SB 209: "An Act relating to oil and gas or gas only leasing; requiring that a minimum work commitment be included in each oil and gas and gas only lease and that a proposed plan of development be included in an application for an oil and gas or gas only lease; and providing for an effective date."
00 SENATE BILL NO. 209 01 "An Act relating to oil and gas or gas only leasing; requiring that a minimum work 02 commitment be included in each oil and gas and gas only lease and that a proposed plan 03 of development be included in an application for an oil and gas or gas only lease; and 04 providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 38.05.180(h) is amended to read: 07 (h) The commissioner shall [MAY] include terms in a [ANY] lease that 08 impose [IMPOSING] a minimum work commitment on the lessee to implement the 09 plan of development submitted by the lessee with a bid for an oil and gas or gas 10 only lease. The terms of the minimum work commitment must [.THESE TERMS 11 SHALL BE MADE PUBLIC BEFORE THE SALE, AND MAY] include appropriate 12 penalty provisions to take effect in the event the lessee does not fulfill the minimum 13 work commitment. If it is demonstrated that a lease has been proven unproductive by 14 actions of adjacent lease holders, the commissioner may set aside a work commitment.
01 The commissioner may waive for a period not to exceed one two-year period any term 02 of a minimum work commitment if the commissioner makes a written finding either 03 that conditions preventing drilling or exploration were beyond the lessee's reasonable 04 ability to foresee or control or that the lessee has demonstrated through good faith 05 efforts an intent and ability to drill or develop the lease during the term of the waiver. 06 * Sec. 2. AS 38.05.180 is amended by adding new subsections to read: 07 (hh) The commissioner shall require each bidder for an oil and gas lease or gas 08 only lease and each lessee applying for an extension or renewal of an oil and gas lease 09 or gas only lease to submit a plan of development for exploring, developing, and 10 producing from the lease within the period of the lease or the extension or renewal of 11 the lease. The commissioner shall review each plan of development and determine if 12 the proposed plan of development is reasonably expected to develop the lease in the 13 best interest of the state. The plan of development shall be included in a lease along 14 with penalties for failing to comply with the plan of development and other terms of 15 the lease. A bidder may not be a "qualified bidder" for the purposes of (f)(1) of this 16 section if the commissioner finds that the bidder has not submitted a proposed plan of 17 development that is in the best interest of the state or that the person that submitted the 18 plan of development is not reasonably capable of implementing the plan. 19 (ii) The commissioner shall review each oil and gas lease or gas only lease 20 each year for the purpose of determining whether a lease is being developed in the best 21 interest of the state, whether the lessee is complying with the plan of development 22 applicable to the lease, and whether revision of a development plan, including the 23 planned rate of development, would provide the maximum benefit to the people of the 24 state. The commissioner shall enforce the terms of the lease, including imposing any 25 applicable penalty or other remedy for noncompliance, within a reasonable time after 26 finding that a lessee is out of compliance with the terms of the lease. The 27 commissioner shall submit a report to the legislature before the first day of each 28 regular session that lists each lessee that is found to be out of compliance and the 29 action by the commissioner to bring the lessee back into compliance or to terminate 30 the lease. 31 (jj) For the purposes of (hh) and (ii) of this section, a plan of development for
01 a cooperative or unit under (p) of this section is the plan of development for a lease 02 within the cooperative or unit, except where a different plan of development is 03 established for a lease within the cooperative or unit. 04 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 APPLICABILITY. This Act applies to a proposed lease sale and the renewal or 07 extension of a lease on or after the effective date of this Act. 08 * Sec. 4. This Act takes effect July 1, 2013.