Legislature(2013 - 2014)BUTROVICH 205
03/05/2013 03:30 PM Senate SENATE SPECIAL COMM ON TAPS THROUGHPUT
| Audio | Topic |
|---|---|
| Start | |
| SB59 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 59 | TELECONFERENCED | |
SB 59-OIL & GAS EXPLORATION/DEVELOPMENT AREAS
3:36:31 PM
CO-CHAIR MICCICHE reported that the committee would have a
seconding hearing on SB 59 today. He noted that the committee
has received two letters in support of the bill and one in
opposition to it.
CO-CHAIR MICCICHE opened public testimony, but no one wished to
testify so he closed public testimony.
3:37:58 PM
SENATOR GARDNER inquired if the Department of Natural Resources
(DNR) has had a chance to see the letter from Lisa Weissler.
JOE BALASH, Deputy Commissioner, Department of Revenue, said he
had read the letter.
SENATOR GARDNER said Ms. Weissler refers to a Supreme Court
decision that required DNR to prepare comprehensive best
interest findings (BIF) for each phase of a project. Ms.
Weissler found the proposed legislation to be contrary to the
court finding. She asked Mr. Balash to comment on that issue.
MR. BALASH explained that with regard to the additional
opportunities for public notice and comment, each of the
decisions is to be taken in turn. The proposed statute would
provide that each stage of the process, the decision to dispose
of the land through the leasing process, then to authorize the
exploration activity, and then the development activities, could
be made at the same, or smaller, levels.
3:40:32 PM
SENATOR GARDNER said there was one particular paragraph she
wished to have clarification on.
WENDY WOOLF, Petroleum Land Manager, Division of Oil and Gas,
Department of Natural Resources, said she has had the
opportunity to read the letter.
SENATOR GARDNER said the part she wished to have clarified was
on top of the second page and she read:
Alaskans will no longer have the opportunity to
comment on proposed plans of operation for specific
project activities that may occur in or near their
community. They will be required to comment on oil and
gas exploration and development without knowing the
'when, where, how, or what kind of exploration,
development or production might ultimately occur' in a
potentially vast sale area - from 2 million acres in
the Beaufort Sea region to 7.6 million acres in the
North Slope Foothills.
MS. WOOLF summarized that the concern is that the public will
have to comment before knowing when, where, how and what kind of
exploration might occur.
SENATOR GARDNER added it could be ten years in advance or a very
large area.
MS. WOOLF deferred to Ms. Brown to comment on the legal aspects
of the concern.
She maintained that the public is going to have an opportunity
to comment about where activities can occur, how they can occur,
and what kind of activities can occur holistically in a
geographical area. They will look at those concerns in a
prospective area before they occur.
3:43:19 PM
SENATOR GARDNER said she applauds the intention to streamline
the process. She voiced concern that it is hard to galvanize the
public to respond when the issue is unknown and so far in the
future. She also wondered about unanticipated changes, such as
new technology.
MS. WOOLF said when talking about exploration approval, those
kinds of activities are broad and temporary in nature. However,
development plans may be more specific. By the time a company
gets to the development stage, they have already discovered a
reservoir and they have an idea of the size of the reservoir and
their overall plan to develop it. The development area will be
larger than a lease, but it may encompass a group of leases or a
unit. From a practical perspective it is not as large as a unit,
encompassing millions of acres. As the point the development
phase is allowed to move forward, each individual activity on
the ground - plans for operation for implementing that
development - still need to be approved by DNR. There are many
permits that will need to be approved through public processes
in order to implement the development. The bill does not get rid
of any public notices or opportunities to address specific
concerns people may have.
SENATOR GARDNER understood that the voice of the public is
retained at each of those steps.
MS. WOOLF said yes. The bill only addresses the Division of Oil
and Gas within DNR and the requirement to do an exploration
phase decision and a development phase decision. It does not
relieve DNR of the obligation under the oil and gas lease to
approve the specific plans of operation that implement a
company's development. Those specific plans of operation will
continue to have agency review, but not a public review. Any
time the division feels that there are concerns they could also
hold public reviews, depending on the need.
3:47:15 PM
SENATOR GARDNER asked if a citizen could rely on the agencies to
bring concerns to the public review phase if the agency saw a
problem.
MS. WOOLF explained that the public would have an opportunity to
comment at the initial phase. She said that when the plan goes
out to agency review that is generally when the division hears
about other concerns. She inquired if Senator Gardner asked if
the public has to rely on the agencies to do their job.
SENATOR GARDNER said yes.
CO-CHAIR MICCICHE commented that is not going to happen by
chance or by the public's notice of something substantially
different that triggers a reevaluation by the department. If
there is a substantial change in the activity that is different
than what is included in the prior lease system, a reevaluation
is triggered.
MR. BALASH clarified that the bill addresses winter exploration
that takes place on the North Slope and the standard exploration
well that has happened over 100 times in the last 25 years. He
added that the people in the communities most directly affected
by this activity are familiar with the process. Yet, the state
persists in going through the same exercise for each one of the
exploration plans and reviews. The bill is intended to provide
the department with a tool under which to standardize or
generalize the conditions under which that exploration activity
can take place in the given area. The department hopes to draw
out patterns of use and seasonal activities, such as subsistence
hunting or gathering, when making development decisions.
3:51:00 PM
SENATOR GARDNER appreciated that information. She emphasized
that she wanted to feel confident that efficiency does not lose
a critical piece - an opportunity for the public to make their
concerns known down the road. It should be the public's right to
be heard, not a department decision.
MR. BALASH pointed out that it is not clear that the department
would make the exploration decision process look exactly like
the leasing process, though it might have the same template.
With regard to the area-wide leasing program, the department
does put together a BIF that applies for ten years. However, it
is not just put on the shelf and left alone for ten years. He
said there is an annual call for new information, a look at new
technology and approaches, and changes in regulatory actions.
Similar features would more than likely be built into the
regulations applicable to SB 59.
3:53:39 PM
CO-CHAIR MICCICHE noted that SB 59 does not compromise any of
the permitting standards, it just allows for bulk permitting in
geographically similar areas. It does not change the 10-year
impact. It provides that a larger area is brought in for pooling
permits. Responsible companies will contact the community and
educate them on impacts of development activities.
MR. BALASH said that was correct. He suggested that the
geographic scope would be taken into account in the decisions.
Activities will look different in each area - it is not a cookie
cutter approach. The bill looks to broaden the geographic scope
of a given decision.
SENATOR GARDNER read, "The legislature amended AS 38.05.035(e)
with the stated intent of making it clear that no best interest
finding is required after the lease disposal phase but that
'public notice and the opportunity to comment shall be provided
at each phase of the project.'". She asked if that provision is
retained in SB 59.
3:56:31 PM
MR. BALASH said yes.
ASHLEY BROWN, Assistant Attorney General, Oil, Gas, and Mining
Section, Department of Law, agreed.
CO-CHAIR MICCICHE opined that Alaska and its natural resources
should be protected. He said he could not support the bill if it
allowed the department unrestricted permitting. He stated he was
comfortable with the aspects of geographic similarities and the
types of activities that would normally occur in those areas. He
spoke in support of needing an efficient permitting system in
Alaska that does not compromise on protection for people or the
environment.
SENATOR MCGUIRE said she was comfortable with the bill.
3:58:04 PM
At ease
3:59:11 PM
CO-CHAIR MICCICHE asked for the will of the committee.
SENATOR MCGUIRE moved to report SB 59 from committee with
individual recommendations and the attached fiscal note. There
being no objection, SB 59 was reported from the Senate Special
Committee on TAPS Throughput.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 59 Support - Brooks Range Petroleum Company 3-1-13.PDF |
STTP 3/5/2013 3:30:00 PM |
SB 59 |
| SB 59 Opposition - Weissler Public Testimony 3-1-13.pdf |
STTP 3/5/2013 3:30:00 PM |
SB 59 |
| SB 59 Support - Linc - Letter for Permit Reform 3-4-13.pdf |
STTP 3/5/2013 3:30:00 PM |
SB 59 |