Legislature(2003 - 2004)

02/20/2003 01:45 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 101                                                                                                            
                                                                                                                                
     An Act  making a  special appropriation  for a  grant to                                                                   
     Arctic  Power  to  promote  the opening  of  the  Arctic                                                                   
     National  Wildlife Refuge  for oil  and gas  exploration                                                                   
     and development; and providing for an effective date.                                                                      
                                                                                                                                
TOM WRIGHT, HOUSE FINANCE STAFF,  REPRESENTATIVE JOHN HARRIS,                                                                   
stated that  HB 101 would  appropriate $3 million  dollars in                                                                   
general  funds to  Arctic Power  to  use in  its campaign  to                                                                   
secure  necessary   support  in  the  U.S.   Senate  to  pass                                                                   
legislation  opening Arctic National  Wildlife Refuge  (ANWR)                                                                   
for oil exploration.  The Budget  Reconciliation bill will be                                                                   
considered early in the Congressional  session.  He commented                                                                   
that  it is  important that  Arctic  Power be  active in  its                                                                   
promotion of opening ANWR throughout  the early part of 2003.                                                                   
                                                                                                                                
Mr. Wright noted that HB 101 would  also appropriate $100,000                                                                   
in general  fund dollars  to the  native village of  Kaktovik                                                                   
for their community  outreach effort to gain  support for the                                                                   
opening  of ANWR  from Congressional  members in  Washington,                                                                   
D.C.                                                                                                                            
                                                                                                                                
He  added  that Alaska's  Congressional  delegation  believes                                                                   
that they  may have  the support to  pass ANWR language  this                                                                   
year.   The  educational  efforts  provided  by Arctic  Power                                                                   
could very  well tip  the scales  in Alaska's favor  whenever                                                                   
that  vote reaches  the  Senate floor.    With the  long-term                                                                   
decrease  in  State  revenue  from  existing  fields,  it  is                                                                   
imperative that Alaska develops  additional new fields in the                                                                   
future.  ANWR is an important part of our fiscal future.                                                                        
                                                                                                                                
Representative  Foster  inquired   how  many  years  had  the                                                                   
Legislature been attempting to achieve the opening of ANWR.                                                                     
                                                                                                                                
Mr. Wright  responded that it has  been nine to ten  years in                                                                   
the making.                                                                                                                     
                                                                                                                                
MIKE NAVARRE,  (TESTIFIED VIA  TELECONFERENCE), ARCTIC  POWER                                                                   
BOARD, REPRESENTING SELF, KENAI,  encouraged the Committee to                                                                   
support  the proposed  legislation  and  ongoing funding  for                                                                   
Arctic Power.   He noted that he had lobbied  for opening the                                                                   
fields of ANWR  for many years and that area  has the highest                                                                   
discovery  potential  in  North  America.   He  claimed  that                                                                   
opening  ANWR   would  provide   the  State  of   Alaska  the                                                                   
opportunity, which will pay investments and great returns.                                                                      
                                                                                                                                
SALLY ANN  CAREY, (TESTIFIED  VIA TELECONFERENCE),  MEMBER OF                                                                   
ARCTIC  POWER,  HEALTH,  SAFETY  AND  ENVIRONMENTAL  TRAINING                                                                   
CONSULTANTS,  ANCHORAGE, discussed  that  $3 million  dollars                                                                   
was a  small investment  for the return  that it  would bring                                                                   
into  Alaska.   Opening ANWR  would  extend Alaskan  careers,                                                                   
production, and sales of local  product, services and funding                                                                   
for  our State.   She  encouraged that  funding Arctic  Power                                                                   
would be a prudent decision.                                                                                                    
                                                                                                                                
MARY   SHIELDS,  (TESTIFIED   VIA  TELECONFERENCE),   GENERAL                                                                   
MANAGER, NORTHWEST  TECHNICAL  SERVICES, ANCHORAGE,  spoke in                                                                   
support  of the proposed  legislation.   She emphasized  that                                                                   
the future  is now and  that it is  time to open  the Arctic.                                                                   
She encouraged  the Legislature's  support of passage  of the                                                                   
                                         st                                                                                     
bill with an effective date of January 1.                                                                                       
                                                                                                                                
BRAD SNOW,  (TESTIFIED VIA TELECONFERENCE),  SELF-TOUR GUIDE,                                                                   
FAIRBANKS, testified in opposition  to HB 101.  He noted that                                                                   
he opposed providing  funds to an organization  that directly                                                                   
threatens his  livelihood.  He  claimed that through  support                                                                   
of the  proposed legislation,  the State would  undermine the                                                                   
infrastructure of the tourism industry.                                                                                         
                                                                                                                                
DEB   MOORE,    (TESTIFIED   VIA   TELECONFERENCE),    ARCTIC                                                                   
COORDINATOR,    NORTHERN   ALASKA    ENVIRONMENTAL    CENTER,                                                                   
FAIRBANKS,  spoke in  opposition to  HB 101.   She  expressed                                                                   
concern for  the non-representation  of environmental  groups                                                                   
during  the process.   She stressed  that Arctic  Power  is a                                                                   
special interest  group whose  sole purpose  is to  lobby the                                                                   
opening of ANWR.  She claimed  that it is inappropriate to be                                                                   
using State  money for a  special interest group  considering                                                                   
that 1/3 of the State's population opposes the drilling.                                                                        
                                                                                                                                
Ms. Moore criticized  supporting private industry  with State                                                                   
resources,  especially  in times  of  financial  constraints.                                                                   
State  money should  be  spent  for things  that  are in  the                                                                   
interest of  all Alaskans and  serve the public at  large and                                                                   
not just  the oil  industry and their  allies.  She  proposed                                                                   
that industry fund the opening  of ANWR.  Ms. Moore urged the                                                                   
Committee to oppose HB 101.                                                                                                     
                                                                                                                                
LUCI BEACH,  (TESTIFIED VIA TELECONFERENCE),  GWITCH STEERING                                                                   
COMMITTEE, FAIRBANKS,  testified in  opposition to  the bill.                                                                   
She discussed the  sacred significance of these  lands to her                                                                   
culture and her people.  Ms. Beach  voiced concern that while                                                                   
the State budget  was being heavily cut, the  Legislature was                                                                   
considering  funding a  private endeavor.   She stressed  the                                                                   
closure of  schools in rural areas,  as well as  agency cuts.                                                                   
Ms. Beach  stressed that  the oil  companies should  bear the                                                                   
financial burden of such an endeavor.                                                                                           
                                                                                                                                
GINNY  WOOD,   (TESTIFIED  VIA  TELECONFERENCE),   FAIRBANKS,                                                                   
testified  in  opposition the  bill.   She  noted  historical                                                                   
examples of  economic gains, which  claimed to  develop Artic                                                                   
resources.   She  maintained  that the  present  plan is  not                                                                   
accountable  and that  the economic  feasibility is  dubious.                                                                   
She expressed  concern over what  she termed a great  deal of                                                                   
misinformation  regarding  the  amount  of oil  available  in                                                                   
Arctic area.  She urged that the  Committee not pass the bill                                                                   
from Committee.                                                                                                                 
                                                                                                                                
JIM  SYKES,  (TESTIFIED  VIA  TELECONFERENCE),  FOUNDER,  OIL                                                                   
WATCH-ALASKA, MAT-SU,  urged that the Committee  veto HB 101.                                                                   
The millions  of dollars already  given to Arctic  Power have                                                                   
produced nothing  to date.  He  urged that there be  an audit                                                                   
on the use of State funds.                                                                                                      
                                                                                                                                
Mr. Sykes  noted that British  Petroleum (BP) has  pulled out                                                                   
of Arctic  Power.   He claimed that  Arctic Refuge  oil would                                                                   
mean  a cut of  40% in  royalties to  the State.   The  State                                                                   
'must'  focus  on  the  development   of  State  lands  as  a                                                                   
priority.   The  State  cannot afford  to  throw "good  money                                                                   
after bad", when the State needs  public education and public                                                                   
safety.  He mentioned the "windfall  profit tax" and how much                                                                   
that tax  would have generated for  the State had it  been in                                                                   
place.  He reiterated that Arctic Power should be audited.                                                                      
                                                                                                                                
KIMBERLY DUKE,  EXECUTIVE DIRECTOR, ARCTIC  POWER, ANCHORAGE,                                                                   
clarified  that  Arctic  Power  has  been  working  with  the                                                                   
Congressional  delegation, the  Governor and the  Legislature                                                                   
for  opening  ANWR.    She  stressed  that  there  have  been                                                                   
considerable  successes  along  the  way and  that  with  the                                                                   
support  of  the President,  circumstances  have  never  been                                                                   
better.  Ms. Duke claimed that  investing in Arctic Power has                                                                   
always been  an investment of  Alaska's future.  Oil  and gas                                                                   
development  is  the 'bread  and  butter' of  Alaska's  State                                                                   
budget and  funds 80%  of the overall  budget.  She  stressed                                                                   
that it would be a wise investment for Alaska.                                                                                  
                                                                                                                                
The  U.S.  Geological   Survey  has  placed   a  conservative                                                                   
estimate of 10 billion barrels  of oil in the ANWR area.  She                                                                   
stated that would  be equal to the amount recovered  from the                                                                   
Prudoe Bay field.  That level  of production would double the                                                                   
level of  production in  the pipeline  right now bringing  it                                                                   
back to capacity of 2 million barrels per day.                                                                                  
                                                                                                                                
Ms. Duke reminded  members that the land is  federal land and                                                                   
that the  State will  receive 50% in  royalties.   In current                                                                   
legislation,  that would  amount to $1.5  billion dollars  in                                                                   
royalties for the State of Alaska.                                                                                              
                                                                                                                                
She noted that  U.S. Senator Stevens has indicated  that when                                                                   
the refuge  was expanded in  1980, his 'compromise  deal' was                                                                   
to  keep  the  coastal  plain  area  open  for  oil  and  gas                                                                   
exploration.  The Department  of Interior  approved that  and                                                                   
recommended exploration  in 1987.  Opening ANWR  will provide                                                                   
jobs and increase domestic production.                                                                                          
                                                                                                                                
Ms. Duke stressed  that Arctic Power has been  working on the                                                                   
issue  for 10 years.   She  noted that  by the  end of  2002,                                                                   
there  were   20  votes  through  Congress   through  various                                                                   
committees and  on the floor.   President Clinton  vetoed the                                                                   
legislation in 1995.   In 2001, the House  passed legislation                                                                   
and  it was  vetoed and  did not  move past  that body  until                                                                   
2002.  She  noted that political considerations  have changed                                                                   
dramatically since that time.                                                                                                   
                                                                                                                                
Ms.  Duke  commented  on  the 'open  book'  policy  of  grant                                                                   
funding  done by  Arctic Power,  noting that  their money  is                                                                   
audited.                                                                                                                        
                                                                                                                                
Representative Stoltze  asked if during the  process if there                                                                   
had  been  any   efforts  to  preclude  certain   areas  from                                                                   
drilling.                                                                                                                       
                                                                                                                                
Ms. Duke responded  that there had been a number  of attempts                                                                   
to preclude  certain areas  and there have  been a  number of                                                                   
bills regularly filed to open  areas.  The coastal plain area                                                                   
is outside  the designated wilderness  of the  Arctic Refuge.                                                                   
Out  of  19 million  acres,  there  are  8 million  acres  of                                                                   
designated  refuge,  which  would include  the  Brooks  Range                                                                   
where a lot of the tourist activities take place.                                                                               
                                                                                                                                
Representative  Stoltze  asked for  a composition  of  groups                                                                   
involved with Arctic Power.                                                                                                     
                                                                                                                                
Ms.  Duke   advised  that  Arctic   Power  is   a  non-profit                                                                   
organization,  '501  C6',  and  is operated  by  a  Board  of                                                                   
Directors.  Arctic Power has been  in existence for ten years                                                                   
and  it is  a  "grass  roots organization"  representing  the                                                                   
State of  Alaska in Congress in  this 'battle'.   She claimed                                                                   
that  Arctic  Power  has approximately  75%  support  in  the                                                                   
State.                                                                                                                          
                                                                                                                                
BARBARA HUF TUCKNESS, DIRECTOR  OF LEGISLATIVE & GOVERNMENTAL                                                                   
AFFAIRS, LOCAL 959, JUNEAU, spoke  on record in support of HB
101.   She noted that Arctic  Power is an excellent  resource                                                                   
for educating  the Alaskan people.   Ms. Huff  Tuckness noted                                                                   
that many members  in the Union are or have  been employed on                                                                   
the North Slope.                                                                                                                
                                                                                                                                
                                                                                                                                
TAPE HFC 03 - 23, Side A                                                                                                      
                                                                                                                              
                                                                                                                              
Ms.  Huff  Tuckness identified  job  opportunities  that  the                                                                   
State can look  forward to with development.   She urged that                                                                   
the State  look at  what can  proactively be  done, as  those                                                                   
resources are  needed for the  long term.  Ms.  Huff Tuckness                                                                   
strongly recommended  that the members support  and move from                                                                   
Committee, HB 101.                                                                                                              
                                                                                                                                
Representative Stoltze commented  that past Legislature's had                                                                   
gone on record  supporting the legislation  encouraging local                                                                   
hire and  fair share.  He  asked if oil companies  would have                                                                   
the same commitment  for lobbying for concerns  for the State                                                                   
of Alaska.                                                                                                                      
                                                                                                                                
Ms. Huff Tuckness believed that they would.                                                                                     
                                                                                                                                
Representative   Stoltze  reiterated,   asking  if   the  oil                                                                   
companies would  be attentive to  local hire and  those other                                                                   
provisions.   He pointed  out that  the Legislature  does not                                                                   
have  the same  interests  as the  oil  companies and  voiced                                                                   
concern that they take care of the local hire issues.                                                                           
                                                                                                                                
Ms.  Huff   Tuckness  explained   that  from  a   Legislative                                                                   
perspective,  there   are  many  issues  of   concern.    The                                                                   
Legislature  must  move forward  to  guarantee  that all  the                                                                   
issues are identified.                                                                                                          
                                                                                                                                
MATT DAVIDSON,  ALASKA CONSERVATION  ALLIANCE (ACA)  ADVOCATE                                                                   
FOR THE  ALASKA CONSERVATION  VOTERS, JUNEAU, requested  that                                                                   
the  bill  be  reconsidered.     He  noted  that  the  Alaska                                                                   
Conservation  Alliance (ACA) and  Alaska Conservation  Voters                                                                   
are sister  nonprofit organizations  dedicated to  protecting                                                                   
Alaska's environment  through public education  and advocacy.                                                                   
The  44 member  organizations and  businesses represent  over                                                                   
35,000  registered Alaskan  voters.   As  many Alaskans,  the                                                                   
members want to  be assured that the State's  limited general                                                                   
funds are  being put to the best  uses.  The State  has given                                                                   
Arctic Power  $7.5 million  dollars over  the past  10 years.                                                                   
Witnessing State agencies and  other entities being cut back.                                                                   
                                                                                                                                
Mr.  Davidson  interjected  that  before  appropriating  $3.1                                                                   
million  dollars to  Arctic  Power, legislators  should  seek                                                                   
answers to these questions:                                                                                                     
                                                                                                                                
        • Ask is this a responsible way to handle the                                                                           
           budget gap  with  the  limited funding  for  basic                                                                   
           protection of  fish habitat and  clean water.   He                                                                   
           asked  why  should  the  State  dump  millions  of                                                                   
           dollars into the Arctic Power black hole.                                                                            
                                                                                                                                
        • Ask where has the money gone.  In the last two                                                                        
           years,  Arctic  Power   has  received   almost  $5                                                                   
           million dollars  from  the  State of  Alaska  with                                                                   
           nothing to  show.   The  reports regarding  Arctic                                                                   
           Power indicate  that  they 'bankroll  high-priced'                                                                   
           lobby firms in Washington D.C.                                                                                       
                                                                                                                                
        • Ask why should Alaskans pay for an effort that                                                                        
           benefits multinational oil companies.                                                                                
                                                                                                                                
        • Ask how does the Legislature plan to hold Arctic                                                                      
           Power  accountable   for   those   general   funds                                                                   
           appropriated.                                                                                                        
                                                                                                                                
Mr.  Davidson concluded  that the  money under  consideration                                                                   
for  Arctic  Power's  use  is   funding  that  would  not  be                                                                   
available  to  address  statewide needs.    Essentially,  all                                                                   
Alaskans are being  asked to help finance the  oil industry's                                                                   
lobbying efforts  and in return,  it is reasonable  for full,                                                                   
public  disclosure  of  how  they   spend  that  money.    He                                                                   
encouraged members of the House  Finance Committee to ask for                                                                   
that information before authorizing any additional funds.                                                                       
                                                                                                                                
Co-Chair  Williams  stated  that  HB  101 would  be  HELD  in                                                                   
Committee for further consideration.                                                                                            

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