Legislature(1997 - 1998)
03/31/1998 10:04 AM O&G
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON OIL AND GAS March 31, 1998 10:04 a.m. MEMBERS PRESENT Representative Mark Hodgins, Chairman Representative Scott Ogan Representative Norman Rokeberg Representative Joe Ryan Representative Tom Brice Representative J. Allen Kemplen MEMBERS ABSENT Representative Con Bunde COMMITTEE CALENDAR SENATE CONCURRENT RESOLUTION NO. 20 Relating to support of the State of Alaska's areawide leasing program. - MOVED SCR 20 OUT OF COMMITTEE *HOUSE BILL NO. 469 "An Act approving the sale of Prudhoe Bay Unit royalty oil by the State of Alaska to Mapco Alaska Petroleum, Inc.; and providing for an effective date." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: SCR 20 SHORT TITLE: STATE Areawide LEASING PROGRAM SPONSOR(S): SENATOR(S) PEARCE Jrn-Date Jrn-Page Action 1/13/98 2181 (S) READ THE FIRST TIME - REFERRAL(S) 1/13/98 2181 (S) RESOURCES 2/04/98 (S) RES AT 3:30 PM BUTROVICH ROOM 205 2/06/98 (S) RES AT 3:30 PM BUTROVICH ROOM 205 2/06/98 (S) MINUTE(RES) 2/09/98 2450 (S) RES RPT 4DP 2/09/98 2450 (S) DP: GREEN, TAYLOR, TORGERSON, SHARP 2/09/98 2450 (S) ZERO FISCAL NOTE (S.RES) 2/10/98 (S) RLS AT FAHRENKAMP RM 203 2/10/98 (S) MINUTE(RLS) 2/12/98 2497 (S) RULES TO CALENDAR 2/12/98 2/12/98 2504 (S) READ THE SECOND TIME 2/12/98 2504 (S) PASSED Y17 N- E2 A1 2/12/98 2506 (S) TRANSMITTED TO (H) 2/16/98 2324 (H) READ THE FIRST TIME - REFERRAL(S) 2/16/98 2325 (H) OIL & GAS 3/31/98 (H) O&G AT 10:00 AM CAPITOL 124 WITNESS REGISTER KRISTY TIBBLES, Researcher to Senator Drue Pearce Alaska State Legislature Capitol Building, Room 518 Juneau, Alaska 99801 Telephone: (907) 465-4747 POSITION STATEMENT: Testified on SCR 20. JOHN SHIVELY, Commissioner Department of Natural Resources 400 Willoughby Avenue, 5th Floor Juneau, Alaska 99801 Telephone: (907) 4532400 POSITION STATEMENT: Testified on SCR 20. ACTION NARRATIVE TAPE 98-29, SIDE A Number 0001 CHAIRMAN MARK HODGINS called the House Special Committee on Oil and Gas meeting to order at 10:04 a.m. Members present at the call to order were Representatives Hodgins, Rokeberg, Ryan and Brice. Representatives Ogan and Kemplen arrived at 10:05 a.m. SCR 20 - STATE AREAWIDE LEASING PROGRAM Number 0012 CHAIRMAN HODGINS announced the committee would hear SCR 20, "Relating to support of the State of Alaska's areawide leasing program." KRISTY TIBBLES, Researcher to Senator Drue Pearce, stated that Senator Pearce sponsored SCR 30 at the request of the support industry, The Alliance. She stated that in 1996 the legislature created the state's areawide leasing program with unanimous support by all 60 legislators and the governor. The current program has been implemented successfully by the Department of Natural Resources and has provided a cost and labor savings approach to offering lease sales in areas of Alaska, already subjected to extensive leasing. She stated that the oil and gas industry operates in a very contentious environment in Alaska and by passing this the legislature would lend its unwavering support for this practical approach to leasing the state's oil and gas land. She stated that this resolution further emphasizes the benefits of this program for all Alaskans. Number 0047 REPRESENTATIVE JOE RYAN stated that according to the letter from The Alliance, the opposition claimed they did not have sufficient time to express their opinions on the legislation. He asked who the opposition is. MS. TIBBLES replied that she did not know and stated that a member from The Alliance was supposed to be here to also testify. Number 0065 JOHN SHIVELY, Commissioner, Department of Natural Resources, stated that the administration supports the resolution and is in the process of implementing the law and will have the first areawide sale on June 24th. He asserted that the preliminary best interest finding for the Cook Inlet areawide sale will be out shortly, the sale is scheduled for April 1999. He stated that there are two other areawide sales scheduled for the future. He stated that this is a better way to lease as it allows the public to understand where they are leasing, for the government to do one best interest finding for ten years, and the industry to understand which land is going to be available for the leasing and when. Number 0101 REPRESENTATIVE NORMAN ROKEBERG asked what was the plan in Cook Inlet after the follow up of the initial plan. Number 0111 COMMISSIONER SHIVELY responded that the first sale is scheduled for April of 1999 and then each April for the next ten years "Cook Inlet areawide will take place. He stated that there would be a comment period prior to the sale where the best interest finding could be amended if so needed. Number 0123 REPRESENTATIVE ROKEBERG asked what the name of the sale is. COMMISSIONER SHIVELY stated that they changed the name to Cook Inlet Areawide Lease Sale as it is not as important now to have numbered sales. REPRESENTATIVE ROKEBERG asked if he was starting with new baseline findings for each of the four sales described or are there findings in place because the 10 year renewal. Number 0150 COMMISSIONER SHIVELY stated that they are building on the existing findings and making the appropriate findings as information comes available but they do not start from scratch. Number 0161 REPRESENTATIVE ROKEBERG stated that he inserted into the bill the 10 year window and asked how he was determining the ten year window. Number 0164 COMMISSIONER SHIVELY stated that he misunderstood his previous question. He stated that what happens is that they will do a full blown best interest finding and that final finding will stand for the 10 years. However, each year they will ask for significant new information that might cause an amendment of the best interest finding. He stated that the best interest finding would stand for the ten years but it is possible to have some amendments to it. Number 0180 REPRESENTATIVE ROKEBERG asked how much money the department is going to be saving in developing investments and findings for the next ten years. Number 0200 COMMISSIONER SHIVELY responded that he could not answer that, although there will be some savings as there will be fewer sales to deal with. He stated that there is no question that there will be a definite work load savings for the department. Number 0215 REPRESENTATIVE ROKEBERG asked what an estimate would be to put together a full blown best interest finding. Would it be in the $300,000 to $400,000 range. COMMISSIONER SHIVELY replied that he did not want to guess. Number 0227 REPRESENTATIVE ROKEBERG asked him to guess or make some assumptions. He stated that it would be supportive of the resolution and it would stroke his ego a little bit. CHAIRMAN HODGINS stated that the chair recognizes the job that other legislatures have done on this and Representative Rokeberg is noted. Number 0252 REPRESENTATIVE KEMPLEN asked what have been the major concerns raised with the areawide leasing program and how has the department met those concerns. Number 0255 COMMISSIONER SHIVELY responded that the major concern is that there is too much acreage offered at one time and that people think a best interest finding cannot be done in a place like Cook Inlet to cover 5 million acres but of which we will be leasing 2.8 million acres. He stated they have leases all but 6 percent of this land in the previous lease sales, so it is not like this is new area. He stated that the previous lease sale program with multiple leases for sale at the same time causes a huge amount of confusion for the public. He stated that his answer to people that feel they are too much is that this program makes more sense. Number 0278 REPRESENTATIVE TOM BRICE stated that in the analysis section of the fiscal note resolution is mis-spelled. He offered an amendment to correct the mis-spelling. CHAIRMAN HODGINS asked if there was an objection. Hearing none, it was so ordered. Number 0300 REPRESENTATIVE OGAN made a motion to move SCR 20 with the corrected zero fiscal note attached. CHAIRMAN HODGINS asked if there was an objection. Hearing none, SCR 20 was a moved out of the House Special Oil and Gas Committee. ADJOURNMENT CHAIRMAN HODGINS adjourned the House Special Committee on Oil and Gas meeting at 10:20 a.m.