State spill prevention and response division prevails in fight for funding

By Steve Rothchild
Administrative Deputy Director

The Alaska Department of Environmental Conservation’s division of Spill Prevention and Response, often referred to by the acronym “SPAR,” has been facing a significant funding shortfall for some time due to declining oil production. The division works to prevent, prepare and respond to spills of oil and hazardous substances as well as oversee the cleanup of contaminated sites. Their work includes facility inspections, contingency plan review and approval, drills and exercises and site monitoring.

In the 1980s, the State legislature instituted a per barrel surcharge on crude oil to provide funding for the division. Unfortunately, when originally enacted, there was no inflation protection in the bill and production has declined.

Running out of money

This year, without inflation protection or another funding source, the crude oil surcharge became inadequate to support SPAR’s work, necessitating staff reductions and other cost savings. Starting in early 2014, department personnel provided projections to both the House and Senate showing the decrease of funds due to lower oil production. SPAR has been relying on large oil spill settlements and penalties to address the shortfall for several years but those are now spent. This year, SPAR reduced expenses by combining the planning and prevention program with the prevention and response program, reducing personnel, and more actively pursued cost reimbursement, however the shortfall was projected to be $7 million annually. Without a fix to funding, essential services would cease and SPAR would have to reduce personnel by approximately 40 percent.

Support from the council

The council has been an advocate for sustained funding of the division since the decline of oil flowing in the trans-Alaska pipeline began in the mid-1990s.

In January, the council approved a resolution of support for the SPAR division, outlining possible ways to develop new funding for consideration. The resolution was sent to every legislator in Juneau in advance of the annual council trip to meet legislators, this past February. Fully funding SPAR was at the top of the list during meetings with legislators.

Proposed solution approved

In March, two similar bills were introduced in Alaska: House Bill 158 and Senate Bill 86. Legislators recognized that the crude oil industry was already paying its share into the fund and put some of the onus on the wholesale refined fuel industry, since the majority of spills and contaminated sites in Alaska are caused by refined fuels.

As The Observer went to press, the latest version of the bill adds a 0.95 cent per gallon tax on refined fuels. It passed both the House and Senate, and it is anticipated that Governor Walker will sign this new legislation so the revenue can be collected starting July 1 this year.

“In today’s lean budgetary climate, it is noteworthy that our legislature proposed and approved a new tax in order to keep this critical oversight function of the state fully operational,” said Mark Swanson, executive director of the council. “Kudos to all involved in advocating for the sustained protection of Alaska’s amazing natural resources and environment.”