Legislature(1995 - 1996)
03/29/1995 08:15 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 29, 1995
8:15 a.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative Bill Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative Ramona Barnes
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
Representative John Davies
Representative Eileen MacLean
COMMITTEE CALENDAR
HB 207: "An Act relating to adjustments to royalty reserved to
the state to encourage otherwise uneconomic production of
oil and gas; relating to the depositing of royalties and
royalty sale proceeds in the Alaska permanent fund; and
providing for an effective date."
CSHB 207(RES) PASSED OUT OF COMMITTEE
Presentation on Stellar Sea Lions
HRES - 03/29/95
HB 191: "An Act relating to the management and disposal of state
land and resources; relating to certain remote parcel and
homestead entry land purchase contracts and patents; and
providing for an effective date."
SCHEDULED BUT NOT HEARD
WITNESS REGISTER
REPRESENTATIVE NORMAN ROKEBERG
Alaska State Legislature
State Capitol, Room 110
Juneau, AK 99801
Phone: 465-4968
POSITION STATEMENT: Commented on proposed amendments to HB 207
KEN BOYD, Acting Director
Division of Oil and Gas
Department of Natural Resources
3601 C Street, Ste. 1380
Anchorage, AK 99503
Phone: 762-2547
POSITION STATEMENT: Commented on proposed amendments to HB 207 and
suggested additional amendments to HB 207
ANDREW TRITES, Research Coordinator
North Pacific Universities Marine Mammal
Research Consortium
University of British Columbia
6248 Biological Sciences Road, Room 18
Vancouver, British Columbia Canada V62 1Z4
Phone: (604) 822-8181
POSITION STATEMENT: Gave presentation on Stellar Sea Lions
JERRY MCCUNE, President
United Fishermen of Alaska
211 Fourth Street, No. 112
Juneau, AK 99801
Phone: 586-2820
POSITION STATEMENT: Voiced concerns regarding number of animals
needed to get off endangered list
SUE MELLO, Representative
National Marine Fisheries Service
709 W. 9th
Juneau, AK 99801
Phone: 586-7221
POSITION STATEMENT: Commented on getting animals off endangered
list
PREVIOUS ACTION
BILL: HB 207
SHORT TITLE: ADJUSTMENTS TO OIL AND GAS ROYALTIES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
02/27/95 501 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 501 (H) OIL & GAS, RESOURCES, FINANCE
02/27/95 501 (H) FISCAL NOTE (DNR)
02/27/95 501 (H) 2 ZERO FISCAL NOTES (DNR, REV)
02/27/95 501 (H) GOVERNOR'S TRANSMITTAL LETTER
03/08/95 665 (H) CORRECTED FISCAL NOTE (DNR)
03/09/95 (H) O&G AT 12:00 PM CAPITOL 17
03/09/95 (H) MINUTE(O&G)
03/14/95 (H) O&G AT 10:00 AM CAPITOL 124
03/14/95 (H) MINUTE(O&G)
03/15/95 (H) O&G AT 05:00 PM BELTZ ROOM 211
03/15/95 (H) MINUTE(O&G)
03/16/95 (H) O&G AT 10:00 AM CAPITOL 124
03/16/95 (H) MINUTE(O&G)
03/17/95 (H) O&G AT 05:00 PM CAPITOL 124
03/17/95 (H) MINUTE(O&G)
03/20/95 (H) O&G AT 05:00 PM CAPITOL 106
03/21/95 (H) O&G AT 10:00 AM CAPITOL 124
03/22/95 848 (H) O&G RPT CS(O&G) NT 4DP 1NR 2AM
03/22/95 849 (H) DP: OGAN, BRICE, ROKEBERG, B.DAVIS
03/22/95 849 (H) NR: G.DAVIS
03/22/95 849 (H) AM: WILLIAMS, FINKELSTEIN
03/22/95 849 (H) 0&G LETTER OF INTENT
03/22/95 849 (H) INDETERMINATE FISCAL NOTE (REV)
03/22/95 850 (H) FISCAL NOTE (DNR) 3/8/95
03/22/95 850 (H) ZERO FISCAL NOTE (REV) 2/27/95
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
03/22/95 (H) MINUTE(RES)
03/22/95 (H) O&G AT 05:00 PM
03/23/95 (H) O&G AT 10:00 AM CAPITOL 124
03/24/95 (H) RES AT 08:00 AM CAPITOL 124
03/24/95 (H) MINUTE(RES)
03/27/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 191
SHORT TITLE: MANAGEMENT OF STATE LAND AND RESOURCES
SPONSOR(S): REPRESENTATIVE(S) THERRIAULT
JRN-DATE JRN-PG ACTION
02/22/95 448 (H) READ THE FIRST TIME - REFERRAL(S)
02/22/95 448 (H) RESOURCES, FINANCE
03/15/95 741 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
03/15/95 741 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 741 (H) RESOURCES, FINANCE
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
03/22/95 (H) MINUTE(RES)
03/29/95 (H) RES AT 08:00 AM CAPITOL 124
ACTION NARRATIVE
TAPE 95-42, SIDE A
Number 000
The House Resources Committee was called to order by Co-Chairman
Green at 8:15 a.m. Members present at the call to order were
Representatives Green, Austerman, and Kott. Members absent were
Representatives Williams, Ogan, Barnes, Davies, MacLean, and
Nicholia.
CO-CHAIRMAN JOE GREEN announced the committee would hear HB 207 and
a presentation on Stellar Sea Lions. The committee will not hear
HB 191.
HRES - 03/29/95
HB 207 ADJUSTMENTS OF OIL AND GAS ROYALTIES
CO-CHAIRMAN GREEN stated the committee would review comments and
suggestions presented at the previous hearing. He discussed
changes contained in the work draft committee substitute (CS),
version U, as they relate to the work draft CS, version K.
CO-CHAIRMAN GREEN said the work draft CS, version U, contains a
rewritten Section 1 which is the legislative intent. He explained
the word "consider" on line 6, page 1, is a change from the
language in version G & K where the word "encourage" was used. He
noted the commissioner had made this suggestion. He felt the word
"consider" will accomplish the same purpose but not tie the hands
of the commissioner on a frivolous request.
CO-CHAIRMAN GREEN told committee members the next change is on page
2, line 10, of the work draft CS, version U. He said the words
"for sale" are included. He stated when talking about a production
from a field, it will be production that has not been offered for
sale, rather than any production. He added on page 2, line 16, of
the work draft CS, version U, the words "price" replace the words
"sale value". He stated the price of oil is a more generic,
understandable, and parallel type of description when talking about
an income from the sale of oil.
CO-CHAIRMAN GREEN stated on page 2, line 31, of the work draft CS,
version U, the words "by making reference to a sliding scale
royalty or equivalent provision that provides for adjustment of
royalty" were added, which the commissioner can refer to and those
things which he should consider.
CO-CHAIRMAN GREEN noted for the record that Representatives OGAN
and WILLIAMS had joined the committee.
Number 134
CO-CHAIRMAN GREEN said on page 3, lines 8-15, of the work draft CS,
version U, subsection (4) reintroduces a floor which restricts the
reduction of otherwise attainable royalty to not more than 80
percent for a new, undeveloped or delineated field and not more
than 90 percent of what would have otherwise been available as
royalty under an economically strapped existing field at its
economic limit. He noted there has been discussion about having no
restriction and restriction on new fields only, and this change
reintroduces restrictions on both fields. He pointed out some
royalty interest remains to the state from all leases.
CO-CHAIRMAN GREEN explained the next change is contained on page 4,
line 31, in the work draft CS, version U. He said in prior
versions of the bill, there was reference to once the
commissioner's determination is final, it is not subject to
litigation. He noted that language previously was a subsection by
itself. Now the language is included as item (D) under subsection
(8). He explained it is the same intent but is repositioned.
Number 190
CO-CHAIRMAN GREEN said there has been a lot of struggling, both in
the Oil and Gas Committee (OGC) and the House Resources Committee,
as to the oversight of the commissioner. He noted there are
varying views from one extreme of absolutely no review, to an
almost rigid type of review by various departments of state
government. Each suggestion has some negativism to them. He
explained the commissioner would be given the opportunity to
proceed, get a consultant if necessary, get a fair determination of
the royalty reduction if it is in the best interest of the state,
and then have a public awareness of what has happened, and provide
30 days after public notice for written comments by members of the
public to the commissioner on their views of what has transpired.
The commissioner then finalizes his determination, summarizes the
public input, and sends both to the presiding officers of the
Senate and House and Chairs of the Senate and House Resources
Committee.
CO-CHAIRMAN GREEN felt this change brings the public into the
picture, which is worthwhile. He said if HB 207 passes, the state
will be going from a conventional safety cushion of offering land
for lease, knowing there is going to be a certain royalty and being
assured, to looking at those accumulations of resources that are
marginal at best and under existing conditions, which the state has
had for 20 years, probably would not be developed, in which case
the state would get nothing. He stressed HB 207 will allow the
state to provide an incentive, comparable to what other countries
provide, saying there is a valuable product in the state, it is
marginal, but what can be done so both the state and the company
can gain. He felt from that standpoint, it is worthwhile for the
public to have access during the process to make their feelings
known. He stressed whatever royalty reduction is determined, it is
imperative that the people of the state are aware of that
agreement.
Number 267
REPRESENTATIVE PETE KOTT made a MOTION to ADOPT the work draft CS,
version U, as CSHB 207(RES).
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
REPRESENTATIVE SCOTT OGAN made a MOTION to AMEND CSHB 207(RES) on
page 2, line 25, through page 3, line 7: Delete all material and
insert: "(3) shall, if preexisting economic conditions warrant, in
the findings, determinations, and agreement, [THE REVENUE FROM THE
LESSEE'S SHARE OF ALL HYDROCARBONS PRODUCED FROM THE FIELD IS AND
IS LIKELY TO CONTINUE TO BE INSUFFICIENT TO PRODUCE A REASONABLE
RATE OF RETURN WITH RESPECT TO THE LESSEE'S TOTAL INVESTMENT IN THE
FIELD. THE COMMISSIONER MAY] condition the [A] royalty reduction
granted under this subsection in any way necessary to protect the
state's best interests; under this subsection, the commissioner
shall include provisions to increase or otherwise modify the
state's royalty share by a sliding scale royalty or other
mechanism; the commissioner may consider one or more relevant
factors, such as a change [INTEREST, INCLUDING RESTORATION OF THE
STATE'S ROYALTY SHARE IN THE EVENT OF AN INCREASE] in the price of
oil or gas, the projected ultimate recovery of oil and gas, field
productivity or development costs and operating costs in the oil or
gas field, pool, or portion of the field or pool;".
REPRESENTATIVE OGAN said this amendment would tighten up the
language and give the commissioner the ability to increase or
otherwise modify the state's royalty. This amendment adds the word
"increase".
REPRESENTATIVE KOTT OBJECTED for discussion purposes.
REPRESENTATIVE NORMAN ROKEBERG explained on line 3 of the
amendment, the additional words are "if preexisting economic
conditions warrant". He said rather than assume there is a macro
condition of necessity to move forward with an application, this
added language establishes there should be preexisting conditions
both on the part of the applicant and perhaps in the world market
place. He explained the reason for the word "agreement" on line 4
of the amendment, is to make sure that all provisions of the
agreement are included in the contractual negotiations which take
place up-front. For example, regarding the concept of reopeners,
the word "agreement" is cited to make sure those discussions do
take place and are bargained for up-front. This gives the
applicant and the commissioner flexibility but also gives notice
that these things should be done up-front.
REPRESENTATIVE ROKEBERG stated on line 11 of the amendment, the
stipulation of the word "increase" is important because this
specifically grants the commissioner the power to increase the
royalty rate on a sliding scale for whatever relevant factor or
event which might cause that. He said this power could override an
existing, pre-bargained for bid for royalty rate. He noted Co-
Chairman Green feels the word "modify" covers that but
Representative Rokeberg felt making it specific and explicit is
helpful and will avoid any confusion in the future.
Number 362
REPRESENTATIVE ROKEBERG said the balance of the amendment reflects
Co-Chairman Green's language also. He stated the one point of
distinction is the mandate of oil price. He noted in CSHB 207(RES)
and the prior versions that is permissive because there are certain
circumstances where price may not be a determining factor. This
allows the commissioner to have a little more flexibility.
REPRESENTATIVE ROKEBERG felt Co-Chairman Green's language and this
amendment are very similar in intent. He urged support for
Representative Ogan's amendment.
(Representative BARNES joined the committee.)
CO-CHAIRMAN GREEN said he preferred the language contained in CSHB
207(O&G). He stated that which is a preexisting condition is
implicit because this issue would not even be on the table if it
were not.
Number 386
KEN BOYD, ACTING DIRECTOR, DIVISION OF OIL AND GAS, DEPARTMENT OF
NATURAL RESOURCES (DNR), testified via teleconference and stated he
agrees with the amendment to add the word "increase".
CO-CHAIRMAN GREEN asked Mr. Boyd to also comment on adding the
words "if preexisting economic conditions warrant".
MR. BOYD said he did not understand that part and would like to see
it in writing. He stated he is not sure what a preexisting factor
is meant to mean.
CO-CHAIRMAN GREEN clarified that Mr. Boyd would prefer to have the
words "increase or otherwise modify".
MR. BOYD replied yes. He felt it gives certainty to the word
"modify" and the word "increase" says one can increase. Therefore,
there is no possibility of misunderstanding.
CO-CHAIRMAN GREEN felt the word "modify" meant increase or decrease
in reference to a sliding scale, which goes either way. He
wondered if Mr. Boyd would like to include the words "increase or
decrease".
MR. BOYD said that would be fine.
Number 450
REPRESENTATIVE ROKEBERG said he would not object to deleting "if
preexisting economic conditions warrant," on line 3 of the
amendment and deleting the words "otherwise modify" and inserting
the word "decrease".
REPRESENTATIVE BILL WILLIAMS asked if the committee is making any
changes to the bill with all this language.
CO-CHAIRMAN GREEN replied probably not.
REPRESENTATIVE BARNES asked since there has been a proposed
language change to the amendment, and since it is a minor
adjustment to the language contained in CSHB 207(RES), would it be
better to not adopt the amendment and just put the words in the
existing draft.
REPRESENTATIVE OGAN WITHDREW his MOTION.
CO-CHAIRMAN GREEN made a MOTION to AMEND CSHB 207(RES), on page 3,
line 3, delete the word "modify" and insert after the word "to" the
words "increase or decrease".
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
REPRESENTATIVE OGAN asked for a brief at ease.
CO-CHAIRMAN GREEN reconvened the meeting at 8:55 a.m.
REPRESENTATIVE BARNES made a MOTION to MOVE CSHB 207(RES) as
amended, with a zero fiscal note, out of committee with individual
recommendations.
REPRESENTATIVE KOTT OBJECTED because he would like to hear Mr.
Boyd's testimony first.
MR. BOYD stated he had a few suggestions which might clarify the
bill better. He said on page 2, line 10, of CSHB 207(RES), the
word "quantities" is not necessary because it is a word that was
left over when the word "commercial" was deleted. On line 25, page
2, he noted the language contemplates a second document when in
fact this is still the commissioner's finding and determination.
He felt for consistency, the language should say, "shall, as part
of the commissioner's finding and determination".
MR. BOYD said on page 2, line 31, of CSHB 207(RES), the words
"sliding scale royalty or equivalent provision" are too restrictive
in that other mechanisms cannot be used. He suggested the words
"sliding scale royalty or other mechanisms" be used. He felt the
words "equivalent provision" means the commissioner cannot use
anything else. He thought it was important to keep flexibility for
the commissioner to modify the royalty in any way he or she seems
appropriate.
MR. BOYD stated on page 3, line 4, it says "economic factors
including". He expressed concern that it appears the factors only
include those terms listed. He suggested the words "may include"
be used instead of "including". He mentioned page 3, lines 8-15,
of CSHB 207(RES), and stressed there still is a desire to keep a
floor of 25 percent. On page 3, line 17, it says "lessee or
lessees to submit, with the application for the royalty reduction,"
and he felt that language is redundant with the language on the
prior line 16. He felt one of the clauses needs to be removed.
Number 570
MR. BOYD said on page 4, line 8, the language says, "make final
written findings and a written determination". He suggested
deleting the words "a written". He stated on page 4, line 31, the
language says "the commissioner's written determination of
royalty". He pointed out if the commissioner did not decide to
give a royalty reduction, this language implies a different
standard which could be appealed. He suggested the word
"regarding" be used after the word "determination".
REPRESENTATIVE BARNES felt Mr. Boyd's words did not have much
substance but since Co-Chairman Green had spent a lot of time on
the work draft, she requested he comment on Mr. Boyd's suggestions.
CO-CHAIRMAN GREEN said in regard to page 2, line 25, he could
understand Mr. Boyd's comments since there may be a finding which
does not allow for a reduction. He stated the word "agreement" was
used because there was a desire to have it as part of the agreement
not a separate document. He felt the word "agreement" should
remain in the language.
CO-CHAIRMAN GREEN stated in regard to page 2, line 31, and the
words "or equivalent provision". He recalled Mr. Boyd suggested
the words "or other mechanisms". He said, "we wanted to include
the fact that the commissioner would reference the sliding scale as
a `yardstick' and whatever he did would not have to have that but
it should be something akin to that. So if they can come to a
different agreement that does provide for the state to have an
increase if oil goes to $75 a barrel, that we would reap some of
that benefit as well or if it drops to a nickel, that we would
reduce the royalty. If they come to another method of doing that,
that is fine as long as it is in the same...so we have some idea
what is coming. I would prefer to leave it the way it is."
CO-CHAIRMAN GREEN said in regard to page 3, line 4, of CSHB
207(RES) and Mr. Boyd's suggestion to change the word "including"
to "may include", at one time different words were considered. He
explained the bill drafter assured him on three separate occasions
that by using the word "including", that does mean this is a basket
the commissioner can pluck anything he wants to from.
CO-CHAIRMAN GREEN said, "We have addressed the 25 percent floor,
which the commissioner wishes versus the need, in my estimation,
that he does need a little bit larger latitude because there may
be, especially in the older fields, some that 25 percent may not be
adequate. As far as being a potential for encouraging others to
come and say, hey we can go to Alaska, explore and if for some
reason we find a puddle but the puddle is not quite big enough, we
know that they are in favor of us developing and will make an
opportunity for us to do that rather than a rigid hard 25 percent."
Number 622
REPRESENTATIVE OGAN said on page 3, line 13, of CSHB 207(RES), it
indicates on older fields, up to 90 percent can be taken off. He
recalled that Co-Chairman Green had said in the case of older
fields, there may be a need for more latitude. He felt they have
that latitude. He noted if Representative Barnes would withdraw
her motion, he has an amendment to offer, changing the 80 percent
on line 10 to 75 percent.
CO-CHAIRMAN GREEN recalled that Mr. Boyd said the language on page
3, lines 16 and 17, is redundant. He said the language may appear
redundant but the thought was one would be an accompanying
document, not something that would be floating around somewhere
else. He felt the language should be left as is. He stated in
regard to Mr. Boyd's comments on page 4, line 9, he does not object
to deleting the words "a written".
REPRESENTATIVE BARNES WITHDREW her MOTION.
REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 207(RES) on page
4, line 8, delete the words "a written".
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 207(RES) on page
4, line 31, delete the word "of" and insert the word "regarding".
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
Number 660
REPRESENTATIVE OGAN made a MOTION to AMEND CSHB 207(RES) on page 3,
line 10, delete the number "80" and insert the number "75".
REPRESENTATIVE OGAN felt the state is going to have a
constitutional problem because the state is required to protect the
resources which belong to the people, not to the state. He thought
the minimal amount from the state's resource development should be
put into the permanent fund. He stated the legislature has a moral
and legal obligation to do that.
CO-CHAIRMAN GREEN stated there is no legal obligation. He said,
"the amount `75' was arbitrary because I think it ties to the
earlier version of leases that said 25 percent of the royalty
received from that lease would go to the permanent fund, 1980 or
1979, it was up to 50 percent of whatever was received not that it
would be of 12.5 percent or 16 percent or 20 percent, which numbers
of royalties have been in other leases. That 75 to me is an
arbitrary figure."
CO-CHAIRMAN GREEN continued, "There is no change that what is
received, whether it be only 20 percent of the 12.5 percent,
roughly 2.4 percent...still 50 percent of the leases since 1981
will still go to the permanent fund and if it is prior to that, 25
percent will still go to the permanent fund and the 12.5 percent,
I submit to you is a historic number, one-eighth and there is no
real justification for that--that is an agreement struck between
the lessor, in this case the state, and the lessee which is the
company. We still protect the permanent fund. We are saying we
would like a smaller piece but have something of that rather than
a big piece of nothing."
REPRESENTATIVE BARNES OBJECTED to the motion.
CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of
the amendment were Representatives Kott, Nicholia, and Ogan.
Voting against the amendment were Representatives Austerman,
Barnes, Williams and Green. The MOTION FAILED 4-3.
TAPE 95-42, SIDE B
Number 000
REPRESENTATIVE OGAN made a MOTION to AMEND CSHB 207(RES), on page
4, lines 2-9 inserting the language contained in the earlier work
draft, version K, page 4, lines 3-26.
CO-CHAIRMAN GREEN OBJECTED.
REPRESENTATIVE BARNES noted that this section had been modified as
a result of Mr. Boyd's suggestion.
Number 052
REPRESENTATIVE OGAN felt proper oversight of the process was not
being provided. He said public comment is a good thing to do but
stressed the public has no leverage over the commissioner. He
stated the Alaska Oil and Gas Conservation Commission has the
expertise to determine whether or not royalty reductions are a good
idea and would provide some legislative oversight.
REPRESENTATIVE ALAN AUSTERMAN OBJECTED.
CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of
the amendment were Representatives Nicholia, Ogan, and Kott.
Voting against the amendment were Representatives Barnes,
Austerman, Williams, and Green. The MOTION FAILED 4-3.
REPRESENTATIVE BARNES made a MOTION to MOVE CSHB 207(RES), as
amended, with a zero fiscal note out of committee with individual
recommendations.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
HRES - 03/29/95
PRESENTATION ON STELLAR SEA LIONS
Number 148
DR. ANDREW TRITES, RESEARCH COORDINATOR, NORTH PACIFIC UNIVERSITIES
MARINE MAMMAL RESEARCH CONSORTIUM, stated the consortium is a group
of university researchers who are being funded by the fishing
industry to look into the interactions between marine mammals and
commercial fisheries. He said he would give an overview of some of
the marine mammal issues the consortium and the fishing industry
are concerned with.
DR. TRITES stated most people in Alaska do not appreciate how
important commercial fisheries are to the state. Commercial
fishing is the largest private employer in Alaska, employing 23
percent of the state's work force. He said commercial fisheries
provide 24 percent of the state's basic industry payroll, and is
second only to the oil industry in its contributions to state
government. Over the last 5 years, the Alaska seafood harvest has
stabilized at record levels of over 5 billion pounds per year.
This represents more than half of all the seafood harvested in the
U.S., now making this fishery the largest fishery in the world.
DR. TRITES felt everyone would agree that is a glowing report card
for commercial fisheries in Alaska. He pointed out it hides the
fact that all is not well in the North Pacific. He stated while
the amount of fish landed has risen to all time highs, the numbers
of some marine mammals in Alaska have declined. Many people assume
that commercial fisheries are to blame for their demise, and they
would like to see it stopped.
DR. TRITES told committee members marine mammals are protected
under two pieces of legislation: The Marine Mammal Protection Act
(MMPA) and the Endangered Species Act (ESA). He said both Acts
became law in the early 1970s when the abundance of many marine
mammals was high. It was also a time when urban America felt
outraged over the Japanese whale harvest, the Canadian harp seal
hunt, and the dolphin/tuna kill in the tropical Pacific. He stated
the MMPA prohibits the taking of any marine mammal unless an
exception has been made. The ESA protects animals whose survival
is in jeopardy by prohibiting the harassment, injury or death of
endangered or threatened species. He noted that critical habitat
must be designated and federal agencies must ensure that their
actions are not likely to adversely modify the critical habitat.
DR. TRITES stated there are currently 15 species of whales and
dolphins in Alaska and 7 species of seals and sea lions. As far as
is known, dolphin populations remain healthy and the great whales
are slowly recovering from the over-exploitation that ended in the
1960s. He said many of the pinnipeds that were once so abundant
are now in decline in many parts of Alaska. He explained the
northern fur seal, which breeds on the Pribilof Islands in the
middle of the Bering Sea, numbered about 2.5 million in 1950.
Today, about 1 million remain and the specie has been declared
depleted under the MMPA. He noted it is not clear why this
population declined, nor why it has failed to recover.
Number 199
DR. TRITES said harbour seals are also declining in many parts of
Alaska. On Tugidak Island, the world's largest population of
harbour seals dropped from 12,000 in 1976 to under 2,000 in 1988.
Only in Bristol Bay and Southeast Alaska have their numbers
remained healthy. He stated the third and greatest concern is over
the disappearance of stellar sea lions from Alaska. He noted that
many feel this species is destined to become the spotted owl of the
North Pacific. Stellar sea lions are now classified as threatened
with extinction and may soon be reclassified as endangered if
recommendations made to the National Marine Fisheries Service are
followed.
DR. TRITES told committee members based on sporadic census counts,
it appears that the total sea lion population in six regions of
Alaska rose from 185,000 in 1956 to 200,000 in the 1970s. The
population peaked at 225,000 in 1980 and fell to under 85,000 in
1990. He noted this decline has continued to the present and is
underway currently. The only exception to the trend is in
Southeast Alaska and British Columbia where the small populations
have been increasing. He stated the population declines of all
three species, harbour seals, northern fur seals and stellar sea
lions, appear to be geographically related to the Gulf of Alaska.
Number 224
DR. TRITES stated many people assume that commercial fisheries are
ultimately responsible for the population declines. He noted that
the total catch of salmon, herring, groundfish, shrimp and crabs
rose from 100,000 metric tons to 500,000 in 1980. This represents
over one billion pounds of seafood. He said most of the catch is
salmon and pollock. He pointed out at the same time catches have
risen, there has been a dramatic rise in the number of licenses
issued and vessels involved in each of the fisheries. Thus, large
amounts of fish are being removed, while sea lions continue to
decline.
DR. TRITES noted there is considerable nervousness among sectors of
the fishing industry over marine mammals and what the future might
hold. He said there are those who claim it will be business as
usual, while others are predicting the closure of Alaskan
fisheries. No one knows how the legislation will be applied to
protect stellar sea lions and their habitat, nor how the story is
going to ultimately unfold.
DR. TRITES said in the summer of 1992, John Roos from the Pacific
Seafood Processors Association wrote to Northwest universities on
behalf of a group of representatives from the fishing industry and
asked for proposals to study the decline of stellar sea lions.
From that initial request, the North Pacific Universities Marine
Mammal Research Consortium was formed with four members: The
University of Alaska, the University of British Columbia, the
University of Washington, and Oregon State University. He stated
the consortium's mandate is to undertake a long term program of
research on the relation between fisheries and marine mammals in
the North Pacific. He noted that most of the initial focus is on
the stellar sea lion.
Number 258
DR. TRITES told committee members the consortium has built on the
foundation of research conducted by the National Marine Fisheries
Service and the Alaska Department of Fish and Game, and has
developed a research program to address the major hypotheses put
forward to explain the cause of the stellar sea lion population
decline. He said ten hypotheses have been proposed, of which five
have largely been discredited. These include storms, pollution,
toxins, and entanglement and shooting. He stated the consortium's
research program is addressing the remaining five.
DR. TRITES said a parasitologist at the University of British
Columbia is examining parasites from sea lion stomachs and feces,
while the leading world expert on sea lion diseases from Oregon
State University has proposed a long term study to evaluate the
contributing role of disease to the population decline. He stated
the predation hypothesis is intriguing. A dead killer whale washed
ashore in Prince William Sound in the summer of 1992. Its stomach
contained 14 flipper tags from stellar sea lions. He noted a study
was started at the University of British Columbia to determine
whether killer whale predation could significantly affect sea lion
numbers.
DR. TRITES stated the stomach contents collected over the past 20
years were compiled from eight stranded killer whales in Alaska and
14 in British Columbia. They support the view that there are two
distinct killer whale races in the eastern North Pacific with non-
overlapping diets. In all, 258 of the marine mammal eating
transient whales were identified between Washington and western
Alaska. He said a computer simulation model found that killer
whale predation may currently account for a significant portion of
the total annual mortality of sea lions in Alaska. When sea lion
populations exceed 100,000, the effects of killer whale predation
on sea lion dynamics appear minimal. However, at levels of 50,000
sea lions or less, the effects are more significant, and may be
sufficient to drive a population decline.
REPRESENTATIVE AUSTERMAN wondered of the percentage of sea lions
tagged, is there a way to extrapolate out what the 14 tags found in
the whale's stomach mean.
DR. TRITES responded in that year, approximately 400 animals were
tagged. Therefore, for this one animal to have such a high
proportion of plastic in its stomach indicates it either had a
taste for plastic, it was homing in on animals with tags or it is
representative of a high rate of predation. He said a report is
being prepared that looks at those various possibilities.
REPRESENTATIVE AUSTERMAN clarified with the 14 tags, it is
difficult to determine if there were more sea lions being eaten.
DR. TRITES replied there is no doubt there would have been other
animals eaten, as the 14 tagged sea lions were a small proportion
of those marked. He said the fact that one animal had that many
tags in its stomach is very significant.
Number 327
DR. TRITES explained three other possible explanations for the sea
lion decline are human disturbance, abherrent behavioral changes,
and the hypothesis that everyone is looking at the hardest,
nutritional stress. He said the consortium proposed a 5-year
research plan in 1993 with three major components designed to test
these hypotheses: Field studies, captive studies, and laboratory
and data analyses. He stated the essence of the field program is
to compare a healthy rookery with a declining rookery. The
consortium began work at Forrester Island in Southeast Alaska where
sea lions are healthy, and at Sugarloaf near Kodiak where sea lions
are declining.
DR. TRITES told committee members the consortium's field studies
are being done with the collaboration and financial support of the
Alaska Department of Fish and Game and involves many people. At
the study sites, the consortium has access to animals to make
direct behavioral observations, and to capture and track them at
sea using satellites. He said the consortium is also collecting
sea lion scats to identify diet from the remaining fish bones and
would like to sample fish from around the study sites. One
interesting finding is the diet of sea lions at the healthy site
appears to be very similar to that at the declining site. The
number one item on the sea lion menu in both areas appears to be
pollock.
DR. TRITES stated a major question is how much food do sea lions
need to eat. To answer that question, the consortium captured sea
lion pups and brought them to the Vancouver Aquarium. They are now
one and one-half years old and weigh over 200 pounds each. He said
from the six animals, the consortium is finding that their basal
energy needs are not constant, but cycle over the course of a year.
With a grant from the Alaska Science and Technology Foundation, the
consortium will be building a swim mill to measure the energetic
needs of the sea lions while swimming at different speeds.
DR. TRITES said the consortium is also measuring the sea lions
digestive efficiency to determine whether for example, pollock is
as good a food source as for example herring. They are also trying
to identify what and how much sea lions are eating in the wild by
feeding the captive animals different foods and observing which
bony hard bits survive the digestive process. He explained the
culmination of these studies will be a calculation which considers
seasonal and annual activity budgets for sea lions at both the
individual and population levels, and makes predictions about the
amount of food they need. He told committee members other
consortium studies include an analysis of fishing activities around
sea lion rookeries which is being done at Oregon State University.
He noted this is the most thorough analysis of its kind to date.
Number 363
DR. TRITES added that two novel studies at the University of Alaska
are considering whether the population decline is related to an
ecosystem shift. One is examining whiskers from sea lions
collected over the past 40 years. What sea lions ate can be
identified from the ratios of carbon and nitrogen isotopes present
in their whiskers. He said carbon and nitrogen isotopes are
concentrated up through the food chain. It is therefore possible
to tell from what level of food chain the sea lions ate by simply
measuring the isotopic ratio in the whiskers. He noted that
identifying a shift in isotope levels would support the hypothesis
that sea lions have changed their diet.
DR. TRITES said the second study is considering whether whaling is
responsible for the decline of sea lions. The removal of whales in
the eastern Bering Sea and Gulf of Alaska that ended in the 1960s
left thousands of tons of euphausids and fish larvae for other
predators to eat. He noted that an initial calculation indicates
approximately 100,000 tons per day of additional biomass was made
available to other consumers by the removal of fin, sei, and sperm
whales from the Bering Sea alone. This amount is about the same as
the daily consumption of 5 million tons of fish. He stated this
may mean that today's abundance of pollock may be linked to the
removal of whales, and may have restructured the food base
available to sea lions and other seals.
Number 394
DR. TRITES told committee members that solving the mystery of the
disappearing sea lions is not a trivial task, but one that requires
a concerted effort and an open mind. He said university resources
are being put to the task with the support of the industry. The
Marine Mammal Research Consortium was formed with industry support
to address issues related to marine mammal/fishery interactions in
the North Pacific. He stated with that in mind, the consortium has
undertaken a solid field program, a strong captive research
program, and a major analytical research initiative.
DR. TRITES noted that concern about interactions between marine
mammals and commercial fisheries in Alaska is receiving more and
more attention from the public. He stressed it is an issue that is
not likely to go away, but one that needs good scientific research
to be resolved.
CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned that one
of the concerns might be the food supply, which includes salmon.
He noted that a large amount of salmon are returning. He asked if
it is possible that salmon have changed their normal migration due
to the fact they might be eaten by sea lions in that normal
migration route.
DR. TRITES said there has been a study looking at the changes in
ocean circulation and atmospheric pressure. He noted there is
something called the 18.6 year cycle where it appears that
something changed in 1976, which seems to correlate with the strong
abundance of salmon and the high record catches of salmon. He
noted that pollock was not an abundant specie until recently.
CO-CHAIRMAN GREEN asked if the major change in the whale population
occurred at the turn of the century. He thought there had not been
that great of a change during the period when the pollock numbers
increased.
DR. TRITES replied there would be a time lag involved but added the
whaling ended in the late 1960s basically when the whales had been
depleted and it was no longer economically feasible to hunt whales.
He said the consortium has been putting together maps to see where
these concentrations of whales were removed, along the Aleutians
and in the Bering Sea. He noted those areas correspond to where
some of the major concentrations of sea lions have been.
CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned trauma as
one of the ten hypotheses explaining the decline in stellar sea
lions but noted that the consortium is using captive animals. He
wondered if there was a possibility of trauma with captive animals.
DR. TRITES replied there is always a concern with trying to
extrapolate from a captive situation to the wild. He noted it is
very difficult to capture animals in the wild and is also difficult
to get enough measurements to say anything meaningful. He stated
very intensive studies are done with captive animals and at the
same time, a controlled study is done, where for example in
measuring metabolic rates, animals are injected with a chemical
called doubly labeled water. By drawing a blood sample, it can be
determined how much (indiscernible) the animals have used over a
period of time. Therefore, the animals are caught, injected, and
then recaptured a week later.
DR. TRITES explained it can then be determined in the wild what an
animal is using, which then can be compared to the weekly or
monthly measurements being taken in captivity. He felt the
comparisons are close but there are always uncertainties. He did
not think any better data could be achieved than what is being
achieved with the captive animals.
Number 458
DR. TRITES told committee members there is a hypothesis called the
junk food hypothesis. It has been suggested that one of the
problems the sea lions are having is they are eating too much
pollock. He said pollock compares to humans trying to exist on
popcorn--it fills your stomach but does not give you the proper
nutrition. Therefore, the consortium is doing controlled feedings
with the captive animals where the animals are fed pollock and the
it is determined how well the animals can assimilate pollock as
compared to herring, cod, salmon, squid, octopus, etc.
CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned taking
clippings off of the sea lions whiskers and by isotope analysis
could determine what the sea lions diet had been. He wondered if
whiskers stay with the animal or do they change as the diet
changes.
DR. TRITES replied it is not known how long the sea lions whiskers
grow. He noted the captive animals' whiskers are being measured.
He said the results of the isotope analyses are suggesting the
whiskers are five to six years in length and are showing five year
cycles. He said it looks as though the sea lions somehow change
their diet over the course of a year. He added that from the scat
samples collected in Southeast, it appears the summer-time salmon
are quite important but in the winter time, it is herring and
pollock. He stressed there are changes seasonally in terms of what
these animals are eating. Therefore, that in turn reflects what
those prey species have been consuming, as these isotopes are
concentrated up through the food chain.
CO-CHAIRMAN WILLIAMS asked Dr. Trites about incidental take.
DR. TRITES responded a simulation model was put together to try and
reconstruct what had happened in the past--how many sea lions were
taken. He noted there are many stories, mostly anecdotal stories,
that tell during the joint venture fisheries, as the trawls were
being brought to the surface, there was competition as to who could
shoot the most sea lions before noon or else the sea lions were
being caught as the nets were being pulled to the surface.
DR. TRITES noted at the peak it is estimated there were
approximately 5,000 sea lions per year being destroyed through
either intentional shooting or through incidental catches and
entanglement. He pointed out the industry saw the writing on the
wall through the early 1980s. There was an initiative in the mid-
1980s to put a stop to it by informing people they were cutting
their own throats--by contributing to the decline, the fishery
could end up being closed. He said the incidental catch has gone
from a very high level, to a level now where it is estimated the
number of sea lions caught incidentally this year will be less than
50. He noted even when the maximum numbers are looked at, which
are based on observers and interviews with fishermen based on the
number of vessels, the numbers are not enough to account for the
decline.
Number 507
CO-CHAIRMAN GREEN wondered if the consortium is also looking at sea
lion pups to make sure there is nothing happening with them.
DR. TRITES replied one of the studies being supported by the
consortium through the University of Alaska is looking at blood
hormones and proteins in the blood, trying to determine whether or
not the animals appear stressed or compromised. He noted there is
a student at Cape St. Elias who is watching animals and they seem
to look great. However, the consortium does not find the animals
who are missing, yet they know they are missing each year.
CO-CHAIRMAN GREEN said as an adult, we might have the ability to
fend off a disease but a two month baby may not be able to. He
asked if there might be something killing the pups which does not
affect the larger animals.
DR. TRITES stated it is possible. He noted not much is known about
disease and added that studying disease is very expensive. He said
during a trip in January, he was on a site that did not have many
animals on it--perhaps 100 animals--but in the 3 days there, he
found 4 fetuses the animals had aborted. Therefore, the question
becomes is there some sort of disease or viral infection involved.
He pointed out in the end, things will be crossed off the list and
hopefully the cause will be left. He added it may not be a single
factor but a combination of a number of things--each piece
contributing something, with a final outcome of a declining
population.
Number 538
REPRESENTATIVE AUSTERMAN felt it was very sad to see the decline in
the sea lion population but added that the good outcome of the
decline is the realization of the negligence in ongoing research
abilities and what is done to look after the resources in the North
Pacific. He noted the state is in the same position, as each year
the fish and game budget is being reduced and the ability to
research is being reduced--research to make sure what is being done
is not causing something like this population decline to happen.
CO-CHAIRMAN GREEN asked Dr. Trites what the state can do, other
than funding research, in connection with the decline of stellar
sea lions.
DR. TRITES replied awareness would be helpful. He said most people
do not realize what potentially is at stake or even aware there is
a problem with sea lions. He added that the industry has taken an
important step in approaching university researchers and forming a
coalition in terms of trying to determine what is happening. He
felt that is an important step which is ground breaking. From the
industry's standpoint, they feel it is better to be part of the
solution than to be seen as the problem. He pointed out the
relationship with fishermen also gives the researchers the
opportunity to talk directly to fishermen and hear what their ideas
might be and to also learn about what is going on in places the
researchers never see or hear about.
DR. TRITES said the researchers have also developed good contacts
with the Native community who provide samples from the subsistence
hunts. He reiterated the more people aware of the problem, the
more interest there will be in helping find a solution.
CO-CHAIRMAN GREEN asked if there is a possibility that these sea
lions migrate as far over as the former Soviet Union and there may
be something happening there causing the problem.
DR. TRITES responded the animals are also declining in the former
Soviet Union. He said not a lot is known about the movements of
animals. He stated several animals have been branded, tagged or
are being satellite tracked. Essentially, it seemed the animals do
not undertake a migration by a seasonable movement. In the
summertime, the animals stay quite close to their rookeries and
appear to come back to their rookery of birth. He explained the
animals stay close to the rookeries in the summer, and disperse in
the winter--perhaps 300 or 400 miles.
Number 577
REPRESENTATIVE AUSTERMAN asked how far back the data goes on
stellar lion research.
DR. TRITES replied the consortium began two years ago. He said the
captive animals being held are the first time captive sea lions
have been kept for research purposes. Therefore, the work being
done with the industry's support is really ground breaking. He
stated in terms of what is known from far back, often times what
happens is you wait until the problem is there before you start to
study it. He noted the National Marine Fisheries Service and the
Alaska Department of Fish and Game have conducted sea lion census
which go back to 1956. He added the census are quite sporadic and
the counts were not done every year. They also did a little
research on stomach contents but not a whole lot.
REPRESENTATIVE AUSTERMAN wondered if the research could be equated
with the population of whales.
DR. TRITES said the consortium has not looked specifically at whale
numbers. He noted they started to put those numbers together but
then it was reported that the Russian researchers indicated many
more whales were killed than what was reported. The Russians then
offered to sell this data to researchers to see how many whales
were actually taken out of the North Pacific and the Antarctic. He
noted there is now an attempt being made to put those numbers
together. He added the numbers are huge.
REPRESENTATIVE AUSTERMAN asked the status of classifying the
stellar sea lions as endangered.
Number 612
DR. TRITES responded a recovery team was appointed by the National
Marine Fisheries Service which met the end of November. That team
made two major recommendations. First, the team recommended the
sea lion population be divided into two populations with the
dividing line being above Prince William Sound. He stated that
recommendation was based on genetic results which said there
appears to be two genetically distinct stocks. He noted the stock
in Southeast appears to be the healthy one, which is different than
the one declining and whether there is some relationship to
genetics is questionable.
DR. TRITES said the second recommendation of the team was the
status of the stellar sea lions should be changed from threatened
to endangered. He stated that recommendation has been forwarded to
the head of the National Marine Fisheries Service and is now
waiting to be put on the Federal Register at which point there
would be a 90 day period for the public to respond for comment, and
then it could be a year after that before the sea lions would
actually be put on the list.
DR. TRITES noted the Endangered Species Act is up for
reauthorization and it is not clear whether or not the Act might be
changed. He said rumor is there will not be any additional species
put on the list for as long as five years. It is not clear how
Congress is going to handle the Act and how the stellar sea lions
will fit into that situation.
CO-CHAIRMAN GREEN noted the commercial fleets from Alaska are
coming under a lot of attack because people think the fleets should
allow more escapement, meaning a reduction in the fleet's harvest.
He asked with the potential stellar sea lion problem, will there be
a further impact on the Alaskan fishing fleet, as opposed to total
fishing, because other flags are fishing the waters. He questioned
if this population decline is an international problem being
addressed or is it only the U.S. or just Alaska.
DR. TRITES replied most of the effort is focused in Alaska because
there is a lot more at stake plus Alaska is where the biggest
problem is. He added that Alaska is the center of the sea lion
range and Alaska is where the sea lions are disappearing from.
Therefore, Alaska is where the greatest concern is.
Number 650
JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA (UFA), stated
UFA has contributed to the efforts Dr. Trites has discussed. He
said as the decline of stellar sea lions is studied, the problem
faced is the question of where was the population 20 years ago and
where is the population supposed to be today. He questioned if the
stellar sea lion is put on the endangered list, then what number
does the population have to get back to, to get it off the
endangered list. He stressed no one knows what the number of that
population is supposed to be. He felt the state should encourage
the federal government to get a scientific team to determine where
the numbers are at.
TAPE 95-43, SIDE A
Number 000
DR. TRITES agreed. He said it is easy to get on the endangered
list but very difficult to get off it. He stated the consortium
has a proposed project this year to look at that question as to how
criteria is applied. He noted one of the unfortunate things in
legislation is it works with the idea there is a fixed number--an
optimum population size--and does not take into account the fact
that if there is an ecosystem shift, there may be different levels
of equilibrium than what was there previously. Yet many look back
to the date legislation was enacted and that is the magic number
which should be there today. He stressed that does not work in
reality because it is a system in constant motion.
SUE MELLO, REPRESENTATIVE, NATIONAL MARINE FISHERIES SERVICE, said
in regard to the concern about there being a number for delisting,
in 1988 when the ESA was amended, that was one of the changes
because of concerns about there being no numbers for getting
animals off the list. She stated the recovery team has defined the
number for delisting the stellar sea lions but she could not
remember the number but could get the information for the
committee.
CO-CHAIRMAN GREEN asked what the team based the number on.
MS. MELLO replied it was based on the count in the 1970s which was
looked at as a healthy population and she thought the number was 40
percent of the count to get off the list.
DR. TRITES felt the number for delisting is an area which needs
more in-depth thinking than what it has been given thus far.
MS. MELLO stated the recovery plan is going to need revising by
1997. Currently, the U.S. Fish and Wildlife Service and the
National Marine Fisheries Service have come up with a more
stringent approach to recovery plans than used in the past. She
felt the recovery plan will be much more detailed than the first go
around.
CO-CHAIRMAN GREEN asked what she meant by stringent.
MS. MELLO replied stringent in the requirements that the agency be
very clear in defining all the considerations in the ecosystem
which may be affecting the species, more details in the plans and
more involvement of the public.
Number 067
REPRESENTATIVE AUSTERMAN thought it was amazing how the different
species are changing in populations.
DR. TRITES agreed and added that the more one looks into it the
more one realizes it is not a simple story. For example in the
case of pollock, the size the fisheries are taking is bigger than
what the sea lions eat and so it has been proposed that is good for
the sea lions because the biggest predator on pollock is pollock
itself.
REPRESENTATIVE OGAN clarified that trawlers are not selective on
what size they take--they take it all, process by size, and then
dump the rest.
CO-CHAIRMAN GREEN thanked Dr. Trites for his presentation.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Co-Chairman Green adjourned the meeting at 9:58 a.m.
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