Legislature(1995 - 1996)
02/27/1996 10:11 AM House O&G
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
February 27, 1996
10:11 a.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Scott Ogan, Vice Chair
Representative Gary Davis
Representative Bill Williams
Representative Tom Brice
Representative Bettye Davis
Representative David Finkelstein
MEMBERS ABSENT
All members were present
COMMITTEE CALENDAR
HOUSE BILL NO. 394
"An Act authorizing a program of natural gas and coal bed methane
development licensing and leasing; relating to regulation of
certain natural gas exploration facilities and coal bed methane
exploration facilities for purposes of preparation of discharge
prevention and contingency plans and compliance with financial
responsibility requirements; amending the duties of the Alaska Oil
and Gas Conservation Commission as they relate to natural gas
exploration activities and coal bed methane exploration activities;
and amending the exemption from obtaining a waste disposal permit
for disposal of waste produced from coal bed methane drilling."
- MOVED OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 394
SHORT TITLE: GAS & COAL METHANE LICENSES & LEASES
SPONSOR(S): REPRESENTATIVE(S) OGAN,ROKEBERG,James
JRN-DATE JRN-PG ACTION
01/05/96 2369 (H) PREFILE RELEASED
01/08/96 2370 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2370 (H) O&G, RESOURCES, FINANCE
02/08/96 (H) O&G AT 10:00 AM CAPITOL 124
02/08/96 (H) MINUTE(O&G)
02/13/96 (H) O&G AT 10:00 AM CAPITOL 124
02/21/96 2846 (H) COSPONSOR(S): JAMES
02/27/96 (H) O&G AT 10:00 AM CAPITOL 124
WITNESS REGISTER
JAMES HANSEN, Leasing/Evaluation
Division of Oil and Gas
Department of Natural Resources
3601 C Street, Suite 1380
Anchorage, Alaska 99503-5948
Telephone: (907) 269-8804
POSITION STATEMENT: Testified on HB 394
JOHN CONNOR
Alaska Agricultural Research Group
Chairman, Natural Resources Committee
Kenai Peninsula Resources Conservation and Development District
P.O. Box 15038
Fritz Creek, Alaska 99603
Telephone: (907) 235-5550
POSITION STATEMENT: Supported HB 394
DAVID LAPPI, Owner
LAPPI Resource, Incorporated
4900 Sportsman Drive
Anchorage, Alaska 99502
Telephone: (907) 248-7188
POSITION STATEMENT: Testified in support of HB 394
BILL WEBB
Trading Bay Energy Trading Company
825 West 8th, Suite 204
Anchorage, Alaska 99501
Telephone: (907) 279-5655
POSITION STATEMENT: Testified in support of HB 394
PAUL CRAIG, Chairman of the Board
Trading Bay Energy Trading Company
825 West 8th, Suite 204
Anchorage, Alaska 99501
Telephone: (907) 279-5655
POSITION STATEMENT: Testified in support of HB 394
JACK CHENOWETH, Legislative Counsel
Legal Services
Division of Legal and Research Services
Legislative Affairs Agency
130 Seward Street, Suite 409
Juneau, Alaska 99801-2105
Telephone: (907) 465-3867
POSITION STATEMENT: Testified on HB 394
ACTION NARRATIVE
TAPE 96-12, SIDE A
Number 000
The House Oil & Gas Special Committee was called to order by
Chairman Norman Rokeberg at 10:11 a.m. Members present at the call
to order were Representatives Rokeberg, Ogan, G. Davis, Williams,
Brice, B. Davis, and Finkelstein. A quorum was present. This
meeting was teleconferenced to Anchorage and Homer.
CHAIRMAN ROKEBERG announced the agenda was a continuation of the
hearing on HB 394.
HB 394 - GAS & COAL METHANE LICENSES & LEASES
Number 165
REPRESENTATIVE SCOTT OGAN, sponsor of HB 394, said it is an act
authorizing shallow bed natural gas leasing. He said, currently
there is problem with diesel fuel storage facilities that are
failing, causing economic and environmental problems in the rural
communities. He said the clean up and renovation of these diesel
fuel storage tanks is estimated to be around $500 million. He
added that every year, $20 million is spent on power cost
equalization. He said transporting diesel fuel is hazardous and
mentioned the potential environmental problems associated with
hauling diesel fuel up river by barge.
Number 237
REPRESENTATIVE OGAN said natural gas, by contrast, is clean and
could be utilized in many parts of rural Alaska. Most of these
rural areas which have natural gas potential will be pioneer areas
of natural gas exploration and are outside of any lease schedule or
large scale development.
Number 259
REPRESENTATIVE OGAN said rural homes could be heated by natural gas
and that electricity could be generated by natural gas because
diesel generators can be converted to burn natural gas.
Number 276
REPRESENTATIVE OGAN said the purpose of HB 394 is to encourage
shallow gas development production within the state of Alaska. He
said this natural gas would not be part of a pipeline system or a
resource that would be exported. The HB 394 relieves the bonding
and regulatory requirements placed upon those who would develop
this resource for rural communities, and added that those
requirements are currently geared towards large, commercial oil
fields that are exporting resources. He said the committee
substitute for HB 394 represents a concerted effort between the
sponsor, private entities and the Administration. He said
converting the rural communities to natural gas should have
occurred much sooner.
Number 397
REPRESENTATIVE OGAN referred to a map of the state of Alaska,
produced by Polar Consult of Alaska which showed the potential coal
and coal methane fields throughout the state. He said the primary
intent of HB 394 will be to go after coal bed methane. He said the
reserves follow the Yukon River and river beds. He said methane
gas is trapped in fissures and within the coal reserves. He said
tapping this resource is very much like drilling a water well,
small rigs are used and would be transported into the region by
cargo plane. He added that the drilling depth is 3,000 feet or
less. He said the possibility of finding oil is remote in these
shallow regions. He said when they get into areas with a high gas
content, the casing will be perforated and it will be piped out
into a system set up within the village to either heat homes or
generate electricity.
Number 501
REPRESENTATIVE OGAN said there is a tremendous potential for coal
and coal bed methane reserves in the state of Alaska. He mentioned
that changes have been made to HB 394.
Number 550
REPRESENTATIVE GARY DAVIS made a motion to adopt the committee
substitute for HB 394, version 9-LS1463\G. Hearing no objection
it was so ordered.
Number 583
REPRESENTATIVE OGAN said there were five major changes made in this
new version of CSHB 394. He said the use of the 470 Fund is exempt
in CSHB 394. He briefly described the 470 Fund, saying that it was
a fund set up by the Department of Environmental Conservation (DEC)
to cover spills. He said there is the possibility of having to use
the 470 Fund to clean up areas contaminated by diesel fuel. He
referred to a handout, available in the committee packet titled,
"Alaska Rural Energy Initiative," which showed photos of leaking
diesel storage tanks and tanks that are not on properly constructed
bases. He said this diesel fuel is continuing to leak and again
referred to the cost of clean up and creating new storage tanks.
He then compared that situation to a graph demonstrating the
worldwide number of oil spills which have occurred in onshore
exploration since 1978. He said there was one in 1985 and since
then there haven't been any. He said the chances are very remote,
especially if you are not drilling below 3,000 feet. He said if
oil is discovered in this shallow depth it will most likely be
heavy oil and not something that is going to be flowing to the
surface.
Number 755
REPRESENTATIVE OGAN said CSHB 394 kept the $25,000 bond. He said
a $1 million dollar bond is limited to large scale developments.
The rent on the lease is changed from an annual cost of $3.00 and
acre to 50 cents an acre, with a cost of 25 cents an acre prior to
production annually. He said CSHB 394 involves small operations in
rural areas and wanted (indiscernible) responsibility and up front
costs which will keep leasers from coming and doing speculative
drilling. He said these are two year leases and if the leaser does
not develop or actively work the lease it is lost.
Number 825
REPRESENTATIVE OGAN said royalties were reduced to 6.25 percent for
these operations, cutting the current royalty in half, to offer
development incentive. He reiterated the potential amount lost in
revenue as compared to the $500 diesel storage tank cost. He said
the higher the royalty, the fewer villages will have natural gas
developments for their fuel use.
Number 882
REPRESENTATIVE GARY DAVIS asked about a fiscal note.
Number 892
REPRESENTATIVE OGAN said there was a fiscal note attached from the
previous version of HB 394 and a new fiscal note hadn't been
prepared for CSHB 394. He said the old fiscal note said the costs
associated with the bill would be $386,000 for the first year in
order to set up a licensing program. He believed the current
licensing provisions under CSHB 394 would create a fiscal note
which would be smaller.
Number 977
REPRESENTATIVE BILL WILLIAMS asked for clarification regarding the
470 Fund.
Number 1007
REPRESENTATIVE OGAN said the 470 Fund was set up to clean up oil
spills. He said a request for information, regarding how this fund
has been used in the past, was sent to DEC. He said the likelihood
of an oil spill is very small due to the 3,000 foot limit. He said
there is no oil above the 3,000 foot limit in the Cook Inlet basin,
and added that on the North Slope, heavy oil is located above this
3,000 foot limit. He said the development will be in pioneer areas
of tertiary sediments, layered sediments of coal. He said in the
unlikely problem derived from a drilling operation, even then the
costs of cleaning up this spill would be less than the current
costs associated with diesel fuel storage tanks and from hauling
this fuel up river.
Number 1169
REPRESENTATIVE DAVID FINKELSTEIN said the 470 Fund is just the
system set up in the state to provide funds for emergency clean-up
in the event of an oil spill. He reiterated Representative Ogan's
point that an oil spill is unlikely and said that it is unlikely
that the 470 Fund would be used.
Number 1201
REPRESENTATIVE OGAN said the most likely exposure, if it were to
occur, would happen when the diesel gas tank was being filled on
the drilling rig. He mentioned the $25,000 bond which would cover
incidental costs.
Number 1223
REPRESENTATIVE FINKELSTEIN said, that however remote the
possibility of an oil spill is, you still want access to the 470
Fund as added precaution.
Number 1290
JAMES HANSEN, Leasing/Evaluation, Division of Oil and Gas,
Department of Natural Resources (DNR), testified via teleconference
from Anchorage. He said CSHB 394 was brought up briefly and some
technical staff also looked at it. He said there are some basic
concerns that need to be addressed, the first being whether the
state is rushing into a new program without fully examining the
possible, negative impacts CSHB 394 might have. He said the best
interest finding (BIF) is a long, arduous process which takes up to
two years, but the purpose of a BIF is to for DNR to determine the
positive and negative impacts for any type of oil and gas
exploration and more importantly to provide a public review
process. He said it is important to give the rural areas a chance
to say whether or not they want the shallow drilling rigs in
certain areas.
Number 1404
MR. HANSEN said the rural areas have a different topography than
the Cook Inlet basin. He said Alaska is a tectonically active area
and are composed of crunched up sediments. He said there is no way
of knowing, outside of drilling, whether there is oil less than
3,000 feet. He said oil has been found less than 3,000 feet in
many of the lower 48 states and cited examples of this occurring in
West Virginia, Pennsylvania, Texas and Kansas. He said, because
oil hasn't been found less than 3,000 feet in the Cook Inlet,
doesn't mean it won't happen in the interior.
Number 1445
MR. HANSEN said that when you get gas from coal you are going to
have to de-water the coal first. He said the formation waters
around coal contain salts and are also acidic. Coal produces
nauseous methane, carbon dioxide, carbon monoxide and nitrogen
gases. He said there are impacts from coal bed methane production
and he asked whether those impacts are worth it compared to the
known impact of diesel fuel storage tanks. He restated the concern
over the public review process and the factors involved with
drilling for natural gas.
Number 1515
REPRESENTATIVE OGAN said an operator who is interested in coal bed
methane told him that their objective is to drill in tertiary
sediments, coal bed sediments. He asked if most of the coal bed
sediments are tertiary.
Number 1545
MR. HANSEN said tertiary refers to an age. He said it is unknown
what the structure of the sediments are, under the surface.
Number 1554
REPRESENTATIVE OGAN asked if, in the interior basin, without
seismic work to discover where broken up pockets are, whether it is
easier to identify coal beds.
Number 1575
MR. HANSEN said an area the interior basin is full of thrusts and
faults, poor reflection data is obtained from those areas. He said
it all depends on how the formation is laid out. He said there are
areas that are going to be flat and areas that are not, but you are
not going to be able to determine this from the surface. This
information will only be obtained through shallow or deep surveys
or through drilling. He said DNR knows little about these areas.
Number 1637
REPRESENTATIVE OGAN referred to the map and asked how they were
able to determine where the coal bed reserves were.
MR. HANSEN said coal will show up with seismic reflections.
REPRESENTATIVE OGAN asked if seismic reflections have been done in
the areas of the map showing known or highly suspected coal
reserves.
Number 1670
MR. HANSEN said a map done by the National Geologic Survey showing
coal bed deposits, he said it was done through a surficial geology
investigations. He said, with coal, you look at the surface, find
the coal and then map where it dips into the subsurface and this is
how these maps are developed. He said only four seismic lines have
been shot in interior Alaska.
Number 1701
CHAIRMAN ROKEBERG asked if coal areas could be exposed with that
type of seismic work.
Number 1708
MR. HANSEN said coal would not necessarily be exposed, he said the
seismic work that had been done was mainly identification of hard
rock minerals.
Number 1714
REPRESENTATIVE FINKELSTEIN referred to a provision of HB 394, and
said it does not allow the Administration to adopt regulations
relating to anything, including the setting of procedures to govern
application of this section. He asked Mr. Hansen to comment on
this section.
Number 1731
MR. HANSEN said, the way HB 394 is written, the DNR cannot write
regulations and if anything needs to be changed, it needs to go
back to the legislature to make those changes. He said this
process would be more cumbersome than writing new regulations. He
recommended leaving the possible regulatory changes to the
discretion of the commissioner. He said, if DNR finds that certain
things are not covered by HB 394, then DNR should be able to write
regulations to address the situation, rather then waiting until
session began to do anything.
Number 1770
REPRESENTATIVE FINKELSTEIN received clarification, from Mr. Hansen,
that there were no other areas that the Administration was
forbidden to write regulations.
Number 1783
CHAIRMAN ROKEBERG asked if DNR disagreed with the provision in HB
394 which exempted a BIF.
Number 1800
MR. HANSEN said, he felt, there would be public resentment,
especially in the local community, if they were not given an
opportunity to express their feelings towards natural gas
development.
Number 1822
REPRESENTATIVE FINKELSTEIN expressed that the commissioner of DNR
cannot make any findings, determinations, and added that HB 394 is
written in such a way that excludes any public input. He referred
to page three, line 24, which says the director shall enter into
these leases upon application.
Number 1846
MR. HANSEN agreed with what Representative Finkelstein said, and
added that in permiting there is a review process within the
agencies and he believed that the public did have an opportunity to
review those permits. He said HB 394 reverts back to a precedent
the state used to follow, he said this precedent was changed. He
added that there would be problems in the community if something is
carried through in which they did not have any input.
Number 1886
REPRESENTATIVE FINKELSTEIN said he is not sure that HB 394 allows
the permit process as described by Mr. Hansen. He said in HB 394
it states, "promptly after receipt of a lease application, the
director shall enter into these lease." He said it was unclear
whether the DNR would have time to enter into discussions or
considerations, and added that if this process is done it doesn't
matter because the lease needed to be given.
Number 1900
JOHN CONNOR, Alaska Agricultural Research Group, and Chairman,
Natural Resources Committee, Kenai Peninsula Resources Conservation
and Development District, testified via teleconference from Homer.
He gave a brief overview of the Kenai Peninsula Resources
Conservation and Development District saying it represented various
constituencies and worked with a federal employee of the Natural
Resource Conservation Service (NRCS) that assists the group with
activities regarding resource development and conservation matters.
He said HB 394 would allow local communities to benefit from the
natural resources which are currently not utilized. He said, "we
are taking the commodity products that we are sending out,
exporting, the wood, the wood chips and the various other things
and produce an industry based on a much cheaper and more reliable
source of fuel that is not as likely to spoil our area as an
increase in diesel fuel and diesel holders, that kind of thing."
He stated that he didn't think that the people in Homer would have
a problem with water well type of drilling.
MR. CONNOR said HB 394 requires a 640 acre size on the lease and
requested some changes to the bill in order to reduce this to a
size suitable to a small industry size, as is done in other states
including Ohio.
Number 2062
MR. CONNOR mentioned the "value added concerns" that might come up
in the Finance Committee. He said commodities, which are currently
not utilized, can be transformed, producing activity for the local
economy. He said local control over these industries needs to be
maintained. He cited the benefits and mentioned the problems the
region around Homer faces. He said it is costly to develop the
natural gas resource and suggested language exempting royalties or
something similar to that, "as long as you are talking about
increased value added processes." He thought, "your BIF will be
actually aired well in advance of these things through the process
of creating an area plan for the Kenai Peninsula through our
organization which is associated with the NRCS and looks to serve
the best interest of all the people of the Kenai Peninsula." He
concluded that he is very supportive of HB 394.
Number 2168
CHAIRMAN ROKEBERG said under HB 394, the original lease could be
640 acres, but the commissioner has the ability to redraft the
amount of lease area, after a discovery is made, contracting the
size of the lease area.
Number 2198
MR. CONNOR believed that the language of HB 394 read that the
"lease area could be reorganized so those 640 acres is cared for in
a different way." He said he would study the language of HB 394
further.
Number 2211
REPRESENTATIVE GARY DAVIS read from CSHB 394, page three, line 17,
which states, "the area to be leased may not exceed 23,040 acres
and may not be less than 640 acres." He requested information from
the sponsor regarding this figure.
Number 2240
REPRESENTATIVE OGAN said the figure was derived from discussions
with industry about what they felt an appropriate minimum lease
size should be. He said he would address this issue and another
concern later in the meeting, at the suggestion of Chairman
Rokeberg.
Number 2266
DAVID LAPPI, Owner, LAPPI Resource, Incorporated, testified via
teleconference from Anchorage. He said his business is a small,
independent oil and gas exploration company based in Anchorage. He
said his company supports CSHB 394 and views it as an environmental
bill rather than something which would add additional risk to the
environment. He said the more rural areas that can switch their
fuel use, from diesel to natural gas, the safer our environment is
going to be. He said Alaskans know the risks of producing,
refining, transporting, storing and distributing diesel fuel and
having them switch over to natural gas is a correct one from an
environmental point of view.
Number 2322
MR. LAPPI said CSHB 394 will protect the 470 Fund because the more
people using diesel fuel, the higher the risk is that the 470 Fund
would have to be used. He addressed the issue of public process
and said the testimony, being conducted on CSHB 394 today, is a
public process. He said public input will be entertained during
the permitting process through the Coastal Zone Management
Consistency Review and other permit requirements. He cited the
fact that a temporary tent camp of more than ten people can not
occur without a permit which has a public comment process. He said
CSHB 394 is designed to reduce the amount of work that the state
government does. He hoped CSHB 394 would have little negative
impact on the state budget and that a small fiscal note would
accompany it. He said drilling will not occur in rural areas where
it is not wanted or desired. He said markets are needed before
drilling can begin and public process will occur through this
manner. He urged the committee to adopt CSHB 394 as it is an
environmental as well as a pragmatic approach to solving some of
the energy problems in rural Alaska.
Number 2477
BILL WEBB, Trading Bay Energy Trading Company, testified via
teleconference from Anchorage. He said he is in support of CSHB
394 so that all the coal bed methane reserves can be developed in
the state of Alaska.
TAPE 96-12, SIDE B
Number 000
MR. WEBB mentioned the BIF and said that everyone he has met agrees
that natural gas is the best fuel used in the world community. He
mentioned the diesel storage tank issue, the power cost
equalization program, the rural electrification program and stated
that he hoped coal bed methane exploration could help resolve those
problems. He remarked that CSHB 394 has received wide spread
public support and added that Commissioner Shively remarked, last
summer, that the public process is often used as a delaying tactic.
He said the new fiscal times demand that we encourage innovation
and efforts by the entrepreneurs rather than delay them and get in
their way. He concluded that he supported CSHB 394 and that it
should be passed this session so that aggressive coal bed methane
development can occur.
Number 076
PAUL CRAIG, Chairman of the Board, Trading Bay Energy Trading
Company, testified via teleconference from Anchorage. He said both
he and his company support CSHB 394.
Number 121
REPRESENTATIVE TOM BRICE asked the cost and the time required for
a BIF.
Number 143
MR. HANSEN said the DNR has to plan for a two year period to
complete a BIF and said the original fiscal note was done under the
assumption that a BIF would need to be done and represented the
cost.
Number 173
REPRESENTATIVE BRICE asked if the expected cost of a BIF is
considered prohibitive to DNR, considering the low expectation of
return from the natural gas royalties and lease payments.
Number 196
MR. HANSEN remarked that the DNR did two BIF for sales that no one
attended.
REPRESENTATIVE BRICE asked if the costs associated with the two
BIFs would be distributed across other sales where people did show
up.
Number 217
MR. HANSEN said the cost of a BIF is in terms of people and time
and if we develop a new program, we will have to do additional
findings requiring more staff.
Number 246
REPRESENTATIVE OGAN asked the maximum time of a BIF.
Number 255
MR. HANSEN said normally the BIF process takes two years which
includes requests for extended public comment period. He said the
extensions of public comment is something that DNR just does, it is
not something that they must do. He said if a BIF were required
under CSHB 394 they could limit it to one public comment period.
CHAIRMAN ROKEBERG asked Mr. Chenoweth to come forward to testify.
He also directed the committee's attention to a letter by the
Calista Corporation, dated February 26, 1996. He said this letter
requests an amendment which would clarify the language relating to
private ownership and state leases in CSHB 154. The Calista
Corporation has requested that any provisions included in CSHB 394
be applicable to private, state and federal lands.
Number 350
REPRESENTATIVE OGAN said this issue didn't appear to be a problem
in CSHB 394, private land owners can okay drilling on their land.
Number 365
JACK CHENOWETH, Legislative Counsel, Legal Services, Division of
Legal and Research Services, Legislative Affairs Agency, was next
to testify. He said the section being referred to was Section 6,
found on the bottom of page eight and the top of page nine. He
said Section 6 offers an exemption for current waste disposal
permitting. He said page eight, line 23, Section 6 states that a
permit is not required. He said, under current law, a permit is
not required for coal bed methane. In the discussion around CSHB
394, it was agreed that no distinction should be made between coal
bed methane drilling and any other shallow bed gas drilling. He
said to do this he eliminated the reference in CSHB 394 to coal bed
methane drilling, at the bottom of page eight, and carried the
whole thing forward in the context of shallow bed gas development
leasing under Alaska Statute 38.05.177, so that in effect the
change would provide for an exemption from a waste disposal permit
for any activity under the exploration activity authorized under
38.05.177.
MR. CHENOWETH said the Calista Corporation is asking that some sort
of protection be built back in CSHB 394 for private land owners.
He said if a private land owner required a permit disposal be
obtained, CSHB 394 could incorporate that into the language. He
said he wasn't sure if the language suggested by the Calista
Corporation would do that, as it merely extends the exemption.
Number 449
CHAIRMAN ROKEBERG said an additional committee substitute would be
formed before CSHB 154 went to the Resources Committee. He said he
would like the committee to adopt the concept of CSHB 394, but the
language did not need to be done right away. He referred to the
amendments submitted by Representative Finkelstein.
Number 517
REPRESENTATIVE OGAN said he opposed the amendments submitted by
Representative Finkelstein.
Number 550
REPRESENTATIVE FINKELSTEIN said there are three amendments. He
said the first, and the most important, Amendment 1, regards the
compromise in the issue of BIF, on page three, line 24 to take the
word, "shall" and replace it with "may" leaving in the provisions
of CSHB 394 that eliminate the BIF. He said CSHB 394 would not
require a BIF process, but would leave some discretion regarding
public comment to the director. He said CSHB 154 automatically
gives someone the right to obtain this lease regardless of any
other use that might be occurring on these lands such as
subsistence hunting or recreational use. He said the way CSHB 394
is written, once the application is put in for those areas, the
director shall give out the lease, regardless of those local
concerns and the director has no chance to mitigate those concerns.
He said the change of the wording allows a modicum of discretion by
the director.
Number 621
REPRESENTATIVE OGAN referred to Mr. Lappi's testimony and said
these are wells that are going to be done with the support,
cooperation, and marketing of the local community before they are
developed.
Number 662
REPRESENTATIVE FINKELSTEIN said there are going to be
circumstances, "we know from experience," where someone is going to
object to certain parts of a land area that they are not going to
want leased and CSHB 394 does not allow the director the ability to
solve problems.
Number 704
CHAIRMAN ROKEBERG said "it was grossly objectionable not to exempt
this from a BIF." He said it is not the intention of this
committee to entirely reject the public process and CSHB 394 should
incorporate public comment.
Number 737
REPRESENTATIVE FINKELSTEIN said Amendment 1 has nothing to do with
eliminating a BIF. He said the director "may" enter into these
leases and referred to the lines where this amendment was focused.
Number 830
REPRESENTATIVE GARY DAVIS clarified that Amendment 1 left Section
3 intact, but gives discretion to the director.
Number 840
CHAIRMAN ROKEBERG said if there were any leases that were a
problem, it would be looked at under Amendment 1.
Number 871
REPRESENTATIVE OGAN said the amendments that haven't been moved
would have a bearing on the public input process. He said he was
hesitant to give the director this discretionary authority on the
lease.
A vote was taken on Amendment 1, Representatives Rokeberg, Ogan,
Gary Davis and Brice voted nay. Representatives Bettye Davis and
Finkelstein voted yea. Representative Williams was absent for the
vote. Amendment 1 failed to be incorporated into CSHB 394 by the
House Special Committee on Oil and Gas.
Number 1000
REPRESENTATIVE GARY DAVIS said he would like the discussion of
Representative Finkelstein's amendments to take place and would
like to see it addressed and possibly incorporated into CSHB 394.
Number 1021
CHAIRMAN ROKEBERG said the areas of public input, fees and
regulation will be reviewed before a committee substitute is
introduced in the House Resources Committee.
Number 1038
REPRESENTATIVE OGAN concurred with Chairman Rokeberg and said he
would be happy to work with Representative Finkelstein to develop
the language of CSHB 394.
Number 1045
CHAIRMAN ROKEBERG thought there should be an inclusion of a fee
application and public process during the permit process, rather
than have a protracted BIF. He said there might need to be
regulations regarding the development of this resource.
Number 1079
REPRESENTATIVE FINKELSTEIN said he would work with the sponsors.
REPRESENTATIVE BETTYE DAVIS made a motion that the committee move
CSHB 394 with accompanying fiscal note and individual
recommendations. Hearing none CSHB 394 was moved from the House
Special Committee on Oil and Gas.
ADJOURNMENT
There being no further business to come before the House Oil & Gas
Special Committee, Chairman Rokeberg adjourned the meeting at
11:19 a.m.
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