MINUTES OF THE ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING Sixty-eighth Session March 15, 1995 The Committee on Natural Resources, Agriculture and Mining was called to order at 1:15 p.m., on Wednesday, March 15, 1995, Chairman John C. Carpenter presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. John C. Carpenter, Chairman Mrs. Marcia de Braga, Chairman Mr. Max Bennett, Vice Chairman Mrs. Genie Ohrenschall, Vice Chairman Mr. Douglas A. Bache Mr. Thomas A. Fettic Mr. David E. Humke Mr. P.M. Roy Neighbors Mr. Brian Sandoval Mrs. Gene Wines Segerblom COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: David S. Ziegler, Senior Research Analyst OTHERS PRESENT: Donald Lindeman, Churchill County School District; John Enloe, Sierra Pacific Power Co.; Allen Biaggi, Chief, Bureau of Corrective Actions; Eric J. Taxer, Nevada Division Environmental Protection; Larry Blalock, Sierra Pacific Power Co.; Bob Hadfield, Nevada Association of Counties; Ken Arnold, Carson City Environmental Control; Bob Gondek, Chevron USA Projects Co.; Ed Ralston, UNOCAL - CERT; Steve Rowley, Nevada Cement Co.; Vic Skaar; Clark County Health District; Peter Krueger, Nevada Petroleum Marketers Association; Stephanie Licht, Elko County Commission; Doug Busselman, Nevada Farm Bureau; Ken Stephens, Western Energetix Corp.; Jeff Johnson, Harding Lawson Associates; Jim Polkinghorne, Mayor, City of Elko; Rob Miller, Broadbent & Associates, Inc.; Gregory J. Moss, American Consulting Engineers Council, GES; Linda Bowman, Vargas & Bartlett, Member State Petroleum Fund Board; Joseph M. McGinley, Steffen Robertson and Kirsten. Chairman Carpenter called the meeting to order and roll call was taken. He explained the meeting would be a hearing on underground storage tanks. The topic has been of extreme importance to all Nevadans from rural to large counties. A presentation would be made by the Nevada Department of Environmental Protection. Mr. Allen Biaggi, Chief, Bureau of Corrective Actions, NDEP, appreciated the opportunity to discuss Nevada's underground tank program. Nevada's program was recognized as one of the best in the west if not the country. Mr. Biaggi provided a brief overview of the program and current status of the division's activities. The underground storage tank program for Nevada was made up of three separate components. The operations and compliance program, the leaking tank program and the state petroleum fund. Each component addresses a different aspect of the program and yet all were connected and interrelated to one another. Mr. Biaggi showed slides which outlined the specifics of each program and were included in (Exhibit C). Mr. Carpenter asked about Mr. Biaggi's explanation of parts per million. Mr. Biaggi said if a half of soda can with gasoline were put in a 55 gallon drum and mixed up it would be approximately 100 parts per million. Mr. Carpenter asked if a half of a soda can were dumped on the ground at Crescent Valley, would it reach the groundwater. Mr. Biaggi stressed it would depend on the site. He explained if he dumped a half a can at Beatty with groundwater at 1200 feet down, he would say no. There were other sites in Nevada where groundwater was much shallower and a half of soda can dumped could cause groundwater contamination. Mr. Carpenter asked if each site were analyzed with the criteria before remedial action was taken. The option was available to the owners and operators to present the information to NDEA to vary the cleanup requirements. What percentage applying for a variance obtained one, asked Mr. Carpenter. Mr. Biaggi said there were usually very valid reasons for the variance and most were granted. Mr. Fettic asked for a definition of site specific. Mr. Biaggi said site specific were the eleven factors under Action and Clean Up Levels (Exhibit C). Mr. Biaggi continued with his presentation of the State Petroleum Fund. Mr. Bennett asked how long had the State Petroleum Fund been in existence. The fund was started in October 1990, said Mr. Biaggi. Mr. Bennett concluded the fund takes in what it pays out. Mr. Carpenter asked how large a backlog of claims against the fund existed. Mr. Biaggi said the $35 million paid out for clean up costs represented 550 cases, which averaged $65 thousand per case. He emphasized the number per case was skewed because of the lesser cost of remediating home tanks than major oil company cases. Heating oil cases made up about 30 percent and major oil and larger companies 15 percent and the balance of the cases from small mom and pop operations. Mr. Eric J. Taxer, NDEA, noted there were currently about $6.6 million worth of backlog cases which represented roughly 100 cases backlogged at this time. Mr. Biaggi noted the cases had not been before the board as yet and processed through the agency. There could be some denials and the number could go down. The cases have been processed first in first out and were brought to the board as they have been completed and submitted by the owner and operator. The cases have been paid pro rata, and holding ground, but overall the department was losing ground. Mr. Carpenter reiterated the fund did not have a balance but was operating as money became available. He also asked about a raise in the funding mechanism and what the increase would be. Mr. Bennett asked if the cases were taken on a as come basis, would they not prioritize a major leak over a small heating oil leak. Mr. Biaggi explained this was a post clean up funding, a reimbursement program. Mr. Carpenter asked Mr. Biaggi to explain the reimbursement procedure. He said the owner/operator would proceed with clean up and as the consultants and contractors came in with receipts and bills to be paid, the owner/operator would pay the bills, fill out the appropriate paper work for the petroleum fund staff and the paper work would be processed and evaluated for cost effectiveness, costs allowed, and recommendations made to the board for review of plans. The board then makes a decision whether or not to reimburse and, if allowed, within six weeks a check would be received by the owner/operator. The entire project need not be finished in order to start receiving money. Mr. Carpenter asked what percentage would be paid. Mr. Biaggi explained there was a $10 thousand deductible for a regulated underground storage tank and the fund would pay up to $990 thousand. He also told the committee there was $990 thousand for third party liability. If the spill goes off the subject's property and contaminates other property there would be additional funding available. The money would be available out of the same fund as the statutes provide for clean up and third party liability. Mr. Fettic questioned the cost of the deductible for Churchill County of $30 thousand for two major mediation projects. Mr. Biaggi said the deductible was $10 thousand per tank. Churchill County was still waiting for $115 thousand and the time of reimbursement would be six weeks. Mr. Biaggi said they were paying pro rata at about 83 percent on the dollar and as additional funds came in the department would reimburse. Mr. Carpenter asked if NDEA felt they were making progress on clean up. Mr. Biaggi felt they would taper off after the new tank standards in 1998 came on line and believed the cost of remediation would go down. Mr. Carpenter questioned the cost of the new tank standards and the cost of upgrading by individuals. Mr. Biaggi said because of the cost the standards gave 12 years for compliance. Mr. Carpenter felt if a tank was not leaking he could not see why it would need replacing, but he understood it was Federal regulations. Would any other leeway be given besides the eleven factors mentioned. Mr. Biaggi cited item eleven which stated "any other factors specific to the site." Mr. Carpenter mentioned the Department of Transportation working at the Carlin Tunnel where there was high concentration to clean up were given leeway. Mr. Biaggi explained they ended up in solid bedrock and there was no more dirt to extract out. There was a restriction on the project, if someone else was working on a project and runs into the material or impacts found in the future from the project, NDOT would have to address those impacts. Mr. Neighbors asked why they had not drilled to extract the residue instead of blasting. Mr. Biaggi said with a drill it would be difficult to extract the amount of material needed to be evacuated. Mr. Sandoval asked if the Nevada site based approach was similar to the Texas approach and if not was there a consideration to adopt the Texas approach (Exhibit D). There were concerns NDEA had required some private property owners to reach levels of clean up when there was no danger to the people or waters of the state of Nevada. Mr. Biaggi explained the Texas program was a good approach but there were differences between the Texas program and Nevada. The Texas program and the Nevada program were similar as they have clear priorities and people knew what would be expected of them. Texas classifies their aquifers. They might say, "no one drinks from this aquifer", and they would not worry about contamination. Nevada groundwater and all water resources would be extremely precious here. Twenty eight percent of Nevada's groundwater resources were drinking water and the rural areas would be a higher percentage. The Texas program varies and they have a larger regulated universe. Storage tanks number approximately 17 thousand leaking underground storage tanks, Nevada has approximately 1500. Texas needed to prioritize their sites, however the longer the wait to do cleanups, the more the contaminants would migrate and the more the clean up would cost. Mr. Sandoval clarified his second question and noted a concern that NDEA had required clean up when there had not been a danger to health or the waters of the state. Mr. Biaggi said if there had been a limited threat to groundwater NDEA could have evaluated the site based on the site specific criteria. Mr. Sandoval said basically the burden would be on the land owner and/or the consultant to show NDEA how far they needed to go. He had another concern dealing with a clean up of 100 parts per million which would cost an amount of money to get to 200 parts per million but then it would cost 4 times the cost to get to 100 parts per million which would become prohibitive. How would those situations be addressed, asked Mr. Sandoval. Mr. Biaggi explained the site specific criteria and said they look at a site case by case. He explained many times an owner/operator would get to 200 parts per million, run up against a building, a storm sewer, an easement, or property line. NDEA would hear the owner/operator and ask for a variance. NDEA would evaluate the site specifics and soil clean up and make commitments to the action level. Mr. Biaggi gave other examples of remediation and clean up. Mr. Biaggi continued with his presentation of Underground Tanks and completed his overview of the program. Mr. Carpenter said the committee would like to hear from all those present and would later discuss the issue in depth at a subcommittee meeting. Mr. Richard Trachok was asked by Chairman Carpenter to testify. He identified himself and said he was a lawyer with Bible, Hoy, Trachok & Wadhams in Reno, Nevada. He indicated he did not have prepared testimony and was asked by Mr. Carpenter to give his input at this meeting. Mr. Trachok said he had worked as an attorney for a number of contractors/owners of property involved in clean up efforts because of underground storage tanks. He had a number of cases where he was defending litigation because of leaking underground storage tanks which had been in the ground for a number of years. One case was a horror story, indicated Mr. Trachok. A lessee of a site at Jackpot, Nevada had leased property for a service station for a period of twenty some years. The service station use was discontinued in 1984 and the tanks were removed before the regulations with NDEA had been enacted. In the early 1990's the property owner had tried to obtain a loan for expansion of the property. The bank required a phase one site survey, and the phase one survey disclosed a service station had been on the site which required a phase two survey. Test holes were drilled and a determination was made residue existed in part of the area from some petroleum product. A hole was dug which was 275 feet in diameter and 75 feet deep and tens of thousands of yards of material was removed, half of the material was hauled by semi-tractor trailer to the Elko landfill. The total cost for the clean up was approaching a half million dollars. At the bottom reaches of the hole they were still getting some reading of petroleum product but the water table was another 100 feet below the level of the hole. The highest concentration of the petroleum product was in the first five or six feet and the concentration averaged about 1000 parts per million. Mr. Trachok said he had been involved in other lawsuits defending contractors or property owners who have on the property underground storage tanks, the expense in the clean up was astronomical. One of the largest expenses would be the cost of the environmental engineer who design and monitor the program. A case in Elko had leakage from an ancient underground storage tank, and had hit the groundwater. The cost to clean it up was in the $100's of thousands, a large portion was the environmental engineering fees on the project. He stated clients had negotiations to acquire properties or other businesses and as soon as the existence of underground storage tanks became known the deal did not go through because of the risk of a possible clean up. The Jackpot issue was an extreme case. Mr. Bennett asked about the least expensive leak detection system a mom and pop operation could install for an underground tank. Mr. Krueger noted the least expensive method used for years would be sticking a tank with a pole. They know what has been pumped out and how much was delivered and what should be in the tank. Mr. Bennett said there was a lot more involved with calbibration and accuracy. Mr. Krueger said the stick procedure was acceptable at this time. Mr. Carpenter asked Mr. Trachok for his recommendations to correct the problem. Mr. Trachok said he was not able to give any testimony on the technical side but as a lawyer representing contractors and owners the issue should be put in balance in terms of the action levels and relationship between the clean up to be achieved and the work to be undertaken. He noted the monies spent in Jackpot and Elko could have been put to better use for minor improvements of the site. He would like to see the action level be anything over a 100 parts per million, which would be something the NDEA would look at and order remedial action. This should be examined to see if it could be increased and in many cases to leave the site alone. Mr. Carpenter asked in the examples given were the individuals reimbursed from the fund. Mr. Trachok said no, tanks were removed prior to the time the program was instituted. Would it be worth it to spend the money in each and every one of the cases. Mr. Trachok talked about the five tanks being removed for the new court house in Reno. The tanks had existed for decades and had some leakage. The project was halted for about a week while soils were tested and a 1000 yards of material were hauled off to an approved disposal area. The NDEA deferred to the Health Department on this issue in Reno. Mr. Fettic asked if the Washoe County problem was before the fund went into effect. Mr. Trachok said no, the Reno problem was in the Spring of 1994. Mr. Bennett asked if at the 75 feet level at Jackpot was it still showing 100 parts per million. Mr. Trachok said it was below 100 ppm and was at 30 ppm. The program was not managed by NDEA, but by a private environmental engineer. The plan was submitted to NDEA who approved the plan. Mr. Carpenter thanked Mr. Trachok for his testimony and asked if he would put something in writing and send it to the committee regarding thoughts to make it a more practical program. Mr. Peter Krueger, State Executive, Nevada Petroleum Marketers Association, spoke from prepared testimony (Exhibit E). Mr. Bennett said he could not come up with anything economical for the mom and pop business for a leak detection system. Mr. Krueger said the method of sticking a tank had been used for 50 years. A long pole would be used to measure the amounts in the tank. They know what has been pumped out by the meter reading, what has been delivered and what should be in the tank. Mr. Bennett said this would not be accurate considering calibrations. Mr. Krueger said the procedure was acceptable at this time. He mentioned the other types of monitoring devices available, but emphasized the expense. Mr. Sandoval asked if the Nevada Petroleum Marketers Association supported Senator Jacobsen's bill. Mr. Krueger said yes, it was at the associations urging that the Senator introduce the bill on their behalf. Mr. Neighbors asked if the increase would be passed on to the consumer and what did the industry have to say regarding the increase. Mr. Krueger asked if he meant the street price of petroleum. There was concern in 1989 when the $.06 was adopted that it would be passed on to the consumer. Fuel has been a price sensitive factor and occasionally after the $.06 raise in 1989 a station would increase their price. It was not too long before the price went back to the prior amount. Mr. Neighbors did not have a problem with it. He felt the money was being well spent and accounted for. Mr. Carpenter remarked if we could get together with the EPA and refine the laws and obtain more leeway, the price would not have to be increased. He suggested the price had to come from somewhere and if the same path were followed an increase could come before each Legislative Session. Mr. Carpenter asked if the industry would be willing to sit down with the EPA to work out some savings. Mr. Krueger suggested it had been seven years since the legislation had been adopted without a fee increase. In 1991 more pressure was put on the fund by reducing the deductible for primarily the small operators in rural Nevada. The deductible was reduced from $25 thousand to $10 thousand. This put a tremendous burden on the fund as it required the fund to be liable for another $15 thousand. Each site clean up would be completely different, no two clean ups were identical. Nevada has been fortunate to be able to prorate, which meant everyone would get paid. Mr. Jim Polkinghorne, Mayor, Elko, Nevada, testified on problems many of the rural counties encounter. He stated Jackpot was systematic of the happenings on a smaller scale which occur throughout the state. The Jackpot clean up was dramatic because it was so huge. The mayor noted during the Jackpot clean up Elko could no longer accept the contaminated soil and Jackpot had to run trucks to Reno 400 miles away to dump the soil. He said the trucks hauling the dirt expended approximately 300 to 400 gallons of diesel fuel, polluting the air for 12 to 14 hours, to bring the dirt from Jackpot to Reno. The cost was ultimately around $l million for the Jackpot clean up. Mr. Polkinghorne said a car dealer in Elko had a small adjacent service station, was preparing for retirement, and sold his business. It was determined to remove the underground tanks at his service station. There had been leakage by the tanks when removed and the soil read 300 parts per million. He had approximately 75 yards of soil to dump and the Elko landfill would not accept it. The dirt had to be transported to Reno at a cost of $13 thousand. Mayor Polkinghorne suggested in many cases most of the underground tanks should be left alone. He said especially when they were isolated and far away from water wells. The mayor felt when a contaminant moved away from the source the concentration would diminish rapidly. The point source of the contaminant would be a nonrenewable source once the tank was removed. In conclusion the Mayor gave an example of the asbestos removal program. Now there was a consensus among very learned individuals the whole program was a mistake and the asbestos should have been left in place. Once the asbestos was disturbed it added to the contamination. He felt the underground storage tank leaks fell in the same category. Leave some of them alone and they will dissipate over a period of time. Mr. Polkinghorne said the fiscal impacts upon the effective parties needed to be weighed. Mrs. de Braga asked if the cases cited had any immediate danger to a water supply. The Mayor said the one in Elko definitely did not, it was close to the river, the city wells were some distance. The wells in Jackpot were on the side hill and the area with the tanks were a down grade from the well. Mr. Neighbors said they had a similar situation in Tonopah where soil had to be hauled 220 miles to Las Vegas. In this particular case it was 900 feet to the closest water. Mr. Donald Lindeman, Assistant Superintendent, Churchill County School District spoke from written testimony (Exhibit F). He explained the $30 thousand dollars was for one site with three tanks at $10 thousand per tank. The other site was a heating oil site for which $250 was paid. Mr. Lindeman said they had a site at one of their elementary schools which was an underground heating oil tank and to this point the district had spent $53 thousand on remediation and have not remediated anything. Pulling the tank out cost approximately $10 thousand and the rest has been spent monitoring groundwater and getting reports done by the environmental engineer. The state pays as they were a part of the petroleum fund and were reimbursed. He was not putting down the environmental engineer but did feel a lot of money went towards paper work. In August of 1992 the tank was removed and a leak was discovered. The plan was to excavate the contaminated soil as the water table was at 8 or 9 feet below ground level. When the tank was pulled Nevada was in a drought situation, but when they were ready to excavate the soil the groundwater table was at 5 feet and the soil was in the groundwater. Mr. Lindeman said they were on hold for the groundwater to go down. The engineer thought a bio remediation where organism would be injected into the soil which would eat up the contamination would work. The petroleum fund said they did not think the bio remediation would work and would have to go back to the excavation which would cost about $35 thousand more than the bio-remediation. The excavation was scheduled for spring break as the tank sat right next to the front of the building. It was determined if excavation took place, damage to the building might occur. Now they again were trying to obtain approval for bio-remediation. To this date they had not removed one ounce of contaminated soil and it has been two and one half years and the cost so far was $53 thousand out of pocket and another $23 thousand encumbered to complete the project. If evacuation was required another $35 thousand would be needed. Over $100 thousand would be spent on removal. The latest reports show no detection in the groundwater of any contamination migrating. The soil was sitting in groundwater but the contaminants were not moving. Mr. Lindeman said they had asked the site be closed and nature take its course but this was not an acceptable alternative as far as the state fund was concerned. The Churchill County School District is trying to get the issue resolved at the least possible expense to the taxpayers. The other site with three gasoline tanks has contaminated groundwater and the district has been working on the clean up. To date $150 thousand has been spent and another $103 thousand has been encumbered and expenses of another $100 thousand were expected. Mrs. de Braga asked if the tank had been removed at Northside Elementary School. Mr. Lindeman said yes, it was a tank that was not needed. Mrs. de Braga wanted to know at what PPR would the excavation of soil be stopped. Mr. Lindeman did not know. He did say the monitoring wells drilled in the ground would tell if the contaminants were moving. Mrs. Segerblom asked what percent of the money spent would be reimbursed. Mr. Lindeman hoped all of the money would be reimbursed except for the deductible. Reimbursement has been made for $84 thousand, and $90 thousand has been submitted to the fund, which has not been reimbursed. Mr. John Enloe, Supervisor for Water Planning, Sierra Pacific Power Company, and Lawrence Blalock, Supervisor, Hazardous Materials and Water Quality Programs, presented their comments from prepared testimony (Exhibit G). Mr. Carpenter asked if the $l.6 million being spent was from Sierra Pacific. He explained they would not be reimbursed from the petroleum fund because it was PCE, a solvent used in cleaning establishments, garages, etc. The drinking water standard for PCE would be 5 parts per billion, very little entered into the ground- water would contaminate and the water be unusable without treatment. Mr. Enloe said the filter consisted of a 45 foot tall by 16 foot diameter air stripping tower next to the river which will be on line by July. Mr. Carpenter asked about the leaking tank near a service station which prevented SPPC from pumping one well. Mr. Enloe stated Washoe County District Health Department was working actively with the service station owners to treat the contaminated soils and groundwater, but due to the well being adjacent to the property the health department has directed SPPC to shut down the well. The two reasons for shutting down the well was fear of contamination getting into the groundwater and pumping of the well could effect the treatment of the groundwater. Mr. Carpenter asked Mr. Enloe as an engineer what did he think of the program being conducted in Washoe County. Mr. Blalock said he was in charge of the underground tank for SPPC and had dealt extensively with Washoe County Health Department. He found dealing with NDEA and Washoe County Health Department to be most cordial. Mr. Carpenter asked about the risk-based assessment outside the Washoe Basin and how it would be operated. Mr. Blalock said SPPC has several substations in outlying areas, remote areas which contain oil filled equipment. If the equipment failed and oil drained in the soil, SPPC would like to have a risk based assessment to determine if the soil needed cleaning based on the extent of the water. He gave an example of a substation twenty miles south of Mina where the nearest water would be a spring 10 miles away and groundwater as deep as 300 feet. They have had incidents like those and Alan Biaggi had been most cooperative and item number 11 would be used for extenuating circumstances. Mr. Neighbors asked at what level the wells were cemented off. Mr. Enloe answered 100 feet. He said the groundwater level near most of their wells was typically very shallow, some 10 to 15 feet and others 30 to 40 feet. Mr. Bennett questioned if hydrocarbons had been discovered in the well by the gas station where the Washoe County Health Department had asked not to pump the well. Mr. Enloe said they had done extensive testing in a cooperative effort with the service station to try and determine if the groundwater within SPPC's well has been contaminated. To date even though there was contamination surrounding the well, the water within the well did not show any contamination. Mr. Bennett asked what kind of soil was the well dug in. Mr. Enloe has had draw down tests done and preliminary results stated there was very little connection between the shallow aquifer at that location and the interval they were screened in. Mr. Bennett asked if there were any shale layers and permeable layers. Mr. Enloe said it was not a homogeneous type of aquifer where a monitor well could be drilled. Mr. Sandoval wanted to have the air stripper explained and the other options to clean up the PCE. Mr. Enloe said the air stripper tower was basically a large tower where the water would be pumped to the top of the tower and falls down through some packing media, at the same time there was a very large air blower up through the media and out to the atmosphere. They received a permit from the health department for the air discharge which did not require any treatment. A risk assessment was made to establish there was not a threat to the public health by discharging the volatilized PCE to the atmosphere. The other options SPPC were pursuing with NDEA included the city and several private property interests which could be treated site specifically and were at 400 parts per billion. PCE was different, gasoline tends to sink rather than float on the surface, over time the contamination basically was down in the aquifer. The deeper one would go the less concentration of the constituent one would see. They were looking to do some site specific treatment in localized areas where the concentrated contamination was occurring. They needed to go after the problem areas to keep control of the situation without impacting any wells within the community. Mr. Sandoval asked if SPPC was seeking any contribution from the responsible parties for the PCE contamination. NDEA has performed a comphrensive study of the contamination in the downtown area which Allen Biaggi could speak to, but at this time they could not identify any responsible parties in the area. SPPC was working with some of the private property interests who were aware of the problem and trying to cooperatively go after clean up of this contamination rather than some of the other approaches. Mr. Bennett said as a registered engineer do you think a health department official would be qualified to tell SPPC to shut a well down. Mr. Enloe said there were registered engineers at the health department also who could speak to their type of degrees. He noted they work cooperatively with the health department to try and prevent any contamination to get into the water supply. The health department did not order SPPC not to use the well. A request was made not to use the well to facilitate the clean up operations at the gas station. Mr. Enloe did remark the well was needed because of the drought and explained why they had worked with the oil company going through the pump testing program and sampling. Determining whether there was a connection between the shallow aquifer and the deeper aquifer SPPC was screened into. Mr. Bennett said if the preliminary reports were correct the well could be operated safely. Mr. Carpenter commented, SPPC has the same problems as the rural communities, they did not want to clean up every aquifer and indicated the program should be site specific. He felt after hearing the testimony of SPPC, risk based assessment was what they testified to. Mr. Enloe gave an example of a site which was looked at and remediated and closed by NDEA and SPPC felt the site might effect one of their other wells. SPPC went to NDEA and presented their position and reopened the site and installed a more active type of treatment system. Mr. Carpenter said he agreed if something was suspected it should be taken care of. If the problem could be left alone, hopefully everyone would agree. Mr. Ken Stephens, Western Energetix Corporation, an Exon/Chevron Jobber, testified on their experiences with clean ups. Western Energetix has about 30 locations in northern Nevada and have had several locations where clean up was needed. He said the experiences Western Energetix has had with the regulations seem to be reasonable and the goals obtainable. No need for a change in regulations at this time, commented Mr. Stephens. Western Energetix has locations from Tonopah, Hawthorne, Yerington, Winnemucca, downtown Reno, and Sparks and they dealt with all of the regulatory agencies when contamination was involved. Claims have been submitted to the state fund, which have been reimbursed, several sites have been closed, and several sites were ongoing. The A through K standards work, but he felt the consultants might not be doing as good a job in not asking for the A - K . There were several types of remediation without removing soil. Mr. Stephens said his title is Environmental Manager and his responsibility was to oversee the clean up operations for the company. Mr. Carpenter asked if in most instances did Mr. Stephens ask for an A-K assessment. Mr. Stephens said no, most of the contamination would be extensive, threatened groundwater and it would be the companies' responsibility to clean up. Mr. Carpenter asked if they had a contamination which would be justified for the A to K assessment, would they ask for help. Mr. Stephens said absolutely. Mr. Carpenter asked if Western Energetix works through the petroleum fund, and how much money has been received to do the clean up. Mr. Stephens said they had spent out of pocket close to $2 million and received with the exception of the deductibles the majority of the money back with some small claims before the board at this time worth $2 to $300 thousand. Mr. Joseph McGinley, Steffen Robertson and Kirsten, explained the company had been involved in approximately 500 storage tanks issues throughout the United States. Locally in Nevada about 150 underground storage tank were issues. The scope of the companies' services range from consulting clients on how to upgrade their tanks to meet the 1998 requirements, doing site assessment, and remedial activities. Nevada has been one of the more lenient states when establishing action levels. He referred to a professional journal, Soils Magazine, which in December of 1993 published a listing of 44 states and their action levels. Thirty- six states out of the 44 did not look at just the Total Petroleum Hydrocarbons, they looked at four main constituents in petroleum products. The action levels have been raised four times in the soil because of having to look at individual components. Nevada was only one of eight states to only look at TPH, and of the eight states only three of the states exceeded the state of Nevada's action levels. The other three states were either less stringent or equal to Nevada. Mr. McGinley said the company had exercised the A-K options in the past on a number of occasions. He felt some of the horrendous stories noted today was due to the under utilization of the A-K in Nevada. The A-K was a risk assessment even though it might be limited. If the consultants have not been exercising the A- K options, it would not be the fault of the regulations or the fault of the regulatory agencies. If the consultants did not provide the proper information in an A-K analysis, it would not be the fault of the regulations or the regulatory agencies. He felt in the rural communities of Nevada some of the technologies being used in the larger communities had not caught up. Mr. Sandoval asked Mr. McGinley about any suggestions to improve the system. Mr. McGinley said a standard needed to be established. The 100 PPM was a decent standard with the caveat in the regulations that the A-K would be used. The regulatory agencies should be encouraging consultants, owners and operators to be fully aware of the availability of the A-K vehicle. Mr. Carpenter asked where Mr. McGinley resided and if he would be available for a work session on this topic. He said he would like to be a part of the session. Mr. Ken Arnold, Environmental Control Manager for the city of Carson testified regarding city owned tanks. He spoke from prepared testimony (Exhibit H). Mr. Arnold said in his experience NDEA had been more than up front with the A-K, letting one know what options were available. The flexibility of A-K would be more than sufficient and he would not like to see it changed. Mr. Arnold praised the NDEA and stated if one was looking for help it was available from them. Mr. Rob Miller, Broadbent & Associates, Inc., has practiced environmental consulting in Nevada since 1986. He stated during the nine years he had been consulting in Nevada he observed the evolution of the USTP at NDEA and what it has become today. Mr. Miller has been called to do work in neighboring states and knows what those agencies require. He agreed with Mr. McGinley's observations previously given. Mr. Miller said he utilized the A-K analysis where suitable. The sale of a property becomes a large part of digging up underground tanks and the buyer being assured of a clean piece of property. As a result of digging up the tanks, contamination was often found. The A-K list could be applied but the client and the buyer might not want the analysis. The property would have to be cleaned up. In addition to the A-K he stated there were also monitoring technologies where the vertical migration of a contaminant and natural degradation could be monitored over a period of time. Mr. Miller's concern over a risk assessment would be how extensive they were and at the end a number was arrived at and numbers could be manipulated. He questioned whether the certified environmental managers in Nevada were capable of performing an adequate risk assessment which incorporates hazard identification, response assessment, exposure assessment and risk characterization. There might not be adequate staffing at the county or state level to review those areas. The A-K list has been working and there was adequate staffing for reviewing the list and the certified environmental managers in the state were capable of handling the A-K list without causing expense to the regulated community. Mr. Carpenter stated approximately $35 million had been spent and wanted to know if the A-K list could be improved to reduce an increase in taxes for the petroleum fund. Mr. Miller felt the A-K would have applied on the Jackpot cleanup and would have saved the fund a great deal of money. He stated if A-K were used more frequently it would result in cost savings, along with monitoring techniques. Mr. Carpenter asked Mr. Miller if he had heard the testimony of Churchill County. Mr. Miller suggested the Churchill County site testimony suggested one site there was soil contamination within the groundwater and the monitoring wells down grade from the location has shown non detected. He did not know if they had a monitor well installed at the point of soil contamination extended into the water table. They could present NDEA the possibility of monitoring the down gradient wells for a period of time to see if they showed any detection. NDEA has seemed to be open to any cost savings measures. Mr. Carpenter said the high profile cases receive a great deal of publicity and cast stones from the Legislature on down. He asked Mr. Miller if he would be willing to come to the subcommittee meeting to discuss the issue further. Mr. Miller would welcome the opportunity to be at the next meeting. Ms. Stephanie Licht, representing Elko County, testified on a problem which existed in Elko, Nevada. The county had acquired a residence for additional parking for the court house. When the county demolished the house they found an underground storage tank for heating oil. When the tank was removed the cost was $10 thousand above the price of the property and had delayed the parking lot for a year which also increased the county cost from a building standpoint. Ms. Licht told a personal story of a small businessman who provided gas as a service to his customers. He bought the station from a person who was retiring from the gas business and put in a lube rack and automotive services as well as the gas. He was losing $1000 per month providing gas to his customers as a service, but because they bought other automotive services it was alright. He also provided a service for senior citizens and those who had difficulty pumping their own gas. It was to Ms. Licht's knowledge the only full service station in town. The EPA said the old underground storage tanks needed to be changed. The process took many weeks and a hole was dug large enough to put the whole station in, he had to haul the dirt to the dump for which he was still responsible, and find backfill to fill the hole, at tens of thousands of dollars. He still had the gas station, although still upset, and continued until the fire marshall came in and said if one gallon of gas was spilled on the tarmac, the fire department would have to be called to clean it up and the responsibility to watch the clean up and pay for it was the owners. At this point he discontinued the gas service, which put two people out of work, and discontinued a very valuable service in the community to seniors and others. Mrs. de Braga asked why the tanks needed to be removed, were they leaking. Ms. Licht said the station had been there many years and yes they were leaking. Mr. Greg Moss, on behalf of the Government Environmental Subcommittee of the Government Affairs Committee of the American Consulting Engineer Council of Nevada spoke from prepared testimony (Exhibit I). Mr. Bob Gondek, Environmental Project Manager for Chevron U.S.A. Products Company, Inc., said he oversees numerous products in Nevada, Alaska, Idaho, California, Montana and Wyoming. Mr. Gondek has managed a number of projects in many states and he said "in all honesty I brag about the state of Nevada to the other states and regulators, saying what a good system they have here." He noted how reasonable the regulators were, the state fund was the best he had seen, and the A-K (1-11) did constitute a risk assessment. He said the horror stories were certainly not uncommon. Chevron had spent hundreds of thousand of dollars cleaning up sites in the past. Mr. Gondek said he felt everyone was getting better at managing these types of projects, smarter and more economical. NDEA's treatment of the issues were very reasonable and they always listen when one calls and get back to the person calling. NDEA treats everyone fairly which one would not see in many other states. Mr. Gondek lives in San Ramon, California but would be happy to come to another meeting. One of the major costs in Nevada in doing cleanups would be the disposal of the soils, which was brought out in other testimony. Most other states allow direct aeration of contaminated soils, which would be excavating the soils and transporting a minimal distance if not on site and allow natural biodegradation and aeration to occur and clean up the soil on site. This would significantly reduce clean ups costs in most cases. Mr. Ed Ralston, UNICAL Corporation, an Environmental Manager for several sites in Nevada as well as other states testified. NDEA has been fair and very flexible and from personal experience he had communicated with NDEA on a monthly basis on several situations Mr. Ralston dealt with and concur with their clean up goals. Several sites Mr. Ralston dealt with in California required ND or Non detect for contaminant levels and from his perspective would be impractical and unachievable. The state of Nevada was one of the forerunners in terms of the reimbursement fund and also their implementation of the USTP. UNICAL had also utilized the A-K risk based program. Mr. Steve Rowley, Nevada Cement Company, would like to lend their support to the current program. He said they had worked through a number of problems with underground storage tanks at Nevada Cement Companies' Fernley site. One of the problems could have been a horror story but through the flexibility of NDEA the site was remediated by the most cost effective means. Nevada Cement Company had a very, very large spill and one problem was transporting and moving all the soil. The state was asked if it would be possible to look at burning the soils with the kiln feed in the rotary cement kilns. They would agree if the air quality gave approval. A trial burn was accomplished and permission was given. Therefore remediation was able to take place and dramatically reduce the cost. Nevada Cement felt NDEA was flexible and fair and professional in the way they administer the current program. Ms. Linda Bowman, an attorney with Vargas and Bartlett in Reno, serves on the state petroleum fund board for reimbursement of claims. She offered her assistance to the committee reviewing anything and would be happy to do so. She stated in the three years she had been on the board there was great emphasis by the NDEA and the fund staff to look at cost effective clean up and be very flexible. Ms. Bowman said the committee should foster the continued working relationship. Mr. Carpenter appointed a subcommittee consisting of himself, Mr. Sandoval, Mr. Bennett, Mrs. de Braga, Mrs. Ohrenschall and Mr. Neighbors. Mr. Carpenter thanked all those who testified for being at the meeting. The meeting was adjourned at 4:15 p.m. RESPECTFULLY SUBMITTED: Pat Menath, Committee Secretary APPROVED BY: Assemblyman John C. Carpenter, Chairman Assemblyman Marcia de Braga, Chairman Assembly Committee on Natural Resources, Agriculture and Mining March 15, 1995 Page