Legislature(1995 - 1996)
02/05/1996 08:13 AM House RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HSCR 1 - DISAPPROVING EXECUTIVE ORDER 92 Number 1888 CO-CHAIRMAN GREEN brought HSCR 1 before the committee. No one from the House Special Committee on Oil & Gas was available to testify. A memorandum from Representative Rokeberg, Chairman, House Special Committee on Oil & Gas to the House Resources Committee is as follows: "Executive Order No. 92 consolidates the Division of Oil and Gas with the Division of Geological and Geophysical Surveys located within the Department of Natural Resources. The testimony before the House Special Committee on Oil and Gas indicated that there is no consensus regarding whether the consolidation outlined in Executive Order No. 92 is the correct configuration of the two divisions. "Remarks during public testimony indicates there are both good and bad consequences if the consolidation goes forward. As a result of committee testimony, the members of the committee voted to introduce a special resolution to oppose the consolidation in order to expedite the process and move the executive order to the appropriate authorized committee. "In addition, we checked with Legislative Legal on the proper procedure for handling a resolution opposing an executive order. The legal memorandum we received stated that under Uniform Rule 21, joint standing committees must consider executive orders." Number 1924 NICO BUS, Acting Director, Division of Support Services, Department of Natural Resources provided background information on the bill. During last year's budget process, the funding for the director's position of the Division of Geological and Geophysical Surveys was deleted. He said the department then looked at the division to see if it warranted it's own division status. The commissioner asked the Alaska Geologic Mapping Advisory Board to establish a committee and assess the role and function of the Division of Geological & Geophysical Surveys and decide whether or not the department needed a director. MR. BUS said that report was finalized, last fall. The board recommended that the director/state geology office be relocated to Anchorage; recruiting through a nationwide recruiting system, and that the director be appointed for a five year term. Another recommendation was that the Division of Geological and Geophysical Surveys needed to have a strong presence in the state of Alaska because of its importance to the resource and because of recurring geological hazards. MR. BUS said another recommendation was that the geological surveys division pursue and develop partnerships with those who are working towards common goals. He said during the Fiscal Year 97 budget preparations, the department looked at efficiencies. The DNR did not want to diminish the mission of the Division of Geological and Geophysical Surveys, and the department also wanted to implement the recommendations of the Alaska Geologic Advisory Board. He said the DNR's objective was to strengthen the surveys and improve administrative support. As a result, the Department of Natural Resources proposed Executive Order No. 92. Number 2082 MR. BUS said, to make sure that the Division of Geological and Geophysical Surveys does not get absorbed into the Division of Oil and Gas, which was a concern of the House Special Committee on Oil and Gas, they will be doing best interest findings for the oil and gas people. The DNR basically wants to keep them separate in terms of budgetary issues. These two divisions will each have their own budget component and the legislature will have the opportunity to fund them at appropriate levels. The DNR plans to keep the field presence in tact for the geological surveys which it feels is very critical. MR. BUS said the consolidation provides some budget efficiencies by sharing administrative support for both divisions and, in that process, the DNR saves $50,000 in the FY97 budget, which is in line with what the legislature charged us with during the budget deliberations. MR. BUS said the DNR feels Executive Order No. 92 is an efficiency measure in state government aimed at improving cooperation and communication between the two divisions and strengthening their missions. In the process, the department is gaining budgetary and administrative efficiencies. He said Mr. Ken Boyd was available to answer programmatic questions. Number 2282 KENNETH A. BOYD, Director, Division of Oil and Gas, Department of Natural Resources, testified that the resolution combines two divisions with a long history of cooperation on various projects including methane projects, and North Slope field work in general. He hoped this combination will provide new opportunities to work together in the future. He said he strongly supports Executive Order No. 92. It is an opportunity for administrative efficiencies. Number 2347 CO-CHAIRMAN GREEN referred to Executive Order N0. 92. Section 3. AS 41.08.010 and Section 4. AS 41.08.020 and discussed requirements and duties of the state geologist. There is no prerequisite in the order requiring that the person who does the administration be a registered geologist; like the Oil and Gas Conservation Commission, for example. CO-CHAIRMAN GREEN said, speaking in accordance with the Special Committee on Oil and Gas, his concern is that, as a function, the prior Division of Geological and Geophysical Surveys would be under the auspices of the Division of Oil and Gas....end tape. TAPE 96-13, SIDE A Number 000 CO-CHAIRMAN GREEN stated that the geology surveys division has consistently been utilized by the minerals industry for their expertise, maps, and hazard specialization which are the described duties for the general public and for entities that do not have large and sophisticated groups of geological and geophysical expertise; whereas the oil and gas industry has these resources at their command. CO-CHAIRMAN GREEN mentioned his past association with the oil and gas industry and expounded on the industry's self-reliance in doing its own surveys. He alluded to the bidding on bonus lease sales and lease sales where there has been no bidding. He said a more direct example would be "bonus bidding" and "the money left on the table." What that is, is significant amounts of money left on the table, even with the most sophisticated geological departments in some of these companies. CO-CHAIRMAN GREEN declared that a better use of the agency's resource might be to keep the Division of Geological & Geophysical Surveys either autonomous or combined with the Division of Mines. He said he agreed with the House Special Committee on Oil and Gas and tended not to approve Executive Order No. 92. Number 327 MR. BOYD said the Division of Oil and Gas does not nominate areas for leasing, the division takes lease sale nominations from industry as far as the five-year process. The two lease sales that had no bidders, both of those areas were nominated by industry, in areas where they had an interest. As time passes, economics may change and companies interest may move, but industry does nominate the acreage. MR. BOYD continued, the purpose of the geology section in the Division of Oil and Gas is not just the technical part of the lease sale, it is there to do a lot of the work that involves unitization computerization and other issues that involve geological and geophysical knowledge. In summary, to protect the state's interest. MR. BOYD said he would try to do a good job as the state's geologist. It is not his intention to meld the groups together except to use the capabilities of both groups in a cross pollination. He would like the people in Fairbanks involved in day-to-day operations, the unitization and computerization functions and to learn how tract allocation works. He felt this is a valuable lesson for any geologist. Number 429 CO-CHAIRMAN GREEN commended Mr. Boyd on the work that he has been doing, he said the work is exemplary. Chairman Green clarified that his comments, in no way, reflect any disrespect for the great job Mr. Boyd is doing. Number 457 CO-CHAIRMAN WILLIAMS said the state is encouraging fiscal restraint and talking about consolidation in many areas. He asked Chairman Green that if his concern was resolved, would it hinder the industry to consolidate. Number 500 CO-CHAIRMAN said consolidation would not hurt the Division of Oil and Gas, it would help them. He said his concern is that the divisions would not stay separate, and the Division of Geological and Geophysical Surveys would not continue to be as aggressive in the charges that are incumbent upon them. He said if there is an economy of scale, he would rather see them combined with a group that does utilize them and stay focused on hard rock and tectonics. Number 643 REPRESENTATIVE AUSTERMAN asked if consolidation can be done and still protect those issues. He said, there is nothing wrong with saving money and now we are saying that we do not want to save money. CO-CHAIRMAN GREEN said there may be a better marriage that saves the same amount of money but does away with the potential of drifting into the wrong element. CO-CHAIRMAN GREEN said the intent of HSCR 1 is to not put the Division of Geological and Geophysical Surveys in the Division of Oil and Gas. Leaving it by itself will require a fiscal note, or continue without a leader, or meld them with the Division of Mines. Number 709 REPRESENTATIVE AUSTERMAN asked if the committee could amend the Executive Order No. 92 to delete the Division of Oil and Gas and include the minerals division. CO-CHAIRMAN GREEN said the House Resources Committee or someone would have to sponsor a bill to do that prior to February 11th. Number 751 REPRESENTATIVE OGAN moved HSCR 1 move from the House Resources Committee with individual recommendations and attached zero fiscal note. Hearing no objection, it was so ordered.
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