HB 370: "An Act protecting fish-bearing surface water and public access to and enjoyment of recreational water, fish habitat water, and water related to hunting activities, if the water may be affected by shallow natural gas exploration and development, and requiring that the disposal of the water produced by dewatering of coal seams in order to recover methane comply with requirements intended to protect surface water; requiring that shallow natural gas exploration and development activities comply with municipal land use regulations, and repealing provisions under which the commissioner of natural resources may waive the application of local planning requirements with respect to shallow natural gas development, and making a conforming change; and providing for an effective date."
00 HOUSE BILL NO. 370 01 "An Act protecting fish-bearing surface water and public access to and enjoyment of 02 recreational water, fish habitat water, and water related to hunting activities, if the 03 water may be affected by shallow natural gas exploration and development, and 04 requiring that the disposal of the water produced by dewatering of coal seams in order 05 to recover methane comply with requirements intended to protect surface water; 06 requiring that shallow natural gas exploration and development activities comply with 07 municipal land use regulations, and repealing provisions under which the commissioner 08 of natural resources may waive the application of local planning requirements with 09 respect to shallow natural gas development, and making a conforming change; and 10 providing for an effective date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section
01 to read: 02 LEGISLATIVE INTENT CONCERNING SECTION 4. It is the intent of the 03 legislature that land use regulations adopted by a municipality under AS 29.40.040 to govern 04 the use and occupancy of land, especially regulations that protect neighborhoods from 05 commercial activities that interfere with qualities that residents desire of their neighborhoods, 06 shall apply to shallow natural gas exploration and development activities. 07 * Sec. 2. AS 38.05.177(h) is amended to read: 08 (h) A lease issued under this section is subject to the following terms and 09 conditions and may be terminated by the director in the event of a breach of a term or 10 condition: 11 (1) the lessee may surrender the lease or relinquish part of the lease at 12 any time; 13 (2) the lease may not be transferred or assigned until a well capable of 14 production of gas in paying quantities has been drilled on the lease; however, this 15 paragraph does not prohibit the lessee from entering into a farm out agreement or 16 similar arrangement with a third party under which the third party assists in 17 exploration and development of production from the lease if the agreement or 18 arrangement does not require a payment of consideration by the third party to the 19 lessee, except that the lessee may retain an overriding royalty interest in the lease or 20 may retain a net profit or other production payment; 21 (3) unless provision is otherwise made for the lease by the Alaska 22 Oil and Gas Conservation Commission under AS 31.05.030(e) that would govern 23 the lessee's disposal of water produced from a coal seam as salt water or 24 nonpotable water in a manner that does not add to or contaminate surface or 25 subsurface water supplies, the lease must contain a term or condition that 26 governs the lessee's disposal of the produced water in a manner that does not add 27 to or contaminate surface water supplies; 28 (4) the lease must contain a term or condition that protects the 29 water quality, water quantity, and habitat of fish-bearing surface water; the term 30 or condition may not take effect until approved by the commissioner of fish and 31 game.
01 * Sec. 3. AS 38.05.177(k) is amended to read: 02 (k) The commissioner may 03 (1) adopt only the regulations that are reasonable and that are 04 necessary to implement, interpret, or make specific the provisions of this section or to 05 establish procedures to govern application of the provisions of this section; 06 notwithstanding the limitation of this paragraph, the commissioner shall adopt 07 regulations under AS 38.05.127(b) and this subsection to ensure that shallow 08 natural gas exploration and development activities do not materially interfere 09 with the public's right to access and enjoy recreational waters, waters that 10 contain appreciable quantities of resident or anadromous fish, and areas 11 important to sport or subsistence hunting activities; and 12 (2) in addition to any requirement for a bond under AS 38.05.130, 13 establish by regulation a form and amount for statewide, areawide, unit-wide, or per- 14 lease bonds sufficient to secure damages that may be caused by the activities of a 15 lessee, or the lessee's successors or assigns, related to a shallow natural gas lease 16 entered into under this section; if the commissioner acts under this paragraph, the 17 commissioner 18 (A) shall require a person applying for a lease under this 19 section to post the bond as a condition for the director's executing the lease; 20 (B) may not require a bond posted under this paragraph from a 21 person applying for a lease if the person has already posted a bond covering 22 the person's statewide oil and gas leasing activities in an amount of at least 23 $500,000. 24 * Sec. 4. AS 38.05.177(n) is repealed and reenacted to read: 25 (n) Land use regulations of a municipality adopted under AS 29.40.040 26 establishing allowable uses and limitations on shallow natural gas exploration and 27 development activities, including limitations that protect neighborhoods, protect the 28 safety of residents, and limit audible noise, shall be given effect to the fullest extent 29 allowed under the Constitution of the State of Alaska. 30 * Sec. 5. The uncodified law of the State of Alaska enacted in sec. 1, ch. 45, SLA 2003, is 31 amended to read:
01 LEGISLATIVE FINDINGS. The legislature finds that 02 (1) the development of shallow natural gas resources is in the best 03 interests of the State of Alaska; 04 (2) shallow natural gas is abundant and widespread in Alaska and 05 bears the promise of providing Alaskans, particularly Alaskans living in rural areas, 06 with an inexpensive and clean source of energy if those resources can be economically 07 developed; 08 (3) the development of shallow natural gas poses significantly fewer 09 risks and creates substantially less impact to the environment than traditional deep oil 10 and gas projects, which have served as the model for oil and gas industry and 11 environmental regulations to date in Alaska; 12 (4) the regulatory requirements developed and applied to traditional 13 deep oil and gas projects in Alaska are ill-suited and unduly onerous when applied to 14 shallow natural gas projects, threatening the economic viability of otherwise desirable 15 exploration and development projects; 16 (5) there is an immediate state and national need for the development 17 of clean and economical unconventional energy sources, such as shallow natural gas 18 resources; 19 (6) reform of existing laws and regulations is needed to remove 20 unnecessary regulatory burdens on the private sector to foster and encourage the 21 development in Alaska of these necessary resources; 22 (7) the legislature is acting in the interest of promoting the active 23 development of such resources, while ensuring that suitable measures are taken to 24 protect human health and safety and the natural environment, 25 (A) to remove impediments to the responsible development of 26 shallow natural gas; and 27 (B) to provide the proper state agencies with clear authority and 28 discretion to adopt regulatory practices appropriate to shallow natural gas 29 exploration and development projects, in recognition of the lower risks posed 30 by such projects to human health and safety and the natural environment [; 31 AND
01 (C) TO RESERVE ALL RIGHTS AND POWERS NOT 02 PREEMPTED BY FEDERAL LAW AND REGULATION IN ORDER TO 03 ASSERT STATE PRIMACY OVER THE REGULATION OF SHALLOW 04 NATURAL GAS]. 05 * Sec. 6. AS 31.05.125 is repealed. 06 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).