Legislature(2003 - 2004)
05/05/2003 03:10 PM House RES
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ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
May 5, 2003
3:10 p.m.
MEMBERS PRESENT
Representative Hugh Fate, Chair
Representative Beverly Masek, Vice Chair
Representative Carl Gatto
Representative Cheryll Heinze
Representative Bob Lynn
Representative Carl Morgan
Representative Kelly Wolf
MEMBERS ABSENT
Representative Beth Kerttula
Representative David Guttenberg
COMMITTEE CALENDAR
HOUSE CONCURRENT RESOLUTION NO. 10
Relating to restoration of riparian habitat that is vital to the
fisheries resources of the state.
- MOVED HCR 10 OUT OF COMMITTEE
HOUSE BILL NO. 283
"An Act relating to limitations on coal leases."
- MOVED HB 283 OUT OF COMMITTEE
HOUSE BILL NO. 208
"An Act relating to hunting on the same day airborne; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 87
"An Act relating to mining."
- SCHEDULED BUT NOT HEARD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 28
"An Act relating to adjustments to royalty reserved to the state
to encourage otherwise uneconomic production of oil and gas; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 198
"An Act providing for a reduction of royalty on certain oil
produced from Cook Inlet submerged land."
- SCHEDULED BUT NOT HEARD
CS FOR SENATE BILL NO. 151(L&C)
"An Act relating to the regulation of natural gas pipelines
under the Pipeline Act; and providing for an effective date."
- BILL HEARING POSTPONED TO 5/07/03
HOUSE BILL NO. 246
"An Act relating to the limitation on upland acreage that a
person may take or hold under oil and gas leases; and providing
for an effective date."
- BILL HEARING POSTPONED TO 5/07/03
PREVIOUS ACTION
BILL: HCR 10
SHORT TITLE:RESTORATION OF RIPARIAN HABITAT
SPONSOR(S): REPRESENTATIVE(S)WOLF
Jrn-Date Jrn-Page Action
02/28/03 0338 (H) READ THE FIRST TIME -
REFERRALS
02/28/03 0338 (H) FSH, RES
03/17/03 0565 (H) COSPONSOR(S): FOSTER
03/19/03 0593 (H) COSPONSOR(S): LYNN, MEYER
03/26/03 0652 (H) COSPONSOR(S): HEINZE,
CHENAULT
04/02/03 0749 (H) COSPONSOR(S): MORGAN
04/04/03 0798 (H) COSPONSOR(S): WILSON
04/04/03 (H) FSH AT 8:30 AM CAPITOL 124
04/04/03 (H) Moved Out of Committee
04/04/03 (H) MINUTE(FSH)
04/07/03 0816 (H) FSH RPT 4DP 1NR
04/07/03 0816 (H) DP: OGG, WILSON, SAMUELS,
SEATON;
04/07/03 0816 (H) NR: GUTTENBERG
04/07/03 0816 (H) FN1: ZERO(LEG)
04/17/03 1030 (H) COSPONSOR(S): GATTO
04/25/03 (H) RES AT 1:00 PM CAPITOL 124
04/25/03 (H) -- Meeting Postponed --
04/30/03 (H) RES AT 1:00 PM CAPITOL 124
04/30/03 (H) -- Meeting Postponed --
05/02/03 (H) RES AT 1:00 PM CAPITOL 124
05/02/03 (H) -- Meeting Canceled --
05/05/03 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 283
SHORT TITLE:ACREAGE FOR COAL LEASES
SPONSOR(S): REPRESENTATIVE(S)FATE
Jrn-Date Jrn-Page Action
04/24/03 1094 (H) READ THE FIRST TIME -
REFERRALS
04/24/03 1094 (H) RES
04/30/03 (H) RES AT 1:00 PM CAPITOL 124
04/30/03 (H) -- Meeting Postponed --
05/02/03 (H) RES AT 1:00 PM CAPITOL 124
05/02/03 (H) -- Meeting Canceled --
05/05/03 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 283 on behalf of
Representative Fate, sponsor.
CHARLIE BODDY, Vice President of Governmental Relations
Usibelli Coal Mine, Inc.
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 283 and answered
questions.
ACTION NARRATIVE
TAPE 03-36, SIDE A
Number 0001
CHAIR HUGH FATE called the House Resources Standing Committee
meeting to order at 3:10 p.m. Representatives Fate, Masek,
Gatto, Heinze, and Morgan were present at the call to order.
CHAIR FATE recessed the meeting to a call of the chair.
Number 0073
CHAIR FATE called the meeting back to order at approximately
7:15 p.m. Present were Representatives Fate, Masek, Lynn,
Gatto, Heinze, and Wolfe; Representative Morgan arrived back as
the meeting was in progress.
HCR 10-RESTORATION OF RIPARIAN HABITAT
Number 0162
CHAIR FATE announced that the first order of business would be
HOUSE CONCURRENT RESOLUTION NO. 10, Relating to restoration of
riparian habitat that is vital to the fisheries resources of the
state. [HCR 10 was sponsored by Representative Wolf.]
CHAIR FATE asked whether anyone wished to testify [there was no
response].
Number 0207
REPRESENTATIVE MASEK moved to report HCR 10 out of committee
with individual recommendations and the accompanying zero fiscal
note(s); she asked for unanimous consent. There being no
objection, HCR 10 was reported from the House Resources Standing
Committee.
HB 283-ACREAGE FOR COAL LEASES
Number 0275
CHAIR FATE announced that the next order of business would be
HOUSE BILL NO. 283, "An Act relating to limitations on coal
leases."
CHAIR FATE, sponsor, asked his staff to present the bill.
Number 0360
JIM POUND, Staff to Representative Hugh Fate, Alaska State
Legislature, highlighted the large amount of coal reserves in
Alaska, noting that throughout the years this resource has
provided power for homes and employed many people. Today,
however, the state is at a juncture. Intended to increase the
amount of state acreage available for coal leases, HB 283 is
written to open the door to economic opportunity. Companies
that currently are working will be able to expand, and new ones
will be more feasible. Suggesting the state will gain from new
and expanded leases, Mr. Pound called this a win-win situation
for both the state and the coal industry. He concluded by
saying HB 283 doesn't change the strict environmental
requirements for companies, but simply makes more land
available.
Number 0478
REPRESENTATIVE GATTO, expressing curiosity as to how the numbers
were determined, asked: If it's a win-win situation and 92,160
acres is better than 46,080 acres, why is there any limitation?
CHAIR FATE suggested Charlie Boddy could answer after presenting
his testimony.
Number 0558
CHARLIE BODDY, Vice President of Governmental Relations,
Usibelli Coal Mine, Inc., told members HB 283 has the full
support of his company as well as other resource-related
organizations around the state. He explained:
This legislation is vital to our company if we plan to
expand operations outside of the Interior of Alaska.
Our recently unveiled 200-megawatt Emma Creek coal-
fired power-generation facility was proposed only
after we secured additional leases in the Healy area
through a competitive sale just over a year ago. That
leasehold acquisition brought our leased state acreage
holdings to 37,952 acres.
It's our belief that Alaska has great potential for
export, both domestically and internationally, and
that this proposed legislation will accord ourselves
and others the opportunity to pursue those options.
Number 0668
REPRESENTATIVE MASEK observed that the fiscal note [from the
Department of Natural Resources (DNR)] says that the department
supports the bill; that the change in allowable acreage is
consistent with a recent change in federal law that increased
the aggregate acreage of federal coal leases held by one
company; and that there is no fiscal impact [predicted for] this
bill. She said the bill will create a better chance for
businesses to develop resources, and spoke in support of it.
Number 0733
REPRESENTATIVE GATTO asked Mr. Boddy how the 92,160 [acres] was
arrived at.
MR. BODDY answered that it changes the leasable acreage from two
full townships to four.
REPRESENTATIVE GATTO asked: If four is better than two, isn't
six even better? And isn't an infinite amount better than no
amount?
MR. BODDY said Alaska is probably one of the few states with any
limitations on state leaseholds; however, most states couldn't
collectively put together 46,000 acres. He added, "Most of the
coal that we would be competing against, for example, in the
Western United States, is the Department of the Interior, is
federal coal. And that ... was the acreage that was increased
in 2001."
Number 0845
CHAIR FATE asked Mr. Boddy whether one reason for this is
because of the competitive nature of the ground opened up by the
Department of the Interior in the Lower 48.
MR. BODDY said that's correct. Noting that he'd discussed the
issue with the National Mining Association in March, he said
some of the markets that would be looked at are West Coast
markets currently supplied by some Western states. He indicated
that this [bill] would provide an opportunity to advance coal
that would probably be closer to tidewater than his company's
Healy operations.
CHAIR FATE surmised that the acreage doesn't have to be
contiguous.
MR. BODDY said that's correct. He added:
I don't think it's any great secret that after 17
years, we had a hard time continuing our relationship
with exporting coal to South Korea. A large part of
that was, we were having to "rail" ... the product all
the way from Interior Alaska to a port at Seward. And
although Alaska Railroad certainly stayed ... in the
hunt as long as we did, to try to keep that program
viable, we simply could not meet the market conditions
by shipping coal from the Interior of Alaska.
Number 0981
CHAIR FATE asked, "In the event that you wanted to do some of
your own exploration for shallow-well or coal bed methane, you
would come under different regulations relative to shallow gas
than you would to mining coal, would you not?"
MR. BODDY answered in the affirmative.
CHAIR FATE offered his understanding, "You would have to still
get your license or permit to go after the gas; it's just your
lease for coal ... wouldn't cover the gas."
MR. BODDY said that's correct.
Number 1049
REPRESENTATIVE MASEK moved to report HB 283 out of committee
with individual recommendations and the accompanying zero fiscal
note; she asked for unanimous consent. There being no
objection, HB 283 was reported from the House Resources Standing
Committee.
ADJOURNMENT
Number 1089
The House Resources Standing Committee meeting was recessed to a
call of the chair at approximately 7:35 p.m. [The meeting was
reconvened May 7, 2003.]
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