Legislature(2009 - 2010)BUTROVICH 205

04/13/2009 03:30 PM RESOURCES

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03:36:03 PM Start
03:38:28 PM Confirmation Hearing: Board of Game
03:52:17 PM HJR22
04:06:30 PM HJR28
04:28:26 PM Confirmation Hearings: Board of Fisheries
05:49:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
Brent Johnson - Board of Fish
Cliff Judkins - Board of Game
Stanley "Stosh" Hoffman Jr.- Brd. of Game
Moved Out of Committee
Moved SCS CSHJR 28(RES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HJR 28-OPPOSE RESTRICTIONS ON OIL/GAS ACTIVITIES                                                                    
4:06:30 PM                                                                                                                    
CO-CHAIR   WIELECHOWSKI   announced  HJR   28   to   be  up   for                                                               
consideration.  [CSHJR 28(RES)am  was  before  the committee  for                                                               
JEANNE OSTNESS,  staff to Representative Johnson,  sponsor of HJR
28,  provided  a  brief  explanation  of  the  history  of  Outer                                                               
Continental Shelf (OCS) drilling.                                                                                               
MS. OSTNESS read the following statement:                                                                                       
     In 1953  Congress passed the Submerged  Lands Act (SLA)                                                                    
     which granted  individual states the rights  to natural                                                                    
     resources  on submerged  lands up  to three  miles from                                                                    
     shore.  It  also  reaffirmed   federal  claims  to  all                                                                    
     resources  on  lands  on the  Outer  Continental  Shelf                                                                    
     (OCS) which consists of all  lands seaward of the outer                                                                    
     limit of the state's 3 mile extent.                                                                                        
     The  passage of  the  Submerged Lands  Act  led to  the                                                                    
     passage of the Outer  Continental Shelf Lands Act later                                                                    
     in    1953.    That    act   outlines    the    federal                                                                    
     responsibilities   over   the   submerged   lands   and                                                                    
     authorizes  the  secretary  of the  Interior  to  lease                                                                    
     those lands for resource development.                                                                                      
     In  the 1960s  and 1970s  an emergent  environmentalist                                                                    
     movement  resulted  in  the  passage  of  the  National                                                                    
     Environmental Policy  Act of 1969, the  creation of the                                                                    
     EPA in 1970 and the  establishment of the Clean Air Act                                                                    
     in  1972. These  and  other related  bills created  the                                                                    
     core  of the  regulatory  framework  that is  currently                                                                    
     applicable to all extractive industries.                                                                                   
     During the  80's, various area specific  moratoriums on                                                                    
     OCS  drilling  were  passed by  Congress.  During  this                                                                    
     time, petroleum revenues dropped markedly.                                                                                 
     By 1990  the bans on  drilling had encompassed  so much                                                                    
     of  the  US  exclusive  economic zone  that  a  blanket                                                                    
     moratorium in most areas was  enacted by the President.                                                                    
     In  2008,  President  Bush rescinded  the  presidential                                                                    
     moratorium on  OCS drilling, removing one  of the major                                                                    
     roadblocks.  And in October  of 2008, Congress followed                                                                    
     suit and rescinded  their ban on OCS  leasing and lands                                                                    
     came up for lease.                                                                                                         
     The (Mining  and Minerals  Service) MMS  estimates that                                                                    
     about 574  million acres  of the  US OCS  are currently                                                                    
     off  limits  representing  about   85  percent  of  OCS                                                                    
     acreage offshore in the Lower  48.  Estimated resources                                                                    
     in the  banned areas  are 17.8  billion barrels  of oil                                                                    
     and 76.5 Tcf of natural gas.                                                                                               
     A  recent  northern  economics report  commissioned  by                                                                    
     Shell oil  on the  economic impacts of  OCS development                                                                    
     in Alaska,  projects that 35,000  jobs will  be created                                                                    
     in the state  over 50 years of OCS  development.  Those                                                                    
     jobs represent  a combine payroll  of $72  billion over                                                                    
     the 50-year period projected in the study.                                                                                 
     Unfortunately, recent comments  and actions by Interior                                                                    
     Secretary  Salazar and  President Obama  have cast  the                                                                    
     future of  OCS drilling  into doubt. Present  Obama has                                                                    
     chosen  to  delay  the   lifting  of  the  presidential                                                                    
     moratorium on  OCS drilling  and Secretary  Salazar has                                                                    
     expressed an  interest in closing or  severely limiting                                                                    
     OCS exploration and  drilling in areas of  the Lower 48                                                                    
     in favor  of an  as yet uncrafted  comprehensive energy                                                                    
     This  kind of  back-pedaling and  uncertainty adversely                                                                    
     effects   potential    exploration   and   development.                                                                    
     Especially in economically  uncertain times like these,                                                                    
     companies  can't afford  to risk  huge sums  of capital                                                                    
     unless  they have  a  reasonable  guarantee that  their                                                                    
     investment won't be  pulled out from under  them at the                                                                    
     last minute.                                                                                                               
     To  that  effect,  HJR  28 sends  a  clear  message  to                                                                    
     President Obama, Secretary Salazar  and the US Congress                                                                    
     that they should pass no  laws or administrative orders                                                                    
     that  would restrict  OCS drilling  and exploration  in                                                                    
     Alaska or the  continental US.  Further,  it urges them                                                                    
     to encourage offshore exploration  and drilling. I urge                                                                    
     you to support this resolution.                                                                                            
SENATOR  FRENCH  asked for  Obama's  comments  which Ms.  Ostness                                                               
referred to.                                                                                                                    
MS. OSTNESS  said she has  Secretary Salazar's at hand.  She does                                                               
not have  President Obama's comments  with her but will  get them                                                               
for Senator French.                                                                                                             
4:11:54 PM                                                                                                                    
MARILYN CROCKETT,  Alaska Oil and Gas  Association, supported HJR
28.  Ms. Crockett  stated  the MMS  estimates  that Alaska's  OCS                                                               
resources contain an estimated 27  million barrels of oil and 132                                                               
trillion  cubic feet  of natural  gas. Recent  analysis shows  it                                                               
could generate another $1.3 trillion  in federal, state and local                                                               
revenues and contribute  150,000 jobs if the  areas offshore that                                                               
are restricted  from development at  this time are opened  up. On                                                               
the Alaska level  there is the potential to  generate 35,000 jobs                                                               
with  a  total  payroll  of  $72  billion.  Clearly  this  is  an                                                               
important resource for Alaska and the nation.                                                                                   
4:14:04 PM                                                                                                                    
MS. CROCKETT said  that a lot of challenges exist  such as remote                                                               
location and  harsh operating  environment, but  other challenges                                                               
can be minimized such as access restrictions.                                                                                   
4:14:34 PM                                                                                                                    
JASON   BRUNE,    Executive   Director,    Resource   Development                                                               
Council(RDC), supported  HJR 28. Mr.  Brune stated that RDC  is a                                                               
statewide non-profit,  membership funded organization  founded in                                                               
1975  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                                                               
together  to encourage  a strong,  diversified private  sector in                                                               
Alaska  and   expand  the  state's  economic   base  through  the                                                               
responsible   expansion  of   natural  resources.   He  said   an                                                               
additional 15 trillion  cubic feet of gas must  be discovered for                                                               
the trans-Canada  or Denali pipeline  project to  be economically                                                               
viable  over  the  long  term.   He  stated  that  we  should  be                                                               
encouraging OCS  development not hampering  it. OCS has  a strong                                                               
track  record  of  coexisting  with  other  industries  including                                                               
MR.  BRUNE  stated  that   energy  exploration,  development  and                                                               
production in federal  and state waters around  Alaska will occur                                                               
in  an  environmentally  sensitive and  responsible  manner  with                                                               
restrictions  when  needed.   He  said  the  U.S.   has  a  moral                                                               
obligation to  develop domestic  energy sources.  The OCS  is the                                                               
ideal  location and  its resources  will buy  the time  needed to                                                               
develop the alternative and renewable  energy resources that will                                                               
someday break our reliance on foreign oil.                                                                                      
4:17:39 PM                                                                                                                    
MS.  OSTNESS drew  attention to  the House  amendment on  page 3,                                                               
line 3 of the resolution. It  put an emphasis on "responsible" in                                                               
encouraging  and  promoting  continued  responsible  exploration,                                                               
development and production.                                                                                                     
SENATOR FRENCH  supported the thrust  of this resolution,  but he                                                               
was concerned about the WHEREAS clause  on page 2, lines 18 - 21.                                                               
It  states  that key  members  of  the Obama  administration  and                                                               
Congress  have  stated  as  "key  priority"  the  restriction  of                                                               
development of  Alaska's off-shore oil and  gas reserves. Senator                                                               
French  said he  wonders if  it would  be better  to remove  that                                                               
clause  and  focus  on  telling   the  Obama  administration  and                                                               
Congress that we are strongly in support of OCS development.                                                                    
SENATOR HUGGINS  objected for discussion.  His first  question to                                                               
the sponsor is whether that is true or not.                                                                                     
MS.  OSTNESS   replied  that  Secretary  Salazar   announced  the                                                               
Department of the Interior's new  strategy for developing an off-                                                               
shore  energy  plan. Ms.  Ostness  said  step  one is  a  180-day                                                               
extension on comment period for the  proposed 5 year plan for oil                                                               
and  gas development.  Step two  is  assembling a  new report  on                                                               
conventional  and renewable  off-shore energies  and having  then                                                               
four regional conferences to review  the findings. The final step                                                               
is expediting renewable energy rule-making  for OCS.  Ms. Ostness                                                               
stated that it just seemed that it was a delaying tactic.                                                                       
SENATOR FRENCH  said he didn't hear  it as a key  priority of the                                                               
Obama  administration   to  impose  restrictions   on  developing                                                               
Alaska's off shore  and gas reserves. That may  be the underlying                                                               
motive  but that  is not  what was  stated. It  is better  off to                                                               
remove it.                                                                                                                      
SENATOR  HUGGINS said  it does  appear to  be a  little bit  of a                                                               
stick in the  eye. He asked the sponsor if  that had been pointed                                                               
out before.                                                                                                                     
MS. OSTNESS replied no, it had not.                                                                                             
CO-CHAIR  WIELECHOWSKI  said  he  hoped   to  move  this  out  of                                                               
committee today as  Secretary Salazar is in Alaska  and a message                                                               
could  be sent  to him.  Co-chair Wielechowski  said he  tends to                                                               
agree with Senator French.                                                                                                      
4:22:16 PM                                                                                                                    
SENATOR WAGONER  said it isn't  imperative that this be  given to                                                               
Secretary Salazar  tomorrow. He  said perhaps this  section needs                                                               
to  be rewritten  and checked  if it  is factual.  Even if  it is                                                               
factual, it should be rewritten.                                                                                                
MS. OSTNESS said  she does not think the sponsor  would object to                                                               
taking that section out.                                                                                                        
CO-CHAIR  WIELECHOWSKI  asked Ms.  Ostness  given  the choice  of                                                               
delaying the resolution  or taking the section out,  if she would                                                               
have a preference.                                                                                                              
MS. OSTNESS replied that she would rather have it move.                                                                         
SENATOR  HUGGINS  maintained his  objection.  He  stated that  it                                                               
would be  smarter to take a  look and see what's  true and what's                                                               
not, change the language and capture the sponsor's intentions.                                                                  
SENATOR FRENCH  said he would  just as soon remove  that section.                                                               
It cleans it  up and the message could be  delivered to Secretary                                                               
Salazar when he's here in Alaska.                                                                                               
4:24:34 PM                                                                                                                    
MS. OSTNESS said  that this is viewed as a  "sense of the House,"                                                               
had  the  majority  members  signed the  letter  and  have  given                                                               
Secretary Salazar the resolution with the House's results.                                                                      
CO-CHAIR WIELECHOWSKI  said he would  like to move HJR  22 today,                                                               
but it is a committee process.                                                                                                  
SENATOR HUGGINS  said he agreed  with striking it, but  the sense                                                               
of  the House  has  already happened.  The  resolutions would  be                                                               
different if the Senate changes it.                                                                                             
SENATOR FRENCH said  there is no obligation that  they be exactly                                                               
the same.  The Senate  could pass  one that  says what  they have                                                               
agreed to.                                                                                                                      
SENATOR HUGGINS said he preferred  to do the modification so that                                                               
it moves out, is accurate and doesn't stick somebody in the eye.                                                                
SENATOR STEVENS pointed  out that this is a  joint resolution. He                                                               
questioned  that the  House has  already dispersed  their version                                                               
even though  it has not been  approved by both the  House and the                                                               
MS. OSTNESS  said a letter  was written just indicating  that the                                                               
House has  passed this  resolution and  that it  was viewed  as a                                                               
sense of the House at this point.                                                                                               
SENATOR  STEVENS remarked  that sending  a joint  resolution that                                                               
hasn't been approved by the Senate was premature.                                                                               
MS. OSTNESS replied  that it was just a letter;  they didn't send                                                               
the resolution.                                                                                                                 
SENATOR STEVENS said he is  comfortable moving the resolution. It                                                               
does not harm the resolution to take it out.                                                                                    
4:26:48 PM                                                                                                                    
SENATOR WAGONER asked for clarification  on what was sent, was it                                                               
a letter stating there was a resolution in process?                                                                             
MS. OSTNESS answered yes - and  that it had passed the House with                                                               
a majority vote.                                                                                                                
SENATOR WAGONER  said he'd  be comfortable taking  it out  if the                                                               
sponsor didn't want to re-write the  section, but he thinks if it                                                               
is left in it should be re-written.                                                                                             
SENATOR FRENCH maintains his motion to  remove page 2, lines 18 -                                                               
4:27:34 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI  asked if there was  continued objection to                                                               
the  motion  of removing  page  2,  lines  18-21. There  were  no                                                               
objections and it was so ordered.                                                                                               
SENATOR FRENCH  moved to  report SCS CSHB  HJR 28(RES)am  be from                                                               
committee   with  individual   recommendations.  There   were  no                                                               
objections and it was so ordered.                                                                                               

Document Name Date/Time Subjects
Cliff Judkins - Confirmation.pdf SRES 4/13/2009 3:30:00 PM
Brent Johnson - Confirmation.pdf SRES 4/13/2009 3:30:00 PM
Stanley Hoffman - Confirmation.pdf SRES 4/13/2009 3:30:00 PM
HJR 22 - Bill Packet.pdf SRES 4/13/2009 3:30:00 PM
HJR 28 - Bill Packet.pdf SRES 4/13/2009 3:30:00 PM