02/27/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR6 | |
| HB99 | |
| HJR7 | |
| HJR6 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 6 | TELECONFERENCED | |
| *+ | HJR 7 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 99 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 27, 2013
1:04 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Dan Saddler, Co-Chair
Representative Peggy Wilson, Vice Chair
Representative Mike Hawker
Representative Craig Johnson
Representative Paul Seaton
Representative Geran Tarr
Representative Chris Tuck
MEMBERS ABSENT
Representative Kurt Olson
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 6
Relating to legacy wells and legacy well sites; urging the
United States Department of the Interior, Bureau of Land
Management, to open new areas of the National Petroleum Reserve
- Alaska for environmentally responsible oil and gas
development; and requesting the Office of the Governor to
increase nationwide awareness about legacy wells and well sites.
- MOVED HJR 6 OUT OF COMMITTEE
HOUSE BILL NO. 99
"An Act extending the termination date of the Alaska Minerals
Commission."
- MOVED CSHB 99(RES) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 7
Urging the United States Congress to pass legislation to open
the coastal plain of the Arctic National Wildlife Refuge to oil
and gas exploration, development, and production; relating to
oil and gas exploration, development, production, and royalties;
and relating to renewable and alternative energy technologies.
- MOVED CSHJR 7(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HJR 6
SHORT TITLE: LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A
SPONSOR(s): REPRESENTATIVE(s) MILLETT
01/28/13 (H) READ THE FIRST TIME - REFERRALS
01/28/13 (H) RES
02/27/13 (H) RES AT 1:00 PM BARNES 124
BILL: HB 99
SHORT TITLE: ALASKA MINERALS COMMISSION
SPONSOR(s): REPRESENTATIVE(s) SADDLER
02/01/13 (H) READ THE FIRST TIME - REFERRALS
02/01/13 (H) RES, FIN
02/25/13 (H) RES AT 1:00 PM BARNES 124
02/25/13 (H) Heard & Held
02/25/13 (H) MINUTE(RES)
02/27/13 (H) RES AT 1:00 PM BARNES 124
BILL: HJR 7
SHORT TITLE: ENDORSING ANWR LEASING
SPONSOR(s): REPRESENTATIVE(s) GATTIS
02/06/13 (H) READ THE FIRST TIME - REFERRALS
02/06/13 (H) RES
02/27/13 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE CHARISSE MILLETT
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HJR 6.
U.S. SENATOR LISA MURKOWSKI
United States Senate
Washington, District of Columbia
POSITION STATEMENT: Testified in support of HJR 6.
CATHY FOERSTER, Commissioner
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "BLM Legacy Wells: Environmental Hazards and
Eyesores," and answered questions during the hearing of HJR 6.
BUD CRIBLEY, State Director-Alaska
Bureau of Land Management
U.S. Department of the Interior
Anchorage, Alaska
POSITION STATEMENT: Provided a status update on the legacy
wells located in the National Petroleum Reserve-Alaska (NPR-A)
and answered questions during the hearing of HJR 6.
PAMELA A. MILLER, Arctic Program Director
Northern Alaska Environmental Center (NAEC)
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing of HJR 6, and
testified in opposition to HJR 7.
DEANTHA CROCKETT, Executive Director
Alaska Miners Association (AMA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 99.
MARLEANNA HALL, Project Coordinator
Resource Development Council for Alaska, Inc. (RDC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 99.
REPRESENTATIVE LYNN GATTIS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the prime sponsor, introduced
the proposed committee substitute (CS) to HJR 7, Version 28-
LS0399\N.
DANIEL LUM
Barrow, Alaska
POSITION STATEMENT: Testified in opposition to HJR 7.
PRINCESS LUCAJ, Executive Director
Gwich'in Steering Committee
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HJR 7.
ADRIAN HERRERA, Washington DC Coordinator
Arctic Power
Washington, District of Columbia
POSITION STATEMENT: Testified in support of HJR 7.
JULIE KITKA, President
Alaska Federation of Natives (AFN)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 7.
TARA SWEENEY, Senior Vice President of External Affairs
Arctic Slope Regional Corporation (ASRC)
Barrow, Alaska
POSITION STATEMENT: Testified in support of HJR 7.
JAMES SULLIVAN, Representative
Southeast Alaska Conservation Council
Juneau, Alaska
POSITION STATEMENT: Submitted written opposition to HJR 7.
LINDA SYLVESTER, Staff
Representative Lynn Gattis
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Gattis, prime
sponsor, explained Conceptual Amendment 1 to HJR 7.
ACTION NARRATIVE
1:04:21 PM
CO-CHAIR DAN SADDLER called the House Resources Standing
Committee meeting to order at 1:04 p.m. Representatives Tarr,
P. Wilson, Seaton, Feige, and Saddler were present at the call
to order. Representatives Hawker, Tuck, and Johnson arrived as
the meeting was in progress.
HJR 6-LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A
1:04:39 PM
CO-CHAIR SADDLER announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 6, Relating to legacy wells
and legacy well sites; urging the United States Department of
the Interior, Bureau of Land Management, to open new areas of
the National Petroleum Reserve - Alaska for environmentally
responsible oil and gas development; and requesting the Office
of the Governor to increase nationwide awareness about legacy
wells and well sites.
1:05:02 PM
REPRESENTATIVE CHARISSE MILLETT, Alaska State Legislature,
speaking as the prime sponsor of HJR 6, informed the committee
that an identical resolution passed the Alaska State Legislature
last year, and invited comments from U. S. Senator Lisa
Murkowski.
1:05:50 PM
U.S. SENATOR LISA MURKOWSKI said she is adamant that a solution
must be found for the issues addressed by HJR 6. The U.S.
Senate Committee on Energy and Natural Resources held a hearing
last summer to bring national attention to the issue of legacy
well remediation, and to educate members of Congress on the dire
situation within the National Petroleum Reserve-Alaska (NPR-A).
She said at that hearing, Bud Cribley, State Director - Alaska,
U.S. Bureau of Land Management (BLM), committed that BLM would
prepare an action plan for well remediation; unfortunately, that
document has not been presented. However, she pledged to
continue to press BLM and the U. S. Department of Interior (DOI)
to formulate an action plan and to keep their promise to begin
the remediation of leaking wells. Recently, Senator Lisa
Murkowski brought this situation to the attention of Secretary
of the Interior Nominee Sally Jewell, making clear that DOI is
engaged in a double standard when it comes to its responsibility
for cleanup. Furthermore, the Senator has obtained a six-fold
increase in funding for legacy well cleanup within the DOI
appropriations bill, which should lead to action on this issue.
She stated that the situation within NPR-A is the pinnacle of
environmental negligence and hypocrisy by DOI, which holds
private industry to the highest standards regarding
environmental protection. Alaskans want reasonable exploration
and development, but not at the risk of the environment, and she
commended private industry within the state for its compliance;
however, the federal government should meet the same standards.
Coupled with other broken promises to Alaskans, the situation in
NPR-A has strained the state's relationship with the federal
government. She also questioned DOI's failure to fund well
remediation efforts within NPR-A, pointing out that is a more
pressing need than purchasing additional land. The Senator said
Alaskans are united on this issue and urged the committee to
pass HJR 6 in order to inform the federal administration that
the status quo is unacceptable.
1:11:30 PM
CO-CHAIR FEIGE asked whether the Senator has suggestions as to
whom committee members should discuss this issue with during
their Energy Council visit to Washington, DC.
U. S. SENATOR LISA MURKOWSKI advised the committee should go
directly to Ken Salazar, Secretary of the Interior, because he
needs to know how important this problem is to Alaskans.
During his visit to legacy well sites last year, although she
provided the location of a particularly grievous example, he
toured only those wells identified by BLM that had already been
cleaned up. She offered to provide assistance with contacts
through her staff.
1:14:48 PM
REPRESENTATIVE MILLETT continued her presentation, noting that
changes in HJR 6 from last session's resolution are reflected in
the sponsor statement. As an aside, she made comments on the
upcoming energy council meetings. Returning to the resolution,
she noted that members of Congress are not aware of what is
happening in Alaska related to the legacy wells, or even that
they exist. Representative Millett pointed out that $9.4
billion has been collected from lease sales in NPR-A; a private
sector producer with this income would be assessed $40 billion
in fines. She further advised that AOGCC Commissioner Cathy
Foerster and she have met with BLM in Washington, DC, on four
occasions.
REPRESENTATIVE SEATON directed attention to the HJR 6 resolve on
page 3, line 18, related to BLM turning over the responsibility
for plugging wells, and to the resolve on page 4, line 1,
related to opening new areas. He asked whether HJR 6 should
include a resolve directly requesting BLM to lease areas
containing legacy wells under certain conditions.
1:18:43 PM
REPRESENTATIVE MILLETT acknowledged that when testifying before
the U.S. Senate, she was asked to provide solutions. Therefore,
she offered the following four solutions: transfer NPR-A to the
state; convey to the state areas around the legacy wells; open
legacy well sites for lease and mandated remediation; or pay the
state $9.4 billion. Speaking as the sponsor, she said she would
not oppose adding the amendment, but was confident the federal
government would not transfer any land in NPR-A to the state.
REPRESENTATIVE SEATON assured the sponsor he did not want to
slow the resolution's progress, but to provide an option.
REPRESENTATIVE MILLETT said that option is part of her testimony
before the Senate. In further response to Representative
Seaton, she offered to provide language for the amendment, and
to co-sponsor a floor amendment.
REPRESENTATIVE JOHNSON recalled that many of the affected areas
have been permanently set aside by Secretary Salazar. He
inquired as to how the legislature can direct that remediation
is completed before the land is transferred, or remediation may
never be done.
1:24:03 PM
REPRESENTATIVE MILLETT observed the irony that the very land the
federal government is trying to save from development has
leaking oil and gas wells, and barrels strewn about. This issue
first arose in 1944, and it is apparent that preserving the land
but not cleaning up the wells is hypocritical.
REPRESENTATIVE JOHNSON feared locking the land up so the problem
can be ignored.
REPRESENTATIVE MILLETT said maybe, the Environmental Protection
Agency (EPA) statute of limitations has run out. She told the
committee one of the wells in the Colville River was buried by
an avalanche and is inaccessible; some are in marshes or
becoming lakes and are a threat to wildlife and subsistence
hunters. Another major question is why not one environmental
group has helped get the wells cleaned up, yet they continue to
carefully watch producers on the North Slope for the slightest
infraction.
1:31:09 PM
CATHY FOERSTER, Commissioner, Alaska Oil and Gas Conservation
Commission (AOGCC), thanked Representative Millett and U.S.
Senator Lisa Murkowski for their past work on this issue because
progress is now being made. She emphasized that the passage of
HJR 6 will keep attention on the matter, and maintains momentum.
The resolution last year prompted a presentation before the U.S.
Senate Energy Committee which spurred a commitment between AOGCC
and BLM to produce an assessment and plan for each well.
Although BLM and AOGCC are not in agreement with the condition
or management of each well, the two agencies will continue to
work together. Commissioners at AOGCC initiated a monthly
public review of wells with comments from BLM. This is a new
approach which is effective; in fact, ten wells have been
removed from the "concerns list" through agreement on shallow
boreholes. At this time, AOGCC is studying wells that have been
plugged by BLM, but that do not meet Alaska's regulations.
Compared to last year, the assessment phase has progressed. In
addition, Ms. Foerster explained that due to the previous
resolution, small amounts of monies are being allocated to be
used on high-priority wells with mutual understanding.
1:36:36 PM
REPRESENTATIVE JOHNSON asked for assurance that methane gas will
not be a problem for wells drilled less than 50 feet deep.
MS. FOERSTER said that is not a problem for the ten wells
removed from the list. In further response to Representative
Johnson, she said there may be a risk to someone traveling by
snow machine over the tundra in winter, or to berry pickers in
summer. She provided pictures of oil barrels and contaminated
lakes.
REPRESENTATIVE JOHNSON posed circumstances of a lake recently
contaminated by an old well and asked whether EPA would assess
this as a new problem even if the statute of limitations had
expired on the well site.
MS. FOERSTER relayed she approached the environmental crimes
unit of the EPA and was informed "because these crimes occurred
X years ago, they're outside of the statute of limitations."
She displayed a slide of the Iko Bay 1 well located near Barrow,
which is leaking methane gas - a human health risk.
REPRESENTATIVE TARR noted there are abandoned U.S. Department of
Defense (DoD) sites in the northern regions, and asked whether
there is an opportunity to combine cleanup efforts with those on
abandoned military sites to be more efficient.
MS. FOERSTER deferred to a representative of the federal
government.
1:41:28 PM
BUD CRIBLEY, State Director-Alaska, Bureau of Land Management,
U.S. Department of the Interior, directed attention to a written
statement provided in the committee packet, and summarized from
that statement as follows:
Essentially what we want to do is reaffirm BLM's
commitment to working on the legacy well issue up in
the National Petroleum Reserve. We have, as we have
previously testified, committed to completing and
providing information to AOGCC and our other partners
up on the North Slope, our current assessment of the
status of all of those wells; we've provided copies of
that draft report to those entities including the
AOGCC asking them ... if they have additional
information to provide to us to include into that
assessment. We would use that in future evaluation of
risks of those wells out on the NPR-A. Then also
want to reaffirm our commitment to you all and also to
the Senator, that we will from that information and
working with AOGCC develop a strategy on our future
work up there as far as identifying priority wells and
putting together a strategy on how we will work to
mitigate those wells and the risks that they pose.
The BLM has been ... in 2004, BLM completed its first
assessment of the wells. At that time we put together
a plan of, or identified, the highest risk wells and
put together a plan in which we addressed those wells
and mitigated those wells. Up until 2012, we have
been able to address all of those but the Iko Bay
well. So, and ... since 2002 the federal government
has invested over $86 million in mitigation of
concerns with ... both surface disturbance and also
with the wells' down-hole issues on wells on the North
Slope. We have been committed and continue to be
committed on this issue. We recognize the importance
of it, and the need to work on this issue. So, it is
not our intent to ignore or to not fulfill what our
responsibilities are on managing those public lands.
1:44:22 PM
MR. CRIBLEY reemphasized that BLM is working as a partner with
AOGCC on identifying the issues with the wells, and to look for
resolutions. In addition, BLM will work with AOGCC to develop a
strategy on determining the priority wells, and how to best
consolidate operations to complete the work.
CO-CHAIR FEIGE asked for the status and delivery dates for the
undelivered document mentioned by U.S. Senator Lisa Murkowski,
and for the final summary report and draft five-year plan
referred to in Mr. Cribley's written statement.
MR. CRIBLEY responded the summary report has been delivered to
AOGCC and to BLM's working partners on the North Slope for their
review and additions, if necessary. At the time all of the
information is collected, BLM will meet with its partners to
identify priority wells and the process for their mitigation.
He acknowledged the original intent was to have this task
completed by the end of 2012.
CO-CHAIR FEIGE assumed that whatever strategy BLM pursues will
cost money. Given the present financial restraints on the
federal government, he asked how much revenue is received in
annual lease payments and whether a portion of that revenue
could be directed towards well cleanup.
MR. CRIBLEY said the federal government has received about $393
million in revenue from lease sales in NPR-A since the 1980s.
Fifty percent of that revenue has gone to the State of Alaska,
the other half into the federal treasury. Annual rental rates
on existing leases total about $4.5 million, of which 50 percent
goes to the state and 50 percent into the federal treasury. Mr.
Cribley advised making those funds available to the BLM would
require a legislative change because of leasing regulations. He
restated that the federal government has invested $86 million in
work on the wells in NPR-A, which is very unusual.
1:48:40 PM
CO-CHAIR FEIGE reminded Mr. Cribley that almost every state
requires a bonding program before drilling a well is allowed.
He pointed out that the federal government's share of the
initial lease payments has been about $190 million, which is an
amount sufficient to plug many wells.
REPRESENTATIVE JOHNSON asked how many wells with problems have
been "fixed" with the $86 million.
MR. CRIBLEY answered that 18 wells have been mitigated since
2002. In further response to Representative Johnson, he
explained those wells were identified as priorities in 2004.
All but one of the priorities have been dealt with, and at this
time, remaining wells are being reassessed for environmental and
human health risks.
REPRESENTATIVE JOHNSON displayed a photo of barrels in a pool
with debris. He asked if it is an old picture.
MR. CRIBLEY said he was unsure when the picture was taken, but
surmised the situation is unchanged. He noted that the well at
the site pictured was plugged by BLM and the structure has been
reattached above ground. The oil/water on the site is not a
lake but an oil seep that occurs naturally on the North Slope in
certain areas. The barrels were not cleaned up because BLM did
not have the money or the ability; however, the site remains on
BLM's priority list although there are questions as to how to
remove the surface debris.
1:52:01 PM
REPRESENTATIVE JOHNSON asked about the condition of the
mitigated 18 wells.
MR. CRIBLEY explained each well is different with individual
issues, many of which are related to the status of the well
itself. In most cases, the biggest issue is plugging the actual
well and not the debris that is left behind.
REPRESENTATIVE JOHNSON said he does not see commitment, but only
involvement, and would like to see more commitment from BLM.
REPRESENTATIVE TARR returned to the question she posed earlier
about the opportunity for agencies such as BLM and DoD to
collaborate and work together more efficiently to address nearby
abandoned DoD sites along with the legacy wells. In addition,
she inquired whether the cost would remain at an average of $5
million each for wells of lessor priority.
MR. CRIBLEY assured the committee that BLM has been working with
other agencies on DoD sites whenever an opportunity to minimize
costs arises. In fact, the next strategy will include
leveraging costs with other activities in the area in order to
expand the amount of mitigation work possible. As far as the
cost per well, although each project is different, grouping the
projects will reduce the cost per well. He could not provide a
long-term projection of total cost. In further response to
Representative Tarr, he clarified that the report that has been
received is the well assessment, updated inventory report. Once
the inventory report is finalized, BLM will begin work on the
strategic plan which will be available to the public. He then
confirmed that BLM leadership is committed to pursuing
collaboration with other entities.
1:57:35 PM
REPRESENTATIVE HAWKER asked whether Mr. Cribley agrees with Ms.
Forester's assessment of the Iko Bay well situation.
MR. CRIBLEY said BLM recognizes the Iko Bay well is a leaking
well, and although monitoring crews were on site this year and
found there is minor seepage right now, it is still important to
remediate that well as conditions can change.
REPRESENTATIVE HAWKER questioned why the well has not been dealt
with in nine years.
MR. CRIBLEY attributed the delay to funding and the agency's
incapacity to accomplish that task.
REPRESENTATIVE HAWKER expressed his concern about the level of
cooperation between BLM and AOGCC regarding the wells that have
been plugged. For example, does BLM comply with Alaska's
standards in that regard?
MR. CRIBLEY acknowledged he cannot say whether all of the wells
have been plugged to all of Alaska's standards at this point.
However, he said BLM intends to continue to work to reach
consensus with AOGCC on standards; BLM recognizes difficulties
in the working relationship with AOGCC and seeks to come to
agreement on what work needs to be done on the ground.
REPRESENTATIVE HAWKER remained concerned about the quality of
BLM's remediation process.
2:01:04 PM
MR. CRIBLEY explained BLM generally tries to remediate the well
and the site, depending on the agency's capacities and goals.
REPRESENTATIVE HAWKER opined there is a very significant
difference of opinion between BLM, those who live on the North
Slope, and AOGCC, about the quality and competence of the work
that has been done to date.
MR. CRIBLEY stated BLM's intent in sharing its updated
assessment report is to allow for its partners to respond
regarding the condition of the wells. The wells on the
assessment list are also included in the inventory for comment.
CO-CHAIR SADDLER agreed with Representative Johnson.
REPRESENTATIVE JOHNSON asked whether BLM is required to file for
permits to begin remediation work.
MR. CRIBLEY said no. In further response to Representative
Johnson, Mr. Cribley said BLM follows the same standard
operating procedures and mitigations that are placed on private
companies to mitigate impacts to the environment when accessing
sites and doing work, thus the high cost and delays. There are
sites around Barrow that can be accessed in summer, but most
activities are focused during winter, as are private projects.
MS. FOERSTER informed the committee every operator who drills a
well or performs well work - including plugging and abandonment
- is required by Alaska statute and regulation to get permission
from AOGCC. However, BLM is of the opinion it does not need to
do so.
2:05:50 PM
CO-CHAIR SADDLER opened public testimony on HJR 6.
2:06:10 PM
PAMELA A. MILLER, Arctic Program Director, Northern Alaska
Environmental Center (NAEC), said her organization was not
prepared to speak to the resolution at this time; however, she
informed the committee that beginning in 1997, the environmental
community brought this issue to the attention of BLM and urged
that no new wells should be drilled before others were cleaned
up. In 2002, concerns about dismantling and restoration of old
oil field facilities led to a review of the matter by the U.S.
General Accountability Office (U.S.GAO). The U.S. GAO review
brought out the role of the Department of Environmental
Conservation (DEC), which was involved from 1992 in the work
done by BLM and the U.S. Geological Survey related to reserve
pit sites surrounding the wells. In 1995, DEC declared that no
further cleanup work was required on 27 NPR-A drilling waste
sites to reduce the risk to surface water in the area. Her
personal experience is that in 1992, 28 of the pit sites
exceeded the toxicity criteria of one or more water quality
standards. The U.S. GAO review also looked at state and federal
bonding requirements for wells, noting that the bonding
requirement per well in Alaska is $200,000 to $500,000. She
concluded, saying there are many dozens of contaminated sites on
state land awaiting funding. In response to Co-Chair Saddler,
she restated NAEC cannot take a position without seeing the
final version of the resolution that is reported from committee.
2:10:42 PM
CO-CHAIR FEIGE asked how much NAEC has spent trying to bring
this issue to the attention of BLM.
MS. MILLER advised NAEC has raised the issue repeatedly. In
response to Representative P. Wilson, she said emails have been
utilized to raise public awareness.
CO-CHAIR FEIGE asked whether NAEC has ever initiated legal
action against the federal government in this matter.
MS. MILLER said no. The major problem is funding, and NAEC
historically works through the administrative processes of BLM
and DEC.
2:14:15 PM
REPRESENTATIVE TARR asked whether Ms. Miller has concerns about
aspects of the proposed conceptual amendment.
MS. MILLER did not clearly hear all four options. Her
organization supports the existing BLM land use plan, final
decision [Record of Decision executed 2/21/13] which allows the
pipeline corridor through NPR-A. She opined the best option
ties the operations to the leaseholder so that areas are cleaned
up before new operations begin.
2:15:35 PM
CO-CHAIR SADDLER, after ascertaining that no one else wished to
testify, closed public testimony.
2:15:52 PM
CO-CHAIR SADDLER handed the gavel to Co-Chair Feige.
[Final action on HJR 6 is reported at the conclusion of this
meeting.]
HB 99-ALASKA MINERALS COMMISSION
2:16:10 PM
CO-CHAIR FEIGE announced that the next order of business would
be HOUSE BILL NO. 99, "An Act extending the termination date of
the Alaska Minerals Commission." [Before the committee was
Version 28-LS0430\N, Martin, 2/15/13, adopted as the work draft
on 2/25/13.]
CO-CHAIR SADDLER recalled the previous discussion of HB 99,
which seeks to extend the expiration date of the Alaska Minerals
Commission, noting that the proposed committee substitute (CS)
extends the expiration date for an additional ten years, adds
provisions for three-year staggered terms - including term
limits - and allows for the election of a commission chair and
vice-chair. Included also are provisions in uncodified law,
allowing the commission to transition to staggered terms. He
summarized, saying the Alaska Minerals Commission has proven
effective and provides an affordable voice for an important
sector of the state's economy, and urged for passage of the
bill.
REPRESENTATIVE JOHNSON asked whether there is a reason for
establishing an eleven-member board rather than saving costs and
seating a nine-member board.
CO-CHAIR SADDLER responded this board is one of the most
economically operated boards; in fact, its funding request of
$13,000 covers travel for members of the commission and the
publication of its annual recommendations. Seating eleven
members allows for representation of all aspects of the minerals
industry, and helps ensure a quorum at meetings.
2:18:44 PM
CO-CHAIR FEIGE opened public testimony on HB 99.
2:19:23 PM
DEANTHA CROCKETT, Executive Director, Alaska Miners Association
(AMA), informed the committee AMA is a statewide business
association representing the mining industry in Alaska, Alaska's
seven large mines, ongoing exploration projects, placer miners,
sand and gravel operators, and industry vendors. She expressed
AMA's support for HB 99 and said the Alaska Minerals Commission
is very beneficial, and is appreciated by AMA members. The
commissioners represent a diverse background and are in close
contact with AMA when making recommendations to the governor and
the legislature on mining policy. Ms. Crockett encouraged the
committee to review the statement of support from the Department
of Commerce, Community & Economic Development. She provided a
brief summary of the mining industry's economic benefits to the
state and local communities. Her organization supports the
proposed CS, and she urged for its passage.
2:21:38 PM
MARLEANNA HALL, Project Coordinator, Resource Development
Council for Alaska, Inc. (RDC), said that RDC is a statewide
membership-funded business association representing the
forestry, oil and gas, mining, tourism, and fishing industries.
She provided a brief history of the mining industry in Alaska,
adding that RDC believes the Alaska Minerals Commission provides
a necessary voice on issues and recommendations for the
betterment of the state's mineral industry. The commission
makes recommendations in an effort to promote exploration and
development, and to ensure policy-makers have the information
they require. Ms. Hall said RDC supports the proposed CS and
urged for passage of the bill.
2:23:14 PM
CO-CHAIR FEIGE, after ascertaining no one else wished to
testify, closed public testimony.
2:24:00 PM
REPRESENTATIVE P. WILSON moved to report the proposed committee
substitute (CS) for HB 99, Version 28-LS0430\N, out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, CSHB 99 (RES) was reported out
of the House Resources Standing Committee.
2:24:30 PM
The committee took a brief at-ease.
HJR 7-ENDORSING ANWR LEASING
2:24:36 PM
CO-CHAIR SADDLER announced that the next order of business would
be HOUSE JOINT RESOLUTION NO. 7, Urging the United States
Congress to pass legislation to open the coastal plain of the
Arctic National Wildlife Refuge to oil and gas exploration,
development, and production; relating to oil and gas
exploration, development, production, and royalties; and
relating to renewable and alternative energy technologies.
2:27:30 PM
REPRESENTATIVE LYNN GATTIS, Alaska State Legislature, speaking
as the prime sponsor, informed the committee the proposed
committee substitute (CS) provides minor grammatical
modifications to HJR 7.
2:27:51 PM
REPRESENTATIVE SEATON moved to adopt Version 28-LS0399\N,
Nauman, 2/26/13, as the working document. There being no
objection, Version N was before the committee.
REPRESENTATIVE GATTIS stated that HJR 7 urges Congress to pass
legislation to open the coastal plain of the Arctic National
Wildlife Refuge (ANWR) to oil and gas exploration, development,
and production. She expressed frustration that "our hands are
tied" with respect to oil exploration in the 1002 area of ANWR,
even though geological indicators predict that the area contains
8 percent of the nation's undiscovered oil. Clearly, ANWR is a
key component of the nation's effort to achieve energy
independence, when combined with other alternatives. Further,
oil development in ANWR will garner great financial benefit to
Alaska. Representative Gattis recalled legislation before
Congress in 1995 and 2002 that could have led to oil production.
She restated the potential for economic benefit to the state and
the nation, and urged that the committee support the resolution.
2:31:09 PM
CO-CHAIR SADDLER opened public testimony on HJR 7.
2:31:54 PM
DANIEL LUM informed the committee he is a former tour operator
and author. Mr. Lum said as an Alaskan it is frustrating to
hear arguments about ANWR raised by those who do not live on the
North Slope. While scientists and politicians debate,
subsistence users see that climate change is real because of the
absence of ice packs, and the melting permafrost on the tundra
and beneath the lakes. As the Arctic climate shifts, the
effects are coastal erosion, the decline of land and marine
species, and the arrival of invasive bird species: small
changes in global climate bring massive changes to plants,
fungus, and lichen on the North Slope. Mr. Lum explained that
with change, certain areas become increasingly more important,
such as the biological stronghold of the North Slope - the
coastal plain of ANWR. When the refuge was created, the intent
was to establish a wilderness refuge for wildlife, however,
industry has targeted the biological heart of the refuge, which
is the calving grounds of the Porcupine Caribou Herd and where
polar bears den. He urged that the committee not support the
resolution.
2:34:12 PM
PAMELA A. MILLER, Arctic Program Director, Northern Alaska
Environmental Center (NAEC), stated that NAEC and fourteen other
environmental organizations in Alaska - representing residents
from Kaktovik to Juneau - issued written opposition to HJR 7 and
in support for protecting ANWR. She pointed out that the area
is a refuge originally established by President Eisenhower,
including the coastal plain. It was expanded by the Alaska
National Interest Lands Conservation Act (ANILCA) and work
continues to permanently protect the coastal plain area. She
said the organizations opposing the resolution identified four
major reasons for continued protection of the refuge: oil, gas,
and wilderness are not compatible; the ANWR coastal range is
important ecologically and culturally; tourism is vital to
Alaska's economy and business; and alternative ways to meet
energy needs must be pursued. Finally, in response to previous
testimony, she said the proposed federal legislation sponsored
by U.S. Representative Don Young will open the entire coastal
plain area to oil and gas, although according to the U.S.
Geological Survey, the oil is located in small, scattered
pockets. In comparison, Prudhoe Bay is one large oilfield. Her
personal experience is that ANWR is a vital and remarkable area,
and an asset to Alaska for future generations.
REPRESENTATIVE JOHNSON requested a copy of the letter of
opposition and a list of the signatory organizations.
MS. MILLER will provide a copy.
2:38:23 PM
PRINCESS LUCAJ, Executive Director, Gwich'in Steering Committee,
said her grandparents are of Arctic Village and expressed her
appreciation to her elders and ancestors who spoke with one
voice to support protection of the refuge and its coastal plain.
She recalled her grandmother saying her grandmother's elders
predicted changes in the weather, the effects of which are now
seen in Alaska and the nation. Living in an oil state creates a
conundrum between the revenue from oil and setting aside the
last 5 percent of the North Slope that is not open to
development. Ms. Lucaj relayed recent conversations with
workers on the North Slope and miners who love Alaska, hunting,
and fishing, and believe that areas like the refuge should be
protected. She said her heritage has taught her to fight to
protect the unique way of life of one of the last indigenous
peoples who can live off the land.
2:41:40 PM
ADRIAN HERRERA, Washington DC Coordinator, Arctic Power, stated
that Arctic Power is a nonprofit organization that runs a
national grassroots advocacy campaign for environmentally
responsible oil and gas development of the 1002 area of the
coastal plain. Organized in 1992, Arctic Power receives grant
funds from the State of Alaska and works closely with the Alaska
Congressional Delegation and the governor's office. Arctic
Power supports HJR 7; in fact, opening 1002 is perhaps one of
the single most important energy policy acts for the nation.
Just this year, two proposed bills have been introduced in
Congress that contain ANWR 1002 provisions, and about fifteen
more are expected during this session. As a matter of fact,
single houses of Congress have passed legislation to open the
1002 area of ANWR fifteen times in the past thirty-three years,
most recently last year. Each resolution passed by the Alaska
State Legislature to open the 1002 area of ANWR is delivered by
Arctic Power to Congressional offices and to many non-
governmental agencies. Mr. Herrera opined this is the most
important action taken to convey the wishes and beliefs of the
residents of Alaska; a past study showed that over 50 percent of
all public respondents who were initially against 1002
development, changed their minds when told that a majority of
Alaskans and state government support this issue. He assured
the committee that Arctic Power will continue to inform others
that development and nature can coexist, and that development of
the 1002 area is crucial to the nation's transition to new
alternative energy resources, funded by trust funds from oil
taxes.
2:46:39 PM
JULIE KITKA, President, Alaska Federation of Natives (AFN),
explained AFN's position of support for HJR 7 was taken after
extended debate and discussion. The official position of AFN is
to support careful and responsible development because Alaska
has a responsibility to further energy security in the national
interest.
2:48:16 PM
TARA SWEENEY, Senior Vice President of External Affairs, Arctic
Slope Regional Corporation (ASRC), informed the committee ASRC
is owned by 11,000 Inupiat shareholders and was formed pursuant
to the Alaska Native Claims Settlement Act (ANCSA) in 1971. The
corporation owns approximately 5,000,000 acres of land within
the boundaries of the North Slope. In addition, ASRC and
Kaktovik Inupiat Corporation, the Native corporation for the
Village of Kaktovik, own more than 92,000 acres of subsurface
and surface acreage inside the coastal plain. These lands hold
significant promise for onshore oil and gas development and both
organizations remain committed to developing resources in a
manner that respects Inupiat subsistence values, protects
culture, and ensures proper care of the environment. As a
result of a provision in the Alaska National Interest Lands
Conservation Act (ANILCA) these lands remain protected awaiting
further action from Congress, which is the basis for ASRC's
support for HJR 7. In addition, her organization requests that
the surface and subsurface ownership of both ASRC and Kaktovik
Inupiat Corporation are acknowledged in the resolution because
the resolution is aligned with ASRC's mission to enhance Inupiat
economic opportunity while protecting subsistence freedoms. Ms.
Sweeney reminded the committee that the Arctic is an unforgiving
climate and home to the residents of Kaktovik - the only village
within the boundaries of ANWR - who subsist from the land and
the sea; in fact, no one would suffer greater harm from the
mismanagement of the coastal plains lands. She opined it is
possible to develop the coastal plains oil and gas reserves and
allow access to energy resources with a minimum footprint in the
refuge and without a significant disturbance to wildlife. The
legislature should take a leadership role to promote sound
energy policy and responsible oil and gas development to provide
a safe and secure source of energy to the nation and to create
jobs for Alaskans. The coastal plain has been home to the
Inupiat people for over 10,000 years and ASRC would not support
development of this area if it would have an adverse effect on
subsistence; however, without further development in the region,
communities will not survive.
REPRESENTATIVE HAWKER asked that the sponsor take heed of Ms.
Sweeney's counsel about respecting the private property rights
and interests within the 1002 area that are being completely and
totally disrespected by the federal government.
2:52:37 PM
JAMES SULLIVAN, representing the Southeast Alaska Conservation
Council (SEACC), submitted written comments from SEACC and
fourteen other organizations across the state and the nation in
opposition to HJR 7. He said the organizations feel that the
refuge should remain a refuge, devoid of exploration and
development. In response to Representative Tarr, he said the
signatory organizations are: Alaska Center for the Environment,
Alaska Community Action on Toxics, Alaska Wilderness League,
Alaska Quiet Rights Coalition, Arctic Audubon, Audubon Alaska,
Friends of Alaska National Wildlife Refuges, Gwich'in Steering
Committee, National Wildlife Federation, Northern Alaska
Environmental Center, Pacific Environment, Sierra Club,
Resisting Environmental Destruction on Indigenous Lands, The
Wilderness Society, and Southeast Alaska Conservation Council.
2:54:19 PM
CO-CHAIR SADDLER, after ascertaining that no one else wished to
testify, closed public testimony.
REPRESENTATIVE JOHNSON remarked:
I find it a little disingenuous that the good
committee from Fairbanks testified earlier that they
would not support the cleanup of oil wells, but yet
they come forward to oppose the opening of ANWR. So,
I just wanted to make sure that that was clear and on
the record.
2:54:57 PM
REPRESENTATIVE P. WILSON moved Conceptual Amendment 1 that read:
On page 4, line 2, delete "Inuit" and add "Inupiat"
REPRESENTATIVE WILSON explained that the word Inuit includes all
of the people, and Inupiat includes all of those living on the
North Slope.
2:55:57 PM
LINDA SYLVESTER, Staff, Representative Lynn Gattis, Alaska State
Legislature, informed the committee that the correction was
brought forward by Representative Nageak, who is from the
Village of Kaktovik.
2:56:41 PM
There being no objection, Conceptual Amendment 1 was adopted.
MS. SYLVESTER advised the sponsor of HJR 7 would consider the
conceptual amendment brought forward by Tara Sweeney to be a
friendly amendment, and suggested drawing the language of the
amendment from Representative Hawker's statement.
2:57:19 PM
REPRESENTATIVE HAWKER moved to adopt Conceptual Amendment 2,
which is that Legislative Legal Services, Legislative Affairs
Agency, is authorized to draft an amendment to HJR 7 that
recognizes the substantial private property interests of
Kaktovik Inupiat Corporation and ASRC in this area, and that
those property rights be respected. He further asked for
Legislative Legal to be granted large latitude to work with the
sponsor, and with Ms. Sweeney, on that language.
CO-CHAIR SADDLER restated the intent of Conceptual Amendment 2.
REPRESENTATIVE HAWKER stressed the importance that the
conceptual amendment reflect the following: the land is held in
private property ownership; the development of the land is being
obstructed by federal policy; these are lands that were conveyed
to the Arctic people by part of the terms and qualifications of
ANCSA; these are their legacy lands that they were charged with
economically developing for the future of their people; and they
are being denied the opportunity for that development through
the federal government's own denial of access to the lands that
were given specifically for that purpose.
2:59:03 PM
There being no objection, Conceptual Amendment 2 was adopted.
2:59:19 PM
CO-CHAIR FEIGE moved to report the proposed CS for HJR 7,
Version 28-LS0399\N, as amended, out of committee with
individual recommendations and zero fiscal notes. There being
no objection, CSHJR 7(RES) was reported from the House Resources
Standing Committee.
2:59:43 PM
CO-CHAIR SADDLER handed the gavel back to Co-Chair Feige.
HJR 6-LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A
[Initial discussion of HJR 6 occurs at the beginning of this
meeting.]
3:00:04 PM
CO-CHAIR FEIGE returned attention to the consideration of HJR 6.
3:00:34 PM
REPRESENTATIVE SEATON moved Conceptual Amendment 1 which read:
Page 3 after line 22
Insert:
"Further Resolved that the Alaska State Legislature
urges the United States Department of Interior, Bureau
of Land Management, to consider accelerating legacy
well resolution by offering a priority competitive
lease to industry of a reasonably constructed unit
area including legacy wells and that a condition be
placed that the lessee shall within two years,
contingent upon issuance of permits by the federal
government and State of Alaska, plug the legacy wells
and remediate the site.
REPRESENTATIVE HAWKER objected for the purpose of discussion.
REPRESENTATIVE SEATON explained that the resolve in HJR 6 on
page 3, line 18, urges BLM to consider turning over the task of
plugging wells to an independent authority, and the resolve on
page 4, line 1, is related to opening new areas. He said there
is no request for the federal government to lease for
development areas that contain legacy well sites; Conceptual
Amendment 1 asks the federal government to lease on a time
priority basis, unit-sized areas containing legacy wells for the
purpose of leasing for development and also for getting the
legacy wells remediated. Thus, a contingency would be that two
years after being granted a permit, the lessee would agree to
plug the wells and remediate the site. Representative Seaton
pointed out that the time period is linked to the issuance of
the permit.
REPRESENTATIVE HAWKER said but he did not understand how a lease
containing a badly-managed legacy well would appeal to a
potential explorer/developer considering the extreme liability
for remediation of the well and that the well itself would be an
indication that the area is marginal for the identification of
hydrocarbons. He suggested the amendment compromises the
integrity of the resolution.
3:04:26 PM
REPRESENTATIVE MILLETT agreed the proposed amendment would be a
deterrent to a lessee if the lessee had to pay a lease cost
also. However, it was recommended to the federal government
that it could lease the land at no cost, and instead, part of
the lease payment would be the remediation of the legacy wells.
In some cases, legacy wells are capable of oil production and
there are also leaking gas wells that are capable of production.
She advised that companies are interested in the prolific legacy
wells that have the potential for producing hydrocarbons if the
federal government will negotiate lower lease costs.
REPRESENTATIVE HAWKER asked whether the resolution's sponsor has
taken into consideration that many oil and gas seeps are
condensates or other hydrocarbons that are not economic to
develop.
REPRESENTATIVE TUCK inquired if the federal government currently
allows leases in the affected areas at this time.
REPRESENTATIVE MILLETT responded that the land designated as
wilderness is not available for lease. She was unsure of the
federal government's plan for leasing legacy wells, noting that
the well at Iko Bay is leaking methane and could be used as an
energy source for the nearby village, but is not "see(n) as ...
anything that is environmentally hazardous, but they also
haven't leased that area for someone to ... produce gas off of
it." She discounted BLM's claim that it is working with AOGCC
on a program because the two agencies do not agree with what is
environmentally dangerous; the federal government has different
definitions on what is high priority than does AOGCC.
3:08:39 PM
REPRESENTATIVE JOHNSON expressed his concern that the amendment
would only give a lessee one year from the time of the issuance
of the permit in which to remediate.
REPRESENTATIVE MILLETT concurred; the permits issued by AOGCC
are only valid for two years. In response to Co-Chair Feige,
she said as the sponsor, she did not have a problem with the
amendment because giving the federal government more options
indicates that the state is serious about cleaning up the
environment.
CO-CHAIR SADDLER observed the amendment may create problems.
REPRESENTATIVE JOHNSON asked whether the amendment was
necessary.
REPRESENTATIVE MILLETT said no.
REPRESENTATIVE HAWKER removed his objection.
3:11:23 PM
REPRESENTATIVE P. WILSON objected.
REPRESENTATIVE SEATON stated the purpose of the amendment was to
provide another option for leasing; he offered to withdraw the
amendment at the request of the sponsor.
REPRESENTATIVE MILLETT said her preference is to withdraw the
amendment.
REPRESENTATIVE SEATON withdrew Conceptual Amendment 1.
3:13:07 PM
CO-CHAIR SADDLER moved to report HJR 6, Version 28-LS0300\N, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, HJR 6 was
reported from the House Resources Standing Committee.
3:14:01 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 3:14 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR6 LAA Fiscal Note.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR6 AOGCC Presentation.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR6 Petroleum News Article.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR6 RDC Letter.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR6 Sponsor Statement.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR6 Version N.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |
| HJR7 ANWR Map.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 CBO Report.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 LAA Fiscal Note.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 RDC Letter.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 Sponsor Statement.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 Version U.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 Version N.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR7 ACE Letter.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 7 |
| HJR6 Cribley Testimony.pdf |
HRES 2/27/2013 1:00:00 PM |
HJR 6 |