Legislature(2009 - 2010)BARNES 124
03/30/2009 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR28 | |
| HCR10 | |
| HJR27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 28 | TELECONFERENCED | |
| *+ | HCR 10 | TELECONFERENCED | |
| *+ | HJR 27 | TELECONFERENCED | |
| + | TELECONFERENCED |
HJR 28-OPPOSE RESTRICTIONS ON OIL/GAS ACTIVITIES 1:03:00 PM CO-CHAIR JOHNSON announced that the first order of business would be, HOUSE JOINT RESOLUTION NO. 28, Urging the President of the United States and the United States Congress not to adopt any policy, rule, or administrative action or enact legislation that would restrict energy exploration, development, and production in federal and state waters around Alaska, the outer continental shelf within 50 miles of shore, and elsewhere in the continental United States; urging the President of the United States and the United States Congress to encourage and promote continued exploration, development, and production of domestic oil and gas resources. JOHN BITTNER, Staff, Representative Craig Johnson, Alaska State Legislature, introduced HJR 28 on behalf of Representative Johnson, sponsor. He reviewed the history of oil drilling within the Outer Continental Shelf (OCS) beginning in 1953 when the U.S. Congress passed the Submerged Lands Act which granted individual states the right to natural resources on submerged lands up to three miles off of shore. The act also re-affirmed federal claims to all resources on OCS submerged lands from three miles offshore to two hundred miles, with a few exceptions, he said. Later that same year, Congress passed the Outer Continental Shelf Lands Act outlining the federal responsibilities over these lands and authorizing the Secretary of Interior to lease those lands for resource development. Environmental activism in the 1960s and 1970s resulted in passage of the National Environmental Policy Act and the Clean Air Act, and creation of the Environmental Protection Agency. He said these and other regulatory bills created the core of the regulatory framework currently applicable to all extractive industries. MR. BITTNER noted that in the 1980s Congress passed various area-specific moratoriums on OCS drilling and during this time petroleum revenues dropped markedly for a variety of reasons. By 1990 the bans on drilling had encompassed so much of the U.S. Exclusive Economic Zone that a blanket moratorium on most areas was enacted by the president. In 2008, President Bush rescinded this moratorium and Congress followed suit by rescinding the ban on OCS leasing. This allowed the U.S. Minerals Management Service (MMS) to start the process of offering OCS lands for lease. He related that the MMS estimates that 574 million acres of the U.S. OCS are currently off limits and these banned areas contain an estimated 17.8 billion barrels of oil and 76.5 trillion cubic feet (TCF) of natural gas. MR. BITTNER stated that a recently released economic report, commissioned by Shell Oil on the economic impacts of OCS development in Alaska, projects that roughly 35,000 jobs will be created in the state over the 50-year period of OCS development and exploration, with those jobs representing a combined payroll of $72 billion. Direct petroleum revenue to the state is estimated at $5.8 billion, the majority of which will directly impact local governments through property taxes. MR. BITTNER said President Obama is delaying the lifting of the OCS drilling moratorium and Interior Secretary Salazar is expressing interest in closing or severely limiting OCS exploration and drilling in the Lower 48 in favor of an as yet uncrafted comprehensive energy plan. He noted that this kind of uncertainty adversely affects potential exploration and development in these areas because companies cannot afford to risk huge sums of capital to develop a resource unless there is a reasonable guarantee that their investment will be secure. To this effect, he said HJR 28 sends a clear message to the President, Secretary of the Interior, and Congress that no laws or administrative orders should be passed that would restrict OCS drilling and exploration in Alaska or the continental U.S. The resolution further urges that offshore exploration and drilling be encouraged. 1:07:09 PM CO-CHAIR NEUMAN asked whether other states have come up with resolutions similar to HJR 28. MR. BITTNER answered that there has been a pretty broad support among several states for OCS drilling. It took hold during the recent energy crisis when oil and gas was expensive and alternative sources of petroleum were being looked for. He said he does not have any specific resolutions from states, but that Congress has passed a resolution urging President Obama to support OCS drilling. REPRESENTATIVE SEATON inquired why HJR 28 only addresses submerged lands as far out as 50 miles rather than the 200-mile OCS limit. MR. BITTNER understood that this is because HJR 28 only looks at the resources in Alaska and most of Alaska's OCS resources currently being considered for development are within the 50- mile range. CO-CHAIR JOHNSON agreed with Mr. Bittner. Alaska is not a signator on the Law of the Sea Treaty, he added, so the decision was to keep the distance close. REPRESENTATIVE SEATON asked whether there is a separate designation of a 50-mile zone. CO-CHAIR JOHNSON said there is not, but that 50 miles is what is being looked at by Shell Oil in the Chukchi and Beaufort seas; thus, this is the area that he would like to address when Interior Secretary Salazar visits Alaska in April 2009. 1:10:02 PM CO-CHAIR NEUMAN related that representatives from the Aleutian Chain and Bristol Bay offered their support for off-shore development while visiting Juneau earlier this year because such development would create jobs and be safe. REPRESENTATIVE TUCK noted that beginning on page 2, line 31, the resolution reads: "in federal and state waters around Alaska, the outer continental shelf within 50 miles of shore, and elsewhere in the continental United States...." He inquired whether "elsewhere in the continental United States" expands the resolution beyond Alaska's interests. MR. BITTNER replied that HJR 28 specifically focuses on Alaska, but does include provisions in support of outer-continental drilling off the rest of the continental United States. CO-CHAIR JOHNSON added that the hope is other states will support and include Alaska when they pass their own resolutions. REPRESENTATIVE TUCK expressed his concern that Alaska's interests not be tied to a conglomerate of other state's interests and that Alaska speak for itself. 1:12:13 PM REPRESENTATIVE WILSON noted that the other states might want to address 200 miles offshore rather than 50 miles, given that 200 miles is what is included in the Law of the Sea Treaty. CO-CHAIR JOHNSON responded he would not oppose amending HJR 28 to 200 miles, even though the resolution was designed to encompass the lease sales that are happening in Alaska right now. He said he does not want to have Canada or Russia oppose the resolution given that Alaska is not a signator on the treaty and technically does not have jurisdiction over the 200 miles. REPRESENTATIVE GUTTENBERG asked whether there are any reasons where it might not be in the state's best interest to develop, such as geoducks or specific places. MR. BITTNER said he is sure there are, but he does not know about any specific sites since he does not know the combination of biology and potential petroleum reserves. He pointed out that before a lease can be issued, and even after it is issued, significant environmental and biological impact studies must be performed, which is taken into account. 1:15:12 PM REPRESENTATIVE TUCK inquired whether HJR 28 would override the wishes of local communities participating in the Coastal Zone Management Plan. MR. BITTNER answered that he understands the resolution would not because it deals only with the views on OCS drilling of the President, Secretary of the Interior, and Congress. CO-CHAIR JOHNSON interjected that a resolution only indicates the legislature's wishes; it has no legal standing and would not affect the Coastal Zone Management Plan. CO-CHAIR JOHNSON opened public testimony. 1:16:28 PM JASON BRUNE, Executive Director, Resource Development Council (RDC), supported HJR 28 on behalf of the RDC. He testified from the following written statement [original punctuation provided]: RDC is a statewide, non-profit, membership-funded organization founded in 1975. The RDC membership is comprised of individuals and companies from Alaska's oil and gas, mining, timber, tourism, and fisheries industries, as well as Alaska Native corporations, local communities, organized labor, and industry support firms. RDC's purpose is to link these diverse interests together to encourage a strong, diversified private sector in Alaska and expand the state's economic base through the responsible development of our natural resources. Oil and gas resources located in the Outer Continental Shelf out to 200 miles are vital to the economic viability of a gas pipeline to the Lower 48 and the continued operation of the Trans Alaska Pipeline System [TAPS]. Indeed, an additional 15 TCF of natural gas must be discovered for either the Trans- Canada or Denali pipeline projects to be economically viable over the long term. In addition, throughput in TAPS continues its decline from 2.1 million barrels of oil per day in the late 80s to one-third of that today. This trend can be reversed with production from the OCS where we should be encouraging development, not hampering it. No one has more care for the environment than Alaskans, and OCS development has a strong track record. It has coexisted with other industries including fishing, in Cook Inlet, the North Sea, and the Gulf of Mexico. Energy exploration, development, and production in federal and state waters around Alaska will occur in an environmentally-sensitive and responsible manner overseen by the strongest of regulatory regimes. When necessary, seasonal operating restrictions and mitigation measures to avoid conflicts with other resource users will be employed. Given the nation will remain heavily reliant on oil and gas development for decades, America must harness the significant energy resources beneath its most promising onshore and offshore oil and gas basins. It is important to take into consideration, when formulating public policy, that for every barrel of oil America refuses to develop domestically, it will have little choice but to import an equal amount from overseas - where weaker environmental regulations often apply. With the impact high-energy prices have on Americans and their economy, the U.S. has a moral obligation to develop domestic energy sources, and the OCS is the ideal location. The resources located in the OCS will buy us the time we need to develop the alternative and renewable energy resources that will someday break our reliance on foreign oil. MR. BRUNE, in regard to earlier discussion, stated that leases currently held in the Chukchi Sea are located between 60 and 120 miles offshore, in the Beaufort Sea they are up to 25 miles, and in the North Aleutian Basin the prospective areas are out to 25 miles. CO-CHAIR JOHNSON asked whether Mr. Brune would support changing the 50 miles to 200 miles. MR. BRUNE supported the 200 miles. 1:21:06 PM MARILYN CROCKETT, Executive Director, Alaska Oil & Gas Association (AOGA), stated that AOGA is the trade association for Alaska's oil and gas industry and it supports HJR 28. She testified as follows: Passage of this resolution will send an important message to the President and lawmakers in the nation's capital that Alaska recognizes the role that this state can play in securing critical domestic energy supplies. An energy plan for the nation will absolutely need to include Alaska since this state has over 30 percent of the nation's technically recoverable resources. In the offshore alone, the MMS estimates that Alaska's OCS contains an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas resources. Furthermore, ... the Chukchi Sea Basin ... has been characterized as the most promising and materially undeveloped offshore petroleum base in the U.S. So, clearly, Alaska can play a very, very critical role in terms of the nation's energy supply. MS. CROCKETT noted that in addition to the jobs and payroll that would result within Alaska from OCS development, $1.3 trillion would be generated by OCS development in the Lower 48 for federal, state, and local government, as well as 160,000 jobs. She said the oil and gas industry has already spent billions of dollars for the rights to explore and develop these OCS resources offshore of Alaska. While harsh climate and remote locations are challenges to OCS development, HJR 28 is a step toward mitigating other types of challenges, such as access restriction. 1:23:30 PM TOM LAKOSH stated that he is a victim of the Exxon Valdez oil spill and while he does not have a problem with offshore gas exploration and development, he does have grave concerns about Alaska's inadequate oil spill prevention and response, particularly in Alaska's ice-bearing waters and extreme sea states. He said he has researched oil spill prevention and response technology and when he presented that technology at a 2003 conference, experts agreed that the technology would be effective in Alaska's waters. He related, however, that a "BP" representative told him the company did not need better spill response because the Department of Environmental Conservation gives an exemption from the oil spill response planning standards when there is more than 10 percent ice on the water. This seems very irresponsible, he said. MR. LAKOSH contended that Alaska is 10 years behind in the standard for evaluating oil spill response effectiveness. He said he must therefore oppose HJR 28 if it promotes continuation of this ineffective oil spill response. He requested that the resolution's language be amended to exclude improved oil spill prevention and response from any restrictions that the state or federal government may impose on offshore development. He said he does not like to think that committee members would violate the constitutional right to reasonable concurrent use of Alaska's resources, of which subsistence has the highest priority and would be adversely affected by the present oil spill regulation which is totally ineffective at preventing damage to subsistence resources. 1:27:45 PM CO-CHAIR JOHNSON said that HJR 28 does say safe and responsible exploration. He explained that since it is a resolution, not a bill, it does not exempt anyone from oil spill requirements. He said he will follow up on the 10 percent ice exemption. REPRESENTATIVE SEATON inquired whether Mr. Lakosh had written testimony. MR. LAKOSH said he does not, but that he would like to follow up with Representative Seaton directly to further explain the exact impediments to effective oil spill recovery in both arctic conditions and high seas that are not being properly addressed by the Department of Environmental Conservation, the MMS, or the U.S. Coast Guard. CO-CHAIR JOHNSON urged Mr. Lakosh to get with Representative Seaton or himself because if there is technology to do it right, then that should be implemented. 1:29:13 PM REPRESENTATIVE SEATON asked whether eliminating the term 50 miles from page 2, line 21, would satisfy Mr. Brune in regard to not restricting OCS development. MR. BRUNE responded that it would be the aforementioned location as well as on page 1, line 4, and that it could be changed to say up to the 200 mile Exclusive Economic Zone. He said it is correct that there are areas in which Alaska's jurisdiction does not extend that far, given other nations that border the state. CO-CHAIR JOHNSON said the committee will probably look at some kind of an amendment on this. He closed public testimony after ascertaining that no one else wished to testify. CO-CHAIR NEUMAN moved that the committee adopt Conceptual Amendment 1 as follows: Page 1, line 4, following "within": Delete "50" Insert "200" Page 2, line 21, following "within": Delete "50" Insert "200" Page 2, line 31, following "within": Delete "50" Insert "200" 1:32:12 PM REPRESENTATIVE SEATON objected for discussion purposes. He asked whether the co-chair wishes to restrict the distance to 200 miles or would it be better to say "the Outer Continental Shelf controlled by the U.S." He noted there is a bill before Congress that would extend U.S. jurisdiction beyond 200 miles. CO-CHAIR JOHNSON said it is not his intention to limit the distance and perhaps the amendment could state 200 miles or whichever is greater. He asked whether the Law of the Sea Treaty would go potentially 150 miles beyond the Outer Continental Shelf or if the Outer Continental Shelf extended more than 200 miles. REPRESENTATIVE SEATON answered that if the Outer Continental Shelf extends beyond 200 miles, then under the Law of the Sea Treaty the U.S. could extend its jurisdiction beyond 200 miles, but only as far as the U.S. Outer Continental Shelf. REPRESENTATIVE GUTTENBERG commented that he would like to have someone with offshore expertise tell the committee the difference between the jurisdictions and what the result would be if the language is changed to that being suggested by Representative Seaton. 1:34:56 PM REPRESENTATIVE SEATON said he agrees with the 200 miles and is only bringing this up because of discussions about the jurisdiction possibly being extended beyond 200 miles. CO-CHAIR JOHNSON said the resolution should not be based on what may happen in the future, given that the Law of the Sea Treaty has not yet been ratified. CO-CHAIR NEUMAN said the committee should deal with the way things are today. CO-CHAIR JOHNSON concurred. REPRESENTATIVE SEATON pointed out that he objected for discussion and is not offering an amendment to Conceptual Amendment 1, but he just wanted the discussion for legislative history to show that the intent is not to restrict the distance to 200 miles should U.S. control of the Outer Continental Shelf be extended beyond that distance. He withdrew his objection. CO-CHAIR JOHNSON, after ascertaining there was no further objection, announced that Conceptual Amendment 1 has passed. 1:37:16 PM CO-CHAIR NEUMAN moved to report HJR 28, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. REPRESENTATIVE TUCK objected and expressed his concern with the language "and elsewhere in the continental United States" that appears on page 1, line 4, as well as several other places in the resolution. He said it is not in Alaska's interest to impose something on other states and trying to exercise control over other states could create a backlash. Because he does not like it when other states pass resolutions about Alaskan issues, he said it concerns him when Alaska does this to other states. CO-CHAIR JOHNSON said the term imposed is wishful thinking because this is only a resolution and a communication to the President and others asking them to take Alaska's wishes into consideration. He said that because the resolution supports something rather than opposes something, each state can use the resolution as it wishes. 1:39:23 PM REPRESENTATIVE TUCK withdrew his objection and reiterated that he would not want another state doing this to Alaska. CO-CHAIR JOHNSON offered his assurance that he would not try to impose the committee's will on any other state. REPRESENTATIVE GUTTENBERG stated that even if the resolution is successful in prompting action, that action might be prevented by the current policies and regulations such that no leases could occur. He urged caution in what is being asked for. CO-CHAIR JOHNSON said he is clear in what he is asking for. CO-CHAIR NEUMAN again moved to report HJR 28, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSHJR 28(RES) was reported from the House Resources Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHCR 10(RES).pdf |
HRES 3/30/2009 1:00:00 PM |
HCR 10 |
| CSHJR 27(RES).pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 27 |
| HJR 28 Packet.pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 28 |
| HCR 10 Packet.pdf |
HRES 3/30/2009 1:00:00 PM |
HCR 10 |
| HJR 27 Packet.pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 27 |
| CSHJR 28(RES).pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 28 |
| HCR 10 NPS Water Regs.pdf |
HRES 3/30/2009 1:00:00 PM |
HCR 10 |
| HCR 10 zero fiscal note.pdf |
HRES 3/30/2009 1:00:00 PM |
HCR 10 |
| HJR 27 zero fiscal note.pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 27 |
| HJR 28 zero fiscal note.pdf |
HRES 3/30/2009 1:00:00 PM |
HJR 28 |