02/21/2003 01:03 PM House RES
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ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 21, 2003
1:03 p.m.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Beverly Masek, Vice Chair
Representative Carl Gatto
Representative Cheryll Heinze
Representative Kelly Wolf
Representative David Guttenberg
MEMBERS ABSENT
Representative Hugh Fate, Co-Chair
Representative Bob Lynn
Representative Beth Kerttula
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 4
Urging the United States Congress to pass legislation to open
the coastal plain of the Arctic National Wildlife Refuge,
Alaska, to oil and gas exploration, development, and production.
- MOVED SJR 4 OUT OF COMMITTEE
HOUSE BILL NO. 86
"An Act relating to permits issued by the state."
- FAILED TO MOVE CSHB 86 (RES) OUT OF COMMITTEE
HOUSE BILL NO. 16
"An Act amending the standards applicable to determining
whether, for purposes of the Alaska Stranded Gas Development
Act, a proposed new investment constitutes a qualified project,
and repealing the deadline for applications relating to the
development of contracts for payments in lieu of taxes and for
royalty adjustments that may be submitted for consideration
under that Act; and providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS ACTION
BILL: SJR 4
SHORT TITLE:ENDORSING ANWR LEASING
SPONSOR(S): SENATOR(S) WAGONER
Jrn-Date Jrn-Page Action
01/21/03 0013 (S) READ THE FIRST TIME -
REFERRALS
01/21/03 0013 (S) RES
01/27/03 0064 (S) COSPONSOR(S): OLSON, STEVENS
B, HOFFMAN
01/27/03 0064 (S) COWDERY, GREEN
01/29/03 0077 (S) COSPONSOR(S): FRENCH
02/03/03 (S) RES AT 3:30 PM BUTROVICH 205
02/03/03 (S) MINUTE(RES)
02/05/03 0118 (S) RES RPT 5DP 1DNP 1NR
02/05/03 0118 (S) DP: OGAN, STEVENS B, SEEKINS,
WAGONER,
02/05/03 0118 (S) DYSON; DNP: LINCOLN; NR:
ELTON
02/05/03 0118 (S) FN1: ZERO(DNR); FN2 ZERO(REV)
02/07/03 0134 (S) RULES TO CALENDAR 2/7/2003
02/07/03 0134 (S) READ THE SECOND TIME
02/07/03 0134 (S) COSPONSOR(S): TAYLOR, OGAN
02/07/03 0134 (S) ADVANCED TO THIRD READING
UNAN CONSENT
02/07/03 0134 (S) READ THE THIRD TIME SJR 4
02/07/03 0134 (S) PASSED Y15 N1 E4
02/07/03 0134 (S) ELTON NOTICE OF
RECONSIDERATION
02/10/03 0150 (S) RECON TAKEN UP - IN THIRD
READING
02/10/03 0150 (S) RETURN TO SECOND FOR AM 1
UNAN CONSENT
02/10/03 0150 (S) AM NO 1 FAILED Y6 N11 E1 A2
02/10/03 0151 (S) AUTOMATICALLY IN THIRD
READING
02/10/03 0151 (S) PASSED ON RECONSIDERATION Y16
N1 E1 A2
02/10/03 0153 (S) TRANSMITTED TO (H)
02/10/03 0153 (S) VERSION: SJR 4
02/12/03 0180 (H) READ THE FIRST TIME -
REFERRALS
02/12/03 0180 (H) RES
02/12/03 0203 (H) CROSS SPONSOR(S): STOLTZE,
DAHLSTROM,
02/12/03 0203 (H) LYNN
02/21/03 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 86
SHORT TITLE:INJUNCTIONS AGAINST PERMITTED PROJECTS
SPONSOR(S): REPRESENTATIVE(S)FATE
Jrn-Date Jrn-Page Action
02/10/03 0169 (H) READ THE FIRST TIME -
REFERRALS
02/10/03 0169 (H) RES, JUD
02/10/03 0169 (H) REFERRED TO RESOURCES
02/21/03 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
SENATOR THOMAS WAGONER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SJR 4 as sponsor.
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 86 on behalf of Representative
Fate, sponsor.
ACTION NARRATIVE
TAPE 03-6, SIDE A
Number 0001
CO-CHAIR MIKE CHENAULT called the House Resources Standing
Committee meeting to order at 1:03 p.m. Representatives
Chenault, Masek, Gatto, Wolf, and Guttenberg were present at the
call to order. Representative Heinze arrived as the meeting was
in progress. Co-Chair Chenault announced that Co-Chair Fate was
excused.
CO-CHAIR CHENAULT turned the gavel over to Vice Chair Masek.
SJR 4-ENDORSING ANWR LEASING
[Contains discussion pertaining to HJR 6, the companion
resolution]
VICE CHAIR MASEK announced that the first order of business
would be SENATE JOINT RESOLUTION NO. 4, Urging the United States
Congress to pass legislation to open the coastal plain of the
Arctic National Wildlife Refuge, Alaska, to oil and gas
exploration, development, and production.
Number 0134
SENATOR THOMAS WAGONER, Alaska State Legislature, testified as
the sponsor of SJR 4. Senator Wagoner informed the committee
that the intent of SJR 4 is to urge the U.S. Congress to pass
legislation to open the coastal plain of the Arctic National
Wildlife Refuge (ANWR) to oil and gas exploration, development,
and production. He pointed out that this resolution has been
before the legislature at least five times. "This year it looks
like everything is in line and we have a good chance of passing
this item both here and in the United States Congress," he said.
He highlighted that this year a majority of the members of all
of the houses of government involved support the opening of the
coastal plain of ANWR to exploration production. He reminded
members of Governor Murkowski's State of the State address
during which he reaffirmed his belief that [the state] should do
all that it can to open up the coastal plain of ANWR. North
Slope production has been in decline since 1988, and therefore
the development of the coastal plain of ANWR will help provide
stability to national energy demands while increasing Alaska's
revenue stream.
SENATOR WAGONER explained that SJR 4 intends for the new
technology used at the Alpine and Northstar [Units] to be used
on the coastal plain of ANWR in order to enhance environmental
protection. The current area [of the coastal plain of ANWR]
under consideration represents approximately one-half of one
percent of the coastal plain, out of the 19-million-acre refuge.
Of the 19-million-acre refuge, 8 million acres has already been
designated as wilderness. Senator Wagoner concluded by urging
the committee's support of SJR 4.
Number 0348
REPRESENTATIVE GUTTENBERG asked if there is any difference
between HJR 6 [which had been heard in both the House Resources
Standing Committee and House Special Committee on Oil and Gas]
and SJR 4.
SENATOR WAGONER answered that the two resolutions are exactly
the same.
REPRESENTATIVE GATTO inquired as to what objections people might
have with regard to this resolution.
SENATOR WAGONER replied that the main objections would be
environmental objections. There have also been [objections]
stating that there isn't enough oil [in ANWR] to make a
difference. However, Senator Wagoner "begged to differ" because
every bit of oil that can be produced makes a difference. He
noted that often there are objections directed at the amount of
acreage involved in the development.
Number 0456
REPRESENTATIVE GATTO noted that he supports [SJR 4]. He turned
to the objections stating that ANWR is a drop in the bucket and
pointed out that [the coastal plain of ANWR] is good for 20
years of continuous production. Therefore, some of the
objections are easy to address, although there are still some in
the U.S. Senate who object to opening the coastal plain of ANWR.
He asked if these objections are held because of objections from
constituents, or whether there are reasonable objections.
SENATOR WAGONER referred to the objections to opening the
coastal plain of ANWR as the "East Coast mentality." He said
that a million barrels of [oil] a day or whatever is produced
isn't a drop in the bucket. One of the best ways to address the
"drop in the bucket" objection is to ask what would happen to
the West Coast if Alaska closed its pipeline. The total
production from ANWR is unknown until exploration occurs and the
size of the field is determined.
REPRESENTATIVE WOLF recalled Senator Wagoner's mention that the
coastal plain of ANWR could produce 1 million barrels a day. He
pointed out that the U.S. is purchasing 1 million barrels a day
from a man in a country with which the U.S. is prepared to go to
war now. "I wonder who's laughing at us," he remarked.
Therefore, he questioned who could argue [against] the
development of ANWR.
SENATOR WAGONER acknowledged that there is a lot of opposition
to the opening of the coastal plain in ANWR, even in Alaska.
Senator Wagoner pointed out that Alaska is in a fiscal crisis
and if not ANWR, what will the state find to balance the budget,
he asked. Although development in ANWR will take a longer time
coming on line, he reiterated that the state will need the
revenue from the oil coming from ANWR in the near future. "This
is the best time to get that," he said. With regard to the oil
imported from the Middle East, if ANWR can produce 1 million
barrels a day, it will go a long way to help the balance of
payments, he suggested. Anything that is produced is good for
Alaska's economy as well as the United States' economy as a
whole.
Number 0843
VICE CHAIR MASEK determined that there was no one else who
wished to testify. She then expressed her hope that some day a
resolution will be [approved] by Congress so that there will be
the opportunity to open ANWR for development. Vice Chair Masek
closed public testimony and asked if there was any committee
discussion.
VICE CHAIR MASEK, in response to Representative Gatto, explained
that a resolution is sent to the President, members of Congress,
and others in order to inform those parties that the Alaska
State Legislature supports the opening of ANWR. She related her
belief in the importance of sending this resolution every time
it's possible because it illustrates the [legislature's near]
unity on this issue.
Number 0976
CO-CHAIR CHENAULT moved to report SJR 4 out of committee with
individual recommendations and the accompanying fiscal note(s).
He asked for unanimous consent. There being no objection, SJR 4
was reported from the House Resources Standing Committee.
HB 86-INJUNCTIONS AGAINST PERMITTED PROJECTS
Number 1022
VICE CHAIR MASEK announced that the next order of business would
be HOUSE BILL NO. 86, "An Act relating to permits issued by the
state."
Number 1034
JIM POUND, Staff to Representative Hugh Fate, Alaska State
Legislature, presented HB 86 on behalf of Representative Fate,
sponsor. He apologized for Representative Fate's absence and
noted that he was attending a "Korean" gas conference in
Anchorage. Mr. Pound said HB 86 is a simple addition to statute
that assures some closure to the existing permitting process.
He informed the committee that a project must go through an
entire permitting process, which includes: submitting
applications; responding to questions about the application from
the department; taking public testimony on the project;
responding to concerns from public testimony; modifying the
permit request to address the concerns from public and the
department; and, finally, receiving the necessary permits to
begin. In theory, he said, once the [project] has reached that
step, the work process should begin: advertising for needed
services; completing the necessary internal assessments;
determining how many people to employ and what equipment will be
needed; actually going to work; and paying the employee's or
contractors until the project is complete.
MR. POUND said in reality that if "someone or a group of
someones decide that they didn't get their way through the
public process, instead of accepting the existing process and
the ruling, they cry to the administrative or judiciary process
that it's not fair." He said this often results in an
injunction against the project until a legal definition of "not
fair" can be determined, "with an overloaded judiciary and
quasi-judicial system; this sometimes takes years." Mr. Pound
stated that passage of HB 86 "does not define 'not fair'; it
does specify what is required to stop a project, simply, new
scientific information or newly recognized local traditional
knowledge." He concluded that this addition to the existing
statute will be a major step in getting Alaska moving.
Number 1180
REPRESENTATIVE GUTTENBERG said he received a letter from the
Johnsons at Cleary Summit Bed and Breakfast expressing concerns
that [HB 86] would take them out of any process because the
permitting process with the contractor, through the RSA
[reimbursable services agreement], would be complete and in
place, and leave them without an avenue to address the issue.
Is that the intent, he asked.
MR. POUND said no, the intent is that there is a relatively
well-established open permitting process, which normally
includes public testimony on any type of project. He suggested
that the typical involvement time would be during the public
process.
REPRESENTATIVE GUTTENBERG suggested that [HB 86] would eliminate
the commissioner's [authority] to overrule "personnel" in the
case that the commissioner decides against a permit that has
already been issued.
MR. POUND referred to AS. 46.14.280 and suggested that the
commissioner would have the ability to revoke a permit if it is
given in error, and once the permit is revoked, there's no
ability for the individual or the project to continue if it's
being built under a permit.
Number 1396
REPRESENTATIVE GUTTENBERG said the section addressed issues that
the permittee had. He asked what would happen if the permittee
had given all of the correct information and the permit was
denied or accepted with some bad or good information, but the
wrong decision was made. He remarked, "I'm trying to figure out
if that actually did take the commissioner out of the loop, but
I'm not sure I heard the answer in your [response]."
MR. POUND offered his belief that the department and the
commissioner are essentially one and the same in most
definitions of statute. He said the commissioner, ultimately,
would have authority over anyone within of his or her
[divisions] as to whether a permit would be issued or could be
revoked.
Number 1456
REPRESENTATIVE GATTO began discussion of what would become a
conceptual amendment. He offered support for the bill, but
expressed concerns about the word "new" in line 7 and the
determination of the definition of "new". He asked if the word
[in this context] means information that is pertinent but not
previously considered.
MR. POUND said he would consider that an accurate definition and
that the issue was to assure that if a project of a fairly major
scale ended up running across an archeological site of whatever
capacity, that would be considered new, traditional local
knowledge; that was why it was worded that way.
REPRESENTATIVE GATTO said he wants to add the word "pertinent"
because there are lots of things one could run into that might
be new and therefore subject to a challenge, but not pertinent.
He remarked, "A new stream, which is four inches wide or a
couple of bones from something, or who knows." He said he
wanted to make clearer language because he believes he knows the
sponsor's intent and agrees with it, but he hadn't seen it in
time to discuss it with the [sponsor]. He said he would offer
an amendment.
MR. POUND said he didn't think there would be a problem with [an
amendment].
REPRESENTATIVE GUTTENBERG referred to the definition of "new"
and asked, if a water use permit upriver impacts the well of
somebody downstream and it goes dry, whether that is considered
new.
MR. POUND said he would assume that would be new because it
wasn't something that was addressed during the permitting
process. He offered his belief that it would fall under the
ability to revoke administratively without having to go through
the judicial process.
REPRESENTATIVE GUTTENBERG remarked, "Maybe I'll extend that when
Representative Gatto puts in his amendment."
Number 1634
REPRESENTATIVE HEINZE noted her support for the bill, but
expressed concerns about the clarity [of the language] and it's
being open to interpretation. She suggested writing the bill so
that it's very clear.
Number 1681
REPRESENTATIVE GATTO moved to adopt a [conceptual] amendment, as
follows:
Page 1, line 7, after "challenge is based on"
Delete "new"
Insert "information pertinent to but not previously
considered"
[There was discussion about the impact of the amendment on the
sentence structure because the word "information" already exists
in the sentence.]
MR. POUND suggested amending the language to "challenges based
on pertinent new scientific information or new recognized local
...."
REPRESENTATIVE GATTO indicated he was amending the inserted
language to read:
Page 1, line 7, after "challenge is based on"
Insert "pertinent but not previously considered
scientific information or newly recognized local ...."
Number 1766
VICE CHAIR MASEK asked if there was any objection. There being
no objection, the [conceptual] amendment was adopted.
REPRESENTATIVE GUTTENBERG asked if there was anybody from an
agency to speak on some of the scientific aspects of the
permitting.
VICE CHAIR MASEK indicated that there wasn't anybody from the
Alaska Department of Fish and Game or the Department of Natural
Resources [waiting to testify].
REPRESENTATIVE GUTTENBERG said there were some issues he
wouldn't mind addressing concerning habitat or oil and gas that
he would like [the departments to answer].
MR. POUND said he didn't have anything of specific concern with
the bill, but explained that the [Department of Environmental
Conservation (DEC)] was a little concerned at first and wanted
to know why it was attached to its statute. He indicated the
answer is that is where [the bill drafters from the Legislative
Affairs Agency] had determined was the best place to put it; it
is one of the key departments dealing with the permitting
process.
REPRESENTATIVE GUTTENBERG said there were questions that he
would like to ask agency people who are involved in [the
permitting process] about how this actually functions and
examples of where it would work. He remarked, "Sometimes, maybe
there's a bad decision made to deny a permit, and things need to
be done to make sure that gets reversed."
VICE CHAIR MASEK offered her belief that all of the [legal
issues] would be addressed in the next committee of referral,
the House Judiciary Standing Committee.
REPRESENTATIVE GUTTENBERG pointed out that he was not a member
of that committee.
Number 1940
CO-CHAIR CHENAULT moved to report HB 86 [as amended] out of
committee with individual recommendations and the accompanying
fiscal notes. He asked for unanimous consent.
Number 1951
REPRESENTATIVE GUTTENBERG objected.
Number 1998
A roll call vote was taken. Representatives Masek, Wolf, Gatto,
and Chenault voted in favor of reporting HB 86, as amended, from
committee. Representative Guttenberg voted against it.
Therefore [because a majority of the nine-member committee
didn't vote to report the bill from committee], CSHB 86 (RES)
failed to be reported from the House Resources Standing
Committee by a vote of 4-1.
Number 2000
[Although it was announced that [CSHB 86 (RES)] was reported out
of committee, it actually failed to be reported from committee.]
VICE CHAIR MASEK told Representative Guttenberg that the sponsor
probably wouldn't mind providing him with information [relating
to his concerns].
Number 2021
MR. POUND told Representative Guttenberg that [the sponsor]
would be glad to work with him.
REPRESENTATIVE GUTTENBERG said he didn't know what questions he
wanted to ask, and offered his belief that having agency people
[present] to ask questions to clarify a bill or statute, to be
comfortable with all aspects of before it moves on, is something
to be done in committee and not to be passed on or debated or
asked on the floor. He explained that he doesn't mean to slow
the bill down, but he needs to be comfortable with what happens
in understanding the flow, to be sure that all the issues are
addressed before it moves on.
VICE CHAIR MASEK said the bill had been posted and suggested if
the department had trouble with the bill, it would have
[contacted] the bill sponsor. She said she understood his
concerns and expressed hope that those issues would be resolved
before the bill gets to the House floor.
[CSHB 86 (RES) failed to move from committee and thus remains in
the possession of the House Resources Standing Committee.]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 1:33 p.m.
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