03/20/1996 08:20 AM House RES

 HB 388 - OIL & GAS LEASING; BEST INT. FINDINGS                              
                                                                               
 The first order of business was CSHB 388(O&G), "An Act revising               
 laws relating to oil and gas leasing as related to land previously            
 the subject of a written best interest finding; amending provisions           
 setting out exceptions to sales, leases, or other disposals for               
 which a revised written best interest finding is not required;                
 authorizing annual offer of land for oil and gas leases if the                
 land, or adjacent land, was the subject of a best interest finding            
 and if preparation of a supplement to the best interest finding for           
 that land is not justified; and modifying the statement of purpose            
 in the Alaska Land Act as it applies to oil and gas leasing."                 
                                                                               
 Number 042                                                                    
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG, sponsor of the measure, related               
 that he had reviewed the proposed amendments and is in full                   
 accordance with the changes and duly noted a drafting change on               
 page 6.  He urged committee's approval of the legislation                     
 disclosing that it is caucus priority.                                        
                                                                               
 CO-CHAIRMAN GREEN recessed the committee due to lack of quorum.               
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN asked for explanation of the drafting           
 change on page 6.                                                             
                                                                               
 Number 141                                                                    
                                                                               
 CO-CHAIRMAN GREEN explained the change was a drafting preference by           
 the drafter which rearranged committee recommendations.                       
                                                                               
 Number 212                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG approved of the drafting change because he            
 felt that it made the language clearer.                                       
                                                                               
 CO-CHAIRMAN GREEN announced that the committee had a quorum and               
 entertained motion to adopt the committee substitute.                         
                                                                               
 CO-CHAIRMAN BILL WILLIAMS moved for the adoption of the proposed              
 committee substitute for HB 388(RES), Version "M."                            
                                                                               
 CO-CHAIRMAN GREEN asked if there was an objection.  Hearing none,             
 CSHB 388(RES), Version "M" was adopted.                                       
                                                                               
 Number 281                                                                    
                                                                               
 REPRESENTATIVE JOHN DAVIES offered the following amendment to page            
 6, line 27:                                                                   
                                                                               
      Following:  "may"                                                        
      Insert:  ", for state land north of the Umiat baseline."                 
                                                                               
 REPRESENTATIVE DAVIES explained that the amendment would make the             
 bill applicable to the North Slope.  The reason being he believes             
 the situation on the North Slope where the homogeneous                        
 distributions of land there are suitable to the areawide proposals            
 in HB 388, and the heterogeneous nature of the Cook Inlet Basin               
 which are not so suitable to the bill, thus the reason for offering           
 the amendment.                                                                
                                                                               
 Number 350                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG indicated objection to the adoption of the            
 amendment, saying that the amendment does a very specific thing.              
 The bill before the committee, Version M, is non-specific to area,            
 it is also discretionary in a large degree.  The Oil and Gas and              
 Resources Committees spent a substantial time, during the interim,            
 having major discussions and hearings.  This is a topic that was              
 discussed in the Governor's Oil and Gas Policy Council and there              
 was concern expressed by the Administration about the Cook Inlet              
 area.  That is why major accommodations were made and revisions in            
 the original bill to remove specific geographic areas from the                
 statutory changes to give the commissioner the ability to                     
 incrementally implement this process as he sees fit.  As the we               
 have heard from the director of the Division of Oil and Gas, he is            
 in support of this.                                                           
                                                                               
 CO-CHAIRMAN GREEN addressed Ken Boyd for his position on the                  
 amendment.                                                                    
                                                                               
 Number 490                                                                    
                                                                               
 KENNETH A. BOYD, Director, Division of Oil and Gas, Department of             
 Natural Resources, testified via teleconference from Anchorage.  He           
 stated he understands the amendment.  He said, "Once you build a              
 foundation finding, I think that's the key.  As long as you have a            
 complete finding, the annual offer of sales, no matter where they             
 are, is somewhat perfunctory.  The sale isn't the issue, it is the            
 finding and once you can do the finding, you can have the sale.               
 So, I don't think you absolutely need sale area specificity, but I            
 do know that the first sale that will take place under this new               
 system, if you like - it isn't really new - it's new and (indisc.),           
 will take place on the North Slope and it will take place between             
 the Colville and the (indisc.) as it is currently under schedule,             
 as the letter I wrote to the committee on the sixteenth of                    
 January."                                                                     
                                                                               
 Number 568                                                                    
                                                                               
 MR. BOYD felt that it would be harder in Cook Inlet because the               
 title is less clear, there are more people living there and the               
 land ownership is somewhat uncertain.                                         
                                                                               
 MR. BOYD said he believes that the process, as described in the new           
 legislation, is universally applicable.  He said, "Only time will             
 tell, as to whether we can create a finding that will satisfy all             
 the people that will be subjected to that finding, but once you do            
 that - once you have that foundation finding and give people the              
 opportunity to comment on a yearly basis, and create a supplement             
 to the finding based on that new information, I do not believe that           
 you would need area specificity."                                             
                                                                               
 Number 621                                                                    
                                                                               
 CO-CHAIRMAN GREEN said that he would object to Representative                 
 Davies amendment.  He then asked for a roll call vote.                        
 Representatives Davies and Nicholia voted in favor of the                     
 amendment.  Representatives Austerman, Ogan, Williams and Green               
 voted against the amendment.  So, the amendment failed.                       
                                                                               
 Number 671                                                                    
                                                                               
 PAT FOLEY, Chairman, Lands Exploration and Operations Committee,              
 Alaska Oil and Gas Association, testified via teleconference from             
 Anchorage.  He stated that he had nothing to add to the testimony             
 except his support for committee substitute, Version M.                       
                                                                               
 Number 699                                                                    
                                                                               
 BRADLEY PENN, Marathon Oil Company, was next to testify via                   
 teleconference from Anchorage.  He testified that the committee               
 substitute, Version M, streamlines the existing process and helps             
 the Division of Oil and Gas prepare best interest findings on an              
 areawide basis.  Marathon Oil Company supports CSHB 388(RES),                 
 Version (M).                                                                  
                                                                               
 CO-CHAIRMAN GREEN asked if there was anyone else wishing to                   
 testify.  There being none, he closed the public hearing on HB 388.           
                                                                               
 Number 783                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN made a motion to pass CSHB 388(RES),                 
 Version M, out of committee with individual recommendations and a             
 zero fiscal note.                                                             
                                                                               
 CO-CHAIRMAN GREEN called for a brief at ease.                                 
                                                                               
 Number 829                                                                    
                                                                               
 CO-CHAIRMAN GREEN acknowledged the motion to move CSHB 388(RES),              
 Version M.                                                                    
                                                                               
 Number 840                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN then withdrew his motion.                            
                                                                               
 CO-CHAIRMAN GREEN announced the committee will probably be recessed           
 until later in the day at which time a vote will be taken.                    
                                                                               
 HB 388 - OIL & GAS LEASING/ BEST INT. FINDINGS                              
                                                                               
 Number 454                                                                    
                                                                               
 REPRESENTATIVE RAMONA BARNES moved and asked unanimous consent to             
 move CSHB 388(RES) from committee with individual recommendations.            
                                                                               
 Number 474                                                                    
                                                                               
 REPRESENTATIVE DAVIES objected.                                               
                                                                               
 CO-CHAIRMAN GREEN asked for a roll call vote.  Representatives                
 Austerman, Barnes, Kott, Long, Nicholia, Williams and Green voted             
 in favor of moving the bill.  Representative Davies voted against             
 moving the bill.  So, CSHB 388(RES) moved out of the House                    
 Resources Committee.