03/31/2008 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SJR17 | |
| SB229 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 17 | TELECONFERENCED | |
| += | SB 229 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 31, 2008
1:36 p.m.
MEMBERS PRESENT
Representative Craig Johnson, Co-Chair
Representative Anna Fairclough
Representative Bob Roses
Representative Paul Seaton
Representative Peggy Wilson
Representative Bryce Edgmon
Representative David Guttenberg
Representative Scott Kawasaki
MEMBERS ABSENT
Representative Carl Gatto, Co-Chair
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 17
Urging the United States Congress to provide a means for
consistently sharing, on an ongoing basis, revenue generated
from oil and gas development on the outer continental shelf with
all coastal energy-producing states to ensure that those states
develop, support, and maintain necessary infrastructure and
preserve environmental integrity.
- MOVED SJR 17 OUT OF COMMITTEE
SENATE BILL NO. 229
"An Act relating to the Tanana Valley State Forest and to
assignment of certain forest land to the Minto Flats State Game
Refuge; and providing for an effective date."
- MOVED SB 229 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SJR 17
SHORT TITLE: OFFSHORE OIL & GAS REVENUE
SPONSOR(s): SENATOR(s) WIELECHOWSKI
02/19/08 (S) READ THE FIRST TIME - REFERRALS
02/19/08 (S) RES
03/01/08 (S) RES AT 11:00 AM BUTROVICH 205
03/01/08 (S) -- MEETING CANCELED --
03/14/08 (S) RES AT 3:30 PM BUTROVICH 205
03/14/08 (S) Moved SJR 17 Out of Committee
03/14/08 (S) MINUTE(RES)
03/15/08 (S) RES AT 11:00 AM BUTROVICH 205
03/15/08 (S) -- MEETING CANCELED --
03/17/08 (S) RES RPT 6DP
03/17/08 (S) DP: HUGGINS, WIELECHOWSKI, WAGONER,
GREEN, MCGUIRE, STEVENS
03/18/08 (S) TRANSMITTED TO (H)
03/18/08 (S) VERSION: SJR 17
03/19/08 (H) READ THE FIRST TIME - REFERRALS
03/19/08 (H) RES, FIN
03/28/08 (H) RES AT 1:00 PM BARNES 124
03/28/08 (H) -- MEETING CANCELED --
03/31/08 (H) RES AT 1:00 PM BARNES 124
BILL: SB 229
SHORT TITLE: TANANA VALLEY FOREST/MINTO FLATS REFUGE
SPONSOR(s): SENATOR(s) THOMAS
01/16/08 (S) READ THE FIRST TIME - REFERRALS
01/16/08 (S) RES, FIN
02/16/08 (S) RES AT 11:00 AM BUTROVICH 205
02/16/08 (S) Moved SB 229 Out of Committee
02/16/08 (S) MINUTE(RES)
02/19/08 (S) RES RPT 5DP
02/19/08 (S) DP: HUGGINS, WAGONER, GREEN, MCGUIRE,
STEVENS
02/29/08 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/29/08 (S) Scheduled But Not Heard
03/03/08 (S) FIN RPT 5DP 2NR
03/03/08 (S) DP: STEDMAN, ELTON, THOMAS, DYSON,
HUGGINS
03/03/08 (S) NR: HOFFMAN, OLSON
03/03/08 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/03/08 (S) Moved SB 229 Out of Committee
03/03/08 (S) MINUTE(FIN)
03/12/08 (S) TRANSMITTED TO (H)
03/12/08 (S) VERSION: SB 229
03/13/08 (H) READ THE FIRST TIME - REFERRALS
03/13/08 (H) RES, FIN
03/28/08 (H) RES AT 1:00 PM BARNES 124
03/28/08 (H) -- MEETING CANCELED --
03/31/08 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
SENATOR BILL WIELECHOWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the sponsor of SJR 17.
MICHELLE SYDEMAN, Staff
to Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding SJR 17.
KEVIN BANKS, Acting Director
Central Office
Division of Oil & Gas
Anchorage, Alaska
POSITION STATEMENT: Supported SJR 17 on behalf of the Palin
Administration.
SENATOR JOE THOMAS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the sponsor of SB 229.
MARTHA FREEMAN, Forest Resources Program Manager
Director's Office
Division of Forestry
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding SB 229.
ACTION NARRATIVE
CO-CHAIR CRAIG JOHNSON called the House Resources Standing
Committee meeting to order at 1:36:09 PM. Representatives
Seaton, Roses, Guttenberg, Edgmon, and Johnson were present at
the call to order. Representatives Kawasaki, Fairclough, and
Wilson arrived as the meeting was in progress.
SJR 17-OFFSHORE OIL & GAS REVENUE
1:36:19 PM
CO-CHAIR JOHNSON announced that the first order of business
would be SENATE JOINT RESOLUTION NO. 17, Urging the United
States Congress to provide a means for consistently sharing, on
an ongoing basis, revenue generated from oil and gas development
on the outer continental shelf with all coastal energy-producing
states to ensure that those states develop, support, and
maintain necessary infrastructure and preserve environmental
integrity.
SENATOR BILL WIELECHOWSKI, Alaska State Legislature, sponsor of
SJR 17, presented the following testimony:
This resolution calls on Congress to provide Alaska
and other coastal states with a fair share of revenue
from oil and gas leasing and development in the Outer
Continental Shelf [OCS]. As you know, [under] the
Mineral Lands Leasing Act of 1920 ... the federal
government shares with the states 50 percent of
revenue generated from mineral production on federal
lands within each state's boundaries. The shared
mineral revenue is distributed to the states
automatically, outside of any budget process.
Unfortunately, there is no comparable authority for
the federal government to automatically share revenue
from oil and gas activities occurring six miles or
more offshore with adjacent coastal states. For years
coastal states have argued that they deserve a share
of OCS revenues because they provide the
infrastructure that supports offshore operations and
bear the environmental risks of offshore development.
On several occasions Congress has recognized this
vital contribution and has created revenue sharing
programs, most of which have been temporary or only
extended to a handful of states. ... Under the most
recent example the federal government agreed to give
Alabama, Louisiana, Mississippi, and Texas 37.5
percent of revenue from oil and gas leasing and
development in newly opened federal waters in the Gulf
of Mexico. This act is expected to distribute more
than $60 billion to those four states over the next
twenty-five years. Alaska was excluded from this
program despite the efforts of our congressional
delegation. This resolution supports the position
that all coastal states with adjacent OCS development
should receive on a regular and ongoing basis a fair
share of revenue from OCS activities as compensation
and reward for their contribution to the nation's
energy infrastructure. Since statehood oil and gas
activities from Alaska's Outer Continental Shelf have
generated almost $5 billion for the federal
government. This does not include the $2.6 billion
the federal government earned in the last Chukchi Sea
sale. If the revenue sharing program, like the one
that is currently in place in the Gulf of Mexico, had
been in place back in February [2008] when the sale
took place, Alaska would have stood to gain $975
million from the sale alone. And more leasing and
development are likely to occur in the future as two-
thirds of the nation's Outer Continental Shelf is off
the coast of Alaska with as much as 55 billion barrels
of technically recoverable oil and 280 trillion cubic
feet of technically recoverable gas. The resolution
has the support of Alaska's congressional delegation,
the administration, and those coastal communities most
affected by offshore oil and gas development and I
would urge your support.
1:39:45 PM
REPRESENTATIVE EDGMON understood that U.S. Senator Jeff Bingaman
[Chair, Energy and Natural Resources Committee] does not support
this revenue sharing. What are the prospects of revenue sharing
actually happening, he asked.
SENATOR WIELECHOWSKI related that U.S. Senator Ted Stevens is
urging this resolution and thinks it is important. Senator
Wielechowski said it is his understanding, as well, that Senator
Bingaman is not supportive of any OCS revenue sharing, but that
Senator Bingaman has also stated he would not oppose someone
else trying to push the issue. Senator Wielechowski understood
that U.S. Senator Max Baucus is interested in opening up this
revenue sharing to other states, including Alaska. So, it is a
challenge, but there are prospects of it happening. From the
fundamental standpoint of fairness, there is really no fair
reason why Alaska should not get a share of the revenue when
four other states are receiving it.
SENATOR WIELECHOWSKI, in further response to Representative
Edgmon, explained that the 50 percent of revenue addressed by
the first whereas in the bill [page 1, lines 6-8] is from
mineral production on federal land within the state's
boundaries. Within zero to three miles the states get a small
amount of compensation, but past six miles the states get
nothing. Because the vast majority of the Chukchi Sea sales
were beyond six miles, Alaska got nothing.
1:42:15 PM
REPRESENTATIVE WILSON asked how far offshore the programs go for
those states that do receive the revenue sharing.
SENATOR WIELECHOWSKI responded that in the Chukchi Sea some of
the sales were sixty miles out, possibly more. He deferred to
his staff person, Ms. Sydeman.
MICHELLE SYDEMAN, Staff to Senator Bill Wielechowski, Alaska
State Legislature, said she believes the revenue sharing
programs go out to the 200 mile limit, which is the limit that
defines the federal OCS.
1:43:05 PM
REPRESENTATIVE SEATON inquired whether any portion of SJR 17
would apply to the extended jurisdiction included in [HJR 39]
which urges the U.S. to ratify the Law of the Sea Treaty.
MS. SYDEMAN replied she has 10 years of OCS discussions and she
is not familiar with any OCS revenue sharing program that looks
beyond the 200 mile limit. She said she imagines the Law of the
Sea applies to those waters that are not within the jurisdiction
of any nation.
1:44:10 PM
KEVIN BANKS, Acting Director, Central Office, Division of Oil &
Gas, stated that the [Palin] Administration supports such a
resolution. It is only fair that Alaska receive the same kind
of treatment as Texas, Louisiana, Mississippi, and Alabama,
especially given the kinds of impacts that will fall on the
rural Alaska communities adjacent to the OCS. The major
industrialization of oil and gas development will have a huge
impact on those communities.
1:45:14 PM
REPRESENTATIVE SEATON asked whether there is any mechanism for
looking at the differential benefit to the state should a gas
line be built and there are bids from OCS or no revenue to the
state that would displace gas bids that would be applicable from
state or federal lands.
MR. BANKS said the appropriate way to think about this is that
the development for areas like the Beaufort Sea and Chukchi Sea
is still fairly immature. So, the state would presumably move
gas through a gas pipeline first. It is also a matter of the
cost of development - the cheaper onshore gas would likely reach
the pipeline before offshore gas. He said he is not sure the
state needs to be concerned about displacement of state gas
insofar as how OCS gas would line up with the state's. It
involves a certain amount of guess work. If a very large
project were to develop in the Chukchi Sea for gas, that would
be self supporting and meet needs for gas into some gas pipeline
onshore and, under current rules, Alaska would get no revenue
from it. However, it would also string along a bunch of onshore
projects that may, at the moment, be too small to reach the
pipeline and from which the state would share in 50 percent of
the revenue. In general, he said, OCS gas would help a gas
pipeline project, but Representative Seaton is correct that the
state would get a lot less revenue for it.
1:47:58 PM
REPRESENTATIVE SEATON inquired whether there is anything that
would prevent a producer owning both offshore and onshore leases
and owning capacity in the gas line from substituting offshore
gas, for which the state would get no royalty or production tax,
for onshore gas.
MR. BANKS answered no, there probably is not any mechanism at
the Federal Energy Regulatory Commission (FERC) or the financing
of the pipeline that would obligate a producer to produce its
onshore gas prior to its offshore gas.
1:49:02 PM
REPRESENTATIVE SEATON surmised that receiving a share of
offshore revenues would provide a potential benefit to the state
and be one more reason for going forward with the gas pipeline.
The revenue sharing would at least eliminate the concern that
the state would do all the work and not get any of the benefit.
MR. BANKS said correct, it would level the playing field.
1:50:17 PM
CO-CHAIR JOHNSON closed public testimony after ascertaining that
no one else wished to testify.
REPRESENTATIVE ROSES moved to report SJR 17 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, SJR 17 was reported from the
House Resources Standing Committee.
The committee took an at-ease from 1:51 p.m. to 1:53 p.m.
SB 229-TANANA VALLEY FOREST/MINTO FLATS REFUGE
1:53:37 PM
CO-CHAIR JOHNSON announced that the next order of business
would be SENATE BILL NO. 229, "An Act relating to the
Tanana Valley State Forest and to assignment of certain
forest land to the Minto Flats State Game Refuge; and
providing for an effective date."
SENATOR JOE THOMAS, Alaska State Legislature, sponsor of SB
229, spoke from the following written sponsor statement
[original punctuation provided]:
Senate Bill 229 amends the boundaries of the Tanana
Valley State Forest (TVSF) to correct errors in legal
descriptions, reflect updated land status, and to
better match the management intent for the Forest.
This is done by adding and deleting boundary
references to the legal descriptions in statute.
These changes result in a net increase to the state
forest of approximately 40,000 acres. SB 229 also
moves approximately 4,300 acres from the state to the
Minto Flats State Game Refuge.
In 1983 the Legislature created the 1.8 million-acre
Tanana Valley State Forest that stretches from Manley
to Tok. The forest is open to mining, gravel
extraction, oil and gas leasing, and grazing. The
Department of Natural Resources manages the state
forests for a sustained yield of these resources, with
the primary purpose of timber management (AS
41.17.200). The Bonanza Creek Experimental Forest, a
12,400-acre area dedicated to forestry research, is
also located within the state forest.
State forests provide fish and wildlife habitat, clean
water, opportunities for recreation and tourism, and
minerals. In addition to the management of these
resources, the Tanana Valley State Forest offers many
recreational opportunities including hunting, fishing,
trapping, camping, hiking, dog mushing, cross-country
skiing, wildlife viewing, snow machining, gold
panning, boating, and berry-picking.
In 1996, the division updated the Tanana Valley State
Forest Management Plan and established a citizens'
advisory committee. The 12-member citizen's advisory
committee, representing a variety of state forest
users, actively participates in forest planning in the
Tanana Basin. This entity has endorsed the
recommendations on management of the forest and has
carefully crafted the changes in a manner that
resulted in support from al affected land users and
owners.
SB 229 is supported by the Alaska State Forest
Association, the Fairbanks Economic Development
Corporation, hunting and recreation groups as well as
all surrounding land owners.
Please join me in amending the Tanana Valley State
Forest to better align with its original intent and
support the passage of Senate Bill 229.
1:56:43 PM
REPRESENTATIVE ROSES inquired whether there is currently a
permitting process or fee structure that would go into place.
SENATOR THOMAS responded no, this is open land, unless there are
some specific recreational use areas where there are charges.
So, there are no fees.
SENATOR THOMAS, in response to Co-Chair Johnson, reiterated that
SB 229 would result in a 40,000 acre [net] increase to the state
forest. It does not change any designations or any uses of the
land other than the part that is put into the Minto Flats State
Game Refuge, and that is pretty much all open as well.
1:57:53 PM
CO-CHAIR JOHNSON asked what happens to the land and what type of
designation is the deleted land.
MARTHA FREEMAN, Forest Resources Program Manager, Director's
Office, Division of Forestry, Department of Natural Resources,
explained that 4,000 acres would be added to the refuge and the
remaining lands [300 acres] would be state public domain land
managed under the Tanana Basin Area Plan. The designations on
most of these are for wildlife habitat and public recreation.
CO-CHAIR JOHNSON inquired whether this would exclude any
traditional uses on the land, such as hunting and fishing, that
were previously allowed under state forest designation.
MS. FREEMAN replied that the generally allowed uses on those
lands will not change.
1:59:05 PM
CO-CHAIR JOHNSON opened public testimony.
REPRESENTATIVE EDGMON asked what the difference is between a
state forest and a state game refuge.
MS. FREEMAN answered that legislatively designated state forest
keeps the land in public ownership so it is not available for
land disposal or sale to private interests, but it can be leased
or permitted for other uses. While managed for multiple use, it
is clear that commercial forest management is part of the use
for the state forest.
2:00:02 PM
REPRESENTATIVE EDGMON inquired whether these different
categories in state statute have a different meaning under land
management plans.
MS. FREEMAN said each has its own special legislative
designation, so first of all the legislature would commit the
land to a particular use. When state forests are established,
the Division of Forestry develops a specific management plan for
each state forest.
REPRESENTATIVE EDGMON surmised the Tanana Valley State Forest
Management Plan would not spill over into the [Minto Flats
State] Game Refuge.
MS. FREEMAN responded correct, there is a separate management
plan for the Minto Flats State Game Refuge.
2:00:54 PM
REPRESENTATIVE SEATON directed attention to the yellow blocks,
12A and 13B, on the Tanana Valley State Forest Management Plan
map. What are the reasons for changing those lands from a state
forest designation to undesignated, he asked.
MS. FREEMAN said the three parcels farthest to the southeast are
wetland or muskeg areas without much forest potential. The
fourth parcel in the northern end is high elevation land that
also does not have much forest potential. Regarding the other
areas, there was a drafting error in the original bill where two
townships were flipped - originally the western township was
supposed to be included and the eastern township was not - so
this corrects that error.
2:02:07 PM
REPRESENTATIVE SEATON inquired whether any of the deleted
parcels are being actively pursued for some other usage.
MS. FREEMAN replied no. The three parcels colored brown [on the
map] are the ones that are wetland and proposed to be added to
the Minto Flats State Game Refuge and they do not have
commercial forestry potential. The other parcel is along the
Chatinika River corridor and it is intensively used for public
recreation and already has many private inholdings.
2:02:46 PM
CO-CHAIR JOHNSON asked whether the no-net-loss of wetlands
policy will apply to removing these wetlands from the state
forest.
MS. FREEMAN answered no, the wetlands are still being retained
in state ownership and there is no development proposal. So,
there is no change to their status in terms of wetland banking
or mitigation.
2:03:29 PM
REPRESENTATIVE SEATON noted that the parcel labeled 4B, proposed
for deletion from the state forest, has a fairly high usage and
some inholdings. He understood the rest of that area could be
available for disposal after it is out of the state forest. He
said he wants to make sure that any disposal of those lands is
through a full and open public process and surmised there would
be no preferential ties.
MS. FREEMAN said correct. There is no presumption that these
parcels are available for disposal. In fact, none of the
parcels coming out of the state forest are classified as
settlement lands, they all happen to be wildlife habitat or
public recreation.
2:05:03 PM
REPRESENTATIVE ROSES inquired whether expansion of Alaska
Railroad spur lines to military training sites could affect any
of the areas in SB 229.
MS. FREEMAN responded there is potential for rail extension to
improve the access of some state lands in terms of commercial
potential for transporting timber resources. However, she does
not know that it goes through any of the parcels currently
proposed for a change in status. In further response to
Representative Roses, Ms. Freeman affirmed that the change in
status would not prevent the railroad from going through any of
those parcels. The legislation that establishes the forest
makes it clear that transportation is one of the uses for which
it is established.
2:06:26 PM
CO-CHAIR JOHNSON closed public testimony after ascertaining that
no one else wished to testify.
CO-CHAIR JOHNSON stated he is not big on creating more park
lands and tying up resources, so he does not have a problem with
SB 229 because it would not minimize development.
REPRESENTATIVE WILSON moved to report SB 229 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, SB 229 was reported out of the
House Resources Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:08 p.m.
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