Legislature(2003 - 2004)

03/15/2004 01:07 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 15, 2004                                                                                         
                           1:07 p.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Nancy Dahlstrom, Co-Chair                                                                                        
Representative Beverly Masek, Co-Chair                                                                                          
Representative Nick Stepovich                                                                                                   
Representative Kelly Wolf                                                                                                       
Representative Beth Kerttula                                                                                                    
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Cheryll Heinze, Vice Chair                                                                                       
Representative Carl Gatto                                                                                                       
Representative Bob Lynn                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 265(RES)                                                                                                 
"An Act  relating to the schedule  of proposed oil and  gas lease                                                               
sales and to  a related report to the  legislature; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
     - MOVED CSSB 265(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SENATE BILL NO. 266                                                                                                             
"An Act  approving an interim classification  by the commissioner                                                               
of natural resources closing certain  land within the area of the                                                               
proposed Bristol  Bay (Alaska Peninsula) competitive  oil and gas                                                               
areawide  lease sale  to oil  and gas  exploration licensing  and                                                               
shallow  natural  gas leasing;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED SB 266 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 417                                                                                                              
"An  Act  amending  the  definition   of  'project'  in  the  Act                                                               
establishing the  Alaska Natural  Gas Development  Authority; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HB 417 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SENATE JOINT RESOLUTION NO. 27                                                                                                  
Relating to the resolution of submerged land title disputes.                                                                    
                                                                                                                                
     - MOVED SJR 27 OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 265                                                                                                                  
SHORT TITLE: OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION                                                                           
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/14/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/14/04       (S)       RES                                                                                                    
02/04/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/04/04       (S)       Moved CSSB 265(RES) Out of Committee                                                                   
02/04/04       (S)       MINUTE(RES)                                                                                            
02/06/04       (S)       RES RPT CS  5DP 1AM         SAME TITLE                                                                 
02/06/04       (S)       DP: OGAN, SEEKINS, WAGONER, DYSON,                                                                     
02/06/04       (S)       ELTON; AM: STEVENS B                                                                                   
02/25/04       (S)       TRANSMITTED TO (H)                                                                                     
02/25/04       (S)       VERSION: CSSB 265(RES)                                                                                 
02/26/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/04       (H)       O&G, RES                                                                                               
02/26/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/26/04       (H)       Scheduled But Not Heard                                                                                
02/27/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/27/04       (H)       -- Meeting Canceled --                                                                                 
03/02/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(O&G)                                                                                            
03/09/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/09/04       (H)       Moved Out of Committee                                                                                 
03/09/04       (H)       MINUTE(O&G)                                                                                            
03/12/04       (H)       O&G RPT 5DP                                                                                            
03/12/04       (H)       DP: ROKEBERG, KERTTULA, CRAWFORD,                                                                      
03/12/04       (H)       HOLM, KOHRING                                                                                          
03/15/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: SB 266                                                                                                                  
SHORT TITLE: BRISTOL BAY OIL & GAS LEASE SALE CLOSURE                                                                           
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/14/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/14/04       (S)       CRA, RES                                                                                               
02/02/04       (S)       CRA AT 1:30 PM FAHRENKAMP 203                                                                          
02/02/04       (S)       Moved SB 266 Out of Committee                                                                          
02/02/04       (S)       MINUTE(CRA)                                                                                            
02/04/04       (S)       CRA RPT    3DP 2NR                                                                                     
02/04/04       (S)       DP: STEDMAN, WAGONER, STEVENS G                                                                        
02/04/04       (S)       NR: LINCOLN, ELTON                                                                                     
02/04/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/04/04       (S)       Moved Out of Committee                                                                                 
02/04/04       (S)       MINUTE(RES)                                                                                            
02/06/04       (S)       RES RPT 6DP                                                                                            
02/06/04       (S)       DP: OGAN, SEEKINS, STEVENS B, WAGONER,                                                                 
02/06/04       (S)       DYSON, ELTON                                                                                           
02/25/04       (S)       TRANSMITTED TO (H)                                                                                     
02/25/04       (S)       VERSION: SB 266                                                                                        
02/26/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/04       (H)       O&G, RES                                                                                               
02/26/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/26/04       (H)       Scheduled But Not Heard                                                                                
02/27/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/27/04       (H)       -- Meeting Canceled --                                                                                 
03/02/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(O&G)                                                                                            
03/09/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/09/04       (H)       Moved Out of Committee                                                                                 
03/09/04       (H)       MINUTE(O&G)                                                                                            
03/12/04       (H)       O&G RPT 1DP 3NR 1AM                                                                                    
03/12/04       (H)       DP: ROKEBERG; NR: KERTTULA, CRAWFORD,                                                                  
03/12/04       (H)       HOLM; AM: KOHRING                                                                                      
03/15/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 417                                                                                                                  
SHORT TITLE: AK NATURAL GAS DEV. AUTHORITY INITIATIVE                                                                           
SPONSOR(S): REPRESENTATIVE(S) CHENAULT                                                                                          
                                                                                                                                
02/02/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/04       (H)       O&G, RES                                                                                               
02/17/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/17/04       (H)       -- Meeting Canceled --                                                                                 
02/19/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/19/04       (H)       Moved Out of Committee                                                                                 
02/19/04       (H)       MINUTE(O&G)                                                                                            
02/23/04       (H)       O&G RPT 2DP 3AM                                                                                        
02/23/04       (H)       DP: ROKEBERG, MCGUIRE; AM: HEINZE,                                                                     
02/23/04       (H)       CRAWFORD, HOLM                                                                                         
02/23/04       (H)       FIN REFERRAL ADDED AFTER RES                                                                           
03/15/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: SJR 27                                                                                                                  
SHORT TITLE: SUBMERGED LAND TITLE DISPUTES                                                                                      
SPONSOR(S): SENATOR(S) SEEKINS                                                                                                  
                                                                                                                                
02/06/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/04       (S)       RES                                                                                                    
02/18/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/18/04       (S)       Moved Out of Committee                                                                                 
02/18/04       (S)       MINUTE(RES)                                                                                            
02/19/04       (S)       RES RPT   4DP 1NR                                                                                      
02/19/04       (S)       DP: OGAN, SEEKINS, STEVENS B, WAGONER                                                                  
02/19/04       (S)       NR: ELTON                                                                                              
02/23/04       (S)       RETURNED TO RLS COMMITTEE                                                                              
03/02/04       (S)       RESOLUTION IN SECOND READING                                                                           
03/04/04       (S)       TRANSMITTED TO (H)                                                                                     
03/04/04       (S)       VERSION: SJR 27                                                                                        
03/08/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/04       (H)       RES                                                                                                    
03/15/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MARK MYERS, Director                                                                                                            
Division of Oil & Gas                                                                                                           
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented CSSB 265(RES) and SB 266.                                                                        
                                                                                                                                
REPRESENTATIVE MIKE CHENAULT                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 417.                                                                            
                                                                                                                                
HAROLD HEINZE, Chief Executive Officer                                                                                          
Alaska Natural Gas Development Authority (ANGDA)                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 417; explained that the                                                                    
bill would expand ANGDA's options for a terminus for the natural                                                                
gas pipeline to include Cook Inlet.                                                                                             
                                                                                                                                
STEVEN PORTER, Deputy Commissioner                                                                                              
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing on HB 417, presented                                                                        
information and answered questions.                                                                                             
                                                                                                                                
SENATOR RALPH SEEKINS                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SJR 27 as sponsor.                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-14, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIR  BEVERLY  MASEK  called  the  House  Resources  Standing                                                             
Committee meeting to  order at 1:07 p.m.   Representatives Masek,                                                               
Dahlstrom,  Stepovich,   Wolf,  Guttenberg,  and   Kerttula  were                                                               
present at the call to order.                                                                                                   
                                                                                                                                
SB 265-OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION                                                                               
                                                                                                                                
[Contains discussion of SB 266]                                                                                                 
                                                                                                                                
CO-CHAIR MASEK announced  that the first order  of business would                                                               
be  CS FOR  SENATE BILL  NO. 265(RES),  "An Act  relating to  the                                                               
schedule of  proposed oil and  gas lease  sales and to  a related                                                               
report to the legislature; and  providing for an effective date."                                                               
[SB 265 was  sponsored by the Senate Rules  Standing Committee by                                                               
request of the governor.]                                                                                                       
                                                                                                                                
Number 0094                                                                                                                     
                                                                                                                                
MARK  MYERS,  Director, Division  of  Oil  & Gas,  Department  of                                                               
Natural Resources (DNR), explained that  CSSB 265(RES) and SB 266                                                               
are bills to  help enable DNR to  hold a Bristol Bay  oil and gas                                                               
lease  sale in  the fall  of 2005.   Under  current statute,  the                                                               
state,  before making  any  changes in  the  areawide sale,  must                                                               
notify   the  legislature   in  the   first  [session]   of  that                                                               
legislature and two  years in advance of the  sale; under current                                                               
law,  the state  would have  to  notify the  legislature of  this                                                               
lease sale  at the  beginning of  the first  session of  the next                                                               
legislature.    In  addition,   fulfilling  the  two-year  notice                                                               
requirement will mean  that the earliest the sale  could occur is                                                               
2007.   Therefore, DNR and  the governor are requesting  a change                                                               
to that notification procedure.                                                                                                 
                                                                                                                                
MR. MYERS  specified that  the proposed  change in  CSSB 265(RES)                                                               
would  allow the  state to  notify the  legislature anytime  with                                                               
regard to  the changes to  the sale and  process.  It  would also                                                               
require  that  annually,  in  February,  DNR  would  provide  the                                                               
legislature with a  report laying out the  five-year schedule for                                                               
areawide  lease  sales.   The  aforementioned  proposal seems  to                                                               
provide good balance in that  additional notification is provided                                                               
while allowing flexibility  to add sales to  the schedule without                                                               
a potential three- to four-year delay in a sale.                                                                                
                                                                                                                                
MR.  MYERS highlighted  that the  notification  doesn't mean  the                                                               
sale will  occur; it  merely allows  the process  to occur.   The                                                               
process includes  a best interest finding  document, which weighs                                                               
whether  a sale  is in  the state's  best interests.   Mr.  Myers                                                               
referred to  a map that  specified the schedule based  on passage                                                               
of CSSB  265(RES).  With its  passage, prior to the  sale there'd                                                               
be  a long  period of  review, public  input, a  preliminary best                                                               
interest finding, public comment  on the aforementioned document,                                                               
and a  final best  interest finding.   Even  with this  bill, the                                                               
earliest  this process  could happen  is in  the fall  2005.   He                                                               
clarified that this  bill will allow the state  to accelerate the                                                               
process for  the Bristol Bay lease  sale by allowing the  sale in                                                               
the fall of 2005, rather than January 2007.                                                                                     
                                                                                                                                
Number 0418                                                                                                                     
                                                                                                                                
MR.  MYERS, in  response to  Representative Stepovich,  clarified                                                               
that the  bill amends the entire  process.  If the  state were to                                                               
contemplate future  areawide sales,  it would  be under  the same                                                               
timeframe proposed in the bill.   However, the immediate need for                                                               
the bill is for the proposed Bristol Bay lease sale.                                                                            
                                                                                                                                
Number 0480                                                                                                                     
                                                                                                                                
CO-CHAIR  DAHLSTROM   moved  to  report  CSSB   265(RES)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  note.    There  being no  objection,  CSSB  265(RES)  was                                                               
reported from the House Resources Standing Committee.                                                                           
                                                                                                                                
SB 266-BRISTOL BAY OIL & GAS LEASE SALE CLOSURE                                                                               
                                                                                                                                
Number 0534                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be  SENATE   BILL  NO.   266,  "An   Act  approving   an  interim                                                               
classification by  the commissioner of natural  resources closing                                                               
certain land within the area  of the proposed Bristol Bay (Alaska                                                               
Peninsula) competitive  oil and  gas areawide  lease sale  to oil                                                               
and gas  exploration licensing and  shallow natural  gas leasing;                                                               
and providing for  an effective date."  [SB 266  was sponsored by                                                               
the Senate Rules Standing Committee by request of the governor.]                                                                
                                                                                                                                
                                                                                                                                
CO-CHAIR  MASEK  explained  that   the  committee  packet  should                                                               
contain a  memorandum to Representative  Kerttula dated  March 4,                                                               
2004, from  Thomas E. Irwin, Commissioner,  Department of Natural                                                               
Resources (DNR), as well as a  letter of intent that follows what                                                               
Commissioner  Irwin's memorandum  states.   The letter  of intent                                                               
read:                                                                                                                           
                                                                                                                                
     It is the intent of  the Legislature that, if the State                                                                    
     deems that an  Alaska Peninsula Oil and  Gas Lease Sale                                                                    
     is  in the  State's best  interest and  a sale  occurs,                                                                    
     companies only be allowed  to access offshore Prospects                                                                    
     from   onshore  drill   sites,  utilizing   directional                                                                    
     drilling technology.                                                                                                       
                                                                                                                                
Number 0637                                                                                                                     
                                                                                                                                
MARK  MYERS,  Director, Division  of  Oil  & Gas,  Department  of                                                               
Natural  Resources (DNR),  explained  that SB  266  is a  mineral                                                               
closing order for the area of  the proposed Bristol Bay sale.  To                                                               
preserve the prospective  area for an areawide  lease sale, [DNR]                                                               
wants  to  close  it  to  shallow  gas  leasing  and  exploration                                                               
licensing.   The  thought, he  said, is  that the  intent of  the                                                               
areawide sale  will be better met  if the leases are  left intact                                                               
and the entire area is available for the competitive program.                                                                   
                                                                                                                                
MR.  MYERS referred  to a  map that  illustrates the  prospective                                                               
section.  Under  shallow gas leasing, entities are  allowed, in a                                                               
noncompetitive program,  to file  for land with  a depth  down to                                                               
3,000 feet and  deeper, if part of  the field is below  that.  He                                                               
said DNR  believes the  competitive process  is better  served if                                                               
the leases are  left intact, and thus all the  mineral rights for                                                               
oil and gas are left and bid  at the same time in the competitive                                                               
sale.  There  are examples in which the shallow  gas lessee would                                                               
probably  be different  from those  bidding  on the  conventional                                                               
lease  sale.   Thus  there would  be  a correlative-rights  issue                                                               
between the  shallower section and  the deeper section.   At this                                                               
point, he  said, it's better  to preserve  the area for  the more                                                               
traditional conventional lease sale area.                                                                                       
                                                                                                                                
MR. MYERS further explained that  [DNR] believes there will be an                                                               
additional economic  value brought in  by higher bonus  bids than                                                               
if the leases were segregated vertically.   He said the intent of                                                               
the bill  is merely  to prevent  those activities  from occurring                                                               
until there is an areawide sale.   Once an area is in an areawide                                                               
sale, he noted,  it's no longer eligible for either  program.  He                                                               
added that the  legislation closes this only for  the shallow gas                                                               
leasing and exploration  licensing; it doesn't close  it to other                                                               
mineral  entry  programs or  prohibit  conventional  oil and  gas                                                               
leasing.                                                                                                                        
                                                                                                                                
Number 0816                                                                                                                     
                                                                                                                                
REPRESENTATIVE STEPOVICH  inquired as  to the  difference between                                                               
this [proposal] and Prudhoe Bay or Cook Inlet.                                                                                  
                                                                                                                                
MR. MYERS answered that this  legislation would align it with the                                                               
same leasing programs used on the  North Slope and at Cook Inlet.                                                               
Outside those  areawide areas in  which competitive  sales occur,                                                               
over-the-counter leases are allowed for  shallow gas leases, just                                                               
for the  shallow section.   Such activity  has occurred  north of                                                               
the  areawide  leasing  area  in  the  Matanuska-Susitna  region,                                                               
Homer, and  other places.   This legislation would provide  for a                                                               
competitive process  versus an over-the-counter process,  and all                                                               
the mineral rights would be leased at the same time.                                                                            
                                                                                                                                
CO-CHAIR MASEK, upon  determining no one else  wished to testify,                                                               
announced that public testimony was closed.                                                                                     
                                                                                                                                
Number 0900                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM moved  to report SB 266 out  of committee with                                                               
individual recommendations, [the  accompanying fiscal notes], and                                                               
the accompanying  letter of  intent.   There being  no objection,                                                               
SB 266 was reported from the House Resources Standing Committee.                                                                
                                                                                                                                
HB 417-AK NATURAL GAS DEV. AUTHORITY INITIATIVE                                                                               
                                                                                                                                
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be  HOUSE  BILL NO.  417,  "An  Act  amending the  definition  of                                                               
'project'  in  the  Act  establishing   the  Alaska  Natural  Gas                                                               
Development Authority; and providing for an effective date."                                                                    
                                                                                                                                
Number 0960                                                                                                                     
                                                                                                                                
REPRESENTATIVE MIKE CHENAULT,  Alaska State Legislature, sponsor,                                                               
explained  that HB  417  amends the  definition  of "project"  to                                                               
include  all options  for a  terminus of  the Alaska  natural gas                                                               
pipeline.     This  specifically  identifies  Cook   Inlet  as  a                                                               
possibility for a terminus.                                                                                                     
                                                                                                                                
Number 0993                                                                                                                     
                                                                                                                                
REPRESENTATIVE   CHENAULT,   in    response   to   Representative                                                               
Guttenberg,  said   this  would  give  the   Alaska  Natural  Gas                                                               
Development Authority  (ANGDA) the  ability to  look at  the Cook                                                               
Inlet basin as  a possible terminus, rather than  only looking at                                                               
Prince William Sound as a possible terminus.                                                                                    
                                                                                                                                
Number 1049                                                                                                                     
                                                                                                                                
HAROLD  HEINZE,  Chief  Executive  Officer,  Alaska  Natural  Gas                                                               
Development Authority,  explained that  Ballot Measure  3, passed                                                               
in 2002, defines  what a "project" is.   It specifically includes                                                               
not only  a [main  natural gas  pipeline] to  Valdez, but  also a                                                               
spur line  from Glennallen to  the Cook  Inlet area.   Mr. Heinze                                                               
noted that  he'd provided information  to demonstrate  that ANGDA                                                               
has been looking at Cook  Inlet and has considered delivering gas                                                               
into the Cook Inlet area, which  is one of ANGDA's most important                                                               
responsibilities and  benefits offered  to Alaska.   He  said his                                                               
understanding  of the  bill is  that it  would instruct  ANGDA in                                                               
looking at  its development-plan  work targeted  for June  15, to                                                               
expand its  [options] for  a terminus  to specifically  include a                                                               
pipeline directly to a Cook Inlet port.                                                                                         
                                                                                                                                
MR. HEINZE  said the  level of  detail it  takes to  address that                                                               
kind  of a  routing between  now and  June 15  is going  to be  a                                                               
little tricky.   He  said ANGDA  has mainly  been using  the work                                                               
that  relates to  the Yukon  Pacific  [Corporation]] effort  that                                                               
went  down  the  Trans-Alaska  Pipeline.     In  looking  at  the                                                               
feasibility of the project, he  said, he isn't uncomfortable with                                                               
looking  at Cook  Inlet  in a  feasibility sense.    He said  the                                                               
engineering  technical  data,  in particular,  the  environmental                                                               
permitting issues related  to that, would be  difficult for ANGDA                                                               
to assess in the short amount of time available.                                                                                
                                                                                                                                
Number 1197                                                                                                                     
                                                                                                                                
STEVEN PORTER, Deputy Commissioner,  Department of Revenue (DOR),                                                               
explained that  DOR and  the state  have looked  at ANGDA  as the                                                               
entity to look at all of the  in-state gas use, and is looking at                                                               
bringing gas to Cook Inlet  and other areas throughout the state.                                                               
He said DOR doesn't consider  this legislation to be inconsistent                                                               
with  that.    Mr.  Porter mentioned  the  broader  economics  of                                                               
bringing gas to Cook Inlet  versus Valdez, barring the permitting                                                               
and the  environmental issues.   He said  the basic  economics of                                                               
those two areas  are so similar that research on  one area fairly                                                               
well  much applies  to the  other area  in terms  of the  overall                                                               
economics  of  an  LNG  [liquefied natural  gas]  project.    The                                                               
permitting and environmental work  on each element, including the                                                               
spur  line  from  Glennallen to  Anchorage,  would  require  some                                                               
additional work  on behalf of  the authority to solve  and answer                                                               
those problems.                                                                                                                 
                                                                                                                                
Number 1277                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA asked how much  of an extra workload this                                                               
could result  in, and if that  was being taken into  account with                                                               
respect to ANGDA's budget.                                                                                                      
                                                                                                                                
MR. HEINZE explained  that based on what had been  looked at thus                                                               
far,  regardless  of  a  route,   there  hasn't  been  a  lot  of                                                               
difference  in the  numbers  relating  to where  and  how gas  is                                                               
brought to  tidewater in Alaska.   He said in terms  of the early                                                               
feasibility  phase [ANGDA]  is  currently in,  it  isn't seen  as                                                               
necessary  to  differentiate,  fairly  exactly,  those  different                                                               
options at  this point;  to do  that would  require little  to no                                                               
additional work,  but a  more definitive  choice between  the two                                                               
areas would require considerable work  and time.  He indicated no                                                               
additional effort  or funding is  required in looking at  the two                                                               
locations indeterminately,  but said  to make the  choice between                                                               
the two locations would require  considerably more effort than is                                                               
included in ANGDA's funding.                                                                                                    
                                                                                                                                
Number 1388                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEPOVICH asked  why Cook  Inlet wasn't  included                                                               
originally.                                                                                                                     
                                                                                                                                
MR. HEINZE said he  had nothing to do with Ballot  Measure 3.  He                                                               
explained that  the project's sponsors  had chosen what  was felt                                                               
to  be the  most executable  project at  the time.   He  said the                                                               
value of  the permitting already done  on the route to  Valdez is                                                               
extremely significant with  regard to the [June  15 deadline] and                                                               
all  of  the  other  issues.   However,  [ANGDA]  is  aware  that                                                               
ConocoPhillips Alaska, Inc., and  BP, in conjunction with several                                                               
others,  have  looked at  a  more  direct  route to  Cook  Inlet.                                                               
Saying [ANGDA]  has never seen the  work and has no  knowledge of                                                               
it, he indicated  he'd feel much better about  moving quickly and                                                               
about what the problems are if he could see the work.                                                                           
                                                                                                                                
Number 1502                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  asked  if  there was  any  reason  to                                                               
exclude other possibilities for other routes.                                                                                   
                                                                                                                                
MR. PORTER  said the governor  has stated interest in  looking at                                                               
all  the different  options for  economic  marketability for  the                                                               
gas,  so there  isn't a  reason to  exclude any  option that  may                                                               
become an economically viable project.                                                                                          
                                                                                                                                
Number 1551                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM moved  to report HB 417 out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, HB  417 was  reported from  the House                                                               
Resources Standing Committee.                                                                                                   
                                                                                                                                
SJR 27-SUBMERGED LAND TITLE DISPUTES                                                                                          
                                                                                                                                
CO-CHAIR MASEK announced  that the final order  of business would                                                               
be SENATE JOINT RESOLUTION NO.  27, Relating to the resolution of                                                               
submerged land title disputes.                                                                                                  
                                                                                                                                
Number 1589                                                                                                                     
                                                                                                                                
SENATOR  RALPH   SEEKINS,  Alaska  State   Legislature,  sponsor,                                                               
explained that  SJR 27 relates  to resolving  land-title disputes                                                               
between the  state and  the federal  government.   He paraphrased                                                               
from  the sponsor  statement,  which  read [original  punctuation                                                               
provided but some formatting changed]:                                                                                          
                                                                                                                                
     Alaska  holds   over  20,000   rivers  and   more  than                                                                    
     1,000,000 lakes considered  to be potentially navigable                                                                    
     waterways.  This amounts to  nearly 60,000,000 acres of                                                                    
     submerged lands.   Title to  all submerged land  was to                                                                    
     be transferred  to Alaska  from the  federal government                                                                    
     at statehood.   It's  important to  note that  up until                                                                    
     statehood this  land was held  in trust for  the future                                                                    
     state by  the federal  government.   Now, more  than 45                                                                    
     years  after  Alaska  became  a  sovereign  state,  the                                                                    
     federal government  has yet to transfer  title to these                                                                    
     promised lands.                                                                                                            
                                                                                                                                
     SJR 27 does three things:                                                                                                  
                                                                                                                                
     1.   It encourages  the Secretary  of the  Interior and                                                                    
     the  Alaska  congressional  delegation to  support  and                                                                    
     endorse the  continuation of the process  for recording                                                                    
     federal disclaimers  of interest for quieting  title to                                                                    
     submerged lands;                                                                                                           
                                                                                                                                
     2.  It requests  the Alaska congressional delegation to                                                                    
     introduce legislation  in the  Congress to  provide for                                                                    
     federal  participation   in  the  proposed   state  and                                                                    
     federal Navigable Waters Commission for Alaska; and                                                                        
                                                                                                                                
     3.  It requests the  introduction of legislation in the                                                                    
     Congress  to  amend  the  Quiet  Title  Act  to  ensure                                                                    
     federal cooperation  in resolving submerged  land title                                                                    
     disputes.                                                                                                                  
                                                                                                                                
     The  dilemma is  clearly  illustrated in  the U.S.  9th                                                                    
     Circuit Court  of Appeals case Alaska  v. USA (decision                                                                    
     filed  on  January 28,  2000).    Circuit Judge  Andrew                                                                    
     Kleinfeld authored  the opinion of the  court excerpted                                                                    
     as follows:                                                                                                                
                                                                                                                                
     It is undisputed that when  the Union was created, each                                                                    
     of the  thirteen original states retained  title to the                                                                    
     lands covered  by navigable waters, and  that under the                                                                    
     "equal footing  doctrine" each new state  succeeds upon                                                                    
     statehood to the federal interest  in these lands.  The                                                                    
     Submerged Lands  Act gave Alaska  title to the  beds of                                                                    
     navigable rivers on January 3, 1959.                                                                                       
                                                                                                                                
     Under [the Quiet Title Act]  ... the federal government                                                                    
     takes the position that  its sovereign immunity shields                                                                    
     it from  the state  government's claim [to  clear title                                                                    
     to  submerged  lands]   until  the  federal  government                                                                    
     itself makes  a claim.   Because Alaska is  very large,                                                                    
     much  of it  is wilderness,  and there  are innumerable                                                                    
     waters,  the federal  government has  not had  time yet                                                                    
     (45 years) to determine what  claims it wishes to make.                                                                    
     Therefore,  the state  government must  wait until  the                                                                    
     federal  government makes  a claim,  if  it ever  does,                                                                    
     before settling whether it has title.                                                                                      
                                                                                                                                
     In  a  nutshell,  the  federal  government's  preferred                                                                    
     method for reconciling these disputes  appears to be to                                                                    
     wait  the state  out.   When (if  ever) the  government                                                                    
     decides to  make a claim against  state ownership, only                                                                    
     then  does Alaska  have an  opportunity to  protect its                                                                    
     ownership interest.   This is accomplished  by filing a                                                                    
     quiet title suit against the  federal government - just                                                                    
     as  it did  in the  case  cited above  relating to  the                                                                    
     Nation, Kandik and Black Rivers.                                                                                           
                                                                                                                                
     The bottom line?   That which should  be indisputable -                                                                    
     that Alaska holds  title to its submerged  lands - has,                                                                    
     in  fact, been  effectively disputed  as a  function of                                                                    
     the  federal  government's   foot  dragging.    Without                                                                    
     doubt,  the existing  processes of  resolving submerged                                                                    
     lands title  disputes are inadequate  and exceptionally                                                                    
     slow.  SJR 27 seeks  resolution to this extraordinarily                                                                    
     unfair dilemma.                                                                                                            
                                                                                                                                
Number 1848                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG asked whether  there was any indication                                                               
from the federal  government that it would [act  to resolve these                                                               
issues].                                                                                                                        
                                                                                                                                
SENATOR SEEKINS said no.                                                                                                        
                                                                                                                                
REPRESENTATIVE GUTTENBERG  asked if that  could be done  with the                                                               
commission or would have to be done with legislation.                                                                           
                                                                                                                                
SENATOR  SEEKINS said  he believes  the commission  is needed  to                                                               
help  analyze  the  situation  between   the  federal  and  state                                                               
governments  and   the  cooperation   that  could   be  extended.                                                               
However,  the [state]  is asking  for some  changes to  the Quiet                                                               
Title  Act  because, based  on  the  opinion written  by  Justice                                                               
Kleinfeld, the [federal]  government can hold its  claim until it                                                               
wants to  assert it.   He said this  is basically unfair  and the                                                               
thought is  that, as a  sovereign state, [Alaska] should  be able                                                               
to go  around that; thus [the  state] is asking for  some changes                                                               
in the legislation as well as the commission.                                                                                   
                                                                                                                                
REPRESENTATIVE STEPOVICH  said he  applauds this  legislation and                                                               
hopes to see more like it.                                                                                                      
                                                                                                                                
CO-CHAIR MASEK noted  that there was a hearing with  DNR in which                                                               
Senator Gene  Therriault was present; discussed  were land issues                                                               
and land  swaps that dealt  with Native corporations,  the state,                                                               
and  the federal  government.    She said  she  thought this  was                                                               
timely and important to go forward with.                                                                                        
                                                                                                                                
Number 1987                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM moved  to report SJR 27 out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, SJR  27 was  reported from  the House                                                               
Resources Standing Committee.                                                                                                   
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 1:34 p.m.                                                                 

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