Legislature(1995 - 1996)
01/30/1995 08:02 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE January 30, 1995 8:02 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 Overview by the Alaska Department of Fish and Game (ADF&G) HJR 13Endorsing in principle, legislation authorizing oil and gas leasing, exploration, and development on the coastal plain within the Arctic National Wildlife Refuge, provided the legislation does not contain a provision decreasing this state's royalty. CSHJR 13 (O&G) PASSED OUT OF COMMITTEE WITNESS REGISTER KEVIN BROOKS, Director Division of Administrative Services Alaska Department of Fish & Game P.O. Box 25526 Juneau, AK 99811 Phone: 465-4120 POSITION STATEMENT: Provided an overview of the division and answered questions FRANK RUE, Acting Commissioner Alaska Department of Fish & Game P.O. Box 25526 Juneau, AK 99811 Phone: 465-4100 POSITION STATEMENT: Provided an overview of the department and answered questions REPRESENTATIVE MIKE NAVARRE Alaska State Legislature State Capitol, Room 521 Juneau, AK 99801 Phone: 465-3779 POSITION STATEMENT: Prime Sponsor HJR 13 REPRESENTATIVE NORMAN ROKEBERG, Chairman Oil and Gas Committee Alaska State Legislature State Capitol, Room 110 Juneau, AK 99801 Phone: 465-4968 POSITION STATEMENT: Answered questions on HJR 13 DAVID VAN DEN BERG, Representative Northern Alaska Environmental Center 218 Driveway Street Fairbanks, AK 99701 Phone: 452-5821 POSITION STATEMENT: Opposed HJR 13 SARA HANNAN, Representative Alaska Environmental Lobby P.O. Box 22151 Juneau, Alaska 99802 Phone: 463-3366 POSITION STATEMENT: Opposed HJR 13 BEVERLY WARD, Representative ARCO Alaska 134 N. Franklin Juneau, AK 99801 Phone: 586-3680 POSITION STATEMENT: Supported HJR 13 GEORGE YASKA, Director of Wildlife Tanana Chiefs Conference 122 First Avenue Fairbanks, AK 99701 Phone: 452-8257 POSITION STATEMENT: Opposed HJR 13 ROBERT BOSWORTH, Director Division of Subsistence Alaska Department of Fish & Game P.O. Box 25526 Juneau, AK 99802 Phone: 465-4147 POSITION STATEMENT: Provided information on the division and answered questions JEFF KOENINGS, Director Division of Commercial Fisheries Management and Development Alaska Department of Fish & Game P.O. Box 25526 Juneau, AK 99802 Phone: 465-4210 POSITION STATEMENT: Provided information on the division and answered questions WAYNE REGELIN, Acting Director Division of Wildlife Conservation Alaska Department of Fish & Game P.O. Box 25526 Juneau, AK 99802 Phone: 465-4190 POSITION STATEMENT: Provided information on the division and answered questions PREVIOUS ACTION BILL: HJR 13 SHORT TITLE: ENDORSING ANWR LEASING SPONSOR(S): REPRESENTATIVE(S) NAVARRE, Rokeberg, Grussendorf, Brown, Davies, Kubina, MacLean, Green, G.Davis JRN-DATE JRN-PG ACTION 01/16/95 19 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 19 (H) O&G, RES, FIN 01/18/95 74 (H) COSPONSOR(S): DAVIES 01/19/95 87 (H) COSPONSOR(S): KUBINA 01/19/95 87 (H) COSPONSOR(S): MACLEAN 01/24/95 (H) O&G AT 10:00 AM CAPITOL 124 01/25/95 127 (H) O&G RPT CS(O&G) NEW TITLE 5DP 1NR 01/25/95 127 (H) DP: BRICE, WILLIAMS, G.DAVIS, B.DAVIS 01/25/95 127 (H) DP: ROKEBERG 01/25/95 127 (H) NR: FINKELSTEIN 01/25/95 127 (H) -ZERO FISCAL NOTE (DNR) 1/25/95 01/25/95 127 (H) REFERRED TO RES 01/25/95 135 (H) COSPONSOR(S): GREEN 01/26/95 147 (H) COSPONSOR(S): G.DAVIS 01/30/95 (H) RES AT 08:00 AM CAPITOL 124 ACTION NARRATIVE TAPE 95-5, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Joe Green at 8:02 a.m. Members present at the call to order were Representatives Green, Austerman, Kott and Ogan. Members absent were Representatives Williams, Barnes, Davies, MacLean and Nicholia. CO-CHAIRMAN JOE GREEN announced since there was not a quorum present, the order of business would be switched. Overview by the Alaska Department of Fish and Game KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, ADF&G, stated the division provides accounting, budget, personnel, payroll, procurement, etc. and helps other divisions of the department attain their missions. MR. BROOKS commented on the commissioner's office. He said the commissioner of ADF&G is involved in numerous committees including the Exxon Valdez trustees, the North Pacific Marine Fisheries, the Pacific Salmon Commission, and a variety of international, internal and external fishery related issues as well as wildlife issues. He noted it is critical that the commissioner set management policy direction for the entire department. MR. BROOKS explained ADF&G is one of the last departments to still have an acting commissioner. He said the board process is currently ongoing to search for a new commissioner. Names will be submitted to the Governor by the third week of February. He stated the boards are now reviewing applicant resumes, there will be an interview process around mid-February and the final list will be forwarded to the Governor. He pointed out that once a commissioner is named, it will be easier for the department to move forward in a more definitive manner. CO-CHAIRMAN GREEN felt since there are new members on the House Resources Committee, the process of naming the ADF&G commissioner should be explained since the process is somewhat different than other departments. Number 080 FRANK RUE, ACTING COMMISSIONER, ADF&G, said the process to select the commissioner of ADF&G involves the joint boards of fisheries and game reviewing applicants and then forwarding a list of names to the Governor. The Governor then selects a permanent commissioner. He hoped that process would be complete by the end of February. REPRESENTATIVE ALAN AUSTERMAN asked if that is the normal process used every four years. MR. RUE replied it is the normal process set up by statute. MR. RUE explained that he would give a general overview of the department and then have each of the directors give short overviews of their division. He said when ADF&G is thought of, one should think of people because what the department does is benefit people. ADF&G manages fish and wildlife for people. If people were not using fish and wildlife, a department would not be necessary. He noted the state has a large economy based on fish and wildlife, subsistence use, commercial fisheries, recreational fisheries, tourism, and many other human uses of fish and wildlife. The ADF&G is integral to managing those resources for people's benefit and enjoyment. MR. RUE stated the concept of what ADF&G does is fairly simple. First, the department counts what is out there and inventories the resources. Once it is determined what is out there and what is available, the department gives the information to the boards of fisheries and game and they then make allocation decisions. The department then does in-season management and manages according to the management plans and regulations passed by the boards. He explained the third responsibility of the department is to maintain habitat. Number 128 MR. RUE said the department is fairly decentralized, with offices located throughout the state. This tends to get the managers closer to the people and resources, enabling them to better understand people's needs and resource uses. He stated currently there are six division directors and added that a couple of years ago there were nine. He noted the department has been contracting as a result of general fund dollars declining. The department has tried to become more efficient by combining divisions. MR. RUE told committee members the department has boards of fisheries and game and another entity within the department which is somewhat separate, the commercial fisheries entry commission. He said there are several issues facing the department. One of the basic issues is the department has to keep doing the job in the face of declining revenue. He noted there will be some things coming over the horizon which will be complicating the department's job of managing the state's fisheries. He said the first issue is the Endangered Species Act and he mentioned the difficulties they are having in the Lower 48 with salmon in the Northwest which can affect Alaska's fisheries. Another issue is the Pacific Salmon Treaty. MR. RUE stressed there are also opportunities facing the department. The first is developing new fisheries, including the sea urchin fishery. He felt there are also opportunities to improve the state's shellfish management and provide additional opportunities for people. CO-CHAIRMAN GREEN noted for the record that Co-Chairman WILLIAMS had joined the committee and a quorum was present. He said since a quorum was now present, he would like to hear the resolution on the committee calendar. After hearing the resolution, the committee would then continue with the ADF&G overview. HRES - 01/30/95 Number 210 HJR 13 - ENDORSING ANWR LEASING REPRESENTATIVE MIKE NAVARRE, PRIME SPONSOR, HJR 13, stated HJR 13 is something which he and many Alaskans have been interested in for a very long time. He said at no time in the state's history, and probably never again, will the state have such a powerful contingent at the federal level as the state does now and the opportunity for having this legislation pushed through at the national level is as good as it has ever been. REPRESENTATIVE NAVARRE stated the Arctic National Wildlife Refuge (ANWR) holds the highest potential in the United States and the entire North American continent for commercially producible oil discovery. He said in terms of potential, it is almost a sure thing in the oil industry. He noted there was a one in five chance and that has been upgraded even more. REPRESENTATIVE NAVARRE pointed out that oil is being imported for more than half of the oil use in the United States, the trade deficit continues to grow, domestic oil production is declining and at the national level, the economy, even though it is improving, could use the type of boost that the entire 50 states would get from the type of development that would take place in ANWR, if there were commercial discoveries available. REPRESENTATIVE NAVARRE said Alaska has proven in all of its oil production, the ability to execute production in an environmentally sound way. He pointed out that oil production on the North Slope, is state of the art production. He stressed that combined with the advances in directional drilling and the fact that most of the exploration wells would be built off ice pads, and ice roads would be used in the middle of winter, the impact would be very small. In addition, after the exploration wells delineate the field, there will be the ability to map out the easiest way to put production wells in place, assuring the smallest minimal impact to the environment. He felt a minimal impact will bode well at the national level, that the development of ANWR can be done right, and there is the ability to convince the U.S. Congress and the people of the United States of that fact. REPRESENTATIVE NAVARRE noted the development of ANWR, according to several statewide polls, is popular with the vast majority of Alaskans. He urged committee members to pass HJR 13. Number 280 CO-CHAIRMAN GREEN mentioned that HJR 13 is a bipartisan resolution and pointed out that both sides of the majorities are in favor of the resolution. He urged committee members to look at the two maps contained in committee member folders. He said there is a consistent misunderstanding in the public arena and some of the legislative offices as to the size of the area being discussed. He explained the area being discussed is the 1002 area, which is a very small amount of the total ANWR. He stated this proposal is to merely allow the industry to look at what might be there and reiterated there is a great potential for discovery. CO-CHAIRMAN GREEN said the biggest question confronting the industry is the fact there have been several wells drilled in the perimeter around ANWR that have found hydrocarbons, but not in economic quantities. He felt the major concern is whether or not there is enough oil there worth fighting about. He stressed there is a need to determine whether or not oil is present and if there is, what is going to be best for both the state and the nation. He pointed out to committee members that there are a couple of Congressional white papers in their packets, as well as newspaper clippings and letters of support. Number 315 REPRESENTATIVE PETE KOTT made a MOTION to MOVE CSHJR 13 (O&G) out of committee with individual recommendations. REPRESENTATIVE IRENE NICHOLIA clarified the area being discussed is very small. CO-CHAIRMAN GREEN responded that is correct. REPRESENTATIVE NAVARRE said the 1002 area was set aside originally by Congress to enable them to go back and take another look at the area and determine what the disposition of that land should be. REPRESENTATIVE KOTT WITHDREW his MOTION due to the fact that several people were present to testify on the resolution. REPRESENTATIVE NICHOLIA asked if there were any members present from the Oil and Gas Committee. She wondered why the reference to porcupine caribou was taken out of the original resolution. Number 340 REPRESENTATIVE NORMAN ROKEBERG responded the committee substitute was a total redraft. The specific references to the porcupine caribou herds were removed because it was the feeling of the committee that the elimination of that reference would help the delegation in Washington move the legislation through Congress. He reminded everyone HJR 13 is to assist the state's Congressional delegation. REPRESENTATIVE NICHOLIA felt the President would feel better about a resolution containing language which recognizes animals important to the people who live in the area, as well as any Canadians who might also have an interest. REPRESENTATIVE ROKEBERG replied there is no denying the importance of the porcupine caribou herd. He said the intent of the resolution is to assist the state's Congressional delegation, not throw up red flags and signals which may generate some negativity. REPRESENTATIVE NICHOLIA clarified the intent is to barrel the resolution through at all costs and not protect the people or the caribou herd. REPRESENTATIVE BILL WILLIAMS noted that the chairman of the Oil and Gas Committee kept in close contact with Alaska's Congressional delegation and asked for their assistance. He said the committee felt the last FURTHER RESOLVED would address Representative Nicholia's concern. He added that Representative MacLean had indicated that there were safeguards in place with the borough in regard to the issue. Number 380 REPRESENTATIVE ROKEBERG stated the wildlife director of the North Slope Borough testified at the Oil and Gas Committee hearings and spoke specifically about the wildlife and other areas of environmental concerns on the North Slope. He said both the mayor and the head of the wildlife protection portion of the borough supported the committee substitute. He pointed out there are three references within the committee substitute to acting in an environmentally sound manner in terms of any development and further exploration. The Oil and Gas Committee felt that was adequate for the purposes of the resolution. REPRESENTATIVE NAVARRE noted the Oil and Gas committee also felt that the value of the porcupine caribou herd had already been recognized through a number of studies conducted. He felt that whether or not there was a line in the resolution, the caribou would be recognized and identified as something very important and something that will be addressed in any plan to explore or develop ANWR. He noted that the exploration stage would be done in the middle of winter, mostly off of ice pads and roads, and the impact would be very minimal. He explained it would first be determined whether or not there is commercially developable oil there and then it would be determined how best to lay out the production plans so there is minimal impact to what is recognized by Congress and others as something very important to the people and environment on the North Slope. REPRESENTATIVE SCOTT OGAN added that when the state was looking at developing Prudhoe Bay, there were legitimate concerns about the effect of that development on the caribou herds. Now, the success of that area can be recognized. He said the caribou herd there has increased sixfold since that development. He noted the state now has a track record for oil development on the North Slope and felt the oil companies have been very conscientious about environmental protection. He stressed some of the environmental technology developed on the North Slope has been exported to other areas of the world. REPRESENTATIVE NICHOLIA stressed there is always another side to the story, especially from the people who live there. She has talked to people living in the area and they have noticed a change. Number 440 DAVID VAN DEN BERG, REPRESENTATIVE, NORTHERN ALASKA ENVIRONMENTAL CENTER (NAEC), testified via teleconference, and stated NAEC opposes HJR 13. He said it was refreshing to see the cooperation between the various legislators on this issue and he understands the political necessity for elected individuals to support oil companies, even in the most sensitive areas in Alaska. He stated he also understands the economic realities facing the state. MR. VAN DEN BERG wondered why this resolution is being considered, particularly as currently worded. He felt it was within the power of the legislature to stipulate things at the outset which would benefit the state most. He noted that conspicuously absent in the resolution is the mentioning of a 90/10 royalty split for the state. He felt a similar resolution directed at ARCO Alaska regarding (indiscernible) field would yield a better return for the state. MR. VAN DEN BERG said while the Coastal Plain is only eight percent of the total ANWR, that Coastal Plain is the most biologically productive area in the entire ANWR. The Coastal Plain is the destination of polar bears, migrating porcupine caribou herd, waterfowl and (indiscernible) from all over the world. He stressed the estimated 5,000 -7,000 acre footprint in the resolution is not a postage stamp but a potential web of industrial facilities which will crisscross and dissect the Coastal Plain, interrupting animal (indiscernible) coastal plain. MR. VAN DEN BERG reminded committee members that in regard to Prudhoe Bay, while the footprint is far less than the overall industrial development there, it spans some 580 square miles. He said if the results from Prudhoe Bay prove anything, it proves those things about Prudhoe Bay only. The l002 area is a totally different area because of its proximity to the mountains, because of the size of the herd that goes there, and because there are musk oxen populations living there throughout the year. He felt the lessons from Prudhoe Bay are only guidelines, not a guarantee of coexistence. Number 507 MR. VAN DEN BERG said on the one hand the committee is pleading to open the Coastal Plain, yet on the other hand the committee is (indiscernible) the export ban. He felt of the two issues, the export ban has a better chance of being lifted. That would mean if oil is found and produced on the Coastal Plain, it would be exported to the highest bidder which would probably be overseas. He said there is language in the resolution which he recommends be changed. Number 530 SARA HANNAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL), said AEL represents over 9,000 Alaskans. She stated the ANWR was set aside originally in 1969 partly because of its unique biological habitat. References to the science which has developed in the past twenty years has let us know that what was known in 1969 is a very limited scope of the science available today. She said populations of caribou are higher in total count and part of that has to do with the fact that caribou are cyclical animals, their populations vary, and it is not known if those are 20 year cycles, 50 year cycles, 100 year cycles or longer. Therefore, extrapolating from a small window of science and saying that today caribou populations are much higher than they were 20 years ago does not give the complete conclusion about the health of the population. MS. HANNAN stated the ANWR Coastal Plain is a small percentage of the entire North Coastal Plain of Alaska. Less than eight percent of the Coastal Plain of the Arctic Coast is set aside from development of oil. Ninety percent of Alaska's Coastal Plain is currently open and available for exploration and drilling. She said a small area, the 1002 area in ANWR, is being debated. The debate has raged because of the area's uniqueness not because oil is not present. She stressed the reason the debate is ongoing is because everyone believes there is oil there. She pointed out that the most optimistic predictions say there might be 3.2 billion barrels of recoverable oil. She noted that amount is only one- third of the energy consumed in the U.S. on an annual basis. MS. HANNAN felt opening up the ANWR for oil exploration is not going to change the country's pattern of consumption and it is not going to stabilize the economy of Alaska. The potential for biologic disaster is present there. She said perception is a substantial part of reality. She stated the original version of HJR 13 acknowledged that the strictest standards in environmental quality could be protected by technology available today and urged the use of that technology. The Oil and Gas Committee eliminated that language. She felt if the committee will not articulate in the resolution that they are willing to adhere to the strictest standards and best technology available, why do they think companies would do it. MS. HANNAN said the original version of HJR 13 acknowledged that for centuries the Gwich'in people have been dependent on a population herd which limited science is available on and encouraged Congress to protect the Gwich'in people's use of it. The Oil and Gas Committee eliminated that language. She stated perception is nine-tenths of reality. By eliminating that language, the committee is not acknowledging those people have concerns and their concerns will be listened to. She urged committee members not to pass the original version of HJR 13 nor the committee substitute. Number 651 BEVERLY WARD, REPRESENTATIVE, ARCO ALASKA, stated ARCO Alaska supports CSHJR 13 (O&G). She said ARCO has been an operator of the Prudhoe Bay and Kuparuk oil fields since their initiation. Their experience in operating Arctic oil fields has given them a thorough understanding of the local environmental requirements and has convinced them that the Coastal Plain can be explored and developed without causing harm to the health and viability of the Refuge ecosystem. MS. WARD pointed out that ARCO's technologies have advanced significantly since they pioneered the design and operation of oil development in the Arctic. Using today's technology, ARCO's presence is compatible with local fish, wildlife, and their habitats. She said the existence of productive and abundant populations of birds, caribou, and fish throughout all North Slope oil fields is evidence of ARCO's ability to be good neighbors with all current land users. MS. WARD stressed that ARCO envisions technologies of the future being even more advanced, further reducing their footprint, while maximizing the benefits of continued resource development to the state, the state's citizens, and to the nation. These benefits range from the creation of exploration and development jobs for Alaskans, to additional state tax revenues, to manufacturing jobs in other states and national security issues. She pointed out that opening ANWR will benefit not only Alaska, but the entire U.S. ARCO believes it is time to move forward with exploring the most potentially productive area in Alaska. She said ARCO supports and encourages the committee to pass CSHJR 13 (O&G). REPRESENTATIVE OGAN said there has been concern expressed about verbiage in the original resolution being eliminated regarding the provision of strict standards for protection of land, water, and wildlife resources. He wondered who ARCO would be accountable to in regard to making environmental impact studies and the oversight involved. TAPE 95-5, SIDE B Number 000 MS. WARD responded there will not be any less of a standard at ANWR than there is at Prudhoe Bay. She said ARCO has all of the federal and state laws to comply with and with all that ARCO has learned, they expect their imprint in ANWR to be much smaller. She noted she would be happy to provide a list of all the different laws and agencies which ARCO would deal with. REPRESENTATIVE OGAN wondered if the specific verbiage is left out, would there be any less oversight by any agencies. MS. WARD said leaving the statement out of the resolution does not change any law or regulation but rather, it is a statement of intent by this legislature. CO-CHAIRMAN GREEN noted ARCO is being referred to in connection with ANWR and he reminded everyone that ANWR would be opened to the industry, not a particular company. REPRESENTATIVE AUSTERMAN wondered if the 90 percent mentioned in the original version is an automatic given. CO-CHAIRMAN GREEN said yes. He stated that was part of the original Alaska Statehood Act. He pointed out, however, the federal government is now trying to renege, saying they want to do something less than 90/10. If the Statehood Act is followed, it would be a 90/10 split in favor of the state not the federal government. REPRESENTATIVE AUSTERMAN wondered why the 90 percent verbiage was removed from the original resolution. REPRESENTATIVE ROKEBERG responded the removal of the reference to the royalty split was a result of a request from the Congressional delegation in Washington. Both Congressman Young and the offices of Senators Murkowski and Stevens indicated that reference to that language would not be helpful because it is a controversial aspect. He said there has been discussion among committee members and testimony received recommending that the 90/10 royalty issue be taken up under a separate resolution to avoid clouding the issue. Number 059 GEORGE YASKA, DIRECTOR OF WILDLIFE, TANANA CHIEFS CONFERENCE (TCC), testified via teleconference and stated TCC is opposed to HJR 13 and the committee substitute. He said the reason for their opposition is due to their concern about the safety and productivity of the porcupine caribou herd. He noted there are no references to the porcupine caribou herd in the committee substitute. The closest language he could find referring to the porcupine caribou herd was "environmental safeguards" and he felt that language was not strong enough. MR. YASKA told committee members that the porcupine caribou herd numbers between 150,000 and 180,000 caribou. The caribou calve within the 1002 area of ANWR and calve principally within the same area where the oil will probably be found. He pointed out that the National Biological Service has been conducting research for eight years and their field report will be completed in June. An early draft of the report indicates a potential significant negative impact to the herd. He stressed the people in the area depend heavily on the porcupine caribou herd. He indicated that is the reason TCC opposes CSHJR 13 (O&G) and HJR 13. REPRESENTATIVE RAMONA BARNES clarified the caribou herd on the North Slope has increased since Prudhoe Bay, especially those caribou that wander along the pipeline. MR. YASKA responded that Representative Barnes was referring to the Central Arctic caribou herd which exists near the Prudhoe Bay reserve. He explained there are two principal differences between the porcupine caribou herd and the Central Arctic caribou herd. First, the Prudhoe Bay field does not lie in the calving area of the Central Arctic herd and the caribou primarily seen at Prudhoe Bay are male caribou. REPRESENTATIVE BARNES clarified a very small footprint will be used for drilling purposes. MR. YASKA replied that is correct. However, that footprint is the same size as the core calving ground for the caribou herd. He said scientists have shown that the caribou would probably have to move and all indications are that during calving, pre-calving, and post- calving, caribou are very skittish and very leery of human activity. He felt they would be especially leery of the heavy industrial activity such as what would be found in ANWR for exploration and drilling. CO-CHAIRMAN GREEN asked Mr. Yaska if he had visited the Kuparuk oil field. MR. YASKA stated he had been at Prudhoe Bay, but not Kuparuk. CO-CHAIRMAN GREEN suggested he try and be there during the migratory cycle. He said while Prudhoe Bay does not lie within the normal course of the calving cycle, the Kuparuk River does and he felt it would be worthwhile to see the extent to which the industry has gone to assist the caribou. He noted the caribou in that area are far from skittish and added that the caribou have the right of way. He stressed it is improper and subject to dismissal for anyone to harass caribou if they cross the roads. He added that when the caribou are calving, they are oblivious to anything around them. Number 128 REPRESENTATIVE NICHOLIA asked Mr. Yaska if he had mentioned that the caribou herd does not always take the same path when migrating. She said it will not be known whether or not the caribou will be going into the 1002 area because they change their route so often. CO-CHAIRMAN GREEN assured Representative Nicholia that fact had been mentioned. REPRESENTATIVE KOTT acknowledged the comments made by Ms. Hannan. He felt many of her comments were very relevant. He noted that she has her constituency, and legislators have theirs. He mentioned he represents over 15,000 people in a very condensed area who are in favor of opening ANWR. He felt that was indicative of acknowledging that the oil companies in the past have been very responsible in oil exploration and production. If that were not the case, he said he would probably have concerns about opening ANWR and perhaps would not support the resolution. He stressed he has been in the area, understands what is going on there and therefore, supports the legislation. REPRESENTATIVE KOTT made a MOTION to MOVE CSHJR 13 (O&G) out of committee with accompanying zero fiscal note with INDIVIDUAL RECOMMENDATIONS. REPRESENTATIVE NICHOLIA OBJECTED. CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of CSHJR 13 (O&G) were Representatives Kott, Austerman, Williams, Ogan, Barnes, and Green. Voting against the motion was Representative Nicholia. The MOTION PASSED 6-1. Overview by the Alaska Department of Fish and Game (cont.) ROB BOSWORTH, DIRECTOR, DIVISION OF SUBSISTENCE, ADF&G, said the division is small with 40 employees. He stated the division's offices are located throughout the state and those offices provide full coverage for the state. He added the division is the subsistence research division. The division provides information to assist with policy decisions and provides information to the boards of fisheries and game and to the public. MR. BOSWORTH stated the fundamental purpose of the division is to illuminate the topic of subsistence with reliable and objective information. He explained that rural residents of Alaska harvest an average of about 375 pounds of wild foods per person, per year. He said that amount is higher for communities off the state's road system. About 60 percent of the harvest is fish, most of which is salmon and the remainder is wildlife, including marine mammals. He said the total annual subsistence food harvest is about 44 million pounds for rural areas, with another ten million pounds for urban residents. Applying a range of $3 to $5 per pound, the overall replacement value of the harvest amounts to between $165 million and $275 million annually, which is a substantial contribution to the economy of Alaska. He noted this is the type of data which the division gathers and contributes to discussions on the topic. Number 227 MR. BOSWORTH stated that information about the subsistence use of fish and game is obtained in two different ways. The first method uses the department's hunting and fishing permit systems. Harvests are tabulated for each hunting and fishing permit issued and returned to the department. He said for most subsistence fisheries and hunting activity, no permits are required. Therefore, the division also conducts systematic surveys from a random sample and in some cases, a complete sample of hunting or fishing households within a community. He added that these surveys may cover other subsistence activities other than strictly hunting and fishing such as trapping, gathering berries, digging shellfish, etc. MR. BOSWORTH explained most of the department's subsistence harvest information is obtained by the Division of Subsistence. The division's staff has special training, expertise and experience in conducting survey research in rural Alaska. In some areas of the state, the subsistence fishing permit process is managed by the Division of Commercial Fisheries. He said most subsistence fisheries are in-river fisheries and accurate assessment of subsistence can be vital for stock assessment. In some cases, subsistence information provides the only reliable stock escapement index. He stated in some areas, subsistence fishermen, who are more numerous than the department's staff, regularly provide the division with information on in-season run strength and timing, which can have a direct bearing on the management of commercial and sport fisheries in those areas. MR. BOSWORTH said subsistence hunters also outnumber department wildlife biologists. Local knowledge about wildlife populations regularly contribute to the department's management programs. He pointed out the boards of game and fisheries follow the state subsistence law in implementing and developing subsistence regulations. He stated subsistence law contains very specific requirements for the boards to make certain findings about subsistence and includes very specific requirements about the information which should be provided to the boards to help them make those decisions. Number 278 CO-CHAIRMAN GREEN wondered what sampling sizes are used and if they are representative. MR. BOSWORTH replied the division does feel the information is valid and reliable. He said combining the results of a number of different studies, taken over a number of years in a number of different communities, makes it increasingly difficult to identify the margin of error in the final outcome. He stated within specific studies for particular communities, the division does provide margins of error. CO-CHAIRMAN GREEN questioned if subsistence hunters help the division know about or perhaps find and prosecute poachers. MR. BOSWORTH said the best opportunity the department has to know what is going on in a local area is to have staff in the area. The department benefits greatly from having biologists living throughout Alaska and in many rural communities, who have developed the kind of rapport it takes in those communities to understand what is going on locally. He stated in reply to Representative Green's question, yes, that can happen and it happens best when there is staff present in rural areas who are accepted in the communities and have lived there long enough to be privy to that sort of information. Number 322 REPRESENTATIVE OGAN asked if the division surveys federal subsistence or state. MR. BOSWORTH said the division's budget is approximately one-half federal money and one-half state money. The federal money comes from a variety of unstable sources and are the funds which allow the division to survey communities who use or are located on federal lands. The division considers them to be Alaskans and the information gathered is relevant to Alaska's management of subsistence, regardless of the fact that the jurisdiction may be federal. REPRESENTATIVE BARNES recalled that three or four years ago, the legislature combined the two divisions of Commercial Fisheries and Fisheries Rehabilitation Enhancement and Development (FRED). She wondered why it took so long to accomplish that. JEFF KOENINGS, DIRECTOR, DIVISION OF COMMERCIAL FISHERIES MANAGEMENT AND DEVELOPMENT, ADF&G, replied the merger of the two divisions has been completed. Staffs have been combined to ensure that resource management programs, as well as the fisheries development programs can go forward in a logical and consistent manner. He added the budgetary process of combining the divisions, as well as the in the field process, has been completed. MR. KOENINGS stated the Division of Commercial Fisheries Management and Development is responsible for the sustained yield management of the state's commercial, subsistence and personal use fisheries; the development of new fisheries; and the programmatic support for the state's private sector mariculture and salmon ranching industries. The division also plays a major role in the management of fisheries in the federal 200-mile Exclusive Economic Zone (EEZ), in several international treaty negotiations such as in Southeast Alaska and Yukon; and, more recently, in addressing concerns over federal legislation affecting Alaska's fisheries such as the Endangered Species Act. MR. KOENINGS explained the divisional organization now represents the completed merger between the old FRED and Commercial Fisheries Divisions. The present division is organized into a headquarters office and four regions: Southeastern, Central, Westward, and Arctic-Yukon-Kuskokwim. The division operates with nearly 300 full-time and 555 permanent part-time positions; and a proposed fiscal year 1996 general fund budget of $30 million with an overall budget of $42 million. The fiscal year 1996 overall budget is $8 million less than the budget for the combined divisions in fiscal year 1992. Number 404 MR. KOENINGS said the direct and indirect economic benefits of the commercial fishing industry is of major importance to the entire state based on what information is available. For example, the seafood industry is the state's largest private employer both in terms of income and employment with roughly 33,000 to 36,000 jobs. He stated the seafood harvesters are small businessmen that account for 8,000 to 12,000 full-time job equivalents. Seventy-seven percent of these commercial fishing permit holders are Alaskan residents. He pointed out to committee members a new brochure on the Alaska Seafood Industry which was developed by all segments of the fishing community. MR. KOENINGS stated the cultural and economic value of the subsistence fishery is even harder to quantify, in direct economic terms, than the commercial fisheries. He said to many it is beyond value, which is understandable. He noted that recently, subsistence fishers have repeatedly said that their subsistence lifestyle, a combination of fishing, hunting, berry picking, etc. is fueled, to varying degrees, by their incomes from commercial fishing. He pointed out there is absolute value and real benefits in having strong, well managed runs of fish to ensure that both the subsistence users and commercial users are provided for. MR. KOENINGS stressed the state's fisheries resources appear to be vibrant and healthy, although problem areas do exist, especially in Western and Interior Alaska. Last year, the commercial harvest of 196 million salmon was an all time record. Yet, because of competition from high quality foreign farmed salmon, prices are down and the economic value is declining. He stated the department is responding by managing, within biological constraints, so fishermen and processors can achieve the best product quality and thus higher economic value. He noted that examples for 1994 include the harvest management of enhanced and wild pink salmon in Prince William Sound, chum salmon in the Kuskokwim River, the herring fishery in the Togiak district, and pink salmon harvests in Norton Sound. MR. KOENINGS stated that in developing new fisheries, the division has pioneered new cooperative efforts with private industry to assess the health of the sea urchin population in the Ketchikan area prior to a commercial fishery. He said the project provides for close cooperation between local divers and processors and is funded entirely by private dollars and by the sea urchin resource itself, not by the general fund. If successful, the fishery could be worth $30 million annually to Southeast fishermen and may become the third largest fishery in state waters. He pointed out that reasonable and responsible development of the state's renewable fishery resources will lead to increased numbers of jobs for Alaskans. Number 470 MR. KOENINGS said despite the general abundance of salmon, which are now on the high end of their productive cycle, there are localized resource problems. For example, the Chinook salmon in the Mat-Su valley, the chum salmon in parts of Western and Interior Alaska, Nushagak River coho salmon in Bristol Bay, and perhaps the sockeye salmon of Chilkoot Lake. He added that the herring populations in the Prince William Sound are in horrible shape and are not fishable. MR. KOENINGS advised that the biggest challenge throughout the state is the management of the state's shellfish resources. He said from Norton Sound in the north to Adak to the south, east to Bristol Bay, Kodiak, Cook Inlet, and the Prince William Sound, the crab populations are failing. He stressed some of the most important crab fisheries are in the Bering Sea where state involvement in resource assessment, necessary for proper state management, is minimal at best. He stated that minimal effort needs to change. REPRESENTATIVE BARNES wondered where Mr. Koenings got the information that 77 percent of the people who are employed in the commercial fishing industry are Alaskans. MR. KOENINGS responded the information came from a report by the Institute of Social and Economic Research at the University of Alaska. REPRESENTATIVE BARNES suggested that he check with the Department of Labor and use their statistics. She felt those statistics would be different. She recalled that a great number of the limited entry permits are owned by people who live in the Seattle/Tacoma area. MR. KOENINGS said there are a number of Seattle area residents who own Alaska limited entry permits. MR. RUE added that Frank Homan from the Commercial Fisheries Limited Entry Commission could give an exact breakdown of the information. REPRESENTATIVE BARNES recalled that Mr. Koenings had mentioned the management of fish for commercial and subsistence fisheries. She wondered what happened to those who are hook and line fishermen. She asked if they are also entitled to some of the resources. MR. KOENINGS replied yes they are. He said his division's responsibilities only include commercial, subsistence and personal use fisheries. The responsibility for managing the primary recreational fisheries belong to the sport fish division. REPRESENTATIVE BARNES felt there is a great conflict between hook and line fishermen and commercial fisheries. She disagreed when it is said they are recreational fishermen. She stated most of those people do not catch those fish just for recreation, but rather do it to feed their families, just like subsistence users. MR. RUE said in his opening remarks he tried to recognize the department's mission to do the management, science and research. He felt the key is the role of the board of fisheries in allocating the fish. REPRESENTATIVE BARNES felt the board of fisheries does not do a very good job. REPRESENTATIVE KOTT recalled a couple of years ago the legislature appropriated $250,000 to conduct an impact study regarding salmon in the Cook Inlet area. He wondered what the status is of the study. MR. KOENINGS responded that the panel involved with that study was chaired by Rob Bosworth. MR. BOSWORTH stated the study was intended to address both sport and commercial economics of the fisheries at the Kenai River. The study was contracted out to the Institute of Social and Economic Research. He explained the study is on schedule and on budget at this time. The sport and commercial surveys have been completed and are now in the data analysis stage. He said the department does get quarterly reports on the progress of the study and he would be happy to make them available. He added that an interim report is expected in April and a final report in August. The information will then be available for the board of fisheries when they meet next fall. Number 610 REPRESENTATIVE OGAN wondered what steps are being taken to spread the burden to all user groups including commercial fishermen in regard to the decline in the king salmon runs, specifically in the Susitna Drainage. MR. KOENINGS responded the allocation of harvestable surpluses of fish is the purview of the board of fisheries. He thought other issues were also being looked at in Cook Inlet such as the sockeye salmon issue. He said the division is specifically looking into where and how king salmon are caught to enable the division to participate in any conservation actions, if necessary, to protect those stocks. Number 635 REPRESENTATIVE OGAN said there is a perception in his constituent group that the burden is being bore by the sport fishermen. He asked Mr. Koenings to get him information on more specific steps being taken. MR. KOENINGS indicated the division is in the process of developing a brief summary of what gear groups are involved when and if they do intercept Chinook salmon and what ability is available in terms of identifying where those fish are bound for. REPRESENTATIVE AUSTERMAN asked if bycatch in the Gulf of Alaska is being addressed in connection with shellfish. MR. KOENINGS thought that information is available and said he would be happy to get it for Representative Austerman. CO-CHAIRMAN GREEN wondered if those types of problems are being created by fishermen within the state of Alaska, registered in the state, as opposed to those who may be from out of state. MR. KOENINGS said the trawl fleet consists of a large number of boats which are home ported in the Seattle area, but also includes smaller boats which are home ported in Alaskan waters. Therefore, the crab bycatch issue is the responsibility of both parties. He stressed there is a considerable bycatch involved in the catches of the large catcher/processors who operate both in the Gulf of Alaska and in the Bering Sea. CO-CHAIRMAN GREEN wondered if Mr. Koenings had total amounts and percentages. MR. KOENINGS replied he has the information and would make it available to Representative Green. CO-CHAIRMAN WILLIAMS said when the sea cucumber fishing in Southeast Alaska began, it was not managed properly but added that changing the fishing time has helped. At the beginning, many of the sea cucumbers were being wasted because there was not enough time to process. He hoped the same thing would be done with the sea urchin. He felt when the time periods are staggered and spread out, the out-of-state fishermen think hard about whether or not they want to come to Southeast to fish. TAPE 95-6, SIDE A Number 000 CO-CHAIRMAN WILLIAMS said in Ketchikan, there has been a lot of discussion about the Cat Island fishery. He stated during the last fishery opening in that area, the quota was never reached and many of the fishermen quit long before the end because there were not any herring. He wondered if the same thing is happening in the Prince William Sound area. He recalled when this question came up last year, the commissioner indicated the herring fishery was the best managed fishery. MR. KOENINGS stated the herring biomass is very strong in Alaska. However, there are problem areas such as the Prince William Sound area. He said those problems are not attributable to the management practices, but rather there are extraneous environmental and other affects in the Sound which hypothetically could be derived from the oil spill and various environmental ecological changes going on. These factors have also affected the pink salmon resources there. He noted the pink salmon have recovered but the herring population has not recovered. He felt that will happen in a matter of time. Number 040 CO-CHAIRMAN WILLIAMS wondered about the Cat Island fisheries. MR. KOENINGS responded the Cat Island (indiscernible) fish will be prosecuted in the same manner as it was last year. Much has been learned from the management changes which will be put in place this year. He felt the full quota will be harvested. CO-CHAIRMAN WILLIAMS clarified the biomass has not decreased in that area. MR. KOENINGS said the biomass is strong in that area. REPRESENTATIVE AUSTERMAN recalled that the majority of tanner fishing is closed in the Gulf of Alaska currently, yet at the same point in time, the bycatch of the trawl fleet is ongoing without any cap. Number 060 WAYNE REGELIN, ACTING DIRECTOR, DIVISION OF WILDLIFE CONSERVATION, ADF&G, said the division's job is to manage Alaska's wildlife and to provide a wide range of uses for the public. He explained that the division has three basic programs. The first is management programs. The division does numerous population surveys and censuses of populations, determines trends of populations and determines the sustained yield. He stated this information is provided to the board of game so they can set the seasons and bag limits. MR. REGELIN noted the second effort of the division is research. The division spends much effort developing new techniques for wildlife management and collecting ecological information on species habitat relationships and predator/prey relationships. He said the third area in which the division is involved is public service. The division has a large hunter education program, a new hunters' services program, a watchful wildlife program for the nonconsumptive users and a general wildlife education program in the schools called "Project Wild". MR. REGELIN told committee members that the division has three sources of funding. Three percent of the division's funding is from the general fund; 50 percent comes from federal aid which is a tax on arms and ammunition; and 47 percent is from license fees and tags which the hunters pay. The division's total budget request for next year is $16 million. He stated there are 165 employees in the division, including 130 who are permanent full- time and 35 who are seasonal. MR. REGELIN stated there are several major issues facing the division currently. The two most important issues are wolf management and the dual federal/state management. He said overall the wildlife populations in Alaska are healthy. He added there are just a couple of areas where there are some concerns. CO-CHAIRMAN GREEN said he presumed one of the problem areas is the Kenai River. MR. REGELIN stated the Division of Wildlife Conservation does not get involved in fishery issues. CO-CHAIRMAN GREEN asked Mr. Regelin to comment on the two problem areas. MR. REGELIN said the division has concerns in Unit 13. He stated it is not a matter of too few animals, but rather a tremendous number of people who want to hunt there and a very confused dual federal/state management system. He noted the populations are as high as what the division desires. The problem is that adequate resources cannot be provided there. He added the moose population there is high but has been very unproductive. There has been no recruitment and very few of the animals survive. MR. REGELIN explained the other problem is in the McGrath area. The division is observing a decline in the moose population. He noted the area has experienced an extreme winter and a high predation level from wolves. REPRESENTATIVE BARNES asked where Unit 13 is located. MR. REGELIN responded Unit 13 is around Glennallen and the Copper River Basin. He said it is the hunting ground for Anchorage people. REPRESENTATIVE BARNES wondered how the moose population in the Mat- Su borough along the railroad tracks is holding up this winter. MR. REGELIN stated there has been a lot of snow there and there has been quite a bit of highway kills. He noted there has not been nearly the problem with the railroad which was experienced in the past. He said the railroad is going to a great extent and working with the division to reduce the kill along the railroad. Number 133 REPRESENTATIVE KOTT stated he had read an article about sprinkling wolf urine along the side of roads to keep moose from crossing the road. He wondered if the department had ever experimented with a process such as that. MR. REGELIN responded the work being referred to was done in Sweden. He said the division has not tried that process. However, the division has tried to remove vegetation back away from the roads and along the railroad. He said the division has also tried different kinds of reflectors to reflect headlights into the woods. He stressed what works best is people slowing down on the road. REPRESENTATIVE KOTT felt if a couple of volunteer wolves could be found, it might be something to pursue. He wondered if the division has ever considered going to a bounty system or somehow encouraging the private sector to take part in wolf control. MR. REGELIN stated the division does work often with trappers by teaching trapper education courses and encourages them to trap wolves. He said a bounty system would take legislation. He noted that approximately 1,000 wolves are legally harvested every winter and a bounty would have to be paid on those also. Therefore, with a $100 bounty, $100,000 would be paid before the harvest is increased. The division is not sure a bounty system would be cost effective and feels it would probably be very unpopular. Number 172 REPRESENTATIVE BARNES clarified wolves are classified as big game animals. MR. REGELIN stated wolves are classified as both big game and fur bear animals. REPRESENTATIVE BARNES wondered if the classification of wolves is changed, would that change the way they could be harvested. MR. REGELIN replied it really does not make any difference. Currently, under trapping licenses, the season begins in November and goes late in the year with no limit. He said the board of game can set any season and bag limit desired for big game animals. He noted there is a very long season for hunting with a bag limit of two in most places. REPRESENTATIVE BARNES asked if the division has ever thought about dropping hay for moose in the winter. MR. REGELIN responded currently the division is not dropping hay or any other kinds of feed, but is working with private individuals to go out on weekends in the Kenai and Mat-Su Valley to cut willow and aspen trees away from the road to draw moose back. He stressed it becomes a big logistical problem to distribute feed to moose because they are not in large herds, but rather small groups. REPRESENTATIVE BARNES clarified that moose congregate in the path of least resistance. MR. REGELIN said moose do congregate more and usually there are groups of eight to ten moose but they are well scattered. REPRESENTATIVE OGAN asked what it would take to get an aerial wolf hunt program going again. MR. REGELIN said it would take two actions. First, the Governor would want a policy allowing that type of program and second, the program would have to be authorized by the board of game. REPRESENTATIVE OGAN clarified the legislature could not do anything. MR. REGELIN replied the board of game provides the authorization. Last year, the legislature did pass legislation on intensive management which provides much more direction to the board. The legislation provides that in certain areas where human use of wildlife is the primary use, if the populations are not providing an adequate opportunity for hunters, before the board can reduce seasons, the board is required to do intensive management. That intensive management could involve wolf control, predator management or habitat improvement. REPRESENTATIVE OGAN recalled Mr. Regelin had stated three percent of the division's funding comes from general funds and the division's budget request for this year is going to be $16 million. He clarified that $16 million is three percent of the division's budget. MR. REGELIN stated that is incorrect. The division's total budget is $16 million and the general fund request is $667,000. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Green adjourned the meeting at 9:50 a.m.