02/02/1994 05:10 PM Senate O&G

 SENATOR LEMAN called the Special Committee on Oil and Gas                     
 meeting to order at 5:10 p.m. and announced  SB 239  (NONCRUDE                
 OIL OPERATIONS:FINANC'L RESPB'TY) to be up for consideration.                 
                                                                               
 SENATOR SHARP moved to adopt the CS to SB 239 dated 1/26/94,                  
 8-LS1408E.  There were no objections and it was so ordered.                   
                                                                               
 SENATOR SHARP explained that his amendment adds to section                    
 46.04.040 (b), reduction of the financial responsibility for                  
 on-shore exploration and production.  He said that other                      
 states have either no financial responsibility for on-shore                   
 drilling except in California where there is a $1 million                     
 financial responsibility requirement within 30 miles of the                   
 coast line.                                                                   
                                                                               
 Number 84                                                                     
                                                                               
 SENATOR ADAMS noted that the present title is too broad.  He                  
 suggested using, "An Act extending the authority of the                       
 Department of Environmental Conservation to grant waivers for                 
 evidence of financial responsibility for certain persons who                  
 conduct non-crude oil operations."  SENATOR LEMAN said that                   
 title would not allow the incorporation of section 1 of the                   
 CS.                                                                           
                                                                               
 RAY GILLESPIE, Crowley Maritime, Delta Western, Petro-Marine,                 
 suggested repealing the temporary nature of the financial                     
 responsibility requirement.  It was noted that the CS already                 
 addressed that issue.                                                         
                                                                               
 SENATOR SALO asked Senator Sharp to explain the intent of the                 
 amendment.  SENATOR SHARP clarified that the CS repeals                       
 section 6 which is the sunset provision for non-crude                         
 shippers.  The other change brings financial responsibility                   
 for onshore oil exploration down to $1 million using the same                 
 wording in SB 150.                                                            
                                                                               
 Number 180                                                                    
                                                                               
 MIKE CONWAY, Director, Division of Spill Prevention and                       
 Response, said they support repealing the temporary waiver                    
 provision.  They support Senator Sharp's changes.  He said                    
 that Mead Treadwell, Department of Environmental Conservation,                
 supported the concept as well.                                                
                                                                               
 SENATOR ADAMS asked him why this language should not go                       
 forward in SB 150.  MR. CONWAY explained that these particular                
 provisions deal with financial responsibility which are in the                
 DEC statutes.  So the reason would be for consistency with all                
 the financial responsibility statutes.                                        
                                                                               
 Number 215                                                                    
                                                                               
 SENATOR HALFORD moved to pass CS to SB 239 (Oil and Gas) with                 
 individual recommendations.  There were no objections and it                  
 was so ordered.