03/15/2004 01:07 PM House RES

SB 265-OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION                                                                               
                                                                                                                                
[Contains discussion of SB 266]                                                                                                 
                                                                                                                                
CO-CHAIR MASEK announced  that the first order  of business would                                                               
be  CS FOR  SENATE BILL  NO. 265(RES),  "An Act  relating to  the                                                               
schedule of  proposed oil and  gas lease  sales and to  a related                                                               
report to the legislature; and  providing for an effective date."                                                               
[SB 265 was  sponsored by the Senate Rules  Standing Committee by                                                               
request of the governor.]                                                                                                       
                                                                                                                                
Number 0094                                                                                                                     
                                                                                                                                
MARK  MYERS,  Director, Division  of  Oil  & Gas,  Department  of                                                               
Natural Resources (DNR), explained that  CSSB 265(RES) and SB 266                                                               
are bills to  help enable DNR to  hold a Bristol Bay  oil and gas                                                               
lease  sale in  the fall  of 2005.   Under  current statute,  the                                                               
state,  before making  any  changes in  the  areawide sale,  must                                                               
notify   the  legislature   in  the   first  [session]   of  that                                                               
legislature and two  years in advance of the  sale; under current                                                               
law,  the state  would have  to  notify the  legislature of  this                                                               
lease sale  at the  beginning of  the first  session of  the next                                                               
legislature.    In  addition,   fulfilling  the  two-year  notice                                                               
requirement will mean  that the earliest the sale  could occur is                                                               
2007.   Therefore, DNR and  the governor are requesting  a change                                                               
to that notification procedure.                                                                                                 
                                                                                                                                
MR. MYERS  specified that  the proposed  change in  CSSB 265(RES)                                                               
would  allow the  state to  notify the  legislature anytime  with                                                               
regard to  the changes to  the sale and  process.  It  would also                                                               
require  that  annually,  in  February,  DNR  would  provide  the                                                               
legislature with a  report laying out the  five-year schedule for                                                               
areawide  lease  sales.   The  aforementioned  proposal seems  to                                                               
provide good balance in that  additional notification is provided                                                               
while allowing flexibility  to add sales to  the schedule without                                                               
a potential three- to four-year delay in a sale.                                                                                
                                                                                                                                
MR.  MYERS highlighted  that the  notification  doesn't mean  the                                                               
sale will  occur; it  merely allows  the process  to occur.   The                                                               
process includes  a best interest finding  document, which weighs                                                               
whether  a sale  is in  the state's  best interests.   Mr.  Myers                                                               
referred to  a map that  specified the schedule based  on passage                                                               
of CSSB  265(RES).  With its  passage, prior to the  sale there'd                                                               
be  a long  period of  review, public  input, a  preliminary best                                                               
interest finding, public comment  on the aforementioned document,                                                               
and a  final best  interest finding.   Even  with this  bill, the                                                               
earliest  this process  could happen  is in  the fall  2005.   He                                                               
clarified that this  bill will allow the state  to accelerate the                                                               
process for  the Bristol Bay lease  sale by allowing the  sale in                                                               
the fall of 2005, rather than January 2007.                                                                                     
                                                                                                                                
Number 0418                                                                                                                     
                                                                                                                                
MR.  MYERS, in  response to  Representative Stepovich,  clarified                                                               
that the  bill amends the entire  process.  If the  state were to                                                               
contemplate future  areawide sales,  it would  be under  the same                                                               
timeframe proposed in the bill.   However, the immediate need for                                                               
the bill is for the proposed Bristol Bay lease sale.                                                                            
                                                                                                                                
Number 0480                                                                                                                     
                                                                                                                                
CO-CHAIR  DAHLSTROM   moved  to  report  CSSB   265(RES)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  note.    There  being no  objection,  CSSB  265(RES)  was                                                               
reported from the House Resources Standing Committee.