04/22/1996 08:11 AM House RES

 HB 381 - OIL AND GAS CONSERVATION & RECOVERY                                 
                                                                              
 Number 0061                                                                   
                                                                               
 CO-CHAIR GREEN announced that the first item on the agenda was HB
, an act relating to oil and gas conservation and recovery.                
                                                                               
 JEFF LOGAN, Legislative Aide to Representative Green, was first to            
 testify.  He read the sponsor statement into the record, "HB 381              
 clarified that the powers of the Alaska Oil and Gas Conservation              
 Commission (AOGCC) to prevent waste, protect correlative rights and           
 realize ultimate recovery on all state land lawfully subject to its           
 police powers prevails over a contrary decision by the DNR.                   
                                                                               
 AS 31.05.027 states very clearly that, `The authority of the                  
 commission applies to all land in the state lawfully subject to its           
 police powers.'  However, recently the administration has raised              
 the specter of overlapping jurisdiction."                                     
                                                                               
 MR. LOGAN referred to the document titled, "Decision Regarding                
 Jurisdiction," located in the committee packet and continued                  
 reading the statement, "We believe that a clear, concise line of              
 authority from the legislature to the independent agency, the oil             
 and gas commission, is important for the development of our                   
 hydrocarbon resources."                                                       
                                                                               
 Number 0177                                                                   
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN asked for a section by section                  
 analysis on HB 381.                                                           
                                                                               
 MR. LOGAN said the first section of HB 381 does exactly as the                
 language states, it allows the AOGCC to modify determination or               
 action by the commissioner of the Department of Natural Resources             
 (DNR) except for 38.05.180, subsections (p), (q) and (u).  He said            
 Section 1 does not allow the AOGCC to modify subsection (j), which            
 was HB 207, passed last year, allowing the commissioner of DNR to             
 change royalty rates.                                                         
                                                                               
 Number 0266                                                                   
                                                                               
 CO-CHAIR GREEN said the other sections of HB 381 have to do with              
 unitization, which is a prerogative of DNR as opposed to the AOGCC.           
 He said HB 381 says, where concessions or agreements have been                
 reached with DNR because the leases being on state property, if               
 there is a jurisdictional dispute which includes conservation or              
 correlative rights, the two prime functions of the AOGCC, the AOGCC           
 would have authority.  He said in other states with subsurface                
 mineral rights there is a continuing need to prevent waste of the             
 reservoir and protect correlative rights.  He said in all the                 
 boundaries, except for the Kenai Moose Range and the potential                
 Northstar unit, the mineral rights are kept by the state of Alaska.           
 He said, in the future, there are possibilities for Native                    
 ownership or federal ownership of subsurface mineral rights.  He              
 said HB 381 just makes a stronger statement about what is already             
 in state law.                                                                 
                                                                               
 Number 0400                                                                   
                                                                               
 CO-CHAIR BILL WILLIAMS made a motion to "move CSHB 381                        
 (indiscernible) with individual recommendations."  Hearing no                 
 objections CSHB 381 was moved from the House Standing Committee on            
 Resources.