Enrolled HB 69: Relating to regulation of shallow natural gas leasing and closely related energy projects; and providing for an effective date.
00Enrolled HB 69 01 Relating to regulation of shallow natural gas leasing and closely related energy projects; and 02 providing for an effective date. 03 _______________ 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 LEGISLATIVE FINDINGS. The legislature finds that 07 (1) the development of shallow natural gas resources is in the best interests of 08 the State of Alaska; 09 (2) shallow natural gas is abundant and widespread in Alaska and bears the 10 promise of providing Alaskans, particularly Alaskans living in rural areas, with an 11 inexpensive and clean source of energy if those resources can be economically developed; 12 (3) the development of shallow natural gas poses significantly fewer risks and 13 creates substantially less impact to the environment than traditional deep oil and gas projects, 14 which have served as the model for oil and gas industry and environmental regulations to date
01 in Alaska; 02 (4) the regulatory requirements developed and applied to traditional deep oil 03 and gas projects in Alaska are ill-suited and unduly onerous when applied to shallow natural 04 gas projects, threatening the economic viability of otherwise desirable exploration and 05 development projects; 06 (5) there is an immediate state and national need for the development of clean 07 and economical unconventional energy sources, such as shallow natural gas resources; 08 (6) reform of existing laws and regulations is needed to remove unnecessary 09 regulatory burdens on the private sector to foster and encourage the development in Alaska of 10 these necessary resources; 11 (7) the legislature is acting in the interest of promoting the active development 12 of such resources, while ensuring that suitable measures are taken to protect human health and 13 safety and the natural environment, 14 (A) to remove impediments to the responsible development of shallow 15 natural gas; 16 (B) to provide the proper state agencies with clear authority and 17 discretion to adopt regulatory practices appropriate to shallow natural gas exploration 18 and development projects, in recognition of the lower risks posed by such projects to 19 human health and safety and the natural environment; and 20 (C) to reserve all rights and powers not preempted by federal law and 21 regulation in order to assert state primacy over the regulation of shallow natural gas. 22 * Sec. 2. AS 31.05.030 is amended by adding a new subsection to read: 23 (j) For the purposes of AS 46.04.030(b), the commission shall determine 24 whether a well drilled for shallow natural gas may penetrate a formation capable of 25 flowing oil and, if so, whether the volume of oil encountered will be of such quantities 26 that an oil discharge prevention and contingency plan will be required. 27 * Sec. 3. AS 31.05.060 is amended by adding new subsections to read: 28 (c) Notwithstanding the requirements of (a) and (b) of this section that relate 29 to fixing a date for a hearing and causing notice of the hearing to be given, for an 30 action under this chapter that involves the exploration for or development of shallow 31 natural gas and that has application to a single well or a single field, upon the request
01 of a lessee or operator, the commission may, where operations might be unduly 02 delayed, approve a variance from the commission's regulations that apply to the well 03 or field without providing notice and opportunity to be heard. In the exercise of its 04 authority to issue the variance, 05 (1) the commission may approve the variance if 06 (A) the approval provides at least an equally effective means of 07 accomplishing the requirement set out in the commission's regulation; or 08 (B) the commission determines that the request is more 09 appropriate to the proposed operation than compliance with the requirement of 10 the regulation; and 11 (2) the terms of the approval of the variance may include exempting 12 the lessee or operator from a requirement of a regulation if the commission determines 13 that the requirement is not necessary or not suited to the well or field taking into 14 consideration 15 (A) the nature of the operation involved; 16 (B) the characteristics of the well or field for which the 17 variance is sought; and 18 (C) the reasonably anticipated risks of the exemption from the 19 requirement to human safety and the environment. 20 (d) The provisions of (c) of this section do not apply to authorize approval of a 21 variance from the commission's regulations that relate to underground injection. 22 * Sec. 4. AS 31.05 is amended by adding a new section to read: 23 Sec. 31.05.125. Regulation of shallow natural gas; relationship of chapter 24 to other laws. If the Department of Natural Resources clearly demonstrates an 25 overriding state interest, the commissioner of natural resources may approve a waiver 26 of local planning authority approval and requirements relating to compliance with 27 local ordinances and regulations. The commissioner shall issue specific findings 28 giving reasons for granting a waiver under this section. 29 * Sec. 5. AS 31.05.170 is amended by adding a new paragraph to read: 30 (15) "shallow natural gas" means coal bed methane, natural gas drilled 31 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the
01 true vertical depth of which is 4,000 feet or less. 02 * Sec. 6. AS 38.05.177 is amended by adding a new subsection to read: 03 (o) If the department clearly demonstrates an overriding state interest, the 04 commissioner may approve a waiver of local planning authority approval and 05 requirements relating to compliance with local ordinances and regulations. The 06 commissioner shall issue specific findings giving reasons for granting a waiver under 07 this subsection. 08 * Sec. 7. AS 46.04.030(b) is amended to read: 09 (b) A person may not cause or permit the operation of a pipeline or an 10 exploration or production facility in the state unless an oil discharge prevention and 11 contingency plan for the pipeline or facility has been approved by the department and 12 the person is in compliance with the plan. This subsection does not apply to an 13 exploration or production facility used solely to explore for or to develop or 14 produce shallow natural gas resources, except that this exemption does not apply if 15 the Alaska Oil and Gas Conservation Commission determines under 16 AS 31.05.030(j) that 17 (1) a well drilled for shallow natural gas may penetrate a 18 formation capable of flowing oil; and 19 (2) the volume of oil encountered will be of such quantities that a 20 contingency plan will be required [BY MEANS OF DRILLING A WELL ON A 21 LEASE AUTHORIZED UNDER AS 38.05.177]. 22 * Sec. 8. AS 46.04.900 is amended by adding a new paragraph to read: 23 (30) "shallow natural gas" means coal bed methane, natural gas drilled 24 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the 25 true vertical depth of which is 4,000 feet or less. 26 * Sec. 9. AS 46.40 is amended by adding a new section to read: 27 Sec. 46.40.205. Consistency determinations for certain activities involving 28 shallow natural gas. (a) When conducted under oversight and regulation of the 29 Alaska Oil and Gas Conservation Commission and the state's resource agencies, 30 projects for the exploration and development of shallow natural gas are consistent with 31 the program described in this chapter. Persons responsible for activities subject to this
01 section shall obtain all required permits and approvals from municipal, state, and 02 federal agencies as otherwise required by law. 03 (b) In this section, "shallow natural gas" has the meaning given in 04 AS 46.04.900. 05 * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).