Legislature(2013 - 2014)BUTROVICH 205
03/15/2013 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR5 | |
| SB60 | |
| SB69 | |
| SB59 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 59 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HJR 5 | ||
| = | SB 60 | ||
| = | SB 69 | ||
SB 59-OIL & GAS EXPLORATION/DEVELOPMENT AREAS
4:16:42 PM
CHAIR GIESSEL announced SB 59 to be up for consideration.
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), Juneau, Alaska, provided an overview of SB 59. In the
broader context he said arresting the TAPS throughput decline is
the most urgent issue facing the state economically.
4:17:54 PM
Enhancing Alaska's competitiveness across a whole number of
areas, in particular tax reform, also includes promoting
Alaska's resources and resource base throughout the entire
world, and facilitating and incentivizing the next phase of
North Slope development. Another key element of that
comprehensive strategy is ensuring a permitting process that is
more efficient, timely, and more certain, and that is what SB 59
is focused on.
4:19:10 PM
COMMISSIONER SULLIVAN said in talking to different companies
throughout the country and the world the issue of
competitiveness comes up, but the issues of permitting,
timeliness and certainty of Alaska's permitting system also come
up. Repsol recently had very senior officials come in from
Madrid to talk about a number of things and they saw the work
the legislature has taken up regarding taxes and permitting
reform, particularly as they looked at moving into development.
He said that one of the other things he has testified previously
on was the Governor's Comprehensive Permitting Reform
Modernization Plan and that includes an entire suite of
permitting reform efforts that has very strong bipartisan
support. Whether it's TAPS throughput, gasline commercialization
off the North Slope, Interior energy plan, Cook Inlet energy
issues, strategic and critical minerals, the work they are
trying to do on permitting reform and modernization touches all
of those critical interests of the state.
COMMISSIONER SULLIVAN said it is encouraging when you start to
see things move. Last week he put out a press release because
the Frasier Institute that does an annual survey of mining
competitiveness had moved Alaska up in its ranking
significantly, and for two major reasons: the statewide mineral
assessment and the significant improvements in labor and skilled
force training in the mining sector (which Senator Bishop had a
lot to do with).
4:22:31 PM
He said the state certainly wants to maintain its high standards
of environmental protection and encouraging responsible
development, but none of the governor's bill diminishes from
that. He explained that there has also been the issue of public
input and this goes to leases that have already been determined
through best interest findings that there is going to be oil and
gas development; the leases have already been issued. The best
interest findings have an enormous public input process. This is
trying to get public input at the beginning of exploration
phases and at the beginning of development phases; it is in many
ways more meaningful than at the smaller points throughout each
of the phases. This also brings certainty to exploration and
development which is not only good for the public to know what's
happening, but it does encourage more investment and it's good
with regard to industry's outlook on developing responsible
resource development in the state.
4:24:11 PM
COMMISSIONER SULLIVAN said that Representative Hawker brought up
a good point on the companion bill in House Resources that DNR
arguably already has the authority to do this. But that
authority is not clear and he wants it absolutely clear that the
department has the authority from the legislative branch rather
than going to court.
4:26:07 PM
SENATOR BISHOP asked how much the gap in permitting time would
close from enacting this legislation.
COMMISSIONER SULLIVAN answered that it closes up public notice
times that are 30, 60 and 90 days currently. He explained that a
lot of their permitting reform efforts are focused on making a
very comprehensive public input process up front at the
exploration phase and the development phase with very specific
parameters within those plans that are approved by public notice
and comment rather than changing something in the middle of the
plan - so everyone knows where the certainty is. But they think
it might have a much more positive impact than just the specific
window of days that are being removed.
4:28:23 PM
BILL BARRON, Director, Division of Oil and Gas, Department of
Natural Resources (DNR), said over the last several years they
had tried to take a real hard look at land management issues and
processes they can modify to encourage dialogue, transmission of
information and data between the public sector and the private
sector. In this bill they are trying to figure out another tool
to manage state land.
One of the common themes they have heard in several discussions
with the North Slope Borough, specifically, is that they really
want to understand on a broader basis what will happen in a
geographic area rather than a project by project approach.
MR. BARRON said they took a page out of their play book from
area wide lease sales in which they go through a robust
discussion and identify state lands that would be made available
for state leases for oil and gas development. The understanding
is that this land well be developed and it's really a question
then of how to develop it.
The next logical step is to identify smaller areas for
exploration and even smaller areas for development than the area
wide lease is. The public would engage upfront with a broader
understanding of the activities that could take place and
probably will take place and be able to identify areas of
concern (before plans are approved) and let the identify
mitigation issues and set standards for companies. He said this
is not something they would do across all state lands; it's just
a tool they would have available.
4:32:54 PM
WENDY WOOLF, Office Assistant, Division of Oil and Gas,
Department of Natural Resources (DNR), said she would go through
how exploration and development activities are approved today
and how this bill will change the process.
She started with how they offer lands for sale and explained
that the department has five oil and gas lease sales in the
state: the North Slope, the Beaufort Sea, the North Slope
Foothills, Cook Inlet and the Alaska Peninsula. These are the
area wide lease sales the bill is addressing.
She said that SB 59 takes the statutory requirement to provide a
public notice at the beginning of each phase of a multi-phased
project and clarifies that DNR can review the phase in each
geographic area. In this context, "project" is not the
individual activity on the land; it is oil and gas development
in general, because the "project" is the lease sale area.
She said the best interest findings indicate the department is
going to do a multi-phased project review, the first phase being
a lease disposal phase, the second phase being exploration and
the third phase being development. When the word "project" is
used in this context it means a general project not one that is
site specific. The last one is actually transportation, which is
the pipelines.
MS. WOOLF said their best interest finding is when they decide
that oil and gas development will occur in the area and it is
done at the initial leasing phase. The question then becomes how
oil and gas development will occur and that's done through the
exploration and development phase decisions. This bill allows
them to take a look at a broader geographical area when
evaluating exploration and development, but it will not change
how they evaluate the transportation phase.
4:35:06 PM
MS. WOOLF explained that this measure will allow the public to
look at exploration and development across the broader
geographic area and provide input about how a particular area
should be developed before the development occurs. They can
identify their concerns at the very beginning before they need
to respond to a project that is already happening in their
neighborhood.
She said industry benefits by knowing what parameters they need
to operate under while they are in the design phase of their
site-specific activities and coming forward with their plan of
operation. So they submit a plan of operation that is in
compliance with not only the lease mitigation measures that come
out in the best interest finding, but in compliance with an
exploration decision that says these are the parameters under
which you can explore.
In the event that a project doesn't meet the parameters, the
department would go out for another public notice and comment.
4:37:19 PM
MS. WOOLF explained that the best interest finding is a broad
public process: it has extensive public and state/federal agency
participation and the impacts associated with oil and gas
development are evaluated based on statutory criteria. The
resulting decision has concrete mitigation measures that the
operators who are successful in acquiring leases in the area
must comply with. It also says they are doing a multi-phased
project review, so that it is only addressing the leasing phase.
Before subsequent phases are approved, the division would do a
public notice of opportunity to comment. Those phases are
defined in statute as "exploration, development, and
transportation."
4:38:30 PM
To implement that requirement, the public is accustomed to the
department taking the requirement to provide public notice and
opportunity to comment at the beginning of an exploration or
development phase down to a site specific activity on a lease by
lease basis from a particular operator. And what happens is that
the lease is disposed of in the lease sale and then the lessee
will come in probably a few years later with a plan of operation
for their seismic program (that may go across multiple leases).
The department would go out to public notice for comments and
come up with approval for their seismic program that includes
any special stipulations that might be necessary.
If they are successful with that, the operator will come in with
their next plan of operation for an exploration well; again the
department will go out with a public notice of comment and issue
the approval for the plan of operation for exploration. If the
same operator wants to come in with another exploration plan -
even for the same lease - the department will go out again for
another public notice and comment before approving it. If the
operator is successful and has a discovery, they will come in
and describe their conceptual development plans, but then at the
point that they come in with their actual plan of development
for their initial development the department will go out with
the public review.
After that public comment period and the plan is approved, if
the operator needs to modify it, they will go out with another
public notice, even though it is in the same area being
developed and do another public notice with comment before
approving the modified plan.
Pipeline applications will continue being a separate process and
is dealt with in a separate statute; that won't change.
If the operator is successful and wants to have enhanced
recovery or additional development (a satellite pad), even in a
fully developed lease, the department will go out with another
public comment period.
4:41:17 PM
If the adjoining lease's operator comes in and wants to put an
exploration well in, the process is started over again, even
though the lease to the north is in full development. Then when
they come in with a development plan, again, the department will
go out for a public notice and comment before approving the plan
of operation. Transportation will continue to be noticed
separately. As Ms. Woolf said, that is how the process works
today and it's very redundant if you're in a small geographic
area. If you're in a totally separate area it's not.
MS. WOOLF explained that when you're talking about a geographic
area where there's activity going on, it's nice to be able to
look at something much more holistically than to focus on each
individual project. In the past the public has wanted to know
more about what is happening in an area before they even provide
comments for the first plan.
4:46:46 PM
Under SB 59, operators' plans would still have agency review (as
today). The development phase goes through a public notice
period and the activities are described; a phase analysis is
done when the department has a conceptual plan of development
from an operator. When the plans are implemented, subsequent
public notices will occur. The pipeline applications will
continue to have their separate public notices.
MS. WOOLF said it's important to remember that the plans of
operation are not automatically approved by these phasing
decisions. The department is required to review them to make
sure they are in compliance with the regulations, the mitigation
measures and sister agency comments. Part of what these
decisions will allow the operators to do is to plan ahead and
hopefully by the time the department gets the plans of operation
its concerns will have been addressed.
So, at the end of the day, the department would come out with
their exploration phase decision and have a public notice and
comment on a little geographic area. They'd go through the
process and come up with the special stipulations, and then when
an operator comes in with their particular plans of operation
for their exploration phase, those pieces could go through
without public notice. The plans will still require approvals,
but they won't require the public notice.
She explained that the department goes out with a decision for
the development phase outlining all the criteria and the
parameters, but once they have gotten through that process, each
individual plan of operation that is implementing the
development plan can proceed without the additional public
notices. As always, any time there are changes or concerns in
the plans of operation that weren't considered in the first
phase analysis they can always go out with individual public
notices for them. This is just a tool the department can use;
it's not a requirement, so it doesn't prevent them from going
out individually.
4:49:29 PM
MS. WOOLF said the time savings will be for both the state and
the companies, because now they may go out for an agency review
and then the public notice and comments; and then they tell the
company their concerns and how to address them. For the state
that takes 30-60 days, but it might take 6 months for the
companies, because they have had to modify their plans to
incorporate those concerns. She said they are trying to provide
certainty for everybody going into a development. In the
beginning industry can also say it can't comply and come up with
some other plan, and then the department would see if it could
go forward or not. This is really about how development occurs
on state land; it doesn't change any of the other regulatory
processes that exist and it doesn't change the opportunity to
appeal a decision the department has made in error. Those
decisions are being more accessible, but they are public and
anyone can come in and look at them.
4:51:11 PM
SENATOR FRENCH asked her to compare slides 6 and 9. On slide 6
it looks like there are seven opportunities for public notice
and comment in the normal course of a lease and exploration and
development plan that, but slide 9 looks like there would be
only two opportunities under this bill.
MS. WOLF replied yes, but he was omitting the important initial
opportunity at the best interest decision. It's important to
remember the extensive notices those go through and the lengthy
mitigation measures that are put in place. In order for an
operator to even submit his plan, he has to go through each
mitigation measure in that area and tell her how they are
complying with it.
SENATOR FRENCH said in slide 6 that would be something that
happened before the final finding of the director.
4:52:48 PM
MS. WOOLF said that was correct. She added that every year they
go out to ask for any new information in the sale areas that
could be needed for their best interest findings. At that point
the public could say there is way too much exploration going on
and why.
SENATOR FRENCH asked how much area they are covering with the
second phase after the best interest finding.
MR. BARRONS said he couldn't answer that question yet, because
they are trying to basically put out a systematic approach
towards this process. They intend to fully to establish those
areas through a regulation process. So, they would engage the
public upfront. For instance, someone could come in through that
process and ask for a larger area to be broken into smaller
portions and the department could do that. He explained that the
area wide lease sale is "pretty darn big" and the exploration
areas should not be as big (although it should be fairly big
because the impacts are ice roads and ice pads and very limited
exposure kinds of operations). They really want to concentrate
on the development portion and those areas could be incredibly
small like the size of a single unit.
SENATOR FRENCH commented that this will have some strong and
fantastic applications on the North Slope where there are few
people and few other impacts, where 95 percent of the state
would say yes, let's explore this. But he thought there would be
more conflicts in the Cook Inlet where there are more people and
more recreational and hunting/fishing users. His concern was
giving the department a huge new opportunity to develop without
that same amount of public input in densely populated areas.
MR. BARRONS said he appreciated that insight and that they had
considered that. Even now some people come in with an amendment
to their plan that is too great and the department has required
them to go back out for public notice and comment and that would
still be the practice of the division. He explained that they
might choose not to do it in multi-use areas; Kenai's east side
would be a good example. But this would be a great tool to use
on the west side, which has a less dense population. They are
just trying to get the clear authority to use it.
4:58:09 PM
SENATOR MICCICHE cautioned him to not use the word "Kenai" too
broadly and that "middle of the Inlet" would be a perfect
application. The process in SB 60 was a safer way to understand
the larger environmental community impacts and he liked that. He
also liked that it is separated in phases and the public would
be lot more comfortable knowing it does require a new evaluation
for significant scope or impact changes. Best, he liked the
added efficiency, because if you're doing the same thing, it's
not only more efficient for human resources at the department
but also for NGOs and individuals who are looking at a larger
area.
4:59:02 PM
CHAIR GIESSEL asked Mr. Barron if he had been operating under
this method and felt that he had this authority already, but
wanted it clarified in statute.
MR. BARRON replied no; they had been doing exactly as Ms. Woolf
described: the public process at every step. But they want to
make sure they understand clearly what this body wants them to
operate.
5:00:23 PM
JAMES SULLIVAN, lobbyist, Southeast Alaska Conservation Council
(SEACC), Juneau, Alaska, said he was becoming more uncertain
about how SB 59 would affect large portions of the state the
more he heard the department's presentations. It's particularly
problematic to not be able to comment on changes within a small
geographic area (as the public is currently allowed) and how
this would be applied in the Cook Inlet area in particular.
CHAIR GIESSEL thanked everyone for their testimony. She closed
public testimony and held SB 59 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 59 vs A.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Transmittal Letter.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Briefing Paper.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Sectional Analysis.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Fiscal Note DNR-DOG 2013.01.14.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB59 SRES DNR Presentation 2013.03.15.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 69 Supp Letter.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 59 Supp Letter Linc CorriFeige 2013.03.04.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Supp Letter NSB CharlotteBrower 2013.03.15.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Supp Letter BRPC BartArmfield 2013.03.01.PDF |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 69 Supp Written Testimony KatieWilliams BSFA.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 69 NFHAP Funding Allocation - approved by the NFHB - Oct 2011.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 60 Opp Letter TinaBrown 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Written Testimony SARDFA 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter JulieDecker 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 USFWS 1994 Conservation Plan.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Legal Opinion.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter SE Conference.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 UCSC Study distributed by AWA.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 National Marine Sanctuaries Kelp Forests distributed by AWA.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter UFA 2013.03.15.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Written Testimony SEAFA 2013.03.12.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Opp Letter PatriciaOBrien 2013.03.15.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| HJR 5 Supp Letter 19 SEAGO.pdf |
SRES 3/15/2013 3:30:00 PM |
HJR 5 |
| HJR 5 Presentation Rep. Tarr.pdf |
SRES 3/15/2013 3:30:00 PM |
HJR 5 |