little distant, not really that cooperative, that seems not 
to really care, show that extra effort in really trying to do 
what's right, not to do just what immediately the local folks 
want, but to work out the solution in a fair, practical, common 
sense way that affects that part of the country.
    My advice, for whatever it's worth, is to get more of your 
people out, just to travel a lot more and meet a lot more of 
these folks. You probably have a travel budget problem and so 
forth. But it's, just having a regional office there might not 
necessarily solve this problem.
    I am not saying it's a huge problem. I'm always saying, 
it's still there, to a degree. As I said, one major exception 
is this guy, Paul Paranard. You've got to give him a huge 
raise. This guy's aces.
    Mr. Diaz. Might I respond, Senator Baucus? Clearly there is 
a need to make sure that our folks are on the ground in Alaska, 
which we have provided for. We also clearly need to let folks 
in Alaska know that we are there from Region 10 as well. We 
have a significant travel budget which is allocated to provide 
for travel to Alaska. Yes, it has been pointed out that there 
is a distance of 1,200 miles to the Seattle regional office. 
But Senator Murkowski himself pointed out that when one takes 
that in the context of the size of Alaska, that's only half of 
the distance north to south in the State of Alaska.
    I have also been advised that by veteran career folks in 
the regional office in Seattle that the regional administrator 
from Region 10, Chuck Clarke, has probably spent more time in 
Alaska than any other regional administrator in recent history. 
We have significant senior management attention to Alaska and 
on the ground in Alaska.
    Senator Baucus. Is it better? EPA sensitivity to Alaska?
    Ms. Brown. I think it is better when we can get the 
attention of the regional administrator. But I would have to 
say on the travel issue, most of the time you see troops of 
State regulators and facility operators going to Seattle to 
meet with a regulator there, because they don't have the travel 
budget to come up. So you'll have five, six Alaskans working on 
an Alaska permit traveling to Seattle to visit with one 
regulator who's never seen the facility.
    Senator Baucus. With all that oil, you can't buy a few more 
airline tickets?
    Thank you very much, Mr. Chairman. Thank you all.
    Senator Smith. Thank you.
    I just want to follow up one more thing, Mr. Diaz. Then I 
have a couple of questions for the other two witnesses.
    Senator Baucus. Mr. Chairman, I've got to leave. I just 
want to say that several environmental groups have an interest 
in this bill. But because of the scheduling problems, they were 
not able to testify. I just ask that the record be held open a 
week for others to submit their testimony.
    Senator Smith. We can hold it open until the end of the 
week.
    Senator Baucus. Thank you.
    Senator Smith. Until Friday.
    Senator Baucus. OK.
    Senator Smith. Just one final point. I don't mean to put 
you on the spot here, Mr. Diaz. I just want to get this 
clarified. A document was provided to us, it's marked 
privileged, but it's EPA work product, dating back to June 23, 
1993, in which there is a discussion about this issue. I 
realize it's work product and I'm not trying to say this is 
policy. But one of the options was ``do nothing,'' referring to 
acting on this issue. Do nothing, hope no one makes an issue of 
it, if they do, deal with it then.
    Also, going back to my original point to you, one of the 
bullets here on these, in the background is, the 12th floor of 
the EPA has been told by OGC that reversing the order 
establishing Region 11 will require the written approval of the 
President. So in your own documents, you're indicating that OGC 
has told you that. So I would like that clarified for the 
record, as to what OGC told you. Because that's what is in the 
documents from June 23, 1993, which was at the time that this 
matter was there.
    So I mean, it's clear, based on if you read, and I'll make 
the whole document part of the record, but it's clear that in 
that document, that the discussion is obvious that EPA, the new 
EPA, does not support the action, which is fine, they have that 
right. But I think it is also important in my view that they 
did not, to note that they did not pay attention to OGC's 
recommendation, which is if that the President doesn't want to 
do this, he should so indicate in writing, and then that would 
at least, the folks in Alaska would at least, wouldn't be held 
in limbo for 7 years wondering what was happening, and we 
wouldn't need another piece of legislation.
    Mr. Diaz. Might I respond, Mr. Chairman, very briefly?
    Senator Smith. Yes.
    Mr. Diaz. First of all, I believe I have seen that 
particular document. Its origin is not clear. I don't know to 
whom it was sent. I do take the point that the formal 
rescission of the President's order, as well as the 
Administrator's internal directive, need also to be formal. 
Having said that, I would certainly be pleased to provide for 
the record the information that you requested.
    Senator Smith. Thank you very much.
    Ms. Brown, just in response to what Mr. Diaz said, how 
often are EPA officials from Seattle in your State?
    Ms. Brown. We see the regional administrator probably 
around three times a year, I would say. The operations people 
are there presently all the time. But they work on primarily 
programs that the State doesn't have delegated direct program 
implementation. The things that we both have jurisdiction over, 
we tend to work with Seattle on. The Region 10 staff does not 
spend that much time traveling out of Region 10 to the State. 
We have to go there.
    Senator Smith. Your testimony was very good in defense of 
having Region 11. But try to focus, if you can, and you can 
answer as well, Mr. Freeman, if you like, what is your specific 
complaint? That they're not knowledgeable, they're not there? I 
mean, is it that they have to be on the ground right there all 
the time to get a handle on this? I'm just trying to get an 
idea from your perspective in Alaska just what the problem is.
    I mean, you make the same argument I guess, that all of us 
here in Washington, DC, don't know what's going on around the 
country. We hear that all the time. But I'm trying to get a 
handle on, I understand the size, when you put Alaska, 
superimposed it over the map of the United States, we can see 
the size, you can certainly make the case for sizes. I'm 
frankly undecided on the legislation, I'm trying to make up my 
mind. You did make a very forceful argument.
    But again, what specifically is the concern? That they'll 
have more knowledge if they're on the ground there, or you can 
work with them better? I hear so many times in the other 10 
regions, we're in complaints a lot, that the EPA's there too 
much, that it's causing more grief and more aggravation than 
it's worth, and a lot of people, I've been waiting for some of 
them to come forth and say, ``Why don't you get them out of 
here?'' Now you folks are asking for Region 11. So I'm just 
trying to make sure I don't go down the wrong path here. So 
help me out.
    Ms. Brown. Thank you, sir. That's a risk we're willing to 
take.
    I think in a nutshell, there's too much for the State to do 
alone. Two-thirds of the State is federally owned and operated. 
We need somebody with clout to help us, but to help us in a way 
that really makes sense. What we have now is help that's not 
making sense too frequently. It's one-size-fits-all, it doesn't 
take into consideration permafrost, arctic conditions, arctic 
engineering.
    So what we would like is a regional office that has the 
clout within EPA to say, ``Here's the outcome that you want, 
headquarters. We want to give you that outcome, but we want to 
do it by method B as opposed to method A.'' That is what I 
think the difference would be, that you would have somebody on 
the ground who knows the difference, who knows that frequently 
our mine discharges in heavily mineralized areas make water 
quality actually better instead of worse. So we need to have 
someone who can actually look for results and compliance in a 
way that makes sense.
    Senator Smith. Without embarrassing anybody personally, 
that's not my intention here, do you have indications that some 
of the EPA folks in the Seattle office are not knowledgeable of 
your concerns in Alaska, or not dealing with those concerns 
appropriately?
    Ms. Brown. A number of the staff just do not have the time 
or the travel funds to study and learn enough about the 
conditions. You will have situations like Mr. Freeman 
mentioned, where a log transfer facility that's located in a 
bay that doesn't even have a name, they want to know what the 
street address is. So those are the kinds of issues that we 
have to deal with that waste a lot of both our time and EPA's 
time, and that's why I think ultimately you might see a savings 
in Region 11, because you'd be spending time on things that 
matter.
    Senator Smith. Did you want to respond, Mr. Freeman?
    Mr. Freeman. Sure, Mr. Chairman, thank you. I guess the 
first point is that the State of Alaska truly is just 
remarkably different than any of the other States. I appreciate 
Senator Baucus' comments about his State is different than 
others on the east coast, for instance. But Alaska has the only 
arctic and sub-arctic conditions, almost half of our State is 
made up of wetlands. Just the vast area, it is remarkably a 
different State. You can't beat having the people that regulate 
the activities with regard to resource development and 
community in the State itself, that have an understanding of 
our uniqueness.
    I also would quickly point out the LTF example. I spoke in 
detail with one of my members who went through the process of 
trying to establish a general permit for the log transfer 
facility. He was really blown away at how adamant EPA staff in 
Seattle were that he come up with an address and a road, for 
when EPA staff did come, if they came to Alaska, to actually 
find the log transfer facility, even though it was well over 
dozens of miles away from any infrastructure.
    Senator Smith. If you could both just try to characterize 
for me the relationship in Alaska among those who would be 
determined as regulators, those who would be determined as 
environmental groups, those who might be businesses, or the 
public generally. What is the relationship between all of those 
groups in Alaska? Why don't you start, Mr. Freeman?
    Mr. Freeman. Thank you, Mr. Chairman.
    I think the relationship between, for instance, the 
business community and our State regulators is very positive. I 
think the relationship between the business community and the 
EPA officials that are in Alaska is very positive. Any time 
that you can meet on a basis, you can meet with someone more 
than three times a year, you can meet with someone on a regular 
basis, I think it helps establish personal relationships that 
build trust and then can lead to flexibility.
    With regard to the environmental community, I think that 
really varies. You have some in the environmental community 
from my perspective that truly are looking to protect Alaska, 
while at the same time understanding the role of resource and 
community development. I think you have other environmental 
interests that I think would like ultimately for the State of 
Alaska to be protected from Alaskans and maybe become a park 
indefinitely.
    Senator Smith. I find myself sitting here thinking that the 
two of you should be on different sides, that the EPA should be 
pushing for Region 11 and you guys should be opposing it.
    Do the environmental, so-called environmental groups in 
Alaska support the Region 11 designation?
    Mr. Freeman. I haven't spoken with any in the environmental 
community recently as to their position. Generally, I believe 
historically they've been opposed because of concerns, drawing 
resources away from the other States in Region 10. I have to be 
honest, many of our members share a point that you brought up, 
there are some concerns about having additional EPA regulators 
in Alaska, a lot more EPA regulators. But as Commissioner Brown 
noted, I think it's well worth the risk. Any time you can have 
more people, more information, more data, I think it leads to 
better decisionmaking. So we welcome the addition of a Region 
11.
    Senator Smith. Mr. Diaz, if you took the cost out of 
whatever the proportionate cost of Region 10 staff, if you took 
that cost out, what would be the additional cost, in your rough 
estimate, to have a Region 11 office?
    Mr. Diaz. I don't have that figure before me. I'd be happy 
to provide it for the record.
    [Additional information submitted by Mr. Diaz follows:]

    The information that follows is derived from EPA's 1992 study of 
the cost of establishing a separate Regional Office for Alaska. As 
indicated, additional resources would be necessary for administration 
and managerial functions, for relocation costs for new or current 
employees (other than those already in Alaska), and for facilities and 
equipment. These costs are not adjusted for inflation.
        resources in region x and estimated costs for region xi
I. Current situation in Region X
            A. Total resources
    1. 623.6 FTEs
    2. $2.0 million travel
    3. $151.7 million State grants (FY00)
    4. $22.6 million Tribal grants (FY00)
    5. $44.2 million Congressional Adds
            B. Resources devoted to Alaska activities
    1. There are 100 Full Time Equivalents (FTE) in Region X working on 
Alaska issues. Of the 100 FTE, 30 FTE are located in the Alaska 
Operations Office in Juneau and Anchorage, and 70 FTE are located in 
Seattle, Washington.
    2. 376.3K travel
    3. $25.3 million State grants (FY00)
    4. $17.5 million Tribal grants (FY00)
    5. $37.6 million Congressional Adds (includes, $30M AK Native)
            C. Status of authorized programs
    1. Air, drinking water, and pesticides programs are authorized to 
be administered by Alaska. RCRA, NPDES, and 404 programs are not.
    2. Alaska Department of Environmental Conservation is not prepared 
to administer the NPDES program at this time. Funding for RCRA's 
hazardous waste program has been virtually eliminated by the State.
    3. Except for one State, wetlands permitting is Federal.
II. Resources required for Region XI
    A. To have needed core of technical expertise, administrative and 
management support, Region XI would need about 180 FTEs; see Table 1. 
That would include 30 FTES (and 4 SEES) currently working in Alaska; 
the remainder would have to be new resources or come from elsewhere in 
EPA.
    B. The net costs (shown in Table 2) to start up the Alaska Regional 
Office assume that, of the 180 FTEs required, 60 FTE would come from 
reallocations within EPA and 120 FTE would be for new employees.
    C. Start up costs (e.g. furniture and equipment, building 
modifications, employee relocation) would be at least $12 million. This 
cost could also spread over more than 1 year.
    D. To make cost estimates, assumptions were made that Region XI 
would be operating at full strength by June 2002.
    1. In reality, it would take 2 or 3 years (perhaps even longer) for 
Region XI to hire and relocate staff, locate office space and make 
necessary modifications, purchase and install equipment, etc.
    2. Functions would have to be transferred gradually from Region X 
as Region XI staffs up; to assure a smooth transition period, the two 
might have to operate in tandem in many program areas for a period of 
time.
    3. Region XI's annual operating costs would be lower during this 
time, but savings would be offset to some extent by the cost of having 
Region X run some programs in tandem with Region XI, a cost that is 
impossible to estimate without detailed planning for a transition.
    E. EPA's Regional lab is not included because the workload would be 
too small to justify the cost of establishing a new lab. EPA Region XI 
could contract with private labs.
III. Foundation for estimating staffing requirements: key 
        characteristics of an EPA Regional Office
    A. An EPA Regional Office (RO) has an established role, which is 
firmly embedded in the Agency's culture, systems, and practices.
    B. Headquarters is the source of policy and procedural guidance. 
Regional Offices are the focal points of program execution and 
integration. Regional Offices maintain strong working relationships 
with States and Tribes, as well as local governments.
    C. A Regional Office is headed by a Regional Administrator (RA) 
appointed by the EPA Administrator. RAs are directly responsible to the 
Administrator and have direct line authority over Regional Office 
activities.
    D. Deputy Regional Administrators and most office directors are 
career-Senior Executive Service (SES) managers.
    E. ROs are self-sufficient with respect to most functions, although 
they may rely on other EPA offices for certain services.
    F. ROs are full participants in Agency-wide planning, budgeting and 
management activities. They work extensively with national program 
managers on budgeting and policy issues.
    G. RO policy decisions are subject to statutory and national policy 
constraints.
IV. Assumptions and methods used to estimate resource needs: Operating 
        expenses include costs of equipment purchases and rental, 
        printing, supplies and materials, and services obtained through 
        contracts (excluding Superfund program contracts). Support 
        includes the cost of office space rental, postage, security, 
        fitness center and operation of wellness/daycare facilities.
            A. Staffing
    1. Assumed Region XI would be largely self-sufficient.
    2. Need for core of technical expertise was the primary 
consideration.
    3. Assumed existing delegations to Alaska.
    4. Estimate does not include special staffing for start-up (e.g., 
to lay out workspace, design telecommunications systems, design 
information systems).
            B. Costs
    1. Salary and expense cost per FTE was based on Region X data; 25 
percent Cost of Living Allocations were added to all salaries.
    2. Cost of relocating new or current employees (except those 
already assigned in Alaska) was included.
    3. Estimate includes building modifications, furniture, equipment, 
telecommunication, information technology, and other start up items.
    4. June 2002 was assumed as the start-up date for the purpose of 
making estimates. In reality, operations would be phased in over a few 
years. Thus actual outlays in early years would be lower, but costs 
would be affected by inflation.

        Table 1.--Estimating Staffing Requirements for Region XI
------------------------------------------------------------------------
                                                       Office/
                       Office                           unit     Office
                                                        total     total
------------------------------------------------------------------------
Regional Administrator's Office:                                       4
  Regional Administrator............................         1
  Deputy Regional Administrator.....................         1
  Administrative Support............................         2
Office of Management Programs:                                        22
  Assistant Regional Administrator..................         2
  Human Resources Unit..............................         2
  Finance Unit......................................         3
  Infrastructure Unit...............................         3
  Information Resources Unit........................         4
  Grants Administration Unit........................         6
  Acquisitions......................................         2
Office of Water:                                                      45
  Office Director...................................         3
  Drinking Water Unit...............................        10
  NPDES Permits Unit................................         5
  NPDES Compliance Unit.............................         6
  Groundwater/UIC/UST Unit..........................        10
  Watershed Restoration Unit........................         6
  Standards and Planning Unit.......................         5
Office of Air Quality:                                                10
  Office Director...................................         2
  State and Tribal Programs.........................         4
  Air Enforcement...................................         2
  Federal and Delegated Program.....................         2
Office of Environmental Assessment:                                    9
  Office Director...................................         2
  Quality Assurance and Data........................         2
  Investigations and Engineering....................         3
  Risk Evaluation...................................         2
Office of Environmental Clean-up:                                     13
  Office Director...................................         2
  Program Management................................         3
  Emergency Response................................         2
  Site Cleanup Unit.................................         6
Office of Waste and Chemicals:                                        16
  Office Director...................................         2
  Solid Waste and Toxics Unit.......................         5
  Resource Management...............................         2
  RCRA Compliance Unit..............................         4
  Permits...........................................         3
Office of Ecosystems and Communities:                                 21
  Office Director...................................         3
  Community Relations/Outreach Unit.................         1
  Aquatic Resources.................................         6
  Pesticides Unit...................................         3
  Geographic Implementation & Natural Resources              8
 Management Unit....................................
Office of Regional Counsel:                                           14
  Office Director (Lead Attorney)...................         2
  Attorneys.........................................        12
Office of External Affairs:                                            3
  Office Director...................................         2
  Public Affairs Officers...........................         1
  Office of Enforcement and Compliance..............                   5
  Office of Tribal Operations.......................                  14
  Office of Civil Rights and Environmental Justice..                   2
  Office of Innovation..............................                   2
                                                     -------------------
    Total...........................................                 180
------------------------------------------------------------------------
Note: Region XI staffing would include 30.3 FTEs allocated to the Alaska
  Operations Office currently. The remainder would have to come from an
  increase in EPA resources or reallocation from other EPA offices.
  Administrative support positions are included in the table.


  Table 2.--Estimated Cost \1\ of Start-up and Hypothetical First Full
                            Year of Operation
------------------------------------------------------------------------
                                         Total           Net cost \2\
------------------------------------------------------------------------
Personnel Compensation and        $16,880,220.......  $11,309,747
 Benefits (PC&B).
Travel..........................  652.000...........  436,840
Operating expenses, contracts, &  5,132,800.........  3,438,976
 support \3\.
Start-up costs..................  $12 million         $12 million
                                   minimum.            minimum
                                 ---------------------------------------
    Total.......................  ..................  ..................
------------------------------------------------------------------------
\1\ Estimates are based on an assumption that Region XI would begin full
  operation June 2002; in reality, it will take two or three years
  (perhaps even longer) for Region XI to reach that point. During that
  time, annual operating costs would be lower than the figures shown
  here. Even start-up costs would be spread over a period of more than
  one year. While such a phase-in would reduce EPA's outlays during this
  period, inflation would increase the ultimate cost.
\2\ Net cost was calculated by assuming 60 FTEs of the estimated 180
  FTES required for Region XI would come from reallocations within EPA.
\3\ 0perating expenses include costs of equipment purchases and rental,
  printing, supplies and materials, and services obtained through
  contracts (excluding Superfund program contracts). Support includes
  the cost of office space rental, postage, security, fitness center and
  operation of wellness/daycare facilities.

                               __________
    Mr. Diaz. But I think it's important to point out, if I may 
very quickly, that the net costs of the 1992 study done on a 
regional office suggested that the incremental net cost would 
be $25 million. Now, one can argue about the numbers. I wasn't 
there, I don't claim to say that those are the accurate 
estimates. I don't say that the number of people that were 
estimated to staff a regional office were exactly accurate. 
They assumed 180 full time equivalents.
    I would note, however, that with regard to the other 
agencies that Senator Murkowski referred to earlier, their 
staffing level is in the range of about 200 full time 
equivalents to as high as about 1,700. We're dealing with a 
regional office that has about 600-plus full time equivalents. 
We're in a zero sum game, essentially. Sometimes even worse in 
dealing with resource allocation within the agency at a time 
that we're under a congressional mandate to reduce our FTE 
utilization by 400 FTE.
    These are very, very difficult resource decisions for us. 
We are attempting to meet the needs that have been indicated as 
representing the concerns of the Alaskan officials and others 
today and into the future. But it is clear to my way of 
thinking, regardless of the exact numbers and dollars that may 
be associated here, we're talking about significant impact on 
the resources available to other States within Region 10 at a 
time when the agency is under congressional mandate to reduce 
our resources, particularly with regard to people.
    Having said that, I once again reiterate the point I made 
earlier, that is that while we have done, I think, some things 
well, we are committed to continuing to work with Commissioner 
Brown and others in Alaska to try to address their concerns 
with regard to on the ground folks, with regard to delegations 
of authorities which are already unique, and with regard to 
Region 10 attention to the needs of Alaska.
    Senator Smith. I would make a request of you, Mr. Diaz, if 
you could have your Region 10 administrator provide some 
testimony for the record as to the rationale directly from that 
region as to how things are working or not working or in 
response to the comments that were made here specifically by 
Mr. Freeman and Ms. Brown. It would help the committee, I 
think. You've made the comments in general for the agency, but 
a little more specificity on the relationship between Seattle 
and Alaska would be helpful as we try to make a determination 
on what direction to go with the legislation.
    Mr. Diaz. We'd be happy to do that, and also respond 
directly to some of the examples that are raised in the 
testimony today.
    [Additional information submitted by Mr. Diaz follows:]

    Chairman Smith asked for an EPA response to the specific concerns 
voiced by the other two witnesses on the panel. The following 
information is submitted in connection with this request.
                                cominco
    Concern: The Resources Development Council alleges that EPA did not 
defer to the State's authority with respect to its air permitting 
program, specifically with regard to the permit application for the Red 
Dog Mine.
    Response: Cominco, the operator of the Red Dog Mine in Northwest 
Alaska applied for a ``Prevention of Significant Deterioration'' permit 
for a significant expansion of the mine, which included an additional 
diesel generator. The State approved the issuance of a permit. The 
National Park Service (NPS), under its authority to review such 
permits, expressed concern about the potential for environmental 
degradation of a nearby National Monument and National Preserve if the 
diesel generator were to be installed as permitted and asked EPA to 
intercede. EPA also was aware of concerns expressed by eleven Alaska 
Native Villages representing about 6,000 Natives who depend on the 
local environment for subsistence.
    Five substantive technical issues were identified by NPS and all 
but one were resolved. The remaining issue related to the adequacy of 
the record to make a ``best available control technology'' (BACT) 
determination for the diesel engine under the Clean Air Act. When 
Alaska awarded the permit with the unsupported BACT determination, 
Region X, in consultation with EPA Headquarters, issued an 
Administrative Order to Cominco instructing it not to build the engine 
pursuant to the invalid permit. The rest of the expansion, however, was 
unaffected. While Alaska has authority to issue permits, it must do so 
in accordance with the Clean Air Act. EPA's actions were taken in its 
oversight role to ensure that the Clean Air Act was followed, pursuant 
to Sections 167 and 113 of that Act.
    The State and the company have filed petitions for review in the 
Ninth Circuit Court of Appeals, who will determine whether EPA's 
actions were appropriate. On June 1, 2000, the Court denied Cominco's 
request for a stay of EPA's order prohibiting construction of the 
diesel engine in question. The final decision of the Court is pending.
    We appreciate the National Park Service alerting us to this matter. 
Rather than a lack of understanding of the specific circumstances in 
Alaska, we believe this example of the Red Dog Mine reflects an alleged 
failure to meet Clean Air Act requirements.
                                arsenic
    Concern: A claim was made that the point discharge level for 
arsenic established by EPA for placer mining permits is 300 percent 
lower than the drinking water standard for arsenic.
                           region x response
    In 1996, Alaska Department of Environmental Conservation reported 
to EPA that the human health standard for arsenic established by EPA 
under the National Toxics Rule was a problem for the State due to the 
naturally high levels of arsenic in some Alaskan waters. The rule that 
gave rise to Alaska's particular concern was developed under the normal 
notice and comment provisions and was broadly applicable to all States 
not then in compliance with the Clean Water Act. Once Alaska's concern 
was brought to EPA's attention, the Agency (Region X and Headquarters) 
worked collaboratively with the State to explore ways of addressing the 
situation. Alaska proposed that the Safe Drinking Water Act maximum 
contaminant level should be used to meet the requirements of the Clean 
Water Act. EPA agreed that the arsenic levels in freshwater, in 
conjunction with Alaska's aquatic life criteria for arsenic, met the 
requirements of the Clean Water Act.
    The Administrative Procedure Act requires EPA to promulgate a new 
rule in order to remove a State from the National Toxics Rule. EPA 
published a proposed rule and request for comments in the Federal 
Register on May 21, 1997. The final rule was published on March 2, 
1998, with an effective date of April 1, 1998.
    When Alaska was removed from the National Toxics Rule, Region X was 
asked by the State to modify the placer mining general permit. EPA 
proposed the general permit using the practical and flexible standard 
for allowable discharges of arsenic under the Safe Drinking Water Act 
maximum contaminant level. This became effective on November 27, 1998.
    We believe that EPA worked effectively with the State to address 
the effects of this rule to take into account the special circumstances 
of Alaska.
                     state revolving funds programs
    Concern: The State Revolving Funds (SRF) programs set project 
construction time requirements and costs that Alaska cannot meet due to 
seasonal and geographical construction constraints unique to Alaska.
    Region X Response: National rules for SRF Loan Programs are 
flexible and do not define time frames in which construction must be 
complete. The rules allow States to establish construction schedules 
that take into account a variety of factors, including seasonal and 
geographical considerations. Construction projects funded by the SRF 
may be phased and funded over a multi-year period, since SRF loans 
carry over from year to year. The SRF programs do require that States 
commit project loan funds (i.e. enter into loan agreements) at levels 
specified in grant payment schedules prepared by the State and approved 
by EPA. However, specific project costs and project schedules are not 
subject to SRF rules once a project has met eligibility requirements.
     safe drinking water testing requirements for rural communities
    Concern: EPA requires testing for contaminants that have never been 
found in Alaska and requires the State to re-draw samples due to 
arbitrary sample holding times.
    Region X Response: The Safe Drinking Water Act requires EPA to 
monitor drinking water for the protection of public health. EPA 
recognizes that some contaminants may not be found in Alaska or may be 
found very infrequently. In these cases, EPA grants a waiver to Alaska 
allowing samples to be taken infrequently (periodically over a 3- to 9-
year period, usually every 6 years), once the water is initially 
certified to be contaminant free.
    With regard to the sample holding times, EPA requires that 
bacterial samples be analyzed within 30 hours to preserve sample 
integrity. Although a shorter holding time is recommended, the 30-hour 
limit is based on the die-off rate of bacteria after which the 
likelihood of detection is greatly reduced. In the case of Alaska, EPA 
has granted a variance from this requirement under certain 
circumstances, such as remote locations and weather delays when these 
factors impede the collection and transportation of samples.
               safe drinking water operator certification
    Concern: Alaska's request for alternative drinking water operator 
certification requirements was ignored by EPA.
    Region X Response: The 1996 amendments to the Safe Drinking Water 
Act authorize the Safe Drinking Water Operator Certification Program. 
The purpose of the Program is to improve public health protections 
through training and certification of small water systems operators. 
National guidelines, published in February 1999, provide States with 
flexibility to design programs that fit their specific needs and 
circumstances. Various options have been discussed with Alaska, 
including the concept of traveling trainers and certification by oral 
method, correspondence course, or Web-based methods.
    At a Citizen's Advisory Board meeting in Anchorage last February, 
there was a general consensus that an expanded Operator Certification 
Program was needed and a new framework program was presented. Although 
the Alaska Department of Environmental Conservation has delayed 
development of an alternative certification program, EPA continues to 
work with the State on the revised rules in anticipation of the 
upcoming deadline of February 5, 2001.
                             npdes permits
    Concern: EPA's NPDES permit system does not work well for Alaska.
    Region X Response: EPA's Alaska-based staff involved in permitting 
includes two professionals who play major roles in permits for mineral 
and storm water management programs. Normally, at least one EPA 
professional makes an on-site inspection of any project requiring an 
NPDES permit.
    EPA understands that oil companies face special challenges on 
Alaska's North Slope with respect to EPA's multi-sector storm water 
permit requirements. Industry has requested that EPA modify the North 
Slope general permit to include storm water discharges. EPA has been 
willing to accommodate the industry's concern but has awaited ADEC's 
proposed modification. We understand that at least one oil company has 
been willing to provide financial support to the State for such work, 
but our most recent information is that ADEC currently has no staff 
member assigned to the effort.
    The State of Alaska has a critical role in this process by 
certifying EPA's proposed final permits. We continue to work with ADEC 
staff to prioritize the permit workload and take into account State 
concerns in developing NPDES permits.
                       relationships with tribes
    Concern: EPA does not have a good relationship with Alaska Tribes, 
primarily due to its lack of understanding, which results in EPA's 
placement of treatment systems in Native Villages where they are not 
necessary.
    Region X Response: EPA Region X has committed extensive resources 
and effort to work with and fully understand the environmental concerns 
of Alaska Tribes and Alaska Natives. Region X has a Tribal Office with 
a staff of 18. In addition there is a Tribal relations unit in the 
Alaska Operations Office with six full-time staff, three of whom are 
Alaska Natives. In addition, EPA has transferred one employee to 
support the work of the Alaska Intertribal Council, which consists of 
178 Alaska Tribal Governments.
    The Tribal Office Director and Tribal relations unit make regular 
site visits to Alaska Tribes and have completed 31 site visits over the 
last nine months. In addition, EPA has taken the following actions to 
improve its relationship with the Tribes and Native Villages:
     EPA provides regular training on managing Federal grants 
and working with the Agency.
     EPA has developed a Tribal sensitivity training course 
(one conducted in Seattle and two in the Alaska Operations Office) for 
EPA employees, taught by Tribal representatives and leaders from 
throughout Alaska.
     Region X has established a Tribal advisory committee 
consisting of four Tribally-elected representatives from each region of 
Alaska. This committee meets monthly to advise the Agency's Regional 
leadership of Tribal concerns, priorities and issues, and to assist the 
Agency in developing policy for working with Tribes and Native Villages 
of Alaska.
     EPA has engaged in extensive outreach efforts to consult 
with Tribes on specific Agency actions, such as Cook Inlet NPDES permit 
for oil platforms discharging into sensitive Tribal subsistence areas; 
promulgation of the Tribal Authority Rule (TAR) under the Clean Air 
Act; development of Tribal unified Watershed Assessments and Clean 
Water Action Plans.
    EPA staffwork closely with the State Village Safe Water program and 
with other Federal agencies in determining priority placements of 
treatment systems in Tribal villages. In addition, EPA is an active 
participant in the Governor's rural sanitation task force and chaired 
the Operation and Maintenance Subcommittee of that task force.
                          wetlands enforcement
    Concern: Regulators based in Alaska are more likely to respond to 
local realities and the need for flexibility in permitting.
    Region X Response: There is substantial local input in EPA's Alaska 
wetlands program. There are four EPA wetlands program staff in the 
State, three of whom operate from EPA's Operations Office in Anchorage 
and one based in the Kenai Peninsula. These staff members are trained 
wetlands ecologists who provide technical assistance and other support 
to address aquatic resources issues in the State. All work closely with 
the Army Corps of Engineers (the Corps) and other Federal and State 
agencies. This primary focus is on population centers and areas of 
development that are likely to have significant wetland impacts. These 
include:
     Anchorage Bowl: special emphasis on coordinating with the 
Municipality of Anchorage and the Corps on re-issuance of the Anchorage 
General Permit.
     Kenai Peninsula: special emphasis on developing local 
plans to address wetlands and other natural resource concerns (e.g. 
Community Rivers Planning Coalition in Anchor Point).
     North Slope Oil and Gas: coordinate with the Corps, 
Federal and State agencies, Tribes, and oil companies on wetlands 
issues pertaining to development on the North Slope.
     Matanuska-Susitna Borough: coordinate with the Corps and 
local watershed councils.
    EPA believes that these efforts reflect substantial collaboration 
with affected entities by experts located in Alaska.
                           coal mine project
    Concern: The distance between the Region X Office and Alaska may 
have posed problems for the Chuitna Coal Mine ``greenfield'' project.
    Region X Response: EPA Region X, in cooperation with the Army Corps 
of Engineers and the Alaska Department of Natural Resources, led the 
preparation of the environmental impact statement (EIS) for the Diamond 
Chuitna Coal Project. In accordance with provisions of the National 
Environmental Policy Act (NEPA), EPA Region X also coordinated with the 
project developer (located in Dallas), other Federal and State 
agencies, local organizations, and the public throughout the 
development, comment period, and finalization of the EIS.
    Environmental impact statements for large energy projects such as 
this one are inevitably time-consuming because of the participation of 
substantial numbers of affected public and private organizations and 
other requirements of NEPA and the Clean Water Act (CWA). To streamline 
the review processes, EPA combined the preparation of the EIS with the 
development of the National Pollution Discharge Elimination Permits 
(NPDES). The draft NPDES permits were included in the draft EIS and the 
proposed final permits were in the final EIS. The public hearings for 
the draft EIS and draft NPDES permits, held by EPA in Alaska, also were 
combined.
    Additional time was needed for this project due to delays by the 
developer in providing needed information for the preparation of the 
EIS and changes made to the proposed project during the course of the 
NEPA review. Coordinating the project review in Alaska would not have 
reduced the time needed for NEPA- and CWA-mandated procedural and 
public review requirements. In our view, distance has not been a factor 
in the evolution of this project.
                    anchorage sewage treatment plant
    Concern: The permit for the Anchorage Sewage Treatment Plant has 
not been issued yet, and the Alaska Department of Environmental 
Conservation has stated that the permit is unnecessary and the delay is 
unreasonable.
    Region X Response: EPA must issue a permit under the Clean Water 
Act (CWA) that conforms to the requirements of the Endangered Special 
Act (ESA), regardless of whether decisions are made in Seattle or in 
Anchorage.
    Review of the application for permit renewal has been prolonged 
because new prospective environmental impacts have been identified 
since the first permit was issued which are considered more significant 
and require further study and project redesign. These new impacts 
include the location of a new seafood processor in Anchorage and new 
concerns about the Beluga whale population.
    During the permit process, it was discovered that Upper Cook Inlet 
exceeded Alaska Water Quality Criteria for a number of metals and 
turbidity. In order to reissue the permit, the State agreed to complete 
a site-specific criteria revision for the affected area of Cook Inlet.
    Alaska submitted the criteria revision to EPA for approval in May 
1999. EPA issued a draft permit in November 1999. Before final EPA 
approval is given, action on the site-specific criteria and permit, EPA 
must complete endangered species consultation with the National Marine 
Fisheries Services (NMFS). Since this project was initiated, concerns 
over the Beluga whale population have increased. EPA Region X decided 
to prepare a biological evaluation for these two Federal actions and 
submitted the evaluation to NMFS for review in April 1999. EPA also 
must address new Essential Fish Habitat (EFH) requirements. EPA is 
currently waiting for a response from NMFS on both the endangered 
species and EFH evaluations. Once Region X adequately addresses 
concerns raised by NMFS, EPA will take final action on the criteria 
revision and NPDES permit.
                         oil and gas expertise
    Concern: In the testimony of the Resource Development Council, the 
point was made that EPA Region X does not have staff with in-depth 
understanding of oil and gas exploration activities.
    Region X Response: Region X staff, both in Seattle and the Alaska 
Operations Office, has had extensive education, training, and 
experience with respect to arctic oil and gas facilities and practices. 
Employees working in this field have undergraduate degrees in mining 
engineering, geology, and petroleum engineering, some with advanced 
degrees in geology, marine geology, geophysics, and chemical 
engineering. Prior to joining EPA, many have had Alaska-based oil and 
gas experience either with the State of Alaska or with private 
industry. More detailed information on the education, training, and 
expertise of individual employees in the oil and gas exploration field 
is available on request.
                         fairbanks air quality
    Concern: Fairbanks is at risk of losing Federal funding and of 
facing sanctions if it does not come into compliance with the Clean Air 
Act.
    Region X Response: We recognize that Alaska faces air quality 
challenges that are different from other areas, and we are committed to 
working with the State to address those challenges. In the case of 
Fairbanks, Alaska has not submitted a plan to demonstrate how Fairbanks 
will meet the health-based air quality standard for carbon monoxide. 
Nor has Alaska submitted information showing that Fairbanks cannot 
attain the carbon monoxide standard by adopting reasonable control 
measures. Because the plan has not been submitted, Fairbanks could be 
subject to offset sanctions (requirements that new CO sources offset 
their emissions by a 2:1 ratio) in October 2001 and to limitations on 
Federal highway funds in April 2002.
    These sanctions would be avoided if Alaska submitted and EPA 
approved a plan for Fairbanks to meet the CO standard. EPA has pledged 
to continue to work with the State and North Star Borough to identify a 
range of measures to address the specific circumstances applicable to 
Fairbanks and to provide healthy air to the citizens of Fairbanks.
    EPA Headquarters and Region X have provided technical and financial 
support for a number of special projects aimed at gathering scientific 
data on air quality for temporal and spatial patterns in Fairbanks 
compared to other major cities, on the sources of air pollution and 
their relative contributions, and on the impacts of various control 
strategies to abate pollution levels. EPA also has begun discussions 
with the Department of Energy and a manufacturer of heat storage 
catalytic converters to examine the technology's potential for use in 
cold weather climates, such as Anchorage and Fairbanks.

    Senator Smith. Does anyone else have any further comment? I 
know especially you two, came all the way from Alaska.
    Ms. Brown. If I could, Senator, I just want to, in the 
study that was done in 1992, it said that there were 84 FTEs 
that were working on Alaska issues. I don't know how it went 
from 84 to 180 is necessary for a new region. But if you use 
the 84 number that was provided, if there are 39 already in 
Alaska, and then that report said 40 others could come out of 
Region 10 without causing harm, you're pretty close to 84 right 
there. If you do the core task analysis, it's not just how much 
time you spend, but what you're producing with that time and 
are you spending the time in really core tasks versus busy 
tasks. A lean but focused Region 11 I think would still make an 
improvement.
    Senator Smith. Just a reminder, I also would like to have 
for the record your estimate of the costs, factoring out 
whatever portion of the Seattle office would be attributed to 
Alaska. Let me just remind the clerk, we'll keep the record 
open until 5 o'clock on Friday for any additional questions 
from the members or additional information.
    Thank you all very much for coming. The hearing is now 
closed.
    [Whereupon, at 11:27 a.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
 Statement of Senator Frank H. Murkowski, U.S. Senator from the State 
                               of Alaska
    Mr. Chairman, thank you for scheduling this hearing on a bill that 
I have introduced with Senator Stevens to establish an EPA Region in 
Alaska.
    Why does Alaska need a separate region? Part of the answer lies in 
the uniqueness of our ecosystems and the extent of our real estate.
    Alaska is comprised of 365 million acres or 586,000 square miles. 
That's two and a half times larger than Texas--or a little more than 63 
New Hampshires, Mr. Chairman. Alaska stretches 2,400 miles from east to 
west, and 1,420 miles from north to south.
    Alaska has 170 million acres of wetlands--that's 65 million acres 
more than the combined total of wetlands in the other 49 States.
    We have more coastline than the rest of the Nation combined--some 
47,300 miles of shoreline.
    We have 3 million lakes larger than 20 acres.
    We have ecosystems ranging from arctic desert to temperate rain 
forests, including ecosystems that are found nowhere else in the United 
States. In addition, Alaska is more ecologically diverse than any other 
State.
    That's why virtually every other Federal Agency with environmental 
or conservation responsibilities has a regional office in Alaska. These 
include:
     The National Park Service
     The U.S. Fish and Wildlife Service
     The Bureau of Land Management
     The U.S. Forest Service
     The U.S. Geological Survey
     The Bureau of Indian Affairs
     The Mineral Management Service
     The Bureau of Mines
    Even the Federal Aviation Administration has a region comprised 
only of Alaska. Moreover, the Coast Guard and the U.S. Army Corps of 
Engineers have District Offices that are in Alaska and specifically 
devoted to Alaskan issues.
    Congress has already recognized the merits of an Alaska region for 
the EPA. In the fiscal year 1992 VA-HUD appropriations bill, Congress 
authorized the President to establish an eleventh region of the EPA 
consisting solely of the State of Alaska. An Administrative Order to 
that effect was signed by EPA Administrator William K. Reilly on 
January 20, 1993. Unfortunately, the order was not carried through. I 
ask that a copy of the signed order be included in the hearing record.
    Mr. Chairman, as I know from my service on this committee when I 
first came to the Senate, and as you know from your leadership in 
environmental issues, environmental protection is a complex 
undertaking. ``One-size-fits-all'' approaches cannot be written in 
Washington or Seattle and applied in Alaska. Bringing the regulator 
closer to the problem yields better decisions and more effective, 
thoughtful regulation.
    Moreover, because 65 percent of Alaska is owned and controlled by 
the Federal Government, most EPA activities directed at Alaska require 
coordination with the Federal land managers who are headquartered in 
Alaska.
    Other benefits we expect from this legislation include:
     Reduced number of appeals and adjudications;
     Reduced travel between Seattle and Alaska;
     Better service to the public;
     Lower costs.
    While EPA may disagree, the last time we asked the Alaska 
Department of Environmental Conservation to perform an analysis of the 
budgetary impacts of an Alaska Regional EPA office, they projected a 
modest savings to the taxpayer. I ask that materials related to cost be 
included in the record.
    Mr. Chairman, I wanted to leave you with just a few examples of 
what happens when good intentions in the EPA Seattle office go awry in 
Alaska.
    In the regulation of mining operations, EPA sought to require 
operators to reduce arsenic discharges to a level below the naturally 
occurring ambient levels. They were apparently unaware that the high 
level of mineralization in areas of Alaska cause some streams to have 
high levels of naturally occurring contaminants.
    Here is another example: When EPA insisted that Fairbanks, my home 
town, use MBTE as a oxygenate for motor fuels, nobody understood what 
happened when MBTE volatilized in an extreme cold air inversion, 
exposing humans directly to the chemical. Let me tell you what 
happened--people started getting sick--complaining of headaches, 
nausea, and dizziness. For far too long, EPA's distant Seattle office 
regarded the health complaints of Fairbanks residents as little more 
than the grumblings of crackpots, and refused to grant a waiver. Many 
months later, after being confronted with hard evidence of sickness, 
EPA granted a waiver.
    How much quickly might that waiver had come, and how many fewer 
Alaskans would have gotten sick, if EPA had a regional office in 
Alaska?
    Today, Fairbanks is a non-attainment area for Carbon Monoxide by 
virtue of the Arctic air inversions that occur several times a year. 
Seattle has never experienced a true Arctic air inversion, so it 
doesn't surprise me that the EPA regional office hasn't come to terms 
with the best way to help Fairbanks solve its problem. Instead of 
considering the unique situation that Fairbanks is in, the EPA started 
the sanctions clock.
    In Nome, where I visited this past weekend, the EPA wants the 
smokestack on the powerplant raised to better dissipate emissions. 
According to the Federal Aviation Administration, doing so would 
interfere with the landing pattern and require a costly realignment of 
the runway at Nome's airport, which would largely be undertaken at 
Federal expense. Is this a sensible, cost-effective solution? Of course 
not. But it's easy to see how this can happen if EPA is sitting in 
Seattle calling the shots without coordinating with the FAA, which has 
its regional headquarters in Anchorage.
    These are just some examples. Commissioner Brown will talk about 
the Anchorage Wastewater Treatment Plant permit where a great deal of 
time, effort and money has been expended for no improvement in water 
quality.
    Let me stress that it is not my intent to question the dedication 
and good intentions of the EPA people in Seattle--but if they are 
closer to the action, they will do a better job.
    In conclusion, I ask that this committee move our legislation that 
directs the establishment of an Alaska region.
    In the interim, you might ask the EPA why they haven't done so 
already.
    Thank you, Mr. Chairman.
                               __________
     Statement of Romulo L. Diaz, Jr., Assistant Administrator for 
                Administration and Resources Management
    Mr. Chairman and members of the committee, I am Romulo L. Diaz, 
Jr., Assistant Administrator for Administration and Resources 
Management at the Environmental Protection Agency (EPA). I am pleased 
to have the opportunity to appear before this committee to present the 
Agency's views on S. 1311, a bill to create a separate EPA Region for 
Alaska.
    Prior to discussing S. 1311, I'd like to provide a brief history of 
EPA's current ten-region structure. EPA was established by 
Reorganization Plan No. 3, signed by President Nixon in 1970. Under the 
terms of the Plan, components of several departments and agencies were 
consolidated in the new EPA, including components of the Departments of 
Interior, Agriculture, and Health, Education and Welfare (HEW).
    EPA inherited two distinct regional structures from its predecessor 
agencies. Those components from HEW followed the ten standard Federal 
regions suggested by a Presidential directive issued in March of 1969. 
Components inherited from the Department of the Interior used a nine-
region system divided along river basins. In order to facilitate easier 
operations with local and State governments as well as other with 
Federal agencies using the ten standard regions model, EPA chose to 
adopt this model.
    In 1974, the Office of Management and Budget issued OMB Circular 
No. A-105, which formalized the 1969 Presidential directive and 
required agencies to adopt the standard ten-region structure unless 
specifically exempted. OMB Circular A-105 remained in force until it 
was rescinded in 1995. In its recommendation to rescind the circular, 
OMB cited the Federal Government's expanded use of technologies to 
interact with the public and other factors that made a strict regional 
structure no longer necessary. The rescission, however, did not require 
agencies to re-examine existing regional structures. While EPA has in 
recent years completed several reorganizations within individual 
regions, it has not found any basis for changing the existing ten-
region structure.
    In 1990, Walter Hickel, then Governor of Alaska, called upon EPA 
Administrator William Reilly to create a separate Regional office for 
the State. Reasons given by the Governor and others in support of this 
request included among others, the State's unique environment and size, 
the predominance of oil exploration and development in the State's 
economy, and security issues related to Alaska's proximity to the 
Soviet Far East.
    In response to the request to create a new region and the concerns 
expressed by the delegations of the potentially affected States, EPA 
undertook a study of the Implications of Establishing a Regional Office 
in and for Alaska. This study, which was completed in 1992, concluded 
that the proposed new region would not be cost effective and that there 
were better approaches to meeting the concerns of Alaska's elected 
officials.
    On January 19, 1993, President Bush signed a memorandum ordering 
Administrator Reilly to establish Region XI. Administrator Reilly 
responded to the President's memorandum on January 20, 1993, by signing 
an ``administrative order'' establishing the new region.
    Under the new Administration, the Agency reviewed the report and 
the history of the proposal. After careful consideration was given to 
the concerns expressed by Alaska's elected officials, its citizens, and 
State, industry, and environmental groups, and the findings of the 
Alaska study, EPA believed that the concerns of Alaska could be more 
effectively and efficiently satisfied through a variety of other means. 
These included better collaboration with the State in developing 
program priorities, in improving delivery strategies, and in modifying 
administrative structures. In light of the 1992 study and EPA's 
experience in the intervening years, we remain convinced that the 
creation of a separate Regional Office for Alaska would not be the most 
effective structure for addressing the unique circumstances faced by 
Alaska. We also remain committed to working with the State to most 
effectively and efficiently serve our mutual goals of protecting public 
health and the environment.
    Let me review a few of the most important ways in which EPA today 
is working to fulfill its commitment to one of this nation's most 
geographically diverse areas.
                    recognizing alaska's uniqueness
    The administrative structure that EPA's Region 10 created for its 
Alaska operations is unique among EPA's State organizations. With 39 
employees, it is the largest of any EPA State-based operation, and EPA 
intends to maintain the necessary emphasis to keep pace with the 
State's needs.
    The Alaska Operations Office makes recommendations on a wide range 
of environmental and human health issues affecting the people of 
Alaska. These recommendations form the basis of final Agency decisions 
on matters relating to the State.
    The Alaska Operations Office is responsible for on-the-ground 
implementation of EPA programs in the State. In addition to 
administering some programs directly, the Operations Office provides 
technical assistance to help the State and local and Tribal governments 
in administering EPA programs that have been delegated to them at their 
request.
    EPA offices in the cities of Juneau and Anchorage provide the 
public in those population centers with access to EPA staff. The 
Agency's office in Juneau facilitates close coordination of EPA 
programs with related departments of the State government. The 
Anchorage office is readily accessible to the businesses and industries 
regulated by EPA.
    In addition to these offices, EPA employees work with the 
Department of Interior in a Joint Pipeline Office, assist the 
Department of Defense in waste clean up, and work in the office of the 
Alaska Inter-Tribal Council. To support preservation and restoration of 
the watersheds in the Kenai Peninsula, EPA has one staff member in that 
location.
    These employees are highly trained professionals, many with 
advanced degrees in scientific and technical fields, specifically 
selected because of their familiarity with the arctic and subarctic 
climate and with the challenges of dealing with environmental issues in 
remote areas. To broaden the expertise of EPA staff and to maintain 
their in-depth knowledge of local issues, the Alaska Operations Office 
has used agreements for the exchange of personnel with State and local 
government organizations such as the city of Anchorage, the Alaska 
Department of Environmental Conservation, the Alaska Inter-Tribal 
Council, the Joint Pipeline Office, the Alaska Native Health Board, and 
the Denali Commission. In addition, interagency exchanges are in effect 
between EPA and the U.S. Department of Defense and the U.S. Forest 
Service. These exchanges help the Agency develop programs that are 
tailor-made for local conditions and that build coalitions with various 
organizations with similar Alaska-related concerns and goals.
               flexible program implementation for alaska
    In 1995, EPA initiated a National Environmental Performance 
Partnership System. Under this system, the Agency's partnership 
agreement with the State of Alaska, initially drafted in May 4, 1977 
and updated every 2 years, is an integrated and flexible strategic plan 
for addressing the State's environmental problems. The recently revised 
agreement contains mutually determined priorities and a plan of action 
that involves both the EPA and the State in working together to achieve 
environmental goals. The plan encompasses all EPA-financed assistance 
that goes to the State, including that designated for air quality, 
water quality, drinking water, facility construction, underground 
storage tanks, wellhead protection, toxic waste clean-up, hazardous 
waste, and pollution prevention programs.
    A central element of the partnership between EPA and Alaska is that 
the agreement integrates federally-funded programs administered by EPA 
with related programs funded by the State and by other Federal 
agencies. It is intended to give the State maximum flexibility to 
address its specific needs while maintaining a core level of 
environmental protection.
    A few examples will serve to illustrate the flexibility that EPA 
gives to Alaska:
     Fuel standards. In light of the State's unique 
geographical, meteorological, air quality, and economic factors, EPA 
has granted Alaska an exemption from meeting the current sulfur 
standard for highway diesel fuel. The Agency is now proposing to lower 
the national standard to 15 ppm (parts per million) for sulfur, but 
also proposed permitting Alaska to develop its own alternative low-
sulfur transition plan. In addition to flexibility on the sulfur 
standard, the State also has authority to develop its own method for 
reducing carbon monoxide, and has been working with Region 10 to 
identify alternative approaches to achieve carbon monoxide reductions.
     Rural sanitation. Region 10 created a Rural Sanitation 
Coordinator position in the Alaska Operations Office to work directly 
with villages and with other agencies and organizations that provide 
rural sanitation services. The Operations Office played a substantial 
role in the development of the State Rural Sanitation Action Plan, 
which recognizes the challenging sanitation issues faced by communities 
in rural Alaska and the difficulties these communities have in 
managing, operating, and maintaining sanitation facilities. EPA's 
Office of Wastewater Management provides funds to the Alaska Native 
Health Board to assist rural Alaskan communities in meeting their sewer 
and water system management, operation, and maintenance needs.
     Drinking water. The Agency recognizes the particular 
challenge Alaska faces in ensuring that communities have water that is 
safe for drinking, swimming, and fishing. There are more than 3,500 
public water systems in Alaska, 95 percent of which serve fewer than 
500 people in rural and remote locations. To help communities in Alaska 
meet this challenge, EPA has provided in excess of $100 million since 
1995 for construction of drinking water facilities in Alaskan 
communities.
     Wetlands protection. EPA and the Corps of Engineers have 
worked to develop a wetlands permitting process that takes into account 
the State's highly diverse environmental, economic, and geographical 
conditions. In 1994, as part of the Alaska Wetlands Initiative, EPA and 
the Corps convened a panel of stakeholders and solicited broad public 
input to identify and address concerns with the implementation of the 
Section 404 program in Alaska. Some 2000 comments were received over 
the course of the initiative. In response to concern's raised by these 
stakeholders, guidance was issued that emphasizes the discretion and 
flexibility afforded to the Corps to craft decisions that take into 
account environmental conditions unique to Alaska. As part of EPA's 
ongoing Section 404 efforts in Alaska, the Agency is working closely 
with local interests in the Kenai to determine how recreational and 
economic activities can proceed while protecting important aquatic 
resources.
                   making progress, achieving results
    A number of measures point to the success of EPA efforts to tailor 
programs to the specific needs of the State and to give the State the 
greatest possible flexibility to establish priorities and allocate 
funds. Here again are some examples:
     Permit backlogs for municipal discharges, mining, pulp, 
and seafood operations have been reduced from 69 percent in 1996, to 21 
percent in March 2000, and are expected to be further reduced by the 
end of this calendar year.
     The Alaska Operations Office has worked successfully with 
the State, the city of Juneau, and the cruise industry to help ships 
comply with State and Federal air and water standards in a cost-
effective and environmentally protective manner. This project, and 
others such as Superfund site cleanups and the restoration of abandoned 
industrial sites to productive use, demonstrates that environmental 
protection and economic development in Alaska, as elsewhere, are 
complementary.
     EPA has been the primary sponsor, both financially and 
technically, of the Yukon River Inter-Tribal Council, which is 
conducting research on ways of protecting the Yukon River Watershed.
     EPA, the State of Alaska, the Canadian Government, and 
related other Federal and State agencies are currently in negotiations 
on ways to protect the Taku Watershed and Alaska fisheries from the 
harmful effects of mining wastes.
     EPA created an arctic monitoring program to assess the 
impact of circumpolar and transpacific pollutants such as persistent 
organic pollutants and radioactive contaminants on the State's 
sensitive arctic region and its indigenous peoples.
Summary
    During the past 7 years, EPA has worked to address all the issues 
that prompted the proposal to create a separate Regional office for the 
State. Although there is always room for improvement, much progress has 
been made. As I have already indicated, we are addressing Alaska's 
unique and varied geography directly in a number of cost-effective 
ways. We will continue to assess our program needs for the State.
    On behalf of the Environmental Protection Agency, I pledge that we 
will continue to work with Members of Congress as well as the State of 
Alaska and others to consider additional ways to better serve the 
environment and people of Alaska.
    Thank you for the opportunity to appear before you today. I would 
be pleased to answer any questions you may have.
                               __________

  Responses by the Environmental Protection Agency (EPA) to Questions 
                           from Senator Smith

    Question 1. The EPA and the Alaska Department of 
Environmental Conservation agree that there are unique features 
about Alaska that require special regulatory treatment. The EPA 
and the State, however, disagree over whether Alaska should be 
a separate region. It could reasonably be argued that having a 
separate Regional Administrator for Alaska is necessary because 
only a political appointee can effectively go to bat for the 
State. Political appointees carry more weight in the battle for 
scarce funds than even the most talented civil servants. The 
policy views of political appointees also carry more weight in 
the debate over the best environmental regulation. Does the EPA 
agree or disagree with the proposition that a political 
appointee can better represent the views of Alaska within the 
EPA than can a civil servant?
    Response. EPA does not agree with the proposition that a 
political appointee could better represent the interests of 
Alaska than a civil servant. Nonetheless, we note that the 
Regional Administrator for Region X, which has responsibility 
for Alaska, has traditionally been a political appointee. The 
experience of this Agency is that environmental and public 
health priorities must be balanced with resources available to 
address them, and that it is the strength of the argument 
rather than the status of the advocate that is likely to be 
most persuasive.

    Question 2a. In your testimony, you said that having a 
separate Region for Alaska is not the most effective means of 
addressing the unique circumstances faced by Alaska. Please 
explain in detail your reasons for that conclusion. In doing 
so, please address the following subjects.
    Please identify the cost and non-cost factors on which you 
rely for that conclusion, as well as identify the relative 
weight given to each factor.
    Response. The data that was analyzed when the establishment 
of a Regional Office for Alaska was first proposed suggested 
that the creation of such an office would not be cost 
effective. That conclusion remains valid. For example, one 
expert on the subject of underground storage tanks provides 
service to the four States in Region X. Creating a separate 
Regional Office for Alaska would necessitate duplicating this 
expertise for Alaska alone. Other areas of scientific and 
technical expertise would also have to be duplicated.

    Question 2b. What is the cost of establishing a separate 
Alaska region? Please separately identify and distinguish the 
cost of immediately creating a fully staffed Regional Office 
from the cost of creating a fully staffed office gradually.
    Response. Information on the cost of establishing a 
separate Regional Office was provided to the committee on July 
27. A table with ``phase-in'' information on estimated costs of 
creating such an office over a 4-year period is attached.

    Question 2c. Please identify all personnel positions (e.g, 
Regional Administrator) that would need to be filled in order 
to operate a separate Alaska Region, as well as all other 
matters (e.g., office space) that would be needed in order to 
establish a separate Alaska Region.
    Response. This information has been provided as above in 
answer to (b).

    Question 2d. Please provide to the committee any formal 
analysis of the foregoing factors that has been prepared during 
this Administration.
    Response. No analysis of the foregoing factors was 
undertaken during this Administration.

    Question 3a. Mr. Diaz, one of the documents that you 
provided to the committee is entitled ``Region XI Approaches to 
Closure'' and is dated June 23, 1993. The document is unsigned. 
The document states the following (at page 1): ``The 12th floor 
has been told by OGC that reversing the order establishing 
Region XI will require the written approval of the President.'' 
Please explain this statement in detail for the committee. In 
doing so, please address the following subjects.
    Who prepared this document?
    Response. We have not been able to determine the author of 
this document.

    Question 3b. To whom was this document sent?
    Response. We have not been able to determine the intended 
recipient of this document nor whether it was ever sent.

    Question 3c. Was the Administrator or Deputy Administrator 
ever briefed regarding this document or the subject of this 
document?
    Response. The Administrator was briefed on the Alaska 
Region XI issue, but has no recollection of being briefed on 
the document or the subject of the document. We have not been 
able to find any information in the files of the Administrator 
or Deputy Administrator indicating that either official had 
been briefed on the document.

    Question 3d. Does the quotation note[d] above represent the 
EPA's current position?
    Response. No.

    (i) If not, what is the EPA's new position?
    Response. After informally consulting with the Office of 
Legal Counsel, Department of Justice, EPA's Office of General 
Counsel (OGC) has advised that only the President can rescind a 
Presidential memorandum and that the President may do so orally 
or in writing. To the best of our knowledge, this is not a 
``new'' position because the unsigned document dated June 23, 
1993, entitled ``Region XI Approaches to Closure'' did not, and 
did not purport to, State EPA's position on this issue.

    (ii) When did the EPA change its position?
    Response. As indicated in the answer to (i), to the best of 
our knowledge, EPA has not ``changed'' its position. OGC 
examined this issue once Chairman Smith questioned Mr. Diaz 
about the June 23, 1993 background document at the committee's 
June 6, 2000 hearing.

    (iii) Who was involved in the process by which the EPA 
changed its position?
    Response. To the best of our knowledge, EPA has not changed 
its position. Subsequent to the hearing, staff in the Office of 
General Counsel, EPA, and in the Office of Legal Counsel, 
Department of Justice, were involved in addressing the legal 
issues of whether the President must rescind a Presidential 
memorandum and whether this must be done in writing.

    Question 3e. Did the Office of General Counsel issue a 
written opinion on the following subjects:
    (i) The validity of the ordered entered by former President 
Bush on January 19, 1993, or the order entered by former EPA 
Administrator William Reilly on January 20, 1993, establishing 
a separate Region 11 for Alaska?
    Response. Based on a thorough inquiry and review of our 
files, to the best of our knowledge, the Office of General 
Counsel did not issue a written opinion on this question.

    (ii) The steps necessary to implement the order entered by 
former President Bush on January 19, 1993, or the order entered 
by former EPA Administrator William Reilly on January 20, 1993, 
establishing a separate Region 11 for Alaska?
    Response. Based on a thorough inquiry and review of our 
files, to the best of our knowledge, the Office of General 
Counsel did not issue a written opinion on this question.

    (iii) The steps necessary to rescind the order entered by 
former President Bush on January 19, 1993, or the order entered 
by former EPA Administrator William Reilly on January 20, 1993, 
establishing a separate Region 11 for Alaska?
    Response. Based on a thorough inquiry and review of our 
files, to the best of our knowledge, the Office of General 
Counsel did not issue a written opinion on this question.
    If so, please provide a copy of those opinions to this 
committee.

    Question 4. At the hearing, you acknowledged that President 
Clinton has never revoked the order entered by former President 
Bush on January 19, 1993, or the order entered by former EPA 
Administrator William Reilly on January 20, 1993.
    Why has the EPA not established a separate Region 11 for 
Alaska?
    Response. The proponents for establishing a separate region 
for Alaska argue that the special geographic, climatic, and 
economic conditions of the State require unique responses to 
its environmental and public health conditions. A study 
undertaken by EPA, Implications of Establishing a Regional 
Office in and for Alaska, at the request of the Alaska 
Department of Environmental Conservation and Senator Murkowski, 
concluded that a proposed new region would not be cost 
effective nor would it provide the advantages that the State 
and others believed possible. After reviewing the report and 
considering the concerns expressed by Alaska's elected 
officials, its citizens, and State industry and environmental 
groups, EPA determined that the issues which formed the basis 
for the order to create a new Region could be more effectively 
and efficiently satisfied through a variety of other means. 
These included improving collaboration with the State in 
developing program priorities, improving delivery strategies, 
and modifying administrative structures. We believe these 
strategic and administrative improvements have been effective 
in addressing the unique circumstances faced by Alaska and have 
eliminated the need for establishing a separate Regional Office 
for the State.

                               Table.--R11 Estimated Costs Over a Four-Year Period
----------------------------------------------------------------------------------------------------------------
            Category                  Year 1          Year 2          Year 3          Year 4           Total
----------------------------------------------------------------------------------------------------------------
Personnel compensation and             3,854,052       3,683,206       4,657,038       4,685,924      16,880,220
 benefits (PC&B)................
Travel..........................         283,100         101,900         133,500         133,500         652,000
Operating expenses, contracts &        2,258,100         833,100       1,018,100       1,023,500       5,132,800
 support........................
Start-up costs..................       5,787,500       2,290,100       2,085,200       1,837,200      12,000,000
                                 -------------------------------------------------------------------------------
    Total per year:.............      12,182,752       6,908,306       7,893,838       7,680,124      34,665,020
                                 -------------------------------------------------------------------------------
       Totals...................      12,182,752      19,091,058      26,984,896      34,665,020
----------------------------------------------------------------------------------------------------------------
Assumptions:
 Costs do not include any inflation factors.
 The RA's Office would be fully staffed the first year.
 The support offices would not exist the first year, but would be phased in at \1/3\ total strength for
  Years 2 thru 4.
 The program offices would be at \1/3\ total strength the first year, \1/2\ strength the second year and
  \3/4\ strength the third year.

                               __________
   Statement of Michele D. Brown, Commissioner, Alaska Department of 
                       Environmental Conservation
    Chairman and members of the committee: I am Michele Brown, 
Commissioner of the Alaska Department of Environmental Conservation. On 
behalf of Alaska Governor Tony Knowles, I am pleased to testify that 
the State of Alaska supports the bill before you to create a separate 
region of the EPA for Alaska, which will foster a far more effective 
Federal-state partnership to protect Alaska's environment and the 
health of its people.
      alaska's environmental challenges are unique and distinctive
    Alaska is a national treasure. You have participated in the debates 
over opening the Arctic National Wildlife Refuge, about timber harvest 
levels in the Tongass National Forest, and over how to prevent and 
improve response to oil spills such as the Exxon Valdez. There is great 
passion in those debates. Alaska is America's proud symbol for 
environmental purity and primal wilderness. It should also be America's 
model for environmental management. Yet, the key Federal agency charged 
in this country with environmental management has only a meager 
presence in Alaska.
    EPA's 1992 report entitled ``Implications of Establishing a 
Regional Office in and for Alaska'' states that a new Alaska region 
should not be established because no one wants to live and work in 
Alaska. My 450 employees and I would like to tell you that when it 
comes to environmental splendor and to the ability to practice creative 
and meaningful environmental management, it simply doesn't get any 
better than Alaska.
    For public health and environmental challenges, and for the 
opportunity to do development right, as Alaska's Governor Tony Knowles 
requires, Alaska is where the rubber meets the road.
    Issues range:
     from addressing third world sanitation conditions in 
hundreds of inaccessible, tiny communities in a State where there is 
virtually no county or borough regional health management system, to 
regulating the U.S.'s most sophisticated and complex oil development, 
production and transportation system, one which yields 20 percent of 
the U.S.'s oil production. Another 30 percent of the U.S.'s proven oil 
reserves lies under Alaska's surface and we all know that Americans 
will not tolerate drilling those reserves without assurances that it 
can be safely managed.
     from protecting the water quality that produces and 
processes over 50 percent of the U.S.'s seafood production and houses 
the largest seafood landing port in the U.S., while regulating the 
discharges from the U.S.'s largest zinc and silver mines and the U.S.'s 
leading placer gold and tin production mines.
     from generating electricity from diesel engines for almost 
all of Alaska's numerous remote villages, and all the mines and oil and 
gas production facilities I just mentioned, because there is no other 
available power source, while assuring air quality for two-thirds of 
all the U.S.'s national parklands, the largest State park system in the 
United States, and the U.S.'s largest national forests, as well as 
preserving the vistas and fresh air quality for the 1.4 million 
tourists who visit Alaska each year.
    And, this all needs to be done over a land base that equals 20 
percent of the United States. As you can see from the map, when 
superimposed on the lower 48 States, Alaska extends north to south from 
the United States-Canada border to southern California and, east to 
west, from Tennessee to Texas and that's not even including the 
Aleutian Islands.
    Alaska shares no border with another State and at our closest point 
is 2\1/2\ miles from Russia. Alaska has 7 ecosystems, including the 
United State's only arctic and subarctic ecosystems. Alaska has 6,600 
miles of coastline (3 times the coastlines of California and Florida 
combined), 34,000 miles of shoreline, 3,000 rivers, 3 million lakes 
over 20 acres each, and more wetlands than those in all the other 
States combined.
    Alaska's entire economic base--oil and gas, seafood, tourism, and 
mining--depends upon its natural resources and its environment and how 
well they are managed. And, our Nation too depends heavily on these 
products.
    Alaska needs strong and effective environmental management from our 
Federal agency partners. Virtually all pertinent Federal agencies, with 
the notable exception of EPA, recognize both the importance and the 
difficulty in managing some of America's most important assets and have 
Regional Offices in Alaska. This includes not just land management 
agencies but also those with regulatory protection programs such as the 
National Oceanic and Atmospheric Association, the Corps of Engineers, 
and the Minerals Management Service. EPA alone tries to provide this 
management from Seattle with a small operations staff in Alaska. Region 
10 covers the largest geographic areas of any EPA region, yet has the 
fewest staff of any region.
    We believe that having a lean, but focussed EPA Region 11 can 
accomplish far more in effective environmental management than the so-
called leveraging of its larger staff in Seattle.
    It takes strong environmental management and standards to balance 
competing demands on the environment and to protect Alaska's national 
assets. Strong and effective management means setting priorities based 
on sound risk assessments and tailoring management to real-time 
conditions to produce on-the-ground, meaningful results. In the multi-
layered and increasingly complex Federal/State/tribe local system of 
environmental management that has developed in this country, Alaska 
needs a Federal partner that is aware of and can produce solutions 
rather than rote and oft-times arbitrary applications of rules 
developed for other circumstances.
    I am not here to criticize EPA but to highlight a serious problem 
in allocation of resources and attention. Let me explain why. I'd like 
to give you four reasons and some brief examples:
      first, alaska's environment needs more effective management
    Despite efforts by EPA Region 10 to be more responsive in Alaska, 
we have seen that managing for results simply does not work from a 
Seattle office. EPA's Alaska operations office basically does direct 
implementation of programs that have not been delegated to or are not 
shared with Alaska's regulators. Consequently, my staff interacts with 
Seattle 90 percent more than it does with the Alaska operations office. 
It's quite frustrating to see State regulators and facility operators 
troop to Seattle to meet with an EPA regulator who has never even 
viewed the facility's site.
    Unfortunately, Seattle staff too often have neither the knowledge 
of Alaska's conditions and cultural diversity or the funds or time to 
travel and study. Lacking that core understanding and a sense of the 
big picture, they merely tackle what shows up on their desks. They do 
this by adhering to tunnel vision one-size-fits-all solutions 
prescribed in regulations and guidance while facing intense pressure 
under a large Region 10 workload and trying to advance EPA headquarters 
virtually endless assault of new initiatives. It's a hard job and one 
that leads to wasted time and resources without producing environmental 
results; and, at its worst, results in nonsensical situations.
    Let me share some examples:
    First, thousands of migratory birds die year after year in a 
wetlands estuary outside of Anchorage due to poisonous phosphorous from 
Army weapons. Two-thirds of Alaska is federally owned and managed, much 
with left over contamination such as this from past management 
practices. Yet, EPA, the Federal agency charged with preventing and 
remediating fellow Federal agencies' actions, has virtually no presence 
to address these hundreds of acres of contaminated wetlands.
    At the same time, however, less than 15 air miles away, the 
Anchorage sewage treatment plant has been through three years of 
bureaucratic red tape to renew its permit in order to account for 
naturally occurring conditions in the Cook Inlet waters. The so-called 
``pollution'' being addressed is due to trace metals and high sediments 
caused by the glaciers grinding up the local mountains. Despite 
countless hours by EPA and Alaska's environmental staff, this permit is 
still not done and, even when it is finished, it will not improve water 
quality whatsoever.
    Second, EPA imposed on Alaska an arsenic standard for point 
discharges that was virtually impossible for any discharger to meet due 
to naturally occurring arsenic in Alaska's waters. No arsenic was being 
added in the mine process. This discharge standard was 300 percent 
lower than the drinking water standard for arsenic. This meant that you 
could dip a glass into a stream and drink the water. That was safe. But 
if you didn't finish the water, you would not be allowed to pour it 
back into the stream because it would violate the arsenic discharge 
standard. It took four years to get this resolved while dozens of major 
and minor mine permits were substantially delayed or went through 
expensive, time-consuming paperwork processes to get around the 
requirement. Again, there was no resulting benefit in water quality for 
all this effort.
    Third, Alaska has a desperate need for safe drinking water for 
thousands of public water systems serving less than 500 people, most 
located in isolated communities that lack any economic base. The 
average annual income in a village in Alaska is $13,000. EPA is 
generous with the construction funding granted by Congress, but the 
community is expected to maintain the system at its own expense once 
built. That's hard enough to do under the best of circumstances, but it 
becomes nearly impossible when the community has to meet EPA 
requirements that don't make sense in Alaska, such as testing for 
contaminants never found in Alaska or having to repeatedly re-draw and 
fly water quality samples to a lab because EPA rejects the results when 
arbitrary sample holding times cannot be met due to distance and 
frequent weather delays. Communities who fail these requirements don't 
get help; they face fines.
    In short, Alaska wants and needs effective management. We do not 
want relaxed standards or to skate from requirements. But, neither do 
we want to go through pointless activities that don't produce 
environmental improvements. A Region 11 would allow Alaska to structure 
compliance in a way that works and to target resources on what truly 
engenders better environmental performance.
     second, public health infrastructure programs must fit arctic 
                               conditions
    EPA's role in water, sanitation, and waste disposal infrastructure 
development in Alaska villages is unique in the region, if not the 
country, especially when you consider that there is virtually no road 
access to the villages, transportation corridors are only open when 
rivers aren't frozen, each village is autonomous, and system design and 
operation require the most extreme arctic engineering. EPA's assistance 
in funding construction is great, but its system management 
requirements can be frustrating and an enormous waste of time due to 
its lack of specific knowledge of Alaska's condition.
    For instance, there's a new requirement that operators of small 
drinking water systems be trained and certified. That's good, but it is 
based upon a model that envisions that a single, certified operator 
will be able to circuit ride from one drinking water system to the next 
and serve as the certified operator for a number of systems in an area. 
This works fine when the circuit rider can drive from one system to the 
next and visit several systems in a day, but sure doesn't work in 
Alaska, where traveling from one system to another can often take two 
days, cost thousands of dollars in air fare, and involves overnighting 
when there are no facilities. Despite the pleas from Alaska to have 
alternative certification requirements, we're now scrambling to figure 
out how to comply.
    The national rules for State Revolving Loan programs for drinking 
water and wastewater projects set the course for disbursing loan funds, 
for construction times, and for costs based upon a 9- or 12-month 
construction season. Those standards assume that materials can be 
purchased nearby and relatively easily trucked to a construction site. 
That simply isn't the case in Alaska. Even the best run, most cost-
effective projects often take longer and cost more in Alaska.
    Further, there is a serious need to integrate the water and 
wastewater system activities with other Federal agencies working in 
same field: Housing and Urban Development, U.S. Department of 
Agriculture-Rural Development, Army Corps of Engineers, and Indian 
Health Service. It is critical to have master planning where housing, 
energy improvements, sewage lagoons, and water and sewer systems are 
all coordinated. All of these other agencies have key, decisionmaking 
offices in Alaska. EPA does not.
 third, tribal relations in alaska require more relevant participation
    Alaska's cultural diversity--a 17 percent native population from 
five distinct ethnic groups--and unique government to government tribal 
relationships requires more attention and coordination than Seattle has 
been able to offer. One-half of all federally recognized tribes are in 
Alaska, yet only one has a reservation land base. EPA out of Seattle is 
now forming environmental policy and passing large amounts of grant 
funds to 228 tribes in Alaska in a way that may make good sense in the 
other Region 10 States, but sure doesn't in Alaska.
    For instance, EPA passed grant funds to tribes to collect and 
recycle batteries and other household hazardous materials. That was 
good in the other Region 10 States where there is both recycling 
opportunities and a road system to move these materials. When the 
village of Galena, located on the Yukon River, received funds to do 
that, villagers collected the hazardous materials and then started 
calling around to find someone to fly or boat hundreds of miles to pick 
up the materials. When they couldn't find anyone to volunteer to do 
that, the villagers dumped the batteries into the local, substandard 
landfill that was being closed out and created a serious water 
contamination threat.
    As I previously mentioned, communities must operate and maintain 
their water and wastewater systems after construction is completed. 
This requires a community organization such as a tribal entity, a city 
government, or a non-profit. Several times, EPA's tribal office has 
passed funds to tribal entities to begin development of new water or 
sanitation systems in communities where villagers are already 
struggling to maintain a current system operated by a local government. 
The result, in a community with a few hundred people, is duplicate 
systems competing for ratepayers.
    Facilitating the government to government relationship that EPA 
promotes must happen in a knowledgeable and sensitive way. It cannot be 
done by merely replicating activities undertaken with tribes with 
reservations. Surely, when half of the tribes that EPA deals with in 
the U.S. are in Alaska, a regional leader is critical to develop that 
government to government relationship in a meaningful and effective 
manner.
 fourth, arctic contamination is becoming a serious threat to alaska's 
        ecosystems and the people who rely upon arctic resources
    The Arctic is a sink capturing chemical coming from the former 
Soviet Union and Asia. Heavy metals and persistent organic pollutants 
concentrate in the Arctic due to air and water currents and persist 
longer in the Arctic than in more temperate climates. These chemicals 
accumulate in the ecosystem and, in particular, in fatty tissues in 
animals. These threatened ecosystems are relied upon for subsistence 
foods, for the seafood trade, and for traditional ways of life. 
Northern people rely on fatty animal foods and there is now increasing 
and frightening evidence of long-term health effects on Alaskans and 
other Arctic peoples.
    EPA is participating in Arctic research and management to address 
these issues but in a fractured and uncoordinated fashion. Having a 
regional focus on this issue would greatly assist the State Department 
as it negotiates treaties on international management of these 
pollutants, would be a more effective partner with the National Oceanic 
and Atmospheric Association, the U.S. Fish and Wildlife Service and 
other Federal agencies grappling with this issue, and could make 
valuable information available to subsistence users on the quality of 
their natural food sources.
     funding region 11 doesn't have to negatively affect region 10
    Those are some of the reasons why a Region 11 would make a positive 
difference in promoting and effectuating meaningful environmental 
management in Alaska. However, I know it must be cost effective and 
must not lessen resources devoted to other Region 10 States.
    EPA's 1992 report on costs--I do not know if that has been 
updated--says 84 FTEs in Region 10 work on Alaska issues. It also says 
that 40 FTEs could be removed from Region 10 without harm to other 
States' coverage.
    There are currently 30 positions on the books for the Alaska 
operations office. Together, that makes 70 positions available for 
Alaska work without compromising the Region 10 workload, pretty close 
to the 84 EPA said work these issues already.
    Somehow, however, EPA then adds about 130 percent more staff when 
it says in that same report that it needs 180 FTEs to run a Region 11 
office. Even if the 84 FTEs it cites as working on Alaska issues does 
not include administrative or legal staff, surely a new Region would 
not need 96 more staff for these functions.
    Maybe it would take 180 positions to open an ideal regional office. 
It would probably take a 130-percent increase to create an ideal Region 
10 too. But, we're not asking for that. Rather, we're asking that an 
Alaska-proportionate share be placed in a regional office that can make 
knowledgeable, relevant decisions and be an equal voice as headquarters 
develops rules and guidance on how to achieve compliance in ways that 
make sense.
    A thoughtful and gradual transition could ameliorate the costs. 
This is especially true if, through a core task analysis, staff were 
actually tasked with work that produced tangible environmental results. 
We believe that a Region 11 can be created that would not have negative 
consequences to the other Region 10 States.
                               conclusion
    Alaska wants and needs a true partner to manage Alaska's national 
treasures and provide a healthy quality of life for Alaskans. The best 
government is the one closest to the people and Alaskans need our 
Federal EPA partner to be present in a way that furthers rather than 
frustrates our mutual goals. 


  Responses of Michele D. Brown to Additional Questions from Senator 
                                 Smith
    Question 1. Your written testimony states that the EPA has pursued 
several misguided policies in Alaska--such as requiring small Alaskan 
communities to have duplicate drinking water systems.
    Please identify specific examples of the problems that you have 
found in working with the EPA. In giving examples, please address the 
following matters:
    (a) How long have these problems existed?
    (b) Have you brought those problems to the attention of the EPA?
    (c) If so, to whom in Alaska and in Seattle?
    (d) If so, what was the EPA's response to your action?
    (e) Is action by the EPA necessary to resolve those problems?
    (f) If so, please identify what action is necessary; whether you 
brought that action to the attention of the EPA; if so, to whom; when 
that was done; and what was the EPA's response?
    Response. The following are examples in several areas where EPA has 
generated needless work or wasted limited, valuable resources due to 
the lack of Alaska-specific knowledge.
                        water quality standards.
     Arsenic--EPA imposed an arsenic standard for point 
discharges that was virtually impossible for any discharger to meet due 
to naturally occurring arsenic in Alaska's waters. No arsenic was being 
added in the mine process. This discharge standard was 300 percent 
lower than the drinking water standard for arsenic. The result, in 
effect, was that you could dip a glass into a stream and drink the 
water. That was safe. But if you didn't finish the water, you would not 
be allowed to pour it back into the stream because it would violate the 
arsenic discharge standard. It took four years to get this resolved 
while dozens of major and minor mine permits were substantially 
delayed.
     Anchorage sewage treatment plant--the Anchorage sewage 
treatment plant has been through three years of bureaucratic red tape 
to renew its permit in order to account for naturally occurring 
conditions in the Cook Inlet waters. The so-called ``pollution'' being 
addressed is due to trace metals and high sediments caused by the 
glaciers grinding up the local mountains. The permit was finally 
completed after hundreds of hours of work for no improvement in water 
quality whatsoever.
                              solid waste
     Although courts have ruled that most Alaska tribes do not 
have Indian Country, EPA Headquarters has mailed a number of letters 
and publications to all 200+ tribes in Alaska concerning solid waste 
management in Indian Country. These mailings were done without notice 
to the State and resulted in considerable confusion, as the State has 
jurisdiction over solid waste in most tribal areas.
     EPA has issued solid waste grants to tribes without 
notifying the State. In some instances, the work funded by these grants 
duplicates work already being done by the State. In another instance, 
the work funded by these grants increased the threat of environmental 
contamination. EPA passed grant funds to tribes to collect and recycle 
junk vehicles, batteries, and other household hazardous materials. That 
worked in the other Region 10 States where there is both recycling 
opportunities and a road system to move these materials. When the 
village of Galena, located on the Yukon River, received a ``cleanup'' 
grant, villagers dutifully collected the hazardous materials and then 
started calling around to find someone to fly or boat hundreds of miles 
to pick up the batteries and dispose of or recycle them. When they 
couldn't find anyone to volunteer to do that, the villagers disposed of 
the batteries in the local, substandard landfill. This landfill was in 
the process of being closed out and the additional hazardous material 
created a serious water contamination threat.
                   drinking water and sewage disposal
     Alaska has a desperate need for safe drinking water for 
the thousands of public water systems serving less than 500 people, 
most located in isolated communities that lack any economic base. The 
average annual income in a village in Alaska is $13,000. EPA is 
generous with construction funding but the community must maintain the 
system at its own expense. That's hard to do under the best of 
circumstances but even more so when limited dollars have to be spent 
testing for contaminants never found in Alaska and repeatedly re-
drawing and flying water quality samples to a lab because EPA rejects 
the results when arbitrary sample holding times cannot be met due to 
distance and frequent weather delays. Communities who fail these 
requirements don't get help; they face fines.
     EPA has imposed a new requirement that operators of small 
drinking water systems be trained and certified. That's good, but it is 
based upon a model that envisions that a single, certified operator 
will be able to circuit ride from one drinking water system to the next 
and serve as the certified operator for a number of systems in an area. 
In Alaska, traveling from one system to another can often take two 
days, costs thousands of dollars in air fare, and involves overnighting 
when there are no facilities. Despite the pleas from Alaska to have 
alternative certification requirements, we're now left scrambling to 
figure out how to comply or face loss of construction funds.
     The national rules for State Revolving Loan programs for 
drinking water and wastewater projects present another set of problems 
for Alaska. For example, national standards for the pace of disbursing 
loan funds, for construction times, and for costs envision a 9- or 12-
month construction season. Those standards assume that materials can be 
purchased nearby and relatively easily trucked to a construction site. 
That simply isn't the case in Alaska. Even the best run, most cost-
effective projects often take longer and cost more in Alaska.

    Question 2. You recommended that the EPA create a separate region 
for Alaska, while the EPA believes that the special needs of Alaska can 
be addressed by devoting more resources to Alaska's needs. Please 
explain in detail why the problems and needs of Alaska can be addressed 
only (or better) through the creation of a separate Region for Alaska, 
instead of (for example) increasing the number of EPA employees devoted 
to Alaska's issues, either in Alaska or in Seattle.
    Response. EPA's Alaska operations office implements programs that 
have not been delegated to or are shared with Alaska's regulators. 
Although EPA claims that the Alaska operations office has more staff 
than any other State operations office, my staff interacts with Seattle 
90 percent more than it does with the Alaska operations office. It's 
quite frustrating to see State regulators and facility operators troop 
to Seattle to meet with an EPA regulator to discuss a site never viewed 
or understood. In the last fiscal year, DEC employees spent over 120 
work days in Seattle meeting with Region 10. Even when we do work with 
EPA's Alaska office, it is often ``overruled'' by Seattle staff.

    Question 3. One argument against having a separate Alaska office is 
that having such an office is inefficient, because of the separate 
infrastructure needed for a separate EPA Regional Office. Please 
address that concern. In so doing, please address the following issues 
as well:
    (a) Based on your experience with your own agency, what personnel 
would be necessary to establish a separate Alaska region?
    (b) What would be the cost of creating separate Alaska region cost? 
In making an estimate, please address both the cost from immediately 
staffing an EPA regional office fully and the cost from doing so 
gradually.
    (c) To what extent can the EPA hire from Alaska new employees in 
whatever scientific and technical fields are necessary to staff a 
regional office?
    (d) How much additional time and resources would you and your staff 
have to serve Alaska better if there were an EPA Regional Administrator 
located in Alaska, instead of in Seattle?
    Response. If efficiency is measured in terms of genuine 
environmental protection and the quality and relevance of EPA's 
decisions, opening a separate Alaska region will increase efficiency. 
Being closer to the regulated resources and activities will increase 
the amount of time staff can spend directly on protection activities 
and reduce the amount of time required to gather information or correct 
misguided policies.
    We believe that having a lean, but focussed Region II can 
accomplish far more in effective environmental management than the so-
called leveraging of its larger staff in Seattle. Local expertise and 
knowledge about Alaskan conditions should increase efficiency as less 
time will be spent heading down wrong paths. More relevant decisions 
will mean less time spent on reviews and appeals.
    EPA's 1992 report entitled ``Implications of Establishing a 
Regional Office in and for Alaska'' states a new region should not be 
established because no one wants to live and work in Alaska. Despite 
their claims to the contrary, however, many people enjoy living in 
Alaska--especially people with an environmental background. The 
stability and possibilities for advancement that EPA offers should be 
sufficient to find technically well-qualified applicants with 
specialized knowledge and experience in Alaska's unique conditions.
    EPA's earlier report on costs--I cannot comment on its updated 
version since I haven't seen it--says 84 FTEs in Region 10 work on 
Alaska issues. It also says 40 FTEs could be removed from Region 10 
without harm to other States' coverage. There are currently 30 
positions on the books for the Alaska operations office. Together, that 
makes 70 positions available for Alaska work without compromising the 
Region 10 workload, pretty close to the 84 EPA said work these issues 
already.
    Somehow, however, EPA then adds about 130 percent more staff when 
it says it needs 180 FTEs to run a Region 11 office. Even if the 84 
FTEs it discusses earlier does not include administrative or legal 
staff, surely the Region would not need 96 more staff for these 
functions.
    Maybe it would take 180 positions to open an ideal Region. It would 
probably take a 130 percent increase to create an ideal Region 10 too. 
But, we're not asking for that. Rather, we're asking that an Alaska-
proportionate share be placed in a regional office that can make 
knowledgeable, relevant decisions and be an equal voice as headquarters 
develops rules and guidance on how to achieve compliance in ways that 
make sense.
    A thoughtful transition could ameliorate costs and impacts. This is 
especially true if, through a core task analysis, staff were actually 
tasked with work that produced real results rather than bean counting, 
creating Region 11 would not have negative consequences to the other 
Region 10 States.

    Question 4. Why is Alaska better off with a separate EPA Region, 
instead of (for example) just having more EPA personnel stationed in 
Alaska and more funds distributed to Alaska?
    Response. Please see answer to question 2.

    Question 5. Please address the following proposition: Alaska needs 
to be a separate Region with its own Regional Administrator because 
only a political appointee, drawn from the State and having the same 
status as the other EPA Regional Appointees, will have sufficient 
awareness of the unique features of Alaska best to address the 
environmental issues that arise in your State, as well as sufficient 
political muscle to represent Alaska's interests to EPA Administrator 
and to obtain for Alaska the needed personnel and fiscal resources from 
the scarce funds available to environmental protection.
    Response. Our experience is that EPA is a bureaucratically bound 
agency rife with second guessing by the regional office over the State 
operations office and by headquarters over the regions. Because of 
this, even relatively simple issues suffer from paralysis by analysis. 
A recent letter from Alaska's Governor took over 6 months for a reply.
    It is necessary to have a Regional Administrator with an equal 
amount of ``clout'' inside the organization to even be heard. Over the 
last several years, Region 10's Administrator has been a great 
resource, but he has to choose carefully which of the many Region 10 
issues he can take on with headquarters. Alaska's issues often don't 
make the list. Furthermore, a Region 11 Administrator could weigh in 
very early in a regulations project to ensure that Alaska-specific 
problems are appropriately addressed, and the result is achieved in a 
way that makes sense, rather than waiting for State comments which EPA 
too often discounts.

    Question 6. Some people may fear that creating a separate Alaska 
Region will lead to the despoliation of Alaska's lands, including its 
wilderness. The argument that could be made is that an Alaska Regional 
Administrator will become too friendly with Alaska's businesses, 
particularly Alaska's oil businesses, to regulate business effectively. 
What is your answer to that concern?
    Alaska's entire economic base--oil and gas, seafood, tourism, and 
mining--depends upon its natural resources and its environment and how 
well they are managed. Alaska wants quality environmental management. A 
Region 11 will foster a far more effective Federal-State partnership to 
protect Alaska and its people. In short, we do not want relaxed 
standards or to skate. A Region 11 would allow Alaska to structure 
compliance in a way that works.
    It takes strong environmental management and standards to balance 
competing demands on the environment and to protect Alaska's national 
assets. Strong and effective management means tailoring management to 
real-time conditions to produce on-the-ground, meaningful results. In 
the multilayered and increasingly complex Federal/State/tribe/local 
system of environmental management that has developed in this country, 
Alaska needs a Federal partner that is aware of and can produce 
solutions rather than rote and oft-times arbitrary applications of 
rules developed for other circumstances.
        Statement of Ken Freeman, Executive Director, Resource 
                          Development Council
    Good morning. My name is Ken Freeman, Executive Director of the 
Resource Development Council (RDC). I am a life-long, fourth-generation 
Alaskan. I am here before you today to express RDC's support for S. 
1311.
    RDC is an Alaska statewide organization consisting of all resource 
sectors, including oil and gas, mining, fishing, tourism and forestry. 
Our membership also includes business associations, labor unions, 
Native corporations, local governments and hundreds of individuals. 
RDC's purpose is to encourage a strong, diversified private sector in 
Alaska and expand the State's economic base through the responsible 
development of our natural resources.
    Historically, RDC has supported the creation of an EPA regional 
office focusing exclusively on Alaska and there is consensus among our 
members on the merits of establishing an EPA region specific to Alaska
    Alaska has always provided unique challenges for both industry and 
Federal regulators. Alaska is a State of vast physical dimensions. 
Covering 375 million acres, it stretches over 2,000 miles from west to 
east and over 1,000 miles from north to south. Alaska is one-fifth the 
land mass of the United States. With 10,000 miles of coastline, Alaska 
has more salt water shoreline than the entire continental United States 
combined. It is the only State with an Arctic and Sub-Arctic 
environment. We have more wetlands, more sensitive ecosystems and more 
need for specialized management than any other State. Special 
circumstances present special problems that demonstrate the need for an 
EPA region for Alaska.
    Oil production from Alaska accounts for nearly 20 percent of all of 
the oil produced in the U.S. Yet, Alaska is the only State within EPA 
Region 10 that has oil and gas exploration and production. Given the 
importance of Alaska oil to the nation's energy security, it is 
imperative that agencies have an in-depth understanding of oil and gas 
exploration and production operations, and specifically operations 
conducted in extreme arctic conditions. Although Alaska is large in 
size, it is small in population and industries; as such, the focus of 
Region 10 employees expertise often-times is on industries and 
conditions in the Pacific Northwest--not on upstream oil and gas 
operations--and certainly not on operations conducted in extreme Arctic 
conditions.
    An excellent example of EPA programs uniquely impacted by these 
operating extremes, and why it is critical that agency personnel have 
the appropriate level of understanding of Alaska, is the NPDES Storm 
water program. This program requires sampling following storm events if 
runoff from facilities reaches waters of the U.S. Virtually all of the 
North Slope is classified as wetlands--and therefore ``waters of the 
U.S.'' Facilities are often located in very remote areas with no road 
access. And ``storm events'' usually occur in the dead of winter when 
temperatures can reach -80 degrees, producing a serious safety 
situation. Without a thorough understanding of these factors, it is 
difficult to convince Seattle-based regulators that programs and 
permits must be adjusted to be workable in Alaska.
    Alaska faces special challenges like no other State when it comes 
to regulating development on wetlands. Because of a broad Federal 
definition, nearly half of the State's land area is considered 
wetlands, accounting for three quarters of the State's non-mountainous 
developable land. Virtually all development--from schools, hospitals, 
and roads to public water and sewer systems--requires using lands 
regulated as wetlands. In Alaska wetlands cannot be avoided. Dry land 
is scarce.
    While many States like California have developed most of their 
wetlands, Alaska has achieved its current level of development while 
preserving 99.9 percent of its wetlands. Yet the 49th State must comply 
with a Federal wetlands policy designed to be a solution to the 
alarming loss of wetlands in other States. The policy has presented 
major economic and permitting challenges in Alaska. While Federal 
regulators may flash statistics showing a small percentage of rejected 
permits, those records do not reveal the numbers of permits voluntarily 
withdrawn by a project sponsor--and sometimes at an agency's request.
    The establishment of a Region XI office in Alaska would bring 
opportunities for Federal regulators to become more familiar with 
Alaska wetland issues and unique circumstances. Regulators based in 
Alaska, with decision-making power, are more likely to respond to local 
realities and the need for flexibility in permitting, especially 
considering the fact that many Alaska wetlands are very different than 
those in the Lower 48, especially in terms of critical functions and 
value.
    While EPA does have staff based in Anchorage with representatives 
elsewhere, decisions vital to Alaska's environment and economy are 
largely driven by Region's X's Seattle headquarters. In reality, the 
local office simply does not have the latitude to implement creative 
solutions. Decisions are made by Seattle regulators who do not fully 
understand the unique environmental characteristics and special 
circumstances which prevail in Alaska. As a result, Alaskans face 
longer delays, some questionable or inappropriate decisions and limited 
field knowledge.
    The EPA has made some improvements in Alaska, but much more remains 
to be achieved and it would be best accomplished through a new regional 
office. The new EPA region would have increased opportunities to build 
knowledge based on first-hand observation of Alaska conditions. As the 
new Region's primary focus, Alaska would get more policy-level 
attention than it would from a regional office serving three other 
States with conditions much different than Alaska.
    Another issue which doesn't reflect realities found in Alaska is 
the Clean Air Act. For example, the geography and winter climatic 
conditions found in Fairbanks creates an extreme atmospheric inversion 
unlike anywhere else. As a result, Alaska's second largest city has a 
greater inversion problem than not only Los Angeles, but perhaps 
anywhere in the world. In previous years, the EPA regional director 
threatened to close downtown Fairbanks to autos because of high carbon 
monoxide levels recorded during the winter inversions.
    In the fall of 1992, the EPA required the additive MTBE (methyl 
tertiary butyl ether) in local gasoline supplies, but then-Governor 
Walter Hickel ordered the program stopped less than two months after it 
began, and the EPA backed off after admitting it had done nothing to 
test the effectiveness and health effects of MTBE in cold climates.
    The city has made progress in complying with air quality 
regulations, but despite its best efforts, Fairbanks still exceeds 
national standards at least three days per year, two more than allowed. 
But that's a big improvement over previous years when Fairbanks was out 
of compliance on dozens of days each year. Yet despite major progress, 
the community is at risk of losing Federal funding and faces other 
punitive sanctions if it does not come into compliance. According to 
local officials, there isn't much else the community can do--short of 
impounding every vehicle in Fairbanks and forcing people to walk to 
work in 50 below zero temperatures.
    Alaska is truly different than the Lower 48 States. Its weather, 
remoteness, vast distances, and special Arctic conditions such as 
permafrost, glacier till and high background levels that contribute to 
higher metals in rivers, set Alaska apart from other States. Frankly, 
Alaska has very little in common with its neighbor 2,000 miles to the 
south. Washington State, the home base of EPA's Region X, is more like 
its neighboring States, Oregon and Idaho, than Sub-Arctic and Arctic 
Alaska.
    Establishing an Alaska EPA region does not set a precedent since 
eleven other Federal agencies have fully staffed offices in the 49th 
State specifically dedicated to Alaskan issues. These agencies range 
from landlords like the U.S. Forest Service to others like the EPA with 
specific oversight and regulatory functions, including the Army Corps 
of Engineers, the Bureau of Indian Affairs, Federal Aviation 
Administration and U.S. Geological Survey.
    Many Alaskans believe Federal and State regulators could do a 
better job of addressing our environmental challenges when decision 
makers are based in Alaska, together, rather than formulating policy 
and implementing regulation by telephone or air shuttle from Seattle. 
Having a regional EPA office in Alaska would overcome distance, 
communication and coordination problems. It would also quite likely 
improve the agency's responsiveness to specific permitting needs.
    For example, the Chuitna Project, a ``green field'' coal 
development located in the Beluga Field of Southcentral Alaska, has had 
two significant engagements with Region X. One involved preparation of 
a third party EIS and the other required processing the renewal of 
NPDES permits. In the first circumstance, Region X was the lead agency 
with the Army Corp of Engineers Regional Office in Anchorage being the 
cooperating agency. The third party was an Anchorage contractor, Dames 
and Moore. With the EPA Regional Office located some 1,500 miles from 
the contractor, the project and the cooperating Federal agency, the 
project developer encountered significant communication and 
coordination problems, many of which could have been avoided if all the 
participants would have been located in Alaska
    In the second instance, the project developer has had an 
application for renewal of four NPDES permits on file with Region X for 
approximately five years. The original permits were issued in 1990 
after publication of a Final Environmental Impact Statement. In spite 
of several initiated contacts by the project developer, no response has 
been received from Region X on renewal of the permits. Here again, were 
the permitting office located closer to where the ``action'' is, the 
agency would most likely be more responsive.
    Another example of why a new Alaska EPA region is needed comes from 
the timber industry. At issue is recent permitting for a general permit 
on Log Transfer Facilities (LTFs). There was a huge and unnecessary 
amount of time that was required to work through the process. Region X 
regulators from Seattle apparently did not fully understand the unique 
challenges posed by the remoteness of Alaska and the isolation of the 
LTFs. Regulators actually requested street addresses and towns for the 
LTFs. They asked for road directions to the sites. They didn't 
understand that these facilities were located far from local 
communities and that there were no roads, no services, no 
infrastructure--just remote, isolated wilderness accessible by aircraft 
or boat. It took the permittee months to get all the logistical issues 
resolved. The permittee noted that Region X regulators showed little 
trust toward those in Alaska they were regulating and did not have a 
reasonable understanding or sense of the magnitude of Alaska, its 
remoteness and unique characteristics.
    A new Region XI office could go further than a local branch office 
with limited latitude, staffing and capabilities in overcoming these 
challenges and developing a much-needed northern and arctic expertise 
in wetlands management, permafrost, ice fog, NPDES permitting and other 
issues. A Region XI office could better respond to Alaska's special 
problems with Alaska solutions. The establishment of an EPA region 
specific to Alaska would be a major step toward achieving the goal of 
ensuring that Federal regulations applied in Alaska reflect Alaska 
realities.
    A current issue making headlines in Alaska is the State's rights in 
respect to its air permitting program. Alaska cannot administer a 
viable air permitting program if EPA's Region X office in Seattle 
continues to summarily overrule carefully made decisions that take into 
account Alaska's unique circumstances.
    The Alaska Department of Environmental Conservation's (ADEC) has 
appealed a recent order by EPA prohibiting the issuance of a Prevention 
of Significant Deterioration (PSD) permit for a diesel generator at the 
Red Dog Mine in Northwest Alaska. This permit is vital and necessary to 
Cominco Alaska's operation at the world's largest deposit of zinc. The 
generator will have a negligible environmental impact.
    ADEC has an EPA-approved State program for issuing PSD permits. 
This approved program gives ADEC full permitting and discretionary 
authority over PSD permits for the State of Alaska.
    Our members across Alaska, from resource developers to local 
communities, need to be able to rely on ADEC's decisions on air permits 
and to be able to proceed based on those decisions. The EPA Region X 
action at Red Dog is alarming because of the harm it may cause our 
members in planning for new or modified air permitting to meet their 
needs. The uncertainty or nullification of the State's PSD program 
would likely have adverse economic effects on Alaska. Permitees, unsure 
of the reliability of the State's process, will wonder if EPA's Seattle 
office can nullify a permit at any time, thus delaying projects until 
PSD authority has been defined.
    If EPA has the power to summarily overrule ADEC's permit decisions 
and demand additional measures beyond what has been determined 
sufficient by ADEC, then our members in effect would be forced to 
permit their projects a second time through EPA.
    Cominco Alaska and ADEC spent an exhaustive 18 months working on 
the permit for this engine, resulting in a determination that Low NOx 
Technology was Best Available Control Technology (BACT). Cominco Alaska 
even agreed to install Low NOx technology on all of the existing 
engines not requiring permits. In short, ADEC is requiring more Best 
Available Control Technology in this PSD permit on these engines than 
EPA or any other State has ever required on any other diesel 
generators.
    To develop the permit, Cominco Alaska and ADEC held meetings every 
other week for over a year. These discussions often centered on the 
Best Available Control Technology decision for the diesel-fired 
generators. Because Selective Catalytic Reduction (SCR) provided the 
greatest decrease in nitrogen oxides (NOx) emissions, ADEC 
staff strongly pursued determining SCR to be Best Available Control 
Technology for the Red Dog Mine diesel-fired generators.
    However, according to EPA guidelines, the Best Available Control 
technology determination is not solely based on pollution control 
efficiency, but must also consider energy, environmental, and economic 
factors. The selection of SCR for the Red Dog Mine would not have been 
similar or comparable, as required, to the economic imposition placed 
on other, recently permitted diesel-fired engines. In fact, with the 
exception of one demonstration unit, SCR has not been required on any 
diesel-fired engine in the United States except in areas where an 
ambient health standard is being exceeded.
    Cominco Alaska and ADEC noted that the cost of implementing SCR at 
the Red Dog Mine would be prohibitively expensive. Additional concerns 
related to the use of SCR at Red Dog include the loss of waste heat 
availability to provide building heat and the lack of a demonstration 
proving that SCR is reliable control technology for diesel-fired 
engines in an Arctic environment.
    Furthermore, the high cost of SCR was not justified because the 
predicted ambient nitrogen dioxide (NO2) impact was less 
than one third of the ambient air quality standard that was adopted to 
protect human health.
    As a result, ADEC determined Best Available Control Technology for 
the diesel-fired generators at the Red Dog Mine would be the Low NOx 
Technology. Prior to issuing a final permit, but after the public 
review process, EPA contacted ADEC to inform them that Region X 
objected to the determination. EPA also informed ADEC that it would 
issue an order against the State if ADEC did not change the 
determination to require SCR. Several months of discussion among EPA, 
ADEC and Cominco Alaska then followed. After this discussion, ADEC 
resumed the process of issuing the final permit because EPA had not 
convinced ADEC that SCR was justified. That final permit required Low 
NOx on the new engine and also required, through the voluntary 
agreement, Low NOx on all other existing powerhouse engines, bringing 
those engines up to current standards in pollution control technology.
    Just prior to issuance of the final permit, EPA issued an order 
prohibiting the issuance, or requiring retraction, of the permit unless 
SCR is implemented. ADEC, acting under their EPA-approved authority to 
use their own discretion in determining Best Available Control 
Technology, decided that EPA's order was not legally valid and issued 
the permit. In a written request, ADEC asked EPA to retract the order. 
EPA refused the request. ADEC then filed a petition for review with the 
U.S. Ninth Circuit Court of Appeals where the issue now resides.
    This issue is not only a battle between agencies on Clean Air Act 
jurisdiction, but it shows once again how a distant EPA region does not 
fully understand Alaska's circumstances. The Red Dog Mine sits in 
complete isolation, far removed from any community. It is not connected 
to Alaska's road system and there are no air quality concerns, 
especially given its location.
    In concluding, a specific Alaska region would allow EPA to work 
closer with Alaska regulators and other Federal agencies on many 
critical issues ranging from wetlands management to NPDES permitting. 
NPDES permits issued from an Alaska regional office would be more 
efficient and reduce the backlog of applications in Region X. While it 
would be wrong to imply that Region X is doing a poor job in respect to 
Alaska issues and concerns, Federal decision makers in Seattle and 
Washington are relatively insulated from Alaska realities. An Alaska 
region is a better option for implementing solutions that protect 
Alaska's environment while supporting the State's economy.
    Thank you for the opportunity to testify on the merits of 
establishing a separate EPA region for Alaska.
                               __________
Statement of Melanie L. Griffin, Director of Lands Protection Program, 
                              Sierra Club
    The Sierra Club is opposed to the bill, S. 1311, put forward by 
Senator Frank Murkowski (R-AK) to direct the Administrator of the 
Environmental Protection Agency (EPA) to establish a separate EPA 
region for the State of Alaska. While the idea of a separate Alaska EPA 
region may seem appropriate given Alaska's size and its distance from 
the contiguous United States, we believe that the proposal is neither 
cost-effective, nor equitable, nor necessary given the administrative 
structure already specially tailored to address the needs of our 49th 
State.
    The Sierra Club agrees that the great State of Alaska has unique 
and varied natural resources that deserve the highest level of 
protection. In fact, protecting the unparalleled landscapes of wild 
Alaska has long been a top priority for Sierra Club members. Because 
Alaska's abundant clean water and air are vulnerable to ever expanding 
oil and gas exploration and other extractive industries, we also agree 
that the State could benefit from additional on-the-ground personnel 
and oversight. However, the political environment in Alaska indicates 
that a new Alaska EPA region would not be in the public interest at 
this time.
    Establishing a new Alaska EPA region would be imprudent given the 
hostile attitude towards national environmental goals, policies, and 
regulations on the part of the majority of elected Alaska officials at 
the local, State, and national levels. In addition, numerous large and 
politically influential national and multi-national corporations 
involved in the exploration and development of Alaska's natural 
resources tend to oppose EPA policies and regulations in Alaska.
    To establish an Alaska EPA region under these circumstances would 
deprive Alaska EPA decision-making officials of the appropriate degree 
of insulation and protection from undue political pressure that they 
now have as part of the Northwest Regional Office. Northwest region 
officials, operating in a political setting where environmental 
protection enjoys widespread support among elected officials and the 
public, are able to support their Alaska colleagues as national 
policies and regulations are applied in Alaska. An Alaska regional 
office, cut-off from the EPA Northwest Region, would be more vulnerable 
than at present to direct pressure and interference by Alaska 
development interests and their elected supporters. EPA's mandate to 
protect the public health and environment in Alaska would be made more 
difficult.
    EPA has previously studied the proposal to create an 11th region 
for Alaska and determined that it was not cost effective. The Sierra 
Club believes that the tremendous costs involved in the establishment 
of a separate region are unwarranted. The proposal also raises 
questions as to fairness to other States, as the ranking member from 
Montana has raised in his own statements during the hearing.
    In the interest of protecting Alaska's abundant clean air and 
water, Congress should not agree to the proposed change in the existing 
EPA organizational structure.
    We recommend that no further action be taken on S. 1311.
    Thank you for considering our views. 
    
    
    
    
                                
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