Legislature(2013 - 2014)HOUSE FINANCE 519

03/26/2013 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ SB 27 REGULATION OF DREDGE AND FILL ACTIVITIES TELECONFERENCED
Heard & Held
+ HB 129 OIL & GAS EXPLORATION/DEVELOPMENT AREAS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 26, 2013                                                                                            
                         8:59 a.m.                                                                                              
                                                                                                                                
8:59:53 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 8:59 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lindsey Holmes                                                                                                   
Representative Scott Kawasaki, Alternate                                                                                        
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative David Guttenberg                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Daniel   Sullivan,  Commissioner,   Department  of   Natural                                                                    
Resources;  Ed Fogels,  Deputy  Commissioner, Department  of                                                                    
Natural  Resources; Larry  Hartig, Commissioner,  Department                                                                    
of Environmental  Conservation; Wendy Woolf,  Petroleum Land                                                                    
Manager,   Division  of   Oil/Gas,  Department   of  Natural                                                                    
Resources;  Joe Balash,  Deputy Commissioner,  Department of                                                                    
Natural Resources.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 129    OIL & GAS EXPLORATION/DEVELOPMENT AREAS                                                                               
                                                                                                                                
          HB 129 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB  27    REGULATION OF DREDGE AND FILL ACTIVITIES                                                                              
                                                                                                                                
          SB 27 was HEARD and  HELD in committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SENATE BILL NO. 27                                                                                                            
                                                                                                                                
     "An  Act  establishing  authority   for  the  state  to                                                                    
     evaluate  and   seek  primacy  for   administering  the                                                                    
     regulatory  program  for  dredge  and  fill  activities                                                                    
     allowed  to individual  states  under  federal law  and                                                                    
     relating  to  the  authority;   and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:00:09 AM                                                                                                                    
                                                                                                                                
DANIEL   SULLIVAN,  COMMISSIONER,   DEPARTMENT  OF   NATURAL                                                                    
RESOURCES, explained  that SB 27  and HB 129  were presented                                                                    
by the  Department of  Transportation and  Public Facilities                                                                    
(DOT/PF).  He noted  the strong  bipartisan support  for the                                                                    
bill.  He  provided  a PowerPoint  presentation,  "Statewide                                                                    
Permitting Reform" (copy on file).                                                                                              
                                                                                                                                
Commissioner Sullivan discussed slide 2: "Importance of                                                                         
Permitting Reform for Alaska's Competitiveness."                                                                                
                                                                                                                                
     Permitting reform has bipartisan, national, and local                                                                      
     recognition and support                                                                                                    
                                                                                                                                
          -Permitting  reform  is  a  bipartisan  effort  as                                                                    
          policymakers  realize  the  economic  benefits  of                                                                    
          allowing   large-scale  development   projects  to                                                                    
          proceed in a responsible, timely manner                                                                               
                                                                                                                                
          -States  as  politically  diverse  as  California,                                                                    
          Massachusetts,  Indiana,  and   Kansas  are  fully                                                                    
          engaged in modernizing their permitting processes                                                                     
                                                                                                                                
          -The  Federal   government  also   recognizes  the                                                                    
          issues  and has  undertaken initiatives  to reduce                                                                    
          costs,   simplify   the  system,   and   eliminate                                                                    
          redundancy and inconsistency                                                                                          
                                                                                                                                
          -Last year  (February 2012),  The Economist  ran a                                                                    
          cover  story  called  "Overregulated  America"  in                                                                    
          which it concluded that  ''America needs a smarter                                                                    
          approach  to  regulation"  that will  "mitigate  a                                                                    
          real danger:  that regulation  may crush  the life                                                                    
          out of America's economy"                                                                                             
                                                                                                                                
          -In  Newsweek June  2011), President  Bill Clinton                                                                    
          lamented that it  can take three years  or more to                                                                    
          permit  major economic  development projects.  One                                                                    
          of his  top recommendations to put  Americans back                                                                    
          to work \-vas to  speed up the regulatory approval                                                                    
          process and  grant state waivers  on environmental                                                                    
          rules  to  hasten   start  times  on  construction                                                                    
          projects                                                                                                              
                                                                                                                                
Commissioner Sullivan looked at slide 3: "Importance of                                                                         
Permitting Reform for Alaska's Competitiveness."                                                                                
                                                                                                                                
     Permitting reform is a national issue affecting                                                                            
     U.S. competitiveness                                                                                                       
                                                                                                                                
          -Potential investors  sometimes express reluctance                                                                    
          to pursue projects in the  U.S. and Alaska because                                                                    
          of the ever-present risk  of permitting delays and                                                                    
          litigation                                                                                                            
                                                                                                                                
          -In  2012,  the   investment  firm  Behre  Dolbear                                                                    
          Group, 'which  undertakes an annual  global survey                                                                    
          of  mineral sector  investment, ranked  the United                                                                    
          States last  (tied with Papua  New Guinea)  out of                                                                    
          25  countries  in   the  category  of  "permitting                                                                    
          delays"                                                                                                               
                                                                                                                                
               "Permitting delays are the most significant                                                                      
               risk to mining projects in the United                                                                            
               States"                                                                                                          
                                                                                                                                
               States  are  negatively impacted  by  federal                                                                    
               rules   that  they   are  bound   to  enforce                                                                    
               resulting  in a  7-to 10-year  waiting period                                                                    
               before mine development can begin                                                                                
                                                                                                                                
               Australia is one of the countries with the                                                                       
               fewest permitting delays                                                                                         
                                                                                                                                
          -Contrast Alcan Highway construction                                                                                  
                                                                                                                                
9:04:21 AM                                                                                                                    
                                                                                                                                
Commissioner Sullivan highlighted slide 4: "Importance of                                                                       
Permitting Reform for Alaska's Competitiveness."                                                                                
                                                                                                                                
     Jobs and the Environment are Undermined by Permitting                                                                      
     Delays and Overregulation                                                                                                  
                                                                                                                                
          -While an overly  burdensome regulatory system can                                                                    
          discourage  investments and  job creation,  it can                                                                    
          also   undermine,   not   enhance,   environmental                                                                    
          protection                                                                                                            
                                                                                                                                
          -When  companies forgo  investing  in places  like                                                                    
          Alaska  and   the  U.S.  places  with   very  high                                                                    
          environmental   standards-because  of   regulatory                                                                    
          delays,  it  can   result.in  passing  energy  and                                                                    
          mineral  investment  to nations  with  substandard                                                                    
          environmental regulations  and little  capacity or                                                                    
          desire to protect the environment                                                                                     
                                                                                                                                
               Last  year  the  Associated  Press  estimated                                                                    
               that 5  to 20  million tons  of oil  leaked a                                                                    
               year in  Russia. At even the  lower end, that                                                                    
               would  be  the   equivalent  of  a  Deepwater                                                                    
               Horizon blowout about every two months                                                                           
                                                                                                                                
               Russia experienced approximately 18,000 oil                                                                      
               pipeline ruptures in 2010 the figure in the                                                                      
              U.S. for the same year was 341                                                                                    
                                                                                                                                
          -The global  environment would be much  better off                                                                    
          if hydrocarbons  and other natural  resources were                                                                    
          produced   in    countries   with    the   highest                                                                    
          environmental  standards rather  than some  of the                                                                    
          lowest                                                                                                                
                                                                                                                                
Commissioner  Sullivan   highlighted  slide   8:  "Statewide                                                                    
Permitting  Reform." He  stated that  the assistance  of the                                                                    
committee was  imperative to reform  and he stated  that the                                                                    
budget was reduced by one third.                                                                                                
                                                                                                                                
9:07:49 AM                                                                                                                    
                                                                                                                                
Representative Gara asked for a synopsis of permitting                                                                          
"streamline bills." Commissioner Butcher replied that HB                                                                        
360 passed in the previous legislature.                                                                                         
                                                                                                                                
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES, stated that  interstate mining compact commission                                                                    
bill passed in the previous session.                                                                                            
                                                                                                                                
Representative Gara  noted problems  with the Army  Corps of                                                                    
Engineers in the  past. He recalled a slide  from a previous                                                                    
presentation that  stated that  the decisions from  the Army                                                                    
Corps  of   Engineers  had  been  historically   timely.  He                                                                    
wondered  if  there   would  be  a  similar   slide  in  the                                                                    
presentation. Commissioner Sullivan  noted that Pt. Thompson                                                                    
and CD  5 were examples  of the  need for primacy.  He added                                                                    
that the department  wished to avoid the  problem of federal                                                                    
EPA and Fish and Wildlife permitting delays.                                                                                    
                                                                                                                                
Representative  Gara  stressed   that  there  were  possible                                                                    
deficits that would reach beyond  a billion dollars. He felt                                                                    
that  the primacy  bill  would  ask the  state  to spend  $2                                                                    
million  per  year. He  asked  if  there  would be  a  slide                                                                    
related  to the  timeliness  of the  decisions  of the  Army                                                                    
Corps  of  Engineers.  Commissioner  Sullivan  replied  that                                                                    
fully evaluating the  cost to benefit aspect  of primacy. He                                                                    
stated that  the Corps  budget was  recently reduced,  so he                                                                    
could not speak to the timeliness of their decisions.                                                                           
                                                                                                                                
Mr. Fogels  added that  the time limits  were not  the whole                                                                    
issue.  Stipulation  and  mitigation requirements  played  a                                                                    
large role in the permitting process.                                                                                           
                                                                                                                                
9:14:50 AM                                                                                                                    
                                                                                                                                
LARRY  HARTIG,  COMMISSIONER,  DEPARTMENT  OF  ENVIRONMENTAL                                                                    
CONSERVATION,  discussed the  primacy aspect  of the  fiscal                                                                    
note. He noted  the bridge and build program  in Section 404                                                                    
permit  from  the Corp  of  Engineers.  He noted  that  with                                                                    
primacy,  the  state  could  be  issuing  the  permits  more                                                                    
quickly.  The 404  program included  wetlands and  waters of                                                                    
the United States, with 65  percent of the nation's wetlands                                                                    
are located in Alaska. He  stated that a wetlands permit was                                                                    
required  for  every  project. He  discussed  the  Corps  of                                                                    
Engineers and  the delays of  the 404 program,  but stressed                                                                    
the importance of  the program. He stated  that the wetlands                                                                    
provided  the improvement  to water  quality that  clean the                                                                    
waters, and noted that many  states were looking at primacy.                                                                    
He  stated  that  the  Waste  Water  Discharging  Permitting                                                                    
Process  was   regulated  by  Department   of  Environmental                                                                    
Conservation  (DEC) for  the last  five years.  He mentioned                                                                    
that Oregon and Alaska were poised to pursue primacy.                                                                           
                                                                                                                                
Mr.  Hartig noted  the  large issue  on  the national  level                                                                    
regarding primacy. He  stated that the bill  would allow the                                                                    
resources to be  accessed sooner. He could  not promise that                                                                    
primacy  was good  for the  state, but  bill authorized  the                                                                    
state to pursue primacy. If  the bill passed, the department                                                                    
would  continue to  review the  option. He  stated that  the                                                                    
application for  primacy with the EPA  would require another                                                                    
visit to the legislature for  the money. He anticipated that                                                                    
the process could last a few years.                                                                                             
                                                                                                                                
9:21:47 AM                                                                                                                    
                                                                                                                                
Mr. Hartig  mentioned that he  asked the Corps  of Engineers                                                                    
with  employees if  the state  would be  well positioned  to                                                                    
achieve primacy.  He pointed out  that the three  year study                                                                    
period.                                                                                                                         
                                                                                                                                
Mr.  Hartig stated  that  the permitting  was  a three  year                                                                    
process, so 5-8 years for permuting effort.                                                                                     
                                                                                                                                
Representative  Kawasaki asked  about  the jurisdiction  for                                                                    
Pebble Mine.                                                                                                                    
                                                                                                                                
Mr. Hartig offered examples  regarding the navigable waters.                                                                    
He  stated   that  a  negotiation   to  the   memorandum  of                                                                    
agreement.  He remarked  that  the  memorandum outlined  the                                                                    
jurisdiction  and how  they would  be  determined. He  noted                                                                    
that the pros and cons and  the benefits were weighed in the                                                                    
jurisdiction.                                                                                                                   
                                                                                                                                
Commissioner Sullivan noted that  the amount of jurisdiction                                                                    
that  the  federal  government was  authorized  through  the                                                                    
state might not be worth pursuing.                                                                                              
                                                                                                                                
9:27:37 AM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about the  placer miners.  Mr.                                                                    
Hartig anticipated that the interior placer miner permits.                                                                      
                                                                                                                                
Representative  Wilson  asked if  the  bill  would help  the                                                                    
miners  through  the  7 year  process.  Commissioner  Hartig                                                                    
noted  that   the  404   permitting  and   its  geographical                                                                    
boundaries had  programmatic general permits. He  noted that                                                                    
the activity  had low  impact individually  or collectively.                                                                    
He stated that the Clean Water  Act and the authority by DEC                                                                    
permitting  for  placer miner  would  not  be obstructed  by                                                                    
geographical location.                                                                                                          
                                                                                                                                
9:30:02 AM                                                                                                                    
                                                                                                                                
Commissioner  Hartig  stated  that   that  the  Pebble  Mine                                                                    
legislation  was not  the impetus  for  the legislation.  He                                                                    
pointed out the  ability to veto permits,  and stressed that                                                                    
EPA still holds the trump card.                                                                                                 
                                                                                                                                
Representative  Munoz  asked  if  the EPA  would  have  veto                                                                    
authority over  the permits that  were issued under  a state                                                                    
program.  Commissioner Hartig  stated  that  two states  had                                                                    
primacy,  and one  dozen other  states were  seeking it.  He                                                                    
remarked that  the EPA  would have veto  power, but  only in                                                                    
very rare occasions.                                                                                                            
                                                                                                                                
Mr. Fogels pointed out that  there were a number of programs                                                                    
that the federal government oversaw in the state.                                                                               
                                                                                                                                
Commissioner  Sullivan   noted  that  the  state   would  be                                                                    
required to meet the federal standards by law.                                                                                  
                                                                                                                                
9:35:40 AM                                                                                                                    
                                                                                                                                
Representative Costello  asked when the Clean  Water Act was                                                                    
passed. Commissioner Fogels replied 1972.                                                                                       
                                                                                                                                
Representative  Costello thought  that  the states  pursuing                                                                    
primacy  and  the  timing interesting.  Commissioner  Hartig                                                                    
replied  that Alaska  reviewed the  decision  to review  the                                                                    
permitting process.  He stated  that the process  lasted six                                                                    
years, as  was the primacy of  the program. He did  not know                                                                    
why there  might be  more effort  now, but  it might  be the                                                                    
general  recognition that  development was  hampered by  the                                                                    
permitting process. He  pointed out that Alaska  had so many                                                                    
wetlands that  it was worth  looking at. He added  that most                                                                    
states expressed concern.                                                                                                       
                                                                                                                                
Commissioner  Sullivan added  that the  agencies came  in at                                                                    
the last minute killed the project.                                                                                             
                                                                                                                                
Representative  Costello stated  that the  bill would  allow                                                                    
analysis of the cost benefits  of the decision. She asked if                                                                    
state primacy  would allow for  more local knowledge  in the                                                                    
decision  making  process.  Commissioner  Butcher  indicated                                                                    
that he would provide that information.                                                                                         
                                                                                                                                
9:42:50 AM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman asked  about resource development projects                                                                    
held up  by 404 permit hold  up. Mr. Fogels stated  that Pt.                                                                    
Thompson  was the  largest example  of a  delay, because  it                                                                    
stalled 1000  Alaskan jobs. He  stressed that  primacy would                                                                    
ease that delay.                                                                                                                
                                                                                                                                
Commissioner  Hartig mentioned  smaller projects,  but noted                                                                    
that the authorization difficulties.  He stressed that there                                                                    
were  delay  issues with  the  Corps  of Engineers  and  the                                                                    
permitting process.                                                                                                             
                                                                                                                                
Mr. Fogels  mentioned that the  stipulations on  the permits                                                                    
make the legislation extremely important.                                                                                       
                                                                                                                                
Vice-Chair  Neuman  discussed  federal oversight  for  small                                                                    
miners. He  understood that the  federal government  and the                                                                    
permitting process, but felt  that smaller mining operations                                                                    
with too  much federal intrusion.  Mr. Fogels stated  that a                                                                    
wetlands  permit was  required for  nearly every  project in                                                                    
the state. He believed that  state control of the permitting                                                                    
process would  benefit the development of  every chapter. He                                                                    
added  that  different  states might  have  different  views                                                                    
about the state's  activities, but noted that  the state had                                                                    
64  percent  of the  country's  wetlands.  Most wetlands  in                                                                    
Alaska were undisturbed.                                                                                                        
                                                                                                                                
9:49:08 AM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  asked about the oversight  of the federal                                                                    
government later on. He hoped  for the future chance for the                                                                    
federal government to take a  step back. Commissioner Hartig                                                                    
replied  that the  404 application  would  remain the  same,                                                                    
including  all regulations.  The  mitigation resources  were                                                                    
available and Alaska might make different decisions.                                                                            
                                                                                                                                
Representative  Gara requested  that  the  decision be  made                                                                    
with facts. He  wished for information about  the Army Corps                                                                    
of Engineers,  and the 84  percent of the  applications were                                                                    
decided  in  60 days.  He  asked  for  the approval  of  $10                                                                    
million in  the next  5 years. He  requested an  analysis of                                                                    
the  Army   Corp.  Commissioner  Hartig  pointed   out  that                                                                    
applications  for 402  general permits  were processed  more                                                                    
quickly,  but   he  would  need   to  see  the   slide  that                                                                    
Representative  Gara  keeps  referring to.  He  promised  to                                                                    
return with  more facts. His experience  with permitting was                                                                    
that  the 404  was  a large  project  when mitigations  were                                                                    
considered, but  stated that the process  might be appealed.                                                                    
The average cost of a permit application was $270 thousand.                                                                     
                                                                                                                                
9:55:21 AM                                                                                                                    
                                                                                                                                
Representative  Gara  discussed CD  5.  He  wondered if  the                                                                    
state takes  over primacy, would  the Clean Water  Act Rules                                                                    
be  observed.  He  discussed   mitigation  options  and  the                                                                    
statutory authorities  as applied. He stated  that decisions                                                                    
would  be  different and  the  state  would and  could  take                                                                    
control.  Mr.  Fogels  responded  that  the  bill  would  be                                                                    
implementing  the  state's  own regulations  challenges  and                                                                    
appeals in Alaska.                                                                                                              
                                                                                                                                
SB  27  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 129                                                                                                            
                                                                                                                                
     "An Act relating to approval for oil and gas or gas                                                                        
     only exploration and development in a geographical                                                                         
     area; and providing for an effective date."                                                                                
                                                                                                                                
                                                                                                                                
Commissioner  Sullivan provided  a PowerPoint  presentation:                                                                    
"HB 129:  Oil and  Gas Exploration and  Development Approval                                                                    
by Geographical Area."                                                                                                          
                                                                                                                                
Commissioner  Sullivan continued  to  discuss a  development                                                                    
plan. He  noted that it  was important to remember  that the                                                                    
public interest phase would occur  after // findings related                                                                    
to  oil  and  gas  leasing.  He  noted  that  there  was  an                                                                    
extensive  vetting phase.  There  was  much opportunity  for                                                                    
meaningful  public input.  He  stressed  that certainty  was                                                                    
important to the public process.  He pointed to DNR statutes                                                                    
and  relayed  that  there  was  a  good  argument  that  the                                                                    
department currently  had the authority; however,  it needed                                                                    
to be clarified. The bill  would avoid an internal debate on                                                                    
the   issue;  the   department  did   not  want   to  invite                                                                    
litigation.                                                                                                                     
                                                                                                                                
10:03:30 AM                                                                                                                   
                                                                                                                                
Co-Chair Austerman  noted that the  bill would be  heard and                                                                    
held at approximately 10:25 a.m.                                                                                                
                                                                                                                                
WENDY WOOLF,  PETROLEUM LAND  MANAGER, DIVISION  OF OIL/GAS,                                                                    
DEPARTMENT OF  NATURAL RESOURCES,  looked to slide  2 titled                                                                    
"Area wide  Oil and  Gas Lease  Sales." She  discussed lease                                                                    
sale  areas. She  moved to  slide 3  and explained  that the                                                                    
bill  would  clarify  a  statutory  requirement  related  to                                                                    
leasing  phases. Subsequent  to the  initial leasing  phase,                                                                    
there  would be  a definition  related  to how  oil and  gas                                                                    
development would occur.                                                                                                        
                                                                                                                                
Ms.  Woolf  explained  slide  4: "Oil  and  Gas  Lease  Sale                                                                    
Process." She discussed  what HB 129 did,  how it benefitted                                                                    
the public, and how it benefitted the industry.                                                                                 
                                                                                                                                
     -It clarifies  the Department of Natural  Resources can                                                                    
     authorize  oil  and  gas  exploration  and  development                                                                    
     activities within a geographical area.                                                                                     
                                                                                                                                
     -It  preserves   public  notice   and  review   at  the                                                                    
     beginning of an exploration or development phase.                                                                          
                                                                                                                                
     -It  ensures  certainty  when   an  approval  has  been                                                                    
    granted for exploration or development activities.                                                                          
                                                                                                                                
     -It allows  the public to comprehensively  evaluate oil                                                                    
     and gas activities within a geographical area.                                                                             
                                                                                                                                
     -It provides an opportunity  for input at the beginning                                                                    
     of an exploration or development phase.                                                                                    
                                                                                                                                
     -It safeguards  environmental concerns  through special                                                                    
     stipulations and conditions.                                                                                               
                                                                                                                                
     -It  allows a  project  to be  planned within  approved                                                                    
     parameters and conditions.                                                                                                 
                                                                                                                                
     -It  provides   certainty  that  plans   of  operations                                                                    
     meeting those defined criteria can proceed.                                                                                
                                                                                                                                
     -It   ensures   predictable   project   approvals   for                                                                    
     subsequent exploration or development activity.                                                                            
                                                                                                                                
Ms.  Woolf  discussed  slide  5: "Oil  and  Gas  Lease  Sale                                                                    
Process."                                                                                                                       
                                                                                                                                
     Proposed Area wide Oil and Gas Lease Sale                                                                                  
                                                                                                                                
         -Public Notice and Opportunity to Comment                                                                              
          -Evaluate Statutory Criteria                                                                                          
          -Develop Mitigation Measures                                                                                          
                                                                                                                                
    Final Finding of the Director to Lease Oil and Gas                                                                          
                                                                                                                                
     Exploration Phase Public Notice and Opportunity to                                                                         
     Comment                                                                                                                    
                                                                                                                                
     Development Phase Public Notice and Opportunity to                                                                         
     Comment                                                                                                                    
                                                                                                                                
     Transportation    (Pipelines)    Public   Notice    and                                                                    
     Opportunity to Comment                                                                                                     
                                                                                                                                
10:09:32 AM                                                                                                                   
                                                                                                                                
Ms. Woolf discussed slide 6: "Life of an Oil and Gas                                                                            
Lease."                                                                                                                         
                                                                                                                                
     Year 0                                                                                                                     
                                                                                                                                
          -Final Finding of the Director - Area wide Oil                                                                        
          and Gas Lease Sale                                                                                                    
          -Lease Issued (10-Year Term)                                                                                          
                                                                                                                                
     Year 3                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Seismic Program                                                                           
          (multiple leases)                                                                                                     
          -Public Notice and Comment Period                                                                                     
                                                                                                                                
     Year 5                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Exploration Well                                                                          
          -Public Notice and Comment Period                                                                                     
                                                                                                                                
     Year 6                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Exploration Well                                                                          
          -Public Notice and Comment Period                                                                                     
                                                                                                                                
     Year 7                                                                                                                     
                                                                                                                                
          -Lease Plan of Development - Conceptual -                                                                             
          Development Plan                                                                                                      
                                                                                                                                
     Year 8                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Initial Development -                                                                     
          Plans                                                                                                                 
          -Public Notice and Comment Period                                                                                     
          -Lease Plan of Operations - Modified Development                                                                      
          Plans                                                                                                                 
          -Public Notice and Comment Period                                                                                     
          -Pipeline Application (AS 38.05.850 or AS 38.35)                                                                      
          -Public Notice and Comment Period                                                                                     
                                                                                                                                
     Year 10                                                                                                                    
                                                                                                                                
          -Production                                                                                                           
          -Lease   Plan    of   Operations    -   Additional                                                                    
          Development Plans                                                                                                     
          =Public Notice and Comment Period                                                                                     
                                                                                                                                
Ms. Woolf  discussed slide 7: Example  of Geographical Areas                                                                    
for Exploration  Activities." The activities in  the core of                                                                    
the  North Slope  would define  the exploration  activities.                                                                    
She separated out the shale from the conventional area.                                                                         
                                                                                                                                
Ms. Woolf discussed slide8:  "Example Geographical Areas for                                                                    
Development  Activities." She  spoke  about the  development                                                                    
activities formed  by the geography.  She remarked  that the                                                                    
areas  reflected  looked  at the  core  of  the  legislative                                                                    
activities.   She  stated   that  the   public  notice   and                                                                    
opportunity  for  comment  were  important  aspects  of  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
10:15:57 AM                                                                                                                   
                                                                                                                                
Ms. Woolf  detailed slide  9:"Life of an  Oil and  Gas Lease                                                                    
under HB 129."                                                                                                                  
                                                                                                                                
     Year 0                                                                                                                     
                                                                                                                                
          -Final  Finding of  the Director  - Area  wide Oil                                                                    
          and Gas Lease  Angela Salerno, Executive Director,                                                                    
          National  Association  of  Social  Workers  Alaska                                                                    
          Chapter Lease Issued (10 - Year Term)                                                                                 
                                                                                                                                
     Lessee develops exploration plans                                                                                          
                                                                                                                                
     Year 3                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Seismic Program                                                                           
          (multiple leases)                                                                                                     
                                                                                                                                
     Year 5                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Exploration Well                                                                          
                                                                                                                                
     Year 6                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Exploration Well                                                                          
                                                                                                                                
     Discovery - Lessee formulates development plan                                                                             
                                                                                                                                
     Year 7                                                                                                                     
                                                                                                                                
          -Lease   Plan   of    Development   -   Conceptual                                                                    
          Development Plan                                                                                                      
                                                                                                                                
     Year 8                                                                                                                     
                                                                                                                                
          -Lease Plan of Operations - Initial Development                                                                       
          Plans                                                                                                                 
          -Public Notice and Comment Period                                                                                     
          -Lease Plan of Operations - Modified Development                                                                      
          Plans                                                                                                                 
          -Public Notice and Comment Period                                                                                     
          -Pipeline Application (AS 38.05.850 or AS 38.35)                                                                      
          -Public Notice and Comment Period                                                                                     
                                                                                                                                
     Year 10                                                                                                                    
                                                                                                                                
          -Production                                                                                                           
          -Lease   Plan    of   Operations    -   Additional                                                                    
          Development Plans                                                                                                     
                                                                                                                                
Ms. Woolf discussed slide 10: "Results."                                                                                        
                                                                                                                                
     HB 129 provides for a new comprehensive review before                                                                      
     exploration or development.                                                                                                
                                                                                                                                
     HB 129 preserves public participation in the process.                                                                      
                                                                                                                                
     HB 129 allows stipulations to be approved before a                                                                         
     company develops site specific plans for exploration                                                                       
     or development activities.                                                                                                 
                                                                                                                                
10:20:52 AM                                                                                                                   
                                                                                                                                
JOE  BALASH,  DEPUTY  COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES, discussed the new fiscal note.                                                                                       
                                                                                                                                
Co-Chair  Austerman wondered  if  the financing  would be  a                                                                    
deposit.  Mr.  Balash  stated  that the  bill  would    make                                                                    
permitting  much more  streamlined. He  remarked that  there                                                                    
would be  more activity from  additional lessees, so  as the                                                                    
workload becomes  greater, the department needed  to be much                                                                    
more efficient.                                                                                                                 
                                                                                                                                
Commissioner Sullivan referred to  the shale oil development                                                                    
which turned around North Dakota and Texas.                                                                                     
                                                                                                                                
Co-Chair  Austerman  requested  a  better  definition  of  a                                                                    
geographical area to encompass shale oil development.                                                                           
                                                                                                                                
Vice-Chair Neuman  remarked upstream cost of  expediting the                                                                    
permitting  process. He  felt  that a  fiscal  note of  $134                                                                    
thousand would lead to a net gain for the state.                                                                                
                                                                                                                                
HB  129  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:25:10 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:26 a.m.                                                                                         

Document Name Date/Time Subjects
01.17.13 Huggins Wetlands 404 PrimacyTransmittal Letter.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
404 Assumption Methods 1-31-13.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
404 Assumption Primacy Benefits 2-22-13.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
404 Assumption Public Process 2-22-13.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
404 Assumption SB 27 and HB 78 FINAL.pdf HFIN 3/26/2013 9:00:00 AM
HB 78
SB 27
SB 27 (H) RES Response .pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 CO Response to Senate Finance Questions r.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 DEC Testimony Senate Finance 2-26-2013.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 Sectional Analysis.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 Support AOGA testimony 2013.02.04.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
HB 129 Briefing Paper.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB 129 Sectional Analysis.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB 129 Transmittal Letter.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
SB 59 NSB Support Letter.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
SB 59
SB 59 Linc Letter of Support for Permit Reform 4 Mar 13.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
SB 59
SB 59 BRPC Letter of Support.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
SB 59
House Finance_Permitting Overview_3-26-13.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB129 Bill Presentation 3-26-2013.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB 129-NEW FN-DNR-DOG-3-25-13.pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB 129 Weissler HFIN Testimony .pdf HFIN 3/26/2013 9:00:00 AM
HB 129
HB 129 Northern Center Ltr to House Opposition to SB59-HB129(1).pdf HFIN 3/26/2013 9:00:00 AM
HB 129
SB 59
SB 27 Northern Center Opposition-HB78-SB27.pdf HFIN 3/26/2013 9:00:00 AM
HB 78
SB 27
SB 27 David Arnold NAEC Community Perspective FDNM.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 DOT Letter Support.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 Leg Research 404.pdf HFIN 3/26/2013 9:00:00 AM
SB 27
SB 27 PP Presentation 3.26.13.pdf HFIN 3/26/2013 9:00:00 AM
SB 27