Legislature(1995 - 1996)
03/12/1996 05:15 PM House O&G
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
March 12, 1996
5:15 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Scott Ogan, Vice Chair
Representative Gary Davis
Representative Bill Williams
Representative Tom Brice
Representative David Finkelstein
MEMBERS ABSENT
Representative Bettye Davis
COMMITTEE CALENDAR
HOUSE BILL NO. 388
"An Act revising laws relating to oil and gas leasing to authorize
a program of areawide leasing."
- MOVED CSHB 388 (O&G) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 388
SHORT TITLE: AREAWIDE OIL & GAS LEASING
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG,B.Davis
JRN-DATE JRN-PG ACTION
01/05/96 2368 (H) PREFILE RELEASED
01/08/96 2368 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2368 (H) O&G, RESOURCES, FINANCE
02/06/96 (H) O&G AT 10:00 AM CAPITOL 124
02/06/96 (H) MINUTE(O&G)
03/07/96 (H) O&G AT 10:00 AM CAPITOL 124
03/07/96 (H) MINUTE(O&G)
03/09/96 (H) O&G AT 1:00 PM CAPITOL 124
03/12/96 (H) O&G AT 5:00 PM CAPITOL 124
WITNESS REGISTER
NORMA CALVERT, Lobbyist
Marathon Oil Company
P.O. Box 3128
Houston, Texas 77253
Telephone: (713) 296-3915
POSITION STATEMENT: Supported CSHB 388
KENNETH A. BOYD, Director
Division of Oil and Gas
Department of Natural Resources
3601 C Street, Suite 1380
Anchorage, Alaska 99503-5948
Telephone: (907) 762-2547
PAT FOLEY, Chairman
Lands Exploration Operations Committee
Alaska Oil and Gas Association (AOGA)
P.O. Box 100360
Anchorage, Alaska 99576
Telephone: (907) 265-6283
POSITION STATEMENT: Testified on CSHB 388
AL HASTINGS, Director of Oil and Gas
Cook Inlet Region, Incorporated
2525 C Street, Suite 500
Anchorage, Alaska 99503
Telephone: (907) 263-5163
POSITION STATEMENT: Testified on CSHB 388
KEVIN TABLER, Land Manager
Union Oil Company
P.O. Box 196247
Anchorage, Alaska 99516
Telephone: (907) 263-7600
POSITION STATEMENT: Testified on CSHB 388
GEORGE FINDLING, Manager
Government and Public Relations
ARCO Alaska, Incorporated
P.O. Box 100360
Anchorage, Alaska 99501
Telephone: (907) 263-4174
POSITION STATEMENT: Testified on CSHB 388
ACTION NARRATIVE
TAPE 96-13, SIDE A
Number 000
The House Oil & Gas Special Committee was called to order by
Chairman Norman Rokeberg at 5:15 p.m. Members present at the call
to order were Representatives Rokeberg, Ogan, G. Davis, and Brice.
This meeting was teleconferenced to Anchorage. A quorum was
present.
HB 388 - AREAWIDE OIL & GAS LEASING
CHAIRMAN NORMAN ROKEBERG announced that the agenda was HB 388, an
Act revising laws relating to oil and gas leasing to authorize a
program of areawide leasing, and said there was a proposed
committee substitute.
Number 0057
REPRESENTATIVE SCOTT OGAN made a motion to adopt CSHB 388, version
9-LS1341\G. Hearing no objection, CSHB 388 was before the House
Special Committee on Oil and Gas.
Number 0198
NORMA CALVERT, Lobbyist, Marathon Oil Company, said that Brad Penn
(ph.) worked with the sponsor of HB 388 and submitted a letter from
him supporting HB 388. She said Marathon supports HB 388.
Number 0345
CHAIRMAN ROKEBERG said he was the sponsor of HB 388 and that he has
been working with the Alaska Oil and Gas Association (AOGA) and
with the Administration to reach a consensus version of HB 388. He
said CSHB 388 is that consensus bill with a few modifications.
Representative Williams joined the committee meeting at 5:20 p.m.
Number 0462
KENNETH A. BOYD, Director, Division of Oil and Gas, Department of
Natural Resources, testified via teleconference from Anchorage. He
said he was pleased that the committee removed the parallel lease
sale process. He said there are some things in CSHB 388 that will
need to be worked out. He wanted to thoroughly evaluate CSHB 388
because many sections refer back and forth to each other.
Number 0571
CHAIRMAN ROKEBERG said it is the committee's intention to move CSHB
388 today and to make additional changes before it arrived at the
House Standing Committee on Resources.
Number 0738
PAT FOLEY, Chairman, Lands Exploration Operations Committee
Alaska Oil and Gas Association (AOGA), testified via teleconference
from Anchorage. He said a letter was sent to the committee
suggesting modifications to CSHB 388. He said even though those
modifications refer to CSHB 388 version F they still apply to the
version marked G.
Number 0790
MR. FOLEY said the title should be changed to reflect in some way,
that it is an areawide leasing bill. He proposed on page one, line
eight, insert "to provide for annual areawide lease sale."
Another change was on page three, Section 1, line 24, after AS
38.05.180(b) insert, "except for a sale under 6(g) of this
subsection". His final comment, on page six, Section 2, line 21,
delete the word, "sales", as the language is awkward. He said you
are offering the land for lease, not offering it for lease sale.
Number 0906
MR. FOLEY asked for the opportunity to provide additional written
comments upon a review of version G of CSHB 388. He said AOGA's
position is to establish a regular and predictable oil and gas
leasing program allowing timely access to the most prospective
areas of the state. He said areawide leasing would provide
efficiencies and reduce costs associated with preparations for best
interest findings. He said AOGA advocates a program of annual
areawide leasing in all areas of the state where competitive leases
are regularly offered. He said, it is believed, this lease program
could be implemented under existing authority.
Number 0993
MR. FOLEY said AOGA members have offered many ideas regarding
areawide leasing. He added that legislative language was also
offered for consideration as AOGA members considered the various
areawide leasing proposals and became concerned that earlier
concepts created a new and arguably different lease sale program,
ultimately requiring regulation. He said these regulations pose a
threat to both the industry and the state. He said the earlier
areawide leasing proposals also created a cumbersome review process
that has been streamlined in the CSHB 388 version before the
committee today.
Number 1124
AL HASTINGS, Director of Oil and Gas, Cook Inlet Region, testified
via teleconference from Anchorage. He said he wanted to echo the
testimony given by Mr. Boyd and Mr. Foley. He supported an
accelerated and smooth leasing process. He mentioned Mr. Foley's
concerns and said he hoped they would be resolved in the committee
process. He chose not to go into details, but said he would submit
a letter to the sponsor.
Number 1124
KEVIN TABLER, Land Manager, Union Oil Company, testified via
teleconference from Anchorage. He said he just received the new
CSHB 388, and generally speaking the bill looks good and supported
the testimony of all previous witnesses. He said CSHB 388 is a
consensus of industry, Administration and the work of the
committee. He said CSHB 388 will streamline the areawide leasing
process as well as the best interest finding process and that he
would provide written information regarding his comments.
Number 1188
GEORGE FINDLING, Manager, Government and Public Relations, ARCO
Alaska, Incorporated, testified via teleconference from Anchorage.
He said he also supports the previous testimony and will provide
written comments for the committee. He said there are three areas
that ARCO is concerned about in addition to the specific comments
that were made by AOGA. He said on page five, lines 7 to 9, and
also on page six, lines 23 and 24, there is some inconsistency in
that wording. He questioned to what extent the wording was
required.
Number 1247
MR. FINDLING said on page six, lines 27 to 30, there doesn't appear
to be a resolution provided and infers that if new information
arises an annual offering cannot be made, independent of the
outcome of a best interest finding. He believed that this was an
unintended consequence. He said if new information arises, a
supplemental best interest finding could be prepared, allowing the
annual sale to go forward.
Number 1290
CHAIRMAN ROKEBERG said there is an intention on page six, line 28,
to insert the word, "substantial", before the word, "new". He
asked if that would help for clarification purposes.
Number 1304
MR. FINDLING said an insertion would commiserate with the rest of
CSHB 388. He said CSHB 388 does not state what a resolution is or
how new information is resolved, allowing the sale to continue.
CHAIRMAN ROKEBERG made a motion to adopt proposed Amendment 1, on
page six, line 21, to delete the word, "sales".
Number 1345
REPRESENTATIVE TOM BRICE questioned the word, "sale" on page four,
line 29.
A discussion ensued regarding the difference between a sale and a
lease.
Number 1451
MR. BOYD said the state offers acreage for lease if you are having
an oil and gas lease sale. He said he would leave the word "sale"
in on page four, line 29, but would omit the word "sales" on page
six, line 21.
Number 1470
CHAIRMAN ROKEBERG repeated Amendment 1 and included page six, line
28, insert the word, "substantial", so that it reads, "that
substantial new information". He said the word, "substantial"
makes the language consistent. He said the intent of CSHB 388 is
that any new information brought up and supplemental to the best
interest finding would have to be substantial, non-meritorious
information. Hearing no objection, Amendment 1 was so adopted to
CSHB 388 by the House Special Committee on Oil and Gas.
CHAIRMAN ROKEBERG noted for the record that Representative
Finkelstein joined the committee meeting at 5:30 p.m.
Number 1610
REPRESENTATIVE DAVID FINKELSTEIN asked Mr. Boyd what the
Administration's position was regarding CSHB 388 and if they have
any amendments to the bill.
Number 1627
MR. BOYD said his testimony was general and stated that he was
pleased that the parallel lease sale process was removed and that
CSHB 388 now works under existing law. He said everyone received
the new version of CSHB 388 an hour ago and said the details must
be analyzed. He said it is the Administration's position to look
at CSHB 388 and submit specific comments that would alleviate any
conflict. He said Title 38 has a lot of pieces and it would be
unfortunate to try to resolve all of those conflicts here. He said
the Administration will probably request further changes to CSHB
388, but that they will not propose any amendments today.
Number 1685
REPRESENTATIVE FINKELSTEIN asked about the Administration's
position of limiting the areawide leasing to north of the Umiat
baseline.
MR. BOYD said it was never the Administration's position to limit
areawide leasing to one specific area of the state. He said, now
that "we don't have a parallel universe here, we are amending
existing law essentially." He said it is a process that can work
anywhere and said as the schedule works, sales are starting on the
North Slope and north of the Umiat baseline. He said the process
created in CSHB 388 will be able to be used anywhere and the
easiest place to start is on the North Slope.
Number 1740
REPRESENTATIVE OGAN made a motion to move CSHB 388 (O&G), version
G, as amended with attached fiscal notes and individual
recommendations. Hearing no objections CSHB 388 (O&G) was so 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 5:46
p.m.
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