Legislature(2017 - 2018)BARNES 124

01/24/2017 11:30 AM ARCTIC POLICY, ECONOMIC DEV., & TOURISM

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Audio Topic
11:31:31 AM Start
11:32:20 AM HJR5
11:57:02 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
*+ HJR 5 ENDORSING ANWR LEASING; RELATED ISSUES TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
          HJR 5-ENDORSING ANWR LEASING; RELATED ISSUES                                                                      
                                                                                                                                
11:32:20 AM                                                                                                                   
                                                                                                                                
CHAIR WESTLAKE  announced that the  only order of  business would                                                               
be  HOUSE  JOINT  RESOLUTION  NO. 5,  Urging  the  United  States                                                               
Congress to  pass legislation  to open the  coastal plain  of the                                                               
Arctic  National  Wildlife Refuge  to  oil  and gas  development;                                                               
urging the United States Department  of the Interior to recognize                                                               
the private property rights of owners  of land in and adjacent to                                                               
the  Arctic National  Wildlife Refuge;  relating to  oil and  gas                                                               
exploration,   development,   production,  and   royalties;   and                                                               
relating to renewable and alternative energy technologies.                                                                      
                                                                                                                                
11:32:44 AM                                                                                                                   
                                                                                                                                
CHAIR WESTLAKE,  as prime sponsor,  introduced HJR 5.   He opined                                                               
that the  opening of the  Arctic National Wildlife  Refuge (ANWR)                                                               
would be beneficial to Alaska, as  well as the rest of the United                                                               
States.  He said the first  priority of his constituents in House                                                               
District 40  is subsistence.  He  stated, "We want the  jobs that                                                               
come  with  this."     He  indicated  that   the  proposed  joint                                                               
resolution  would create  tens of  thousands of  jobs across  the                                                               
nation.  He emphasized that he would  not be offering HJR 5 if he                                                               
did  not think  that development  in ANWR  could be  done [in  an                                                               
environmentally responsible  manner].   He deferred to  his staff                                                               
for further presentation of the proposed legislation.                                                                           
                                                                                                                                
11:33:59 AM                                                                                                                   
                                                                                                                                
JESSE LOGAN,  Staff, Representative Dean Westlake,  presented HJR                                                               
5  on  behalf of  Representative  Westlake,  prime sponsor.    He                                                               
stated  that if  passed by  both bodies,  HJR 5  would signify  a                                                               
unified  voice  of  Alaska  -   to  U.S.  Congress  and  the  new                                                               
Presidential Administration  - that  Alaska supports  the opening                                                               
of the  coastal plain of ANWR  for oil and gas  development.  Mr.                                                               
Logan said HJR 5 urges U.S.  Congress to pass legislation to open                                                               
["the 1002  study area"]  of ANWR, urges  the U.S.  Department of                                                               
the Interior to  recognize the property rights of  owners of land                                                               
in and  adjacent to  the refuge, and  recognizes the  efforts the                                                               
State of  Alaska has made  in developing and  deploying renewable                                                               
energy across the state.                                                                                                        
                                                                                                                                
MR.  LOGAN reviewed  that  upon passage  of  the Alaska  National                                                               
Interest Lands  Conservation Act  (ANILCA), by U.S.  Congress, in                                                               
1980, 1.5  million acres  of the nearly  19.5 million  acres that                                                               
make   up   ANWR  were   set   aside   specifically  for   future                                                               
consideration  of oil  and gas  development.   He said,  "Section                                                               
1002 of ANILCA  set aside 1.5 million acres  for consideration of                                                               
oil and gas development on the  coastal plain of the refuge."  He                                                               
relayed  that   depending  on  the   structure  of   the  federal                                                               
legislation   that   would    authorize   the   development   and                                                               
exploration, it's  possible that less  than 2,000 acres  would be                                                               
needed  for surface  infrastructure, which  represents less  than                                                               
.01  percent of  the refuge  - a  footprint often  compared to  a                                                               
postage stamp on a football field.                                                                                              
                                                                                                                                
MR.  LOGAN  stated  that  according  to  the  Energy  Information                                                               
Administration (EIA), the operation  of the Trans-Alaska Pipeline                                                               
System (TAPS)  is uneconomical if production  falls below 200,000                                                               
barrels per day; current production  is just over 500,000 barrels                                                               
per day,  which is down  from the peak of  2 million in  the late                                                               
'80s.   He  said  TAPS has  seen  a decline  of  about 5  percent                                                               
annually.   Less oil produced  means slower moving oil,  which in                                                               
turn means  colder oil, and  that combination  "makes complicated                                                               
engineering  and operation  of TAPS."    Mr. Logan  said the  EIA                                                               
estimates that  development of ANWR  would peak  approximately 10                                                               
years  after the  beginning  of production;  peak  flow would  be                                                               
between 500,000  and 1.5 million  barrels per  day.  He  said the                                                               
low estimate could double the  throughput of TAPS, while the high                                                               
end could quadruple it.                                                                                                         
                                                                                                                                
MR. LOGAN stated that the  United States Geological Survey (USGS)                                                               
has  estimated an  approximate mean  of 10.5  billion barrels  of                                                               
recoverable oil;  however, this number  is an estimate,  since no                                                               
one  has ever  developed this  resource, and  recoverable oil  is                                                               
based on a range of $12 to $24 per barrel.                                                                                      
                                                                                                                                
MR. LOGAN stated that Alaska  has been responsibly developing its                                                               
natural  resources for  decades, while  also maintaining  some of                                                               
the highest  environmental standards  in the  world.   For years,                                                               
Alaska   congressional   delegation   has  been   putting   forth                                                               
legislation  to  open  the  plain   of  ANWR.    He  stated  that                                                               
responsibly opening ANWR  is not only vital  to Alaska's economic                                                               
future, but  also to the  nation's inner  security.  He  said the                                                               
proposed  joint  resolution  would  give  Alaska's  congressional                                                               
delegation a clear  message and "some extra  ammunition" that the                                                               
legislature  and   the  state  supports  "the   passage  of  that                                                               
legislation."                                                                                                                   
                                                                                                                                
11:37:08 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN  noted that the prime  objection to opening                                                               
the  1002  study  area  has  been the  possible  effects  on  the                                                               
Porcupine  Caribou  herd.    He   asked  Chair  Westlake  if  his                                                               
understanding  of the  general consensus  of his  constituents is                                                               
that they  believe there  could be more  development in  the area                                                               
without affecting locals.                                                                                                       
                                                                                                                                
CHAIR WESTLAKE  replied that Representative  Neuman had  hit upon                                                               
something  missing,   which  is  "the  coastal   zone  management                                                               
component of  this."   He added,  "And having  that -  and having                                                               
local input  back in there -  certainly would bolster that."   He                                                               
reiterated  that  the  people  in  the  area  would  welcome  the                                                               
opportunity to have  the jobs that would result  from the opening                                                               
of ANWR.   He  emphasized the importance  of having  coastal zone                                                               
management.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  NEUMAN   noted  that  in  Kotzebue,   a  wildlife                                                               
subsistence  board had  been created  to manage  wildlife in  the                                                               
area from  the Red Dog Mine  to the fort.   He said if  there was                                                               
going  to be  any detrimental  effect from  a project,  the board                                                               
could stop the  project.  He asked the sponsor  if he anticipated                                                               
there might  be a local  board to  oversee the 1002  region, such                                                               
that  the  Natives  in  the area  could  suspend  development  or                                                               
oversee the wildlife management in the area.                                                                                    
                                                                                                                                
CHAIR  WESTLAKE, regarding  the overseeing  of the  Red Dog  Mine                                                               
projects, emphasized that  the board had been  created right from                                                               
the start.  He said, "Everything  was above board, and it works."                                                               
Notwithstanding that,  he said  he could not  predict how  such a                                                               
board could work  in conjunction with possible  projects in ANWR,                                                               
"because we're not there yet."                                                                                                  
                                                                                                                                
REPRESENTATIVE NEUMAN  directed attention  to the  first sentence                                                               
of the  last paragraph  of the sponsor  statement, which  read as                                                               
follows, [original punctuation provided]:                                                                                       
                                                                                                                                
     HJR 5 urges  Congress to take action and  open the 1002                                                                    
     Area to  oil and gas development  and to do so  in ways                                                                    
     that protect  local residents as well  as the Porcupine                                                                    
     Caribou herd.                                                                                                              
                                                                                                                                
REPRESENTATIVE NEUMAN  asked the bill  sponsor if he  could offer                                                               
clarification as to what type of protection he had in mind.                                                                     
                                                                                                                                
CHAIR  WESTLAKE said  there would  be further  discussion on  the                                                               
topic.   He stated,  "Just me  answering those  alone is  doing a                                                               
disservice to  the people in Alaska."   He said he  would like to                                                               
hear both sides of the issue.                                                                                                   
                                                                                                                                
11:40:34 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE EDGMON  said one  big difference of  the Northwest                                                               
Arctic  Borough is  the fact  that  it is  an organized  borough;                                                               
therefore, it  has more authority through  its subsistence board,                                                               
which  has been  staffed  by  elders from  its  inception in  the                                                               
1980s, at the outset of the Red Dog project.                                                                                    
                                                                                                                                
CHAIR  WESTLAKE  offered that  at  the  time  there had  been  an                                                               
agreement through Cominco Alaska and NANA Regional Corporation.                                                                 
                                                                                                                                
REPRESENTATIVE EDGMON  indicated that a grant  had been involved,                                                               
and  it  was  more  enforceable,   because  there  had  been  the                                                               
formation of  a borough.   He offered his understanding  that the                                                               
1002 study area does not reside in the North Slope Borough.                                                                     
                                                                                                                                
MR. LOGAN  offered his  understanding that  Representative Edgmon                                                               
is correct.                                                                                                                     
                                                                                                                                
REPRESENTATIVE   EDGMON  recollected   that  the   aforementioned                                                               
borough formation  played a  big role in  local control  over the                                                               
Red Dog project.                                                                                                                
                                                                                                                                
11:42:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  TUCK  opined  that  it is  important  to  include                                                               
language in  HJR 5  seeking protection  of the  Porcupine Caribou                                                               
herd, because  there may be  opposition [to the opening  of ANWR]                                                               
from members of U.S. Congress,  and such provisions may give them                                                               
confidence  that  Alaska  intends  to do  things  right,  protect                                                               
everyone's interest, and have sound development of resources.                                                                   
                                                                                                                                
11:43:13 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN  opined that the  issue of opening  ANWR is                                                               
an important  one that  has come  before the  legislature before.                                                               
He related  that he  thinks the issue  of wildlife  is important,                                                               
and  he   explained  that  because   Chair  Westlake  is   a  new                                                               
legislator, he would like to find  out his stance on the issue of                                                               
wildlife management, restrictions on  hunting, and whether or not                                                               
the herd is currently a "level herd."                                                                                           
                                                                                                                                
CHAIR  WESTLAKE said  there  are  several herds  out  there.   He                                                               
indicated that  [the number of  caribou in the area]  has dropped                                                               
some, but has leveled out.                                                                                                      
                                                                                                                                
11:43:54 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KNOPP,  as one  who had  previously worked  in the                                                               
area  being discussed,  noted  that while  some  locals had  been                                                               
allowed  to  hunt,  those  visiting or  working  there  were  not                                                               
allowed to  do so.   He said the  state makes provisions  for its                                                               
wildlife  through a  regulatory process.   He  stated that  other                                                               
than making  reference to  that regulatory  process, he  would be                                                               
reluctant to insert any details  to wildlife management in HJR 5.                                                               
He said he  would like to see  a resolution of support  for HJR 5                                                               
from the  people of  Kaktovik, since that  community is  close to                                                               
[the 1002 study area].                                                                                                          
                                                                                                                                
11:45:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON expressed support for  HJR 5.  He stated                                                               
that he  thinks the area  can be opened [to  development] safely.                                                               
He directed attention  to language on page 3, lines  7, of HJR 5,                                                               
which   references   offshore   drilling.      He   offered   his                                                               
understanding that the  bill sponsor is trying  to emphasize that                                                               
"if  there's  going to  be  any  federal reluctance  on  offshore                                                               
drilling, it's all the more important to do ANWR."                                                                              
                                                                                                                                
CHAIR  WESTLAKE  confirmed  that  with the  closing  of  offshore                                                               
drilling, "this  makes it even  more imperative; this is  what we                                                               
have now."  He indicated that  [oil spills] can be contained more                                                               
easily on land.                                                                                                                 
                                                                                                                                
11:46:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE TUCK  said Alaska has repeatedly  demonstrated how                                                               
well  it  does  on  the  North Slope  with  land  drilling.    He                                                               
mentioned the oil spill in the  Gulf of Mexico and asked, "Why in                                                               
the world do  we want to push people offshore  into the dangerous                                                               
oil spill  potential when we can  do it safely right  here in the                                                               
1002 area?"  He encouraged opening  the 1002 study area.  He said                                                               
it  had been  pointed out  "by our  presenter" that  it would  be                                                               
safe.  He offered his understanding  that the size of the caribou                                                               
herds  had grown  three times  its  size since  the pipeline  was                                                               
built, which he said shows  that resource development and caribou                                                               
herds can exist side by side.                                                                                                   
                                                                                                                                
11:48:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  NEUMAN related  he had  heard that  the footprint                                                               
being considered in  area 1002 is similar in size  to the Houston                                                               
Airport in the middle  of the state of Texas.   He asked the bill                                                               
sponsor to describe how much land would actually be used.                                                                       
                                                                                                                                
MR.  LOGAN  said  the  answer  depends  largely  on  the  federal                                                               
legislation that  authorizes the  exploration.  He  said recently                                                               
bills that have  been introduced have designated  less than 2,000                                                               
acres  for service  development.   He  mentioned preservation  of                                                               
land  and  wildlife  species,  as  well  as  the  development  of                                                               
directional drilling.   He said  several years ago,  U.S. Senator                                                               
Lisa Murkowski  introduced a  bill to  allow development  of ANWR                                                               
from outside its borders using only directional drilling.                                                                       
                                                                                                                                
REPRESENTATIVE NEUMAN noted  that HJR 5 speaks to  the 1002 area,                                                               
and  he   asked  again  how   much  area  would  be   needed  for                                                               
development.                                                                                                                    
                                                                                                                                
CHAIR WESTLAKE said he does not know the answer at this time.                                                                   
                                                                                                                                
11:50:08 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE EDGMON directed attention  to the second "WHEREAS"                                                             
clause, on page 2, lines 5-7, of HJR 5, which read as follows:                                                                  
                                                                                                                                
     WHEREAS  the 1002  study area  is part  of the  coastal                                                                  
     plain located within the North  Slope Borough, and many                                                                    
     of the  residents of the  North Slope Borough,  who are                                                                    
     predominantly  Inupiat, are  supportive of  development                                                                    
     in the 1002 study area; and                                                                                                
                                                                                                                                
REPRESENTATIVE EDGMON  said he presumes  it would be  "almost pro                                                               
forma to get a gesture of support from the borough."                                                                            
                                                                                                                                
CHAIR  WESTLAKE answered  that  is correct.    He said,  "They've                                                               
already expressed support ...."                                                                                                 
                                                                                                                                
REPRESENTATIVE  EDGMON   remarked  that   in  his  time   in  the                                                               
legislature, he has  seen five versions of this  legislation.  He                                                               
said he  understands the intent  of expressing  the legislature's                                                               
unwavering support for  opening ANWR.  He said he  thinks this is                                                               
one  major   resource  development  project  that   "crosses  all                                                               
political boundaries" in terms of  support.  He expressed support                                                               
for HJR 5, and  stated that he would like it  to pass through the                                                               
legislature  in  an expedient  manner.    He  noted that  two  of                                                               
Alaska's congressional  delegates from  the U.S. Senate  would be                                                               
coming through  the Alaska legislature  in about a  month's time,                                                               
and  he  opined  it  would  be  appropriate  to  give  them  this                                                               
legislation  in order  to appeal  to the  new Administration  the                                                               
sense of strong support and urgency to "get this thing moving."                                                                 
                                                                                                                                
11:52:33 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  TUCK  directed  attention  to a  handout  in  the                                                               
committee packet, titled "ANWR Land  Use," which he said offers a                                                               
visual  of hypothetical  development  areas.   It  shows that  50                                                               
percent of ANWR is refuge land;  42 percent of ANWR is wilderness                                                               
land; 8 percent of ANWR is the  1002 area; and .08 percent of the                                                               
land,  noted by  two red  dots, is  the hypothetical  development                                                               
area.   He said that is  a miniscule area compared  to the entire                                                               
ANWR area.                                                                                                                      
                                                                                                                                
11:53:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN  first noted  for public interest  that the                                                               
language  on page  3,  lines 6-11,  of HJR  5  gives the  acreage                                                               
information.   He then asked  whether the state has  received all                                                               
the federal land transfers that are due.                                                                                        
                                                                                                                                
MR. LOGAN offered  his understanding that the State  of Alaska is                                                               
still due land from the federal government.                                                                                     
                                                                                                                                
REPRESENTATIVE NEUMAN  suggested a  change to the  proposed joint                                                               
resolution  to include  a  request  for those  lands  due to  the                                                               
state.  He  said he believes the Department  of Natural Resources                                                               
would love  to manage  more state-owned land,  so that  the state                                                               
could gain royalties.                                                                                                           
                                                                                                                                
CHAIR WESTLAKE concurred.                                                                                                       
                                                                                                                                
11:54:39 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  offered  his  understanding  that  the                                                               
State of  Alaska has been  given, either  "in fee" or  "other not                                                               
yet fully deeded  lands" of 100 million acres and  is entitled to                                                               
5 million  more.  Further, he  said he thinks the  land would not                                                               
be  eligible  for  selection.    He noted  there  is  a  national                                                               
movement  to convert  federal land  to state  ownership; however,                                                               
the  Secretary of  the Interior  designee, Ryan  Zinke, does  not                                                               
favor that approach.  He  allowed that with a new Administration,                                                               
anything could happen.                                                                                                          
                                                                                                                                
11:55:40 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE EDGMON observed  that the aforementioned Secretary                                                               
of  the  Interior designee  was  not  listed under  the  "COPIES"                                                             
portion of HJR  5, because he had not yet  been confirmed, and he                                                               
questioned  whether  the  timing of  [Mr.  Zinke's]  confirmation                                                               
would  comport with  the  timing of  passing  the proposed  joint                                                               
legislation through the Alaska State Legislature.                                                                               
                                                                                                                                
MR. LOGAN  indicated that  legal counsel had  been sought  in the                                                               
drafting of  HJR 5,  and he  confirmed that  some names  had been                                                               
left out because of the timing of the proposed legislation.                                                                     
                                                                                                                                
11:56:32 AM                                                                                                                   
                                                                                                                                
CHAIR WESTLAKE announced that HJR 5 was held over.                                                                              

Document Name Date/Time Subjects
HJR 5 Sponsor Statement.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 ver D.PDF HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 Fiscal Note LAA.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 Supporting Document ANWR All Areas.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 Supporting Document ANWR Land Use.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 - Supporting Document- ANWR NETL.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 - Supporting Document- Enivromentally Responsible Energy.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 Supporting Document DNR Report 2013.pdf HAET 1/24/2017 11:30:00 AM
HJR 5
HJR 5 - Supporting Document - Estimates of Undiscovered Oil and Gas Resources.pdf HAET 1/24/2017 11:30:00 AM
HJR 5