Legislature(2003 - 2004)
02/04/2004 03:34 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 266-BRISTOL BAY OIL & GAS LEASE SALE CLOSURE
CHAIR OGAN asked Mr. Myers to explain why the state would want
to close lease sales.
MR. MARK MYERS, Director of the Division of Oil and Gas,
Department of Natural Resources (DNR), told members the reason
to close the Bristol Bay area is that DNR currently has multiple
leasing programs. In the areawide-leasing program, an upfront
best interest finding is done, and the lease is competitively
bid and provides grass-roots surface to grass-roots oil and gas
mineral rights. A second program, the exploration licensing
program, is competitive in nature and allows a single licensee
to bid on a work commitment on up to 500,000 acres. Once the
work commitment is completed, the licensee can lease all or part
of the acreage. A third program is shallow gas leasing: an over-
the-counter, non-competitive program with limited depth rights.
The first filing cost is $5,000; it is designed for areas
typically without competitive sales or exploration licensing.
MR. MYERS said the intent of SB 266 is to do an oil and gas
mineral closing order for the area of the proposed Bristol Bay
competitive sale. He cautioned that if that area is not closed
to mineral entry, the area would either be open for exploration
licensing or shallow gas leases. If shallow gas leases were
filed, the mineral rights would be split into parts. DNR does
not believe that would bring as much value to the lessee and
creates correlative rights problems. He pointed out that any gas
discovered to a depth of 3,000 feet, if leased with shallow gas
leasing, would go to the shallow gas lessee but gas below that
depth might go to a different lessee. He said that is not an
efficient way to lease and DNR believes it would get more
economic value out of the overall competitive sale. To prepare
for the sale and provide maximum value to lessees should the
proposed sale go forward, DNR would like to close this area now
to shallow gas leasing and exploration license proposals.
MR. MYERS said DNR is doing the opposite in the area to the
north and is not recommending it for mineral closure. DNR has
received an exploration-licensing proposal from Bristol Shores
for that area. In conclusion, he stated in the area with
competitive sales, DNR doesn't believe segregating the mineral
estate is in the state's best interest. He noted the
commissioner established a temporary closing order but to
withstand, it has to be verified and approved by the
legislature.
CHAIR OGAN asked if the conflict over correlative rights would
occur if Company A had a lease for the area below 3,000 feet but
its structure reached into the 3,000-foot level where shallow
gas was found. Company A might produce the gas owned by a
different lessee or DNR might have to prorate the gas.
MR. MYERS said that is correct. He noted that part of a field
for a shallow gas lease must be above a depth of 3,000 feet.
Some of the geologic structures in that area may continue down
to deeper depths, in which case there would be arguments about
whether the deeper lessee owned it or the shallow gas lessee
owned it. In general, DNR tends to not put areas with shallow
gas leases in license areas because of the correlative rights
fight that would ensue. Also, in early negotiations, if a top
file shallow gas lease exists, the state would ultimately get
less in the competitive bid process because a shallow gas lease
devalues the competitive lease and sets up the correlative
rights issue. He noted in addition, a company could arguably try
to block a sale by artificially buying shallow gas leases with
no intention of developing them, thereby significantly
decreasing the value of the [lower] lease.
CHAIR OGAN asked if anyone has applied for a shallow gas lease
in the [Bristol Bay] area.
MR. MYERS said not to the best of his knowledge.
CHAIR OGAN noted that when the original legislation passed,
there was talk of shallow gas that had been identified from
previous onshore drilling in the Bristol Bay area. He asked if
that area has wells that were drilled in the 1950s.
MR. MYERS replied that about 26 wells were drilled in the entire
region from 1903 to 1985. Some were drilled outside of the
proposed lease area but about 12 wells were drilled within the
area proposed for licensing. Those wells penetrated into the
prospective section; many of them encountered gas but at the
time, gas wasn't economic. Some of the wells have fairly good
shows of oil but they were never commercially tested so DNR does
not know the quantity. DNR knows that both oil and gas are
present in the basin, particularly in the southern part of the
basin where it is deeper. To the north, the oil thins and DNR
expects it is dominated by gas potential, similar to the gas in
Cook Inlet. Much of that gas is shallow.
MR. MYERS told members that DNR and the U.S. Department of
Energy did some test work for coal bed methane in the Chignik
Lagoon area; they believe coal bed methane potential is there.
He added that an areawide lessee is entitled to produce coal bed
methane as well as deep gas so a lessee may look at both. He
believes a lessee would look at conventional gas first because
it is more economical.
CHAIR OGAN said it looks like some of the offshore area is
included in the exploration license area in the northern part of
Bristol Bay. He asked if that was done intentionally and whether
there is a current moratorium on offshore drilling in Bristol
Bay.
MR. MYERS said the current policy is not to include offshore
areas on licenses in [box 5-4]; that policy could change. The
current standard that DNR is proposing for the Bristol Bay lease
sale would be onshore siting of facilities only. Therefore, if
license rights or lease rights are later offered in the offshore
to the 3-mile limit state waters, they would have to access
those potential resources by drilling directionally from
onshore. He believes it is DNR's intention to restrict facility
placement to onshore only.
SENATOR SEEKINS referred to a map of the area to be reserved
provided by Mr. Myers, and asked if the red line represents the
3-mile limit.
MR. MYERS said that is correct.
SENATOR SEEKINS asked, regarding the state's authority, if the
bays are classified as historic bays. He questioned if the bays
are agreed to or claimed as, regarding state jurisdiction.
MR. MYERS said one of the things DNR has to clarify is the 3-
mile limit. It has never been surveyed. He advised that
legislators will probably see a capital funding request so that
DNR can accelerate that process. DNR believes that historical
bays are pretty well established by precedence but that must be
clarified as well. Part of the process of putting the lease sale
together is to help determine, in conjunction with the federal
government, where those actual lines are. Right now they are
only lines on a map.
CHAIR OGAN asked Mr. Myers to provide committee members with the
background of the plans for the Bristol Bay area and when he
expects the lease sale to occur and how he views the prospects.
MR. MYERS referred to a chart showing the proposed timelines of
the process and noted the targeting time would be the fall of
2004 for the license area and the fall of 2005 for the lease
sale. He pointed out the fall of 2005 is dependent upon DNR's
ability to notify the legislature at any time [SB 265], rather
than during the legislative session. He said if that is not
possible, the date would be 2007 because DNR would have to
notify the legislature next year and provide two years notice of
the upcoming sale. He said the process is long and detailed, and
the primary document is a best interest finding document. In the
case of the lease sale, DNR would request information from
agencies and public comment, which DNR has done. DNR has met
with all three borough governments in the Bristol Bay area, as
well as the Bristol Bay Native Association, and other interested
folks, and it has started the request for public comment.
That will eventually lead to a preliminary best interest
finding, similar to an EIS document, that will list all
concerns, potential stipulation and litigation measures, and the
balancing test of the economics and environmental effects. That
preliminary findings report will be widely distributed
throughout the same area for comment. MR. MYERS said that DNR
has memoranda of understandings with the Bristol Bay Native
Corporation and the Aleut Corporation to customize and maximize
benefits to the local communities and Native corporations to the
extent possible.
MR. MYERS pointed to the towns on the map where public
informational meetings have occurred. He indicated, at Governor
Murkowski's direction, the exploration license areas are on a
faster track with the goal of finding a local source of energy,
followed by the competitive sale. He repeated that the
exploration license areas are somewhat driven by the applicant.
CHAIR OGAN asked if the license area in the north is primarily
for shallow gas.
MR. MYERS said the basin thickness is less than 5,000 feet in
the license area. By definition, that area is geologically
shallow, so the best potential there is for gas.
CHAIR OGAN asked, "So would that be under the shallow gas rules
then - so it would be a non-conventional type - air drilled or
do you have any idea yet?"
MR. MYERS said DNR doesn't know yet but there would be the
opportunity to drill conventional gas plays in the sense that
they are shallow. He said a lot depends on the type of
production technique.
SENATOR SEEKINS asked whether data, regarding exploration
licensing, will be made public if it becomes available.
MR. MYERS said drilling well data will be confidential for 25
months from the date of completion, according to Alaska statute
and AOGCC standards. Seismic data will not become public. The
data acquired falls under the same rules as the well data on a
conventional lease. He added if economic incentive credits are
used, there is a requirement to release the data early to DNR.
In 10 years, the seismic data becomes public.
SENATOR SEEKINS asked if an entity obtains data, that entity is
also allowed to get involved in the competitive bid process for
harvest of what is there.
MR. MYERS said that is the full intent of the program. In a non-
competitive bid, an entity negotiates with DNR, as a term of the
license, what the terms would be to convert to a lease.
SENATOR SEEKINS commented, "So it kind of gives them a leg up.
You say if you guys do this, you're first in line to pick the
fruit from what you find."
MR. MYERS agreed and said the entity is exclusively allowed to
do that under the license program.
SENATOR BEN STEVENS asked if the SB 185 credit (the seismic
incentive credit) will apply to this region.
MR. MYERS said it does; the requirements are that it has to be 3
miles from an existing well drilled before 1976. It will allow
the 40 percent credit up to 2007.
SENATOR BEN STEVENS questioned whether that legislation only
applied to the North Slope.
MR. MYERS said it was not restricted to the North Slope. The
credits were statewide and applied to federal and private lands
as well.
SENATOR ELTON asked how DNR deals with the critical habitat
areas in a lease sale.
MR. MYERS said a lot more discussion takes place with the Alaska
Department of Fish and Game (ADF&G) on the critical habitat
areas. A process of elevation exists should ADF&G not like the
standards. However, a lot of information gathering goes on and
there is recognition of the importance of those areas, so
stipulation and mitigation measures are adapted as appropriate
to those areas. Local community involvement becomes critical. He
hopes that by working with the local communities and Native
organizations, DNR can work through those issues without
difficulty.
SENATOR ELTON thanked the department for providing that
information
4:00 p.m.
CHAIR OGAN asked if the Hammond Administration placed a
moratorium on leasing in that area because it felt oil
development was not compatible with fishing, the economic
mainstay of the region. He asked if the decline of the Bristol
Bay fishing industry has motivated the change in attitude about
oil and gas development.
MR. MYERS said many of the letters of support recognize the
economic situation and the need for a long-term economic fix and
the value of a local tax base from oil and gas development. Even
the fishing industry recognizes that the value-added part of the
industry is dependent on a local energy source. He noted this
process started locally.
CHAIR OGAN said in his opinion, that area is one of the great
wonders of the world, regarding the wildlife and ecological
systems. He said the people who live in the area are very
culturally and spiritually tied to the land so he finds it
interesting that there has been a shift in attitude. He noted
that deep well oil and gas is riskier [from an environmental
standpoint] than shallow gas.
MR. MYERS said he believes one reason the potential for an oil
and gas sale is more appealing to residents now is because of
changes in technology. Since the earlier wells were drilled in
that area, environmental safety records have improved
dramatically. The footprint of the development facilities is
much smaller, perhaps 20 percent of the size they were in the
1980s. The combination of superior technology, good stipulation
and mitigation measures, good spill response, the need for a
locally trained workforce, and directional drilling present a
good case to minimize environmental effects. He said one of the
key issues is the location of a port or tanker facility. He
noted the best interest finding does not assume there will be a
sale - it is a balancing test, and state will have to be
convinced that the benefits outweigh the environmental risks.
CHAIR OGAN asked if Bristol Bay is the largest contiguous area
available for onshore oil and gas leasing.
MR. MYERS said the basin is 500 miles long and he is not aware
of any other place in onshore North America, other than ANWR,
like that. He cautioned that although the area has good oil and
gas shoals, reservoir rocks and traps, commercial hydrocarbons
have not yet been demonstrated. The division would love to see
some modern data to help quantify the resource in the area.
CHAIR OGAN announced that Representative Moses had joined the
committee. He then asked if the oil that will be drilled from
onshore is offshore.
MR. MYERS referred to the map of the geologic cross-section and
described the area.
CHAIR OGAN asked about the potential for hydrates.
MR. MYERS said he is not aware of any onshore.
CHAIR OGAN took public testimony.
MR. TOM HAWKINS, Senior Vice President of the Bristol Bay Native
Corporation (BBNC), noted that BBNC has about 7,000
shareholders, of which more than half live in the region. The
BBNC board of directors adopted a resolution about a year ago
that encourages the Governor and DNR to consider oil and gas
leasing in Bristol Bay - both were very responsive. They held a
lot of hearings and have been easy to work with. The BBNC wants
the record to reflect that the local support for these
activities is good. BBNC supports both SB 265 and SB 266.
CHAIR OGAN asked Mr. Hawkins if he believes the public notice
has been adequate and whether BBNC's position is representative
of the general public.
MR. HAWKINS said he believes the BBNC board of directors is more
bullish than the general population, but the board has traveled
around the region and talked to the boroughs and non-profit
organizations and village corporations, and found an amazing
level of support for oil and gas exploration. He said the
support thinned a bit as the Outer Continental Shelf (OCS) was
discussed. A sale was held out there in 1992 and later canceled.
People are still wary of activity in the bay but DNR has been
very open about explaining access to offshore acreage from
onshore and the various groups that the BBNA has conversed with
have routinely supported that. BBNC believes DNR has done an
excellent job. The region is huge with multiple boroughs.
CHAIR OGAN cautioned that he strongly believed that the people
of his area supported an activity but people from outside, with
outside agendas, had other opinions. He said he can't emphasize
enough how important it is that people understand the facts.
MR. HAWKINS acknowledged that the region is habitat sensitive
and that residents are shrewd about protecting those values. He
said that fish, wildlife, and waterfowl play a big part in the
economy of the region - both the traditional economy and the
true economy. He believes the people will hold DNR to high
standards to make sure that development is done in the right
way.
MR. TERRY HOEFFERLE, Chief Executive Officer of the Bristol Bay
Native Association, a tribal organization, told members that the
BBNA has a 38-member board that supports both SB 265 and SB 266.
He noted the BBNA unanimously opposed Lease Sale 92 back in the
days when the price of a barrel of oil was $13 and the price of
a sockeye salmon was $12. The current price is $33 per barrel
for oil and $2 for a sockeye. He said people's attitudes have
changed with the times. He indicated the communities of Bristol
Bay also support both bills.
MR. BRYCE EDGMON, Chief Operating Officer for the Bristol Bay
Economic Development Corporation, stated support for both SB 265
and SB 266.
MR. NELS ANDERSON JR., representing himself, said that he has
been a subsistence hunter and fisherman who opposed any oil and
gas activity in the region for many years. However, Bristol Bay
fishermen cannot sell their fish for a decent price that enables
them to make a living. As a result, the economy in the area is
going downhill and many people are moving out of the area,
therefore the residents have no choice except to diversify the
economy. He said he is very, very proud of the Bristol Bay
Native Corporation for taking the courageous step of shifting
away from considering commercial fishing as the sole source of
economic activity. He also commends the BBNC for working very
closely with the Murkowski Administration. The Governor has made
it clear that he would not have taken the initiative on oil and
gas development in the area without the full support of the
region. He said that diversifying the economy is not possible
without low cost energy. He said he is more confident that the
oil and gas industry is able to do exploration work without
doing any serious harm to the environment. The Native people in
the area have been very successful in protecting the resources.
He suspects that vigilance will continue throughout any oil and
gas development on the Alaska Peninsula. He stated support for
SB 265 and SB 266, as they will help expedite and move the
calendar up a bit so that licensing can occur earlier than would
be the case under current law.
MR. ANDERSON said his only concern is that there is no official
oversight capability on what is happening in the region. He
believes the Murkowski Administration and regional leaders need
to think about that. He believes the only way to ensure that are
fish and game resources are adequately is to form a borough. He
next stated:
But that's something that we'd have to work out here
on a local level. And then another thing that we'd
have to do, I believe, to help not only the ... oil
and gas industry, but the mining industry with that
huge pebble find up in the Iliamna area, is that they
really can't build roads and they really can't develop
the energy without the full cooperation of all the
villages in the Bristol Bay region so I have asked the
administration to take a very serious look at a
Bristol Bay regional development authority, not unlike
the [Knik Arm] Bridge authority that will help
expedite the construction of that particular facility.
So the two things the region needs is that we may have
to have a borough to provide that oversight to protect
our fish and game resources, and two, a Bristol Bay
regional development authority under the State of
Alaska to help the construction of the infrastructure
that will provide the access and the power needed to
develop our oil and gas industry and our mineral
industry out here.
4:25 p.m.
TAPE 04-6, SIDE B
CHAIR OGAN suggested that if the development is successful and a
borough is formed, the area would have a tax base to pay for it.
MR. HJALMAR OLSON, Bristol Bay Native Corporation, told members
he has fished in the region for 50 years and has been a board
member of the BBNC for 30 years, and chair and president for 25
years. He said after seeing the economy change in the area, the
BBNC board decided to rethink oil and gas development. He
applauded Governor Murkowski for trying to develop natural
resources in the rural areas. He said the BBNC board has held
about 12 meetings around the region. He stated support for SB
265 and SB 266.
SENATOR DYSON maintained that there are some very significant
cultural resources in the area; archeology teams have
investigated a number of villages over the years. He asked what
protections will be available to make sure they are not
disturbed or that a sufficient analysis is done if necessary.
MS. MARIE CROSLEY, Division of Oil and Gas, DNR, told members
that federal and state laws are quite protective of the
archeological resources. In addition, DNR has three mitigation
measures that are attached to the lease that would also protect
them. Prior to a permit being issued, the lessee would
investigate known sites for the purpose of steering clear of
them.
CHAIR OGAN said from his experience in the private sector, he
learned that the mitigation measures require that an
archeologist survey the sites where potential work will be done.
If any archeological sites are discovered, mitigation measures
are used to leave them undisturbed or to preserve the findings
appropriately.
SENATOR ELTON asked which bill the committee was considering.
CHAIR OGAN clarified that SB 266 was before the committee. He
said he would assume that those people who have testified on
both bills do not want to testify again unless he hears
differently. He then announced that he would defer to the will
of the committee regarding whether to pass the bill from
committee today.
SENATOR ELTON said he views the bills as a pair and suggested
passing them both with one motion after they have been
discussed.
SENATOR WAGONER informed members that the only opposition
expressed in the Senate Community and Regional Affairs Committee
was the fact that the Murkowski Administration did not supply
the letters of support from the Native corporations to the
committee. He said those letters are available now so he does
not believe the opposition would remain.
CHAIR OGAN announced that the committee would hold SB 266 and
take up SB 265.
SB 265-OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION
MR. MARK MYERS, Division of Oil and Gas, Department of Natural
Resources (DNR), explained to members that SB 265 is
straightforward. The areawide leasing statutes require DNR to
notify the legislature at the first part of a session of changes
to the areawide lease sale process. SB 265 would change that
requirement so that DNR would be required to notify the
legislature of those changes, but not during the first part of
the legislative session. The original requirement was
established pre-areawide leasing, when the competitive sale
process was the only mechanism of leasing and competitive sales
were proposed all over the state so the lease sale schedule was
constantly changing. Under that scenario, the legislature was
given a five-year schedule of the sales and DNR would notify the
legislature during the first part of the session of any changes.
Under areawide leasing, DNR has traditionally offered the same
areas for lease every year so there is a more predictable
pattern. Other than North Slope foothills, this is the first
time another sale has been added to the areawide process.
However, because the local folks are driving the sale, the
earliest this sale could be offered is 2007 if DNR is required
to provide the legislature with a two-year notice early next
session. SB 265 will allow DNR to notify the legislature anytime
during the year. He noted the legislature does not vote on the
lease sale, it is just notified. Passage of SB 265 will allow
the sale to occur in 2005 rather than 2007.
CHAIR OGAN noted that SB 265 is necessary to change the process
for one sale only and asked whether Mr. Myers was saying that it
would not affect other sales around the state because those are
identified and predictable.
MR. MYERS said that is correct. He added that DNR has improved
its best interest finding process, which typically takes 18
months, so those sales "do not sneak up on anyone." He repeated
that the statutory language does not require the legislature to
vote on any of the lease sales so SB 265 will only expand the
timeframe for notification. He said he is not sure what the
intent behind requiring notification during the early part of
the legislative session was in the original legislation. He said
realistically, DNR will not be going forward with many examples
of additional areawide sales.
4:35 p.m.
CHAIR OGAN suggested that the original legislation required
stth
notification between the 1 and 15 day of the session because
legislators are so busy at the end of session, the notice may go
unnoticed. He asked Mr. Myers if DNR feels it is important to
remove that language because technically DNR could provide
notification on the legislation when everyone is extremely busy.
SENATOR ELTON said he would go even further. Although he
recognizes the current process can be cumbersome, he feels SB
265 is "pretty loosy-goosy." He reads it to say DNR is not even
required to present its annual report on the last day of the
legislative session; it could present that report in August. His
concern is that this fix is being done in such a way that the
legislature will be losing some of its prerogatives. He prefers
the requirement that the legislature be notified at the
beginning of the session because that report could become part
of the "pipeline of information" available to committees to aid
in decision-making.
CHAIR OGAN said SB 265 says DNR must notify the legislature but
that could entail sending one report to a legislative aide. He
asked what kind of modality that notification encompasses.
MR. MYERS said he believes the notification language in SB 265
is the same as the language in the original statute; the only
change is to the timing. He said the intent is not to keep the
legislature out of the loop; it is to provide the flexibility to
hold a sale as quickly as DNR reasonably can. He repeated that
DNR was encouraged by local input to get the [Bristol Bay] sale
going as quickly and smoothly as possible, especially given the
full and complete best interest findings process. He pointed out
the original legislation requires notification to occur during
the first part of each 2-year session, not each year.
SENATOR ELTON maintained if DNR is going to provide an annual
report, the annual report could be due to the legislature by
January 15 of each year.
CHAIR OGAN suggested working on the language to specify who in
the legislature will receive the report, perhaps the chairs of
specific committees or the chair of Legislative Council and
majority and minority leaders during the interim.
SENATOR BEN STEVENS said that language does not cause him angst
because he reads it to say the commissioner shall annually
prepare a 5-year program of proposed lease sales to be offered
for leasing during the calendar year of the notification. He
said in his mind, it would be dated January 1 for that year. It
would be in the best interest of the commissioner to give it to
the legislature on January 1 because if it was distributed on
December 15, it would only address the changes for the last 15
days of the year. He said if the commissioner is going to
propose a change to the 5-year annual program and he is to give
the report to the legislature annually, it only makes sense the
commissioner would provide it at the beginning of the year.
He then referred to page 2, line 2, and read, "Notification to
each legislator, by electronic message or other means,
constitutes notification to the legislature under this
subsection." He felt the words "or other means" are too
ambiguous and moved to insert the word "written" between "other"
and "means" [Amendment 1] and asked for unanimous consent.
CHAIR OGAN announced that without objection, Amendment 1 was
adopted.
SENATOR DYSON said his guess is the original notification
requirement was included to address scenarios similar to that of
the Local Boundary Commission or other entities, where the
legislature must intervene to stop the commission from taking
action on its decisions. He thought the committee should make
sure that all legislators and the relevant committees get
notification. If the legislature finds the administration has
done an outrageous deed, it can either deal with it through
Legislative Council or call a special session, although he does
not anticipate that happening.
CHAIR OGAN clarified that the bill already specifies
"notification to each legislator."
SENATOR ELTON said he sees nothing in the legislation that
precludes an annual report from being issued in January of one
year and August of another year. He expressed concern that it
might be presented in August intentionally so that DNR does not
have to answer any questions. He said this legislation removes
the language that requires DNR to submit the report in a timely
manner.
CHAIR OGAN asked how the Bristol Bay lease sale would be
affected if the bill only changed the requirement for a biennial
report to an annual report and retained the existing January
deadline.
MR. MYERS said the lease sale must be on the schedule for two
years after notification, so if DNR notified the legislature by
January 15 of next year, the earliest the sale could occur would
be in 2007.
CHAIR OGAN suggested modifying the bill to apply to this sale
only since a good public process has been taking place and the
legislature was already notified.
MR. MYERS said the driver of the bill is the Bristol Bay sale
but it will also allow future flexibility.
SENATOR ELTON said he does not see that as a problem because
subsection (b) has two elements. The first is when DNR reports,
but it also provides, beginning on line 13 on page 1, that the
commissioner may at any time notify the legislature of
revisions. He said since the bill has an immediate effective
date, he does not see a problem that would affect the Bristol
Bay sale because DNR could revise its program.
MR. MYERS deferred to Ms. Crosley for clarification.
MS. MARIE CROSLEY, Division of Oil and Gas, Department of
Natural Resources (DNR), agreed with Mr. Myers and said there
are two elements to this. When DNR adds a sale to the schedule,
it would notify the legislature immediately. The second part is
notifying the legislature of availability of the five-year
program each year instead of every other year.
SENATOR STEVENS thanked Mr. Crosley for the clarification. He
said the two-year reporting requirement will change to an annual
requirement and that is to report on the activities of that
calendar year and the proposed activities for the next four
years. It also gives the commissioner latitude to say at any
time, under that plan, it can be changed with notification.
Therefore, the commissioner could notify the legislature that
DNR wants to change the lease sale from 2007 to 2006. He
repeated that provides the commissioner with some latitude and
it also provides a better reporting mechanism because DNR will
have to notify the legislature of any changes every year and
every time it proposes a change.
SENATOR WAGONER moved SB 266 and its attached fiscal note with
individual recommendations.
SENATOR DYSON noted, for the record, that he has run research
vessels in the [Bristol Bay] lease area related to the basin in
years past for oceanographers and marine biologists. No one owes
him any money from that work. In addition, he fished Bristol Bay
for 25 years but no longer has any financial interests in that
area.
CHAIR OGAN asked Senator Dyson, given his experience in the
area, whether he supports this legislation.
SENATOR DYSON said he does.
CHAIR OGAN noted that without objection, SB 266 moved from
committee.
SENATOR WAGONER moved SB 265 as amended and its attached fiscal
note from committee with individual recommendations.
SENATOR ELTON objected for the purpose of a potential amendment
[Amendment 2]. He suggested amending page 1, lines 5 and 6, by
adding "and prior to February 1 of each calendar year" so that
those lines would read:
"The commissioner shall annually prepare, and prior to
February 1 of each calendar year, notify the
legislature of".
He explained that he believes there is value for the legislature
to have the five-year plan before it during session. That would
enable legislators to know what DNR projects as a reasonable
schedule. He fears if a deadline is not provided for the five-
year schedule, the legislature's opportunity to discuss it
during session would be precluded.
CHAIR OGAN noted a motion was on the table to move the bill so
the amendment is out of order at this time.
SENATOR WAGONER withdrew his motion to move SB 265 from
committee.
SENATOR ELTON moved to adopt Amendment 2.
CHAIR OGAN announced a brief at-ease. Upon reconvening, he asked
Mr. Myers to comment on Amendment 2.
MR. MYERS said as long as Amendment 2 does not delay the
[Bristol Bay] lease sale, DNR would have no objection. He asked
Ms. Crosley if she sees any potential delay to the Bristol Bay
sale resulting from Amendment 2.
MS. CROSLEY said she is reasonably sure it does not. She said
one of the problems was with Section 2, which required the sale
to be on the schedule for two calendar years.
SENATOR ELTON reassured DNR and committee members that if
Amendment 2 will cause problems for the Bristol Bay lease sale,
he would encourage that it be revisited on the Senate floor.
MR. MYERS again stated that DNR is comfortable with Amendment 2.
SENATOR STEVENS repeated that the bill requires an annual
report, whereas the existing law requires a biennial report. He
questioned the need to specify a time certain for the report
each year. He indicated he would go with individual
recommendations but will not support the amendment.
SENATOR ELTON said he does not believe Mr. Myers' intent is to
keep information from the legislature, but if the annual report
is delivered every October, the legislature will be reviewing
four years of the plan when it convenes.
CHAIR OGAN called for the question.
The motion to adopt Amendment 2 carried with Senators Dyson,
Wagoner, Elton and Chair Ogan in favor, and Senators Stevens and
Seekins opposed.
SENATOR WAGONER moved CSSB 265(RES) and its attached fiscal
notes from committee with individual recommendations.
CHAIR OGAN announced that without objection, the motion carried.
He then adjourned the meeting at 5:00 p.m.
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