Legislature(2003 - 2004)
02/20/2003 01:45 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.