Legislature(2013 - 2014)BARNES 124
03/17/2014 01:00 PM House RESOURCES
Audio | Topic |
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Start | |
HCR22 | |
HB325 | |
HB367 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
*+ | HB 367 | TELECONFERENCED | |
*+ | HB 325 | TELECONFERENCED | |
*+ | HCR 22 | TELECONFERENCED | |
+ | SB 138 | TELECONFERENCED | |
+ | TELECONFERENCED |
HCR 22-IN-STATE REFINERIES 1:03:29 PM CO-CHAIR SADDLER announced that the first order of business is HOUSE CONCURRENT RESOLUTION NO. 22, Urging the governor to take all action necessary to keep in-state oil refiners in operation and to keep oil refining operations in the state competitive. 1:03:52 PM REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, as the sponsor, stated that HCR 22 urges the governor to take all action necessary to keep in-state oil refiners in operation and to keep oil refining operations in the state competitive. She referenced the possibility for the closure of the Flint Hills Refinery and its search for a buyer. She reported that the Flint Hills Refinery was supplying clean drinking water to local residents during the problems with contaminated water, and would continue to do so throughout. She declared that currently it was more affordable to import fuel than for in-state refining. She said that, as this could change with time, the legislature needed to determine the value for maintaining refineries in the Interior and throughout the state. She stated "for right now we aren't competitive globally." She questioned the results should there be a disaster, noting that the State should be as self- sufficient as possible. She emphasized that it was important for the governor to move quickly in negotiating a royalty oil contract with a potential new buyer and to ensure who was responsible for the aforementioned contamination. She expressed that her biggest concern was for closure of the refinery and the necessity of new permits. She declared that the proposed resolution addressed the need for maintenance of self- sufficiency, an ability to refine other imports, and use for its best capacity. 1:06:24 PM REPRESENTATIVE SEATON referenced page 1, lines 14-16 of the proposed bill, and inquired how a royalty-in-kind contract would be negotiated that would help the in-state refineries. REPRESENTATIVE T. WILSON replied that the current contract was $2.15 over the price of the North Slope, as the law states that we get the most for the value. She explained that Department of Natural Resources (DNR) would account for the import cost which included many pieces, and not just the price. She said that this was all "within the realm of the administration when they're negotiating the contract." She suggested that there was a possibility for contract negotiation to other uses at the plant. 1:07:28 PM REPRESENTATIVE KAWASAKI directed attention back to lines 14-16, and referenced a recent royalty oil contract with Flint Hills Resources. He asked if Representative T. Wilson was considering a new contract with another party, and he asked, if there was not another party, how this would be possible. REPRESENTATIVE T. WILSON offered her understanding there were "some other players at the table." She declared that, as Flint Hills would no longer have this contract as of June 1, 2014, this was not a re-negotiation of the contract for Flint Hills. She stated that Flint Hills had made it quite clear that it would not be the owner and operator. However, they did want to ensure that this would be more economical for another party. This contract would be for the potential buyer with which Flint Hills was currently negotiating. REPRESENTATIVE KAWASAKI suggested that, during contract negotiation, "it's good to know who we're negotiating with." He questioned the theory that the state would get a good deal from this negotiation. REPRESENTATIVE T. WILSON replied that, although there was a lot of concern to get the most money for a resource, there should also be consideration for the other ancillary pieces. She said that the proposed resolution asked for all these points to be taken seriously, and that there should be some possible negotiations. 1:09:41 PM REPRESENTATIVE TARR asked whether the proposed resolution was being sent to other individuals in addition to the governor. REPRESENTATIVE T. WILSON replied that "these kind of negotiations is done by the administration and the governor is the one who is in charge." 1:10:04 PM CO-CHAIR SADDLER, acknowledging that the Interior refineries were "a hot topic in the news," asked why the proposed resolution did not include refineries in other areas of Alaska. REPRESENTATIVE T. WILSON replied that the proposed resolution focused on in-state refineries, as they had different issues and a different mechanism. She pointed out that the Flint Hills plant was being shut down. She acknowledged that it was important to include all the refineries. CO-CHAIR SADDLER expressed his agreement that there was no attempt to disparage the other refineries in Alaska. CO-CHAIR SADDLER directed attention to page 1, line 14, and asked if this should be a "Resolved" statement as opposed to a "Whereas" statement. REPRESENTATIVE T. WILSON expressed her agreement. CO-CHAIR SADDLER asked if she would accept a conceptual amendment to make this change. REPRESENTATIVE T. WILSON expressed her agreement. CO-CHAIR SADDLER moved to adopt Conceptual Amendment 1, which would, on page 1, line 14, delete "Whereas" and insert "Be It Resolved that" with conforming changes. REPRESENTATIVE JOHNSON asked if this was a motion. 1:12:18 PM There being no objection, Conceptual Amendment 1 was adopted. REPRESENTATIVE KAWASAKI directed attention to page 2, line 1, and asked for the current timeline for the cleanup and how this proposed resolution could impact the decisions made at Department of Environmental Conservation (DEC). 1:13:23 PM LYNN KENT, Deputy Commissioner, Office of the Commissioner, Department of Environmental Conservation, explained that state law made owners and operators of a contaminated property jointly and separately liable for the contamination. She stated that although DEC had been working primarily with Flint Hills as the current owner, the Department of Law had recently initiated action to bring both Williams and Flint Hills forward as responsible parties to work out the allocation of cost. She directed attention to the cleanup standards, acknowledging that this standard had to be based on and supported by sound science. She relayed that the level set by the Division of Spill Prevention & Response was being appealed by Flint Hills, and that it was unknown for how long this appeal process could take. She returned attention to the question of liability, and she offered her belief that not having the allocation of cost figure would not have any impediment to sale of the facility, as the state administration had offered to enter into a prospective purchaser agreement with a new buyer, so the new buyer would not have any liability for pre-existing contamination. She offered her belief that neither the final clean up standard or the allocation of costs was necessary to have clarified prior to the purchase and operation of the facility. REPRESENTATIVE SEATON asked for clarification that reasonable clean-up standards supported by science would not have an impact on the decisions that were currently under appeal. MS. KENT replied that the clean-up standard was under appeal, although it did not have to hold up the sale of the refinery to a new operator. REPRESENTATIVE SEATON asked if the language in the proposed resolution to "expeditiously set up a reasonable cleanup standard supported by science" would impact what DEC would look at as the cleanup standard which it suggested. MS. KENT deferred to the Department of Law, and opined that this language would not influence any appeal. 1:16:42 PM JOHN HUTCHINS, Assistant Attorney General, Oil, Gas & Mining Section, Civil Division (Juneau), Department of Law (DOL), expressed his agreement with the testimony from Ms. Kent. 1:17:58 PM JOE BALASH, Commissioner Designee, Department of Natural Resources, in response to Representative Seaton, pointed out that restriction of the terms for a refinery to within the boundaries of the North Star Borough would only include two operations, and would exclude two others on the North Slope and "two south of the range." He noted that further expansion raised questions regarding the legislative intent for the actions by the administration. He observed that there was the ability to transfer the upcoming Flint Hills contract to a prospective buyer, should a buyer be identified, as that contract had already been reviewed and approved by the legislature. He cautioned the committee about using price of a royalty contract as the sole means to make any refinery competitive in Alaska with other imported products. He opined that there were other ways to achieve this, and that the governor had convened a subset of his cabinet, including the commissioners of DEC and DNR, as well as the Attorney General, to consider ways to assist any prospective buyer of the Flint Hills facility. They were also having extensive discussion for the importance of maintaining the existing refineries. He noted that there was a concern for losing other refineries. He acknowledged that offering the royalty for sale at some discount had been considered, although there was concern that discounting a fraction of the royalty would lead to requests for discounts to the remaining royalty. He noted that pricing of West Texas Intermediate (WTI) versus Alaska North Slope (ANS) would realize a difference of almost $150 million of royalty to the state. He offered his belief that there were more efficient ways to ensure Alaska based refining, and that the governor was considering other recommendations. He noted that some of this $150 million value would go to the producers of the royalty, whereas the administration would prefer to find a solution to keep the refineries healthy and keep the benefits to those refineries and the consumers in Alaska. 1:23:43 PM REPRESENTATIVE T. WILSON stated that she had not intended to preclude the other refineries, and that there were other issues, as well, that needed to be resolved. She said "all refineries are very important and I don't want to step on any, but I just want it done fast." She requested to have the resolution brought back to the committee in a short time. She stated that she would talk with the committee members to ensure that any other questions were answered. 1:24:24 PM CO-CHAIR SADDLER held over HCR 22. 1:24:30 PM REPRESENTATIVE HAWKER requested that the sponsor ensure that Flint Hills concurred with the proposed resolution. REPRESENTATIVE T. WILSON replied that, as she wanted to ensure that no refineries would be closed, she would broaden the proposed resolution, and make sure that Flint Hills and the other refineries were in support. REPRESENTATIVE HAWKER offered his desire to have formal endorsements to the resolution from the refineries involved. REPRESENTATIVE T. WILSON expressed her agreement. 1:25:16 PM REPRESENTATIVE SEATON requested that the commissioner of DNR report whether a new contract would delay the opening of the Flint Hills refinery, as the legislature would not be available to approve a royalty in-kind contract which was different than the existing contract.
Document Name | Date/Time | Subjects |
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HB325 AP Stories.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 Conservation Surcharge on Oil Statutes.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Budget Sub Presentation.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Budget Sub Slide.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Oil & Haz Prev Account Report.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 Sectional Analysis.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 Sponsor Statement.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 Version A.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325-DEC-RFA-03-14-14.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325-DOR-TAX-3-14-14.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB367 AVEC Letter.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 367 |
HB367 GVEA Letter.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 367 |
HB367 Sponsor Statement.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 367 |
HB367 Version C.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 367 |
HB367-DOR-TAX-03-14-14.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 367 |
HCR 22 ADN Article i.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 ADN Article ii.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 ASRC White Paper.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Clarion Article i.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 EIA FAQ.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Cook Email.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Hazardous Substances Statutes.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 News-Miner Article i.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 News-Miner Article ii.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 News-Miner Article iii.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 News-Miner Article iv.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Proposed Sale.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Sponsor Statement.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 Sulfolane Investigation.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR22-LEG-SESS-3-15-14.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 DNR Document i.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 DNR Document ii.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HCR 22 DNR Document iii.pdf |
HRES 3/17/2014 1:00:00 PM |
HCR 22 |
HB325 Alaska Chamber Letter.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 Version A.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Response 3.26.14, Doc 1.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Response 3.26.14, Doc 2.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |
HB325 DEC Response 3.26.14, Doc 3.pdf |
HRES 3/17/2014 1:00:00 PM |
HB 325 |