Legislature(2009 - 2010)BUTROVICH 205

04/01/2009 03:30 PM Senate RESOURCES


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03:35:24 PM Start
03:35:40 PM Governor's Appointments
04:18:22 PM SB150
04:51:06 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 150 EMERGING ENERGY TECHNOLOGY FUND TELECONFERENCED
Heard & Held
+ Confirmation Hearings: TELECONFERENCED
Big Game Commercial Services Board
Alaska Oil & Gas Conservation Commission
Commercial Fisheries Entry Commission
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 1, 2009                                                                                          
                           3:35 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Bill Wielechowski, Co-Chair                                                                                             
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Hollis French                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Gary Stevens                                                                                                            
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Governor's appointments:                                                                                                      
 Commercial Fisheries Entry Commission - Judge Peter Froehlich                                                                  
 Alaska Oil And Gas Conservation Commission - John Norman                                                                       
 Big Game Commercial Services Board - Dirk Nickisch, Betty J                                                                    
 "BJ" Schmitz, Paul E. Johnson                                                                                                  
     CONFIRMATIONS ADVANCED                                                                                                     
                                                                                                                                
SENATE BILL NO. 150                                                                                                             
"An Act establishing an emerging energy technology fund."                                                                       
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 150                                                                                                                  
SHORT TITLE: EMERGING ENERGY TECHNOLOGY FUND                                                                                    
SPONSOR(s): SENATOR(s) MCGUIRE                                                                                                  
                                                                                                                                
03/13/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/09       (S)       ENE, RES, FIN                                                                                          
03/26/09       (S)       ENE AT 11:00 AM BUTROVICH 205                                                                          
03/26/09       (S)       Heard & Held                                                                                           
03/26/09       (S)       MINUTE(ENE)                                                                                            
03/27/09       (S)       ENE AT 11:00 AM BUTROVICH 205                                                                          
03/27/09       (S)       Moved SB 150 Out of Committee                                                                          
03/27/09       (S)       MINUTE(ENE)                                                                                            
03/30/09       (S)       ENE RPT   3DP                                                                                          
03/30/09       (S)       DP: MCGUIRE, KOOKESH, WIELECHOWSKI                                                                     
04/01/09       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JUDGE PETER FROEHLICH, Commissioner                                                                                             
Commercial Fisheries Entry Commission (CFEC)                                                                                    
POSITION STATEMENT: Nominee for the Commercial Fisheries Entry                                                                
Commission (CFEC).                                                                                                              
                                                                                                                                
JOHN NORMAN, Commissioner                                                                                                       
Alaska Oil and Gas Conservation Commission (AOGCC)                                                                              
POSITION STATEMENT: Nominee for the Alaska Oil and Gas                                                                        
Conservation Commission (AOGCC).                                                                                                
                                                                                                                                
DIRK NICKISCH                                                                                                                   
Coldfoot, AK                                                                                                                    
POSITION STATEMENT: Nominee for the Big Game Commercial Services                                                              
Board.                                                                                                                          
                                                                                                                                
BETTY JO "BJ" SCHMITZ, Member                                                                                                   
Big Game Commercial Services Board                                                                                              
POSITION STATEMENT: Nominee for the Big Game Commercial Services                                                              
Board.                                                                                                                          
                                                                                                                                
PAUL E. JOHNSON, Member                                                                                                         
Big Game Commercial Services Board                                                                                              
POSITION STATEMENT: Nominee for the Big Game Commercial Services                                                              
Board.                                                                                                                          
                                                                                                                                
SENATOR MCGUIRE                                                                                                                 
State Capital Bldg.                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 150.                                                                                        
                                                                                                                                
TREVOR FULTON                                                                                                                   
Staff to Senator McGuire                                                                                                        
State Capital Bldg.                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on the CS to SB 150 for the                                                                     
sponsor.                                                                                                                        
                                                                                                                                
LARRY PERSILY                                                                                                                   
Staff to Representative Hawker                                                                                                  
State Capital Bldg.                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 150.                                                                                         
                                                                                                                                
JASON MEYER                                                                                                                     
Alaska Denali Commission                                                                                                        
POSITION STATEMENT: Supported SB 150.                                                                                         
                                                                                                                                
PAUL KENDALL, representing himself                                                                                              
POSITION STATEMENT: Commented on energy and personnel issues.                                                                 
                                                                                                                                
KATHERINE KEITH                                                                                                                 
Alaska Center for Energy and Power (ACEP)                                                                                       
POSITION STATEMENT: Supported SB 150.                                                                                         
                                                                                                                                
D. DOUGLAS JOHNSON, Director                                                                                                    
Alaska Projects                                                                                                                 
Ocean Renewable Power                                                                                                           
POSITION STATEMENT: Strongly supported SB 150.                                                                                
                                                                                                                                
KATE TROLL, Executive Director                                                                                                  
Alaska Conservation Alliance (ACA)                                                                                              
POSITION STATEMENT: Supported SB 150.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:35:24 PM                                                                                                                    
                                                                                                                                
CO-CHAIR BILL  WIELECHOWSKI called the Senate  Resources Standing                                                             
Committee meeting  to order at 3:35  p.m. Present at the  call to                                                               
order were Senators Huggins, Wagoner, French, and Wielechowski.                                                                 
                                                                                                                                
3:35:40 PM                                                                                                                    
^Governor's Appointments                                                                                                        
Governor's Appointments                                                                                                         
                                                                                                                                
CO-CHAIR WIELECHOWSKI  announced that  the committee  would first                                                               
take up the Governor's appointees.                                                                                              
                                                                                                                                
JUDGE  PETER  FROEHLICH,  nominee for  the  Commercial  Fisheries                                                               
Entry    Commission   (CFEC),    reviewed    his   history    and                                                               
qualifications. He  said this  is a reappointed  to the  CFEC for                                                               
him and he began there in August  of 2005. He came to Alaska from                                                               
the Upper Midwest  in 1970; he worked  construction in Anchorage,                                                               
and  crab  fished and  tendered  salmon  out of  Kodiak.{  Having                                                               
little to do  in the winter in  those days, he came  to Juneau to                                                               
work for the session in 1973 and  made it his home. Since then he                                                               
has  worked in  this building  for 16  more sessions  moving from                                                               
downstairs  in  the legislative  mail  room  to upstairs  in  the                                                               
Attorney  General's  Office,  stopping  at  the  House  Judiciary                                                               
Committee  and House  Research where  he  did some  work for  the                                                               
CFEC. During the 80s he fished  as a commercial troller for three                                                               
years.  The longest  position he  held was  16 years  as district                                                               
court judge  here in  Juneau covering  all of  Northern Southeast                                                               
Alaska.                                                                                                                         
                                                                                                                                
Since  starting  at the  Commission  he  has  taken a  couple  of                                                               
administrative law  courses at the  Judicial College,  the second                                                               
one as part of  the faculty. He serves on a  couple boards in the                                                               
community;  he  is  on  one  statewide  board  for  Partners  for                                                               
Progress,  a  non-profit  organization  promoting  and  operating                                                               
therapeutic  courts.   Judge  Froehlich   said  he   is  uniquely                                                               
qualified  to serve  on the  Commission because  of his  combined                                                               
work experiences in several regions of the state.                                                                               
                                                                                                                                
3:39:25 PM                                                                                                                    
JUDGE FROEHLICH  said one of the  Commission's biggest priorities                                                               
has been  to reduce  its adjudication  case load,  and he  used a                                                               
graph that indicated  cases were down from 250 down  to 88. Those                                                               
efforts are ongoing.                                                                                                            
                                                                                                                                
He  said they  also  have  been able  to  eliminate general  fund                                                               
appropriations  completely for  their  operations as  of FY  '08,                                                               
because  of  '05 legislation  that  allowed  them to  restructure                                                               
their fees  by raising  the maximum  and creating  more different                                                               
categories. As a result they generate  about $6 million a year in                                                               
fees; $4  million of that  funds the Commission's  operations. Of                                                               
the  balance, $400,000  goes  to the  Fishermen's  Fund to  cover                                                               
injuries  to  fishermen  and  about  $1.6  million  goes  to  the                                                               
Division  of Commercial  Fisheries  to  partially fund  fisheries                                                               
management.                                                                                                                     
                                                                                                                                
3:39:50 PM                                                                                                                    
SENATOR STEDMAN joined the committee.                                                                                           
                                                                                                                                
JUDGE FROEHLICH  said they have  been successful in  holding down                                                               
their costs  and have had  no increase in their  operating budget                                                               
since FY'07 and  no new positions since FY'04.  Finally, he said,                                                               
they are  working hard to get  into the computer age  so they and                                                               
fishermen can  do their data  work faster and better.  An example                                                               
of this is the E-landings program  on which they are working with                                                               
the Division  of Commercial  Fisheries and  NMFS to  convert fish                                                               
tickets to a computerized system  for instance data capture. They                                                               
do have  a capital  budget request for  $138,000 for  the machine                                                               
that would barcode permit cards to enable that to work.                                                                         
                                                                                                                                
3:41:56 PM                                                                                                                    
More immediately, in January of  this year the Commission started                                                               
an  on-line  licensing  program called  "Limited  Entry  on  Line                                                               
(LEON)." Over 1,300 people have used  it so far. (There are about                                                               
20,000  permit  renewals  and 10,000  vessel  licenses.)  Interim                                                               
permits and  new vessel  licenses can use  this program  as well.                                                               
Kiosks for  that purpose  are now  in Juneau,  Anchorage, Kodiak,                                                               
Sitka, Cordova, and Homer. More  are being installed in Ketchikan                                                               
and Craig this month.                                                                                                           
                                                                                                                                
3:42:46 PM                                                                                                                    
In closing,  he mentioned that  their website is  a "much-praised                                                               
research  tool" for  fishermen and  agencies alike.  It gets  3-4                                                               
million hits a year. The  Commission's annual report comes out on                                                               
line now, too.                                                                                                                  
                                                                                                                                
3:43:13 PM                                                                                                                    
CO-CHAIR MCGUIRE joined the committee.                                                                                          
                                                                                                                                
3:43:42 PM                                                                                                                    
SENATOR WAGONER  asked how  long it  would take  to get  a vessel                                                               
license to Kenai.                                                                                                               
                                                                                                                                
MR. FROEHLICH  replied that it's in  the mail the same  day it is                                                               
keyed in.                                                                                                                       
                                                                                                                                
SENATOR FRENCH thanked him for  putting his name forward to serve                                                               
again.                                                                                                                          
                                                                                                                                
3:44:24 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
                                                                                                                                
SENATOR HUGGINS asked his number one challenge in this position.                                                                
                                                                                                                                
JUDGE  FROEHLICH replied  getting rid  of the  adjudicated cases;                                                               
some of  them had been pending  in various levels of  the process                                                               
for decades.  It's not easy. "The  doggy files are the  ones that                                                               
you look at the last."                                                                                                          
                                                                                                                                
CO-CHAIR WIELECHOWSKI said his credentials are very impressive.                                                                 
                                                                                                                                
3:46:16 PM                                                                                                                    
SENATOR WAGONER  asked how much  of the caseload is  dealing with                                                               
interim use permits.                                                                                                            
                                                                                                                                
MR. FROEHLICH  answered that  everyone who  has a  pending appeal                                                               
can get an interim use permit  and keep fishing even if they have                                                               
been denied a permit.                                                                                                           
                                                                                                                                
3:47:12 PM                                                                                                                    
SENATOR FRENCH  moved to  forward Judge  Froehlich's name  to the                                                               
full body. There were no objections and it was so ordered.                                                                      
                                                                                                                                
CO-CHAIR WIELECHOWSKI  announced the AOGCC nominee,  John Norman,                                                               
to be before the committee.                                                                                                     
                                                                                                                                
3:47:30 PM                                                                                                                    
JOHN  NORMAN,  Commissioner,  Alaska  Oil  and  Gas  Conservation                                                               
Commission (AOGCC),  said he  is a 40-plus  year resident  of the                                                               
State of Alaska,  and he originally came up with  an oil company.                                                               
He was recruited into the Department  of Law at that time and was                                                               
legal counsel to this Commission  and to the Alaska Department of                                                               
Natural  Resources  for a  couple  of  years. Following  that  he                                                               
practiced privately for  a number of years  and worked throughout                                                               
the state from Ketchikan to  Barrow with Native Corporations, oil                                                               
industry, timber,  public land law,  and a  good deal of  oil and                                                               
gas law.  Five years ago  he was  appointed to the  Commission to                                                               
fill out a  vacancy. During that time he has  worked hard to make                                                               
positive  contributions to  the Commission.  It is  respected not                                                               
just by industry here, but across  the United States for having a                                                               
good  regulatory structure  - fair,  but tough,  regulations. The                                                               
Commission's  responsibility  is  prevention   of  the  waste  of                                                               
Alaska's  valuable hydrocarbon  resources and  the protection  of                                                               
correlative rights  - the  right of each  owner to  produce their                                                               
fair share  of that  resource. They also  work to  ensure greater                                                               
ultimate recovery.                                                                                                              
                                                                                                                                
The  Commission is  also charged  with promoting  good oil  field                                                               
practices.   This    translates   into    safety,   environmental                                                               
protection, and  generally good practices  in the oil  fields. It                                                               
administers the federal Underground  Injection Control Program in                                                               
the State  of Alaska in so  far as it pertains  to the production                                                               
of oil  and gas. They  are currently working on  interacting with                                                               
the National  Environmental Protection Agency (NEPA)  with regard                                                               
to carbon  capture and sequestration  (CCS) and the  evolving new                                                               
set of regulations  that will require CO  to  be re-injected into                                                               
                                        2                                                                                       
the ground.                                                                                                                     
                                                                                                                                
3:52:30 PM                                                                                                                    
The  Commission  has  26 staff  including  five  petroleum  field                                                               
inspectors, two  of which who are  on call on the  North Slope at                                                               
all times;  they also have a  presence in the Cook  Inlet (two on                                                               
call  in Nikiski).  They  have implemented  steps  to tighten  up                                                               
their own  statute in  Title 31. With  the tools  the Legislature                                                               
has given them,  they are working on regulations in  the areas of                                                               
safety,  well control,  and things  like that  to make  sure they                                                               
don't have a  "blow out" in any of Alaska's  oil fields. They are                                                               
constantly alert  to the  need to be  responsive to  the industry                                                               
and  to  the  public.  There  is  no  learning  curve  here;  the                                                               
Commission is prepared to take quick action.                                                                                    
                                                                                                                                
The average  turnaround for a  drilling permit is 7-8  days. They                                                               
try not to push  it below that because they don't  want to have a                                                               
performance measure be the cause  of losing quality review of any                                                               
permit.                                                                                                                         
                                                                                                                                
MR. NORMAN said he enjoys the  work; his background is in geology                                                               
and  law. He  believes this  is a  very important  agency and  it                                                               
makes a big  difference to have an agency  that can intelligently                                                               
regulate the industry  that provides most of the  revenue for the                                                               
State  of Alaska.  To his  knowledge things  are generally  going                                                               
fairly smoothly here.                                                                                                           
                                                                                                                                
CO-CHAIR WIELECHOWSKI remarked  that he had been  an attorney for                                                               
40 years; so he qualified as a long-term Alaskan.                                                                               
                                                                                                                                
SENATOR  FRENCH thanked  him for  his service.  He has  a stellar                                                               
resume',  and the  State  of Alaska  is lucky  to  have a  public                                                               
servant like him working for her.                                                                                               
                                                                                                                                
CO-CHAIR MCGUIRE thanked  him for his work through  the years and                                                               
his guidance in getting her arms around oil and gas policy.                                                                     
                                                                                                                                
3:59:12 PM                                                                                                                    
CO-CHAIR MCGUIRE moved  to forward Mr. Norman's name  to the full                                                               
body. There were no objections and it was so ordered.                                                                           
                                                                                                                                
3:59:41 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI announced the  confirmation hearing of Dirk                                                               
Nickisch for the Big Game Commercial Services Board.                                                                            
                                                                                                                                
DIRK NICKISCH, nominee, Big Game  Commercial Services Board, said                                                               
he wants  to preserve the industry  so his kids could  work in it                                                               
if  they want  to.  He and  his  wife  own a  small  air taxi  in                                                               
Coldfoot and  a have a cabin  in Fairbanks. His is  interested in                                                               
this  position because  he is  seeing  increasing conflicts  with                                                               
both transporters  and guides  and other  hunters and  users. His                                                               
business is in Coldfoot and they have a cabin in Fairbanks.                                                                     
                                                                                                                                
SENATOR FRENCH  asked if this is  his first time serving  on this                                                               
board and if he has the time available.                                                                                         
                                                                                                                                
MR. NICKISCH replied yes and yes.                                                                                               
                                                                                                                                
SENATOR  FRENCH asked  if  his  air taxi  service  is mostly  for                                                               
hunters and hikers in the Coldfoot area.                                                                                        
                                                                                                                                
MR. NICKISCH answered yes.                                                                                                      
                                                                                                                                
SENATOR FRENCH asked where the meetings for this board are held.                                                                
                                                                                                                                
MR. NICKISCH replied that they  alternate; the spring meeting was                                                               
in Fairbanks, the winter meeting last year was in Anchorage.                                                                    
                                                                                                                                
SENATOR  FRENCH asked  for more  information on  what this  board                                                               
does.                                                                                                                           
                                                                                                                                
MR.  NICKISCH   replied  that  the  board   reviews  questionable                                                               
applications and  does some adjudication.  It also  consults with                                                               
the  DNR about  guide use  areas on  DNR property  and additional                                                               
regulations to control user conflicts with transporters.                                                                        
                                                                                                                                
SENATOR  HUGGINS asked  if  he is  in  the seat  for  one of  the                                                               
transporters and who is in the other.                                                                                           
                                                                                                                                
MR. NICKISCH replied  that is correct; there  are two transporter                                                               
seats and Leaf Wilson from Tok has the other one.                                                                               
                                                                                                                                
SENATOR HUGGINS asked what kinds of issues he has bumped into.                                                                  
                                                                                                                                
MR. NICKISCH  replied he  has flown  in a  large number  of areas                                                               
throughout the  state over the  years, and the current  issues in                                                               
his  area are  pretty similar  to issues  in other  parts of  the                                                               
state in  that they are  seeing huge numbers of  guides operating                                                               
in one area resulting in a  fair amount of conflicts between both                                                               
guides, resident  hunters and other  guides. The other  issue out                                                               
to the  west is the  number of hunters transporters  are dropping                                                               
off  and  conflicts with  both  residents  and particularly  with                                                               
subsistence users.                                                                                                              
                                                                                                                                
SENATOR HUGGINS asked  the difference between an  outfitter and a                                                               
transporter.                                                                                                                    
                                                                                                                                
MR. NICKISCK  answered the line  is really drawn between  a guide                                                               
and  a  transporter.  The transporter  does  not  actually  place                                                               
somebody  in  the field  with  a  client; they  strictly  provide                                                               
transportation services to  people into the field.  There is also                                                               
a  differentiation  between an  air  taxi  and a  transporter.  A                                                               
transporter is a person that on  top of moving the person like an                                                               
air  taxi, he  advertises  for hunting  clientele  and charges  a                                                               
different  fee  schedule  for  hauling that  person  as  well  as                                                               
providing additional information to him about where to hunt.                                                                    
                                                                                                                                
4:05:25 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI  finding   no  further  questions,  closed                                                               
public testimony.                                                                                                               
                                                                                                                                
4:05:39 PM                                                                                                                    
CO-CHAIR  MCGUIRE moved  to forward  Mr. Nickisch's  name to  the                                                               
full body. There were no objections and it was so ordered.                                                                      
                                                                                                                                
4:06:16 PM                                                                                                                    
BETTY JO  "BJ" SCHMITZ, said  she lives  on a farm  between North                                                               
Pole and  Salcha. She has served  on the board for  the past four                                                               
years, has learned  a lot, and would like to  continue on. She is                                                               
a hunter  and has  worked with  the ADF&G  in the  Outdoors Woman                                                               
Program. She  is not a guide  or an outfitter, but  is interested                                                               
in maintaining  good quality hunting experiences  in Alaska while                                                               
maintaining the guiding business, too.                                                                                          
                                                                                                                                
SENATOR FRENCH asked  what she has enjoyed and  not enjoyed about                                                               
serving on the Board.                                                                                                           
                                                                                                                                
MS.  SCHMITZ said  knowing the  guides is  fascinating; the  hard                                                               
part  is  trying  to  understand how  the  regulations  work  and                                                               
finding out how  they affect people. Something that  seems so cut                                                               
and dried on one side affects people in ways you wouldn't know.                                                                 
                                                                                                                                
SENATOR  HUGGINS  asked  how exclusive  guide  areas  affect  her                                                               
board.                                                                                                                          
                                                                                                                                
MS. SCHMITZ  answered that they  have been working on  this issue                                                               
on  state  lands  for  the  past couple  of  years.  The  federal                                                               
properties,  except for  BLM, already  have the  guide use  areas                                                               
allocated. That pushed  a lot of people onto state  land and that                                                               
is what has caused a lot of  conflict in the prime areas. So, DNR                                                               
has been trying figure out a  way to allocate guide areas without                                                               
being exclusive. They  are looking at dividing  the state's guide                                                               
use areas already  on the map into smaller  concession areas, and                                                               
then having a way of competing for those areas.                                                                                 
                                                                                                                                
SENATOR  HUGGINS  asked  what enforcement  measures  are  at  her                                                               
disposal and which ones they actually exercise.                                                                                 
                                                                                                                                
MS. SCHMITZ  replied the  Board can pull  guide licenses  for bad                                                               
enough  situations;  it  can  assess  fines  and  put  people  on                                                               
probation, and it has done all of those things.                                                                                 
                                                                                                                                
4:10:56 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI  found  no further  questions  and  closed                                                               
public testimony.                                                                                                               
                                                                                                                                
CO-CHAIR MCGUIRE moved  to forward Ms. Schmitz' name  to the full                                                               
body. There were no objections and it was so ordered.                                                                           
                                                                                                                                
CO-CHAIR  WIELECHOWSKI announced  Paul E.  Johnson to  be up  for                                                               
confirmation to serve  again on the Big  Game Commercial Services                                                               
Board.                                                                                                                          
                                                                                                                                
PAUL  E. JOHNSON,  nominee, Big  Game Commercial  Services Board,                                                               
said he had been  a guide in Alaska for over  35 years. The state                                                               
has been  good for him; he  believes in the state,  its resources                                                               
and  its future,  and he  will do  the best  he can  to help  the                                                               
guiding and transporting industry move forward.                                                                                 
                                                                                                                                
4:13:06 PM                                                                                                                    
SENATOR STEDMAN  praised Mr.  Johnson's resume'  and said  he had                                                               
done a great professional job during his life.                                                                                  
                                                                                                                                
4:15:20 PM                                                                                                                    
SENATOR HUGGINS  asked where he  got his pilot's  license because                                                               
there aren't enough good days in Juneau to get it there.                                                                        
                                                                                                                                
MR.  JOHNSON  replied  that  he got  his  license  in  Snohomish,                                                               
Washington.                                                                                                                     
                                                                                                                                
4:16:28 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI closed public testimony.                                                                                  
                                                                                                                                
CO-CHAIR MCGUIRE moved to forward  Mr. Johnson's name to the full                                                               
body for  consideration. There were  no objections and it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
SENATOR  STEDMAN  remarked  that  Mr. Johnson  had  been  in  the                                                               
Resources  Committee a  number of  times over  the years  and the                                                               
members  were  taking this  opportunity  to  poke some  Southeast                                                               
humor at him.                                                                                                                   
                                                                                                                                
             SB 150-EMERGING ENERGY TECHNOLOGY FUND                                                                         
                                                                                                                                
CO-CHAIR   WIELECHOWSKI   announced  SB   150   to   be  up   for                                                               
consideration.                                                                                                                  
                                                                                                                                
4:18:22 PM                                                                                                                    
CO-CHAIR MCGUIRE, sponsor of SB  150, said it basically creates a                                                               
fund  for emerging  energy technologies.  It's not  funded within                                                               
the bill, but it is merely a  structure to receive funds or to be                                                               
funded should better times come. It  is set up not as a dedicated                                                               
fund,  but rather  one  that  can receive  funds  should they  be                                                               
available.  It will  be  administered by  the  Alaska Center  for                                                               
Energy and Power.                                                                                                               
                                                                                                                                
She said that emerging energy  technology is an important part of                                                               
Alaska's future  and funds  like this  have provided  seed monies                                                               
end up being an attractive  incentive for new renewable companies                                                               
to come in.  They know it drives the attraction  of grant dollars                                                               
and  the ability  to co-partner  with the  federal government  in                                                               
matching grants.                                                                                                                
                                                                                                                                
CO-CHAIR MCGUIRE  explained that  in recent years  the Department                                                               
of Energy has  offered millions in federal  grants that typically                                                               
require as  low as a  20 percent cost  share at the  state level,                                                               
and  this is  the  kind of  fund that  can  offer those  matching                                                               
dollars.   The   stimulus    package   has   alternative   energy                                                               
opportunities,  and they  are  hoping this  fund  could serve  as                                                               
another mechanism  to leverage and  partner with those  funds, as                                                               
well.                                                                                                                           
                                                                                                                                
One of  the things missing  in alternative energy  development is                                                               
the research  and development dollars  - "the seed part  of where                                                               
some  of these  ideas grow  out  of." When  you look  at the  AEA                                                               
grants that  the Senate  Finance Committee  put into  place, they                                                               
are talking about proven technologies  that are out in the field.                                                               
This fund is  geared toward the research  and development dollars                                                               
that really happen more at the base level.                                                                                      
                                                                                                                                
CO-CHAIR MCGUIRE  stated that at  one point Alaska had  an Alaska                                                               
Science and  Technology Fund  and there is  some impetus  in that                                                               
fund's existence for this bill  although they are different. This                                                               
is targeted specifically at emerging energy technologies.                                                                       
                                                                                                                                
4:22:13 PM                                                                                                                    
The  board  members   have  to  have  a   background  in  energy,                                                               
engineering,  technology  and  science;  it should  be  based  on                                                               
science  and not  politics -  a  complaint when  the Science  and                                                               
Technology  Fund was  being considered.  Some people  thought the                                                               
projects that were approved out  of it were political or regional                                                               
in nature and not necessarily  provable. They also wanted to make                                                               
sure  it was  administered by  an association  that was  separate                                                               
from  the  University in  the  event  that  the University  or  a                                                               
partner  with the  University chose  to  apply for  any of  these                                                               
monies. That  is how she  came up  with Alaska Center  for Energy                                                               
and Power  (ACEP), but it could  be administered out of  a couple                                                               
of other places.                                                                                                                
                                                                                                                                
SENATOR HUGGINS moved to adopt CSSB 150(RES), version E.                                                                        
                                                                                                                                
TREVOR  FULTON,  staff  to  Senator  McGuire,  said  it's  really                                                               
version S.                                                                                                                      
                                                                                                                                
SENATOR  HUGGINS  amended  his  motion  to  adopt  CSSB  150(RES)                                                               
version S. There were no objections and it was so ordered.                                                                      
                                                                                                                                
4:25:25 PM                                                                                                                    
MR. FULTON  explained the changes  in the  version S. He  said it                                                               
incorporated  Senator Wielechowski's  request -  a concern  about                                                               
the possibility  of funding projects  that were a little  too far                                                               
into the  realm of science  fiction. So, language was  added that                                                               
limits   project  eligibility   to   those   that  might   become                                                               
commercially  viable  within  the  next five  years.  The  second                                                               
change  added  a five-member  advisory  committee  - providing  a                                                               
level  of separation  between the  administering  agency and  the                                                               
recipients of the grants.                                                                                                       
                                                                                                                                
SENATOR  FRENCH  asked  regarding ACEP  being  the  administering                                                               
agency  (page  1,  line  12) that  it  is  the  interdisciplinary                                                               
research  unit of  the College  of Engineering  and Mines  at the                                                               
University  of  Alaska,   but  the  idea  was   to  provide  some                                                               
separation between  the University and the  administering unit to                                                               
keep from  any allegations of self-dealing  should the University                                                               
be eligible for one of these grants.                                                                                            
                                                                                                                                
MR. FULTON said  he is correct, and pointed out  language on page                                                               
2, line 28,  through page 3, line 1, which  delineated the makeup                                                               
of  the  advisory   committee  that  has  no   members  from  the                                                               
University - that took care of that issue.                                                                                      
                                                                                                                                
4:27:49 PM                                                                                                                    
He said the  third and final change  in the CS was  to expand the                                                               
definition of eligible applicants  to include both private sector                                                               
and non-profit sector entities. When  the bill was first drafted,                                                               
language  was  borrowed  from  the  Renewable  Energy  Fund  that                                                               
excluded some  entities they  wanted to  include because  that is                                                               
where  these  sorts  of  projects  get a  lot  of  their  in-kind                                                               
partnerships. A  good example would be  Gwen Holdman's geothermal                                                               
energy project  in Chena Hot  Springs. Part of the  equipment was                                                               
donated  by   UTC,  a  large   corporation  that   developed  the                                                               
technology,  but they  gave  it  to her  as  sort  of an  in-kind                                                               
partnership deal.  They did  not want to  exclude those  kinds of                                                               
deals.                                                                                                                          
                                                                                                                                
SENATOR  HUGGINS  asked  for an  example  of  a  quasi-government                                                               
entity.                                                                                                                         
                                                                                                                                
MR.  FULTON   replied  the  University  qualifies   as  a  quasi-                                                               
governmental entity as well as the Alaska Railroad.                                                                             
                                                                                                                                
4:29:46 PM                                                                                                                    
LARRY PERSILY, staff to Representative  Hawker, added that he has                                                               
been  working   on  energy  issues   for  the   legislature,  and                                                               
specifically the stimulus  bill. He offered that  whereas much of                                                               
the focus  of the legislature in  the last few weeks  has been on                                                               
the energy  provisions of  the stimulus bill  - the  State Energy                                                               
Program, the  Energy Efficiency and  Conservation Block  grants -                                                               
those are  funding for off-the-shelf  technology and  home energy                                                               
improvements, not  research and  development money.  However, the                                                               
stimulus bill  also has  funding sources that  deal with  R&D and                                                               
this would be one way for the state "to get into the game."                                                                     
                                                                                                                                
4:31:23 PM                                                                                                                    
SENATOR HUGGINS stated  that the state is doing  all these things                                                               
with energy,  but it doesn't  have an  energy policy. Did  he see                                                               
the need  for an  umbrella policy under  which to  operate before                                                               
they get too many things going?                                                                                                 
                                                                                                                                
MR. PERSILY  said his instructions  were to give  information and                                                               
not opinions,  but he  opined that the  state's energy  policy is                                                               
somewhat diverse.  It has  the Alaska  Energy Authority  with its                                                               
role,   the  Alaska   Housing  Finance   Corporation,  which   is                                                               
technically  designated  by  the  Governor as  the  State  Energy                                                               
Office with  the U.S.  Department of  Energy, the  University has                                                               
offices - and it would behoove  the state to coordinate them with                                                               
in one form or another.                                                                                                         
                                                                                                                                
4:32:57 PM                                                                                                                    
JASON  MEYER, Alaska  Denali Commission,  said he  is working  to                                                               
develop  a  renewable and  alternative  energy  strategy for  the                                                               
Commission and  supported SB 150.  He said the  Denali Commission                                                               
is  an independent  federal agency  designed to  provide critical                                                               
utilities infrastructure and  economic support throughout Alaska.                                                               
With  the  creation of  the  Alaska  Denali Commission,  Congress                                                               
acknowledged the need for  increased inter-agency cooperation and                                                               
focus  on Alaska's  rural  communities.  The Commission's  Energy                                                               
program  focuses   on  bulk  fuel  power   plants  and  renewable                                                               
alternative  energy. Recently  the  Commission's energy  advisory                                                               
committee   discussed  strategy   for  continued   investment  in                                                               
alternative  and renewable  energy and  supportive testimony  was                                                               
heard  on  their  involvement   in  emerging  alternative  energy                                                               
developments at their quarterly meeting  in Juneau last week. The                                                               
Commission has historically been  involved in emerging technology                                                               
pilot   projects,  several   of   which  are   the  Eagle   River                                                               
Hydrokinetic project,  the Chena  Hot Springs  geothermal project                                                               
and  the  high voltage  direct  current  (HVDC), feasibility  and                                                               
prototype  design.  "Without  the  investment  of  such  emerging                                                               
technologies,  new   options  for  energy  in   Alaska  would  be                                                               
limited," he said.                                                                                                              
                                                                                                                                
MR.  MEYER said  the Commission  is tracking  efforts related  to                                                               
emerging technologies  that seem consistent with  their renewable                                                               
and alternative  energy strategy  which currently includes  a $10                                                               
million  budget.  It is  currently  developing  an MOU  with  the                                                               
University  of  Alaska's Center  for  Energy  and Power  and  the                                                               
National  Renewable  Energy  Lab.   Their  goal  is  to  leverage                                                               
resources  and  expertise  to support  emerging  technologies  in                                                               
Alaska in the hopes that  successful new options can be developed                                                               
and put to use.                                                                                                                 
                                                                                                                                
4:35:26 PM                                                                                                                    
PAUL  KENDALL, representing  himself, said  he is  very concerned                                                               
about  Mr.  Haagenson   at  AEA.  In  1981   it  dropped  several                                                               
magnificent programs like the hydrogen  conversion at Old Harbor.                                                               
He said  the real  truth is  "that our  real partnership  lies in                                                               
waterways - the  Cook Inlet, the Turnagain Arm, the  Knik Arm and                                                               
various other  bodies close  in, and it  can be  immediate within                                                               
three  to six  years." Whenever  he sees  new divisions,  he sees                                                               
people "who know  how to work the system" to  capture these funds                                                               
and then they  go out with their elite group  of people who think                                                               
they are special. These same  people have energy forums where you                                                               
have to  pay a lot  of money to see  them, but the  state's money                                                               
put  them  where they  are.  "The  whole  thing has  just  become                                                               
perverse, at best."                                                                                                             
                                                                                                                                
4:39:44 PM                                                                                                                    
KATHERINE KEITH, Alaska Center for  Energy and Power (ACEP), said                                                               
she works with  coordinating wind diesel systems  within the Wind                                                               
Diesel Application Center, which  was developed with partnerships                                                               
between National  Energy grants, the Alaska  Energy Authority and                                                               
ACEP.  She  said energy  is  foremost  in everybody's  mind,  yet                                                               
Alaska that  has the highest  energy costs  and some of  the most                                                               
                                                                th                                                              
complex and difficult issues to deal with in  the U.S., ranks 46                                                                
in  research and  development for  renewable energy.  We need  to                                                               
invest in energy projects, policy and research.                                                                                 
                                                                                                                                
AEA  has  no  has  mandate  or capability  to  engage  in  energy                                                               
research, she  stated. The question  needs to be asked  what kind                                                               
of research exists in the  state. Wind turbine verification could                                                               
be successfully  deployed in Arctic environments,  energy storage                                                               
systems are needed for high  penetration wind diesel systems, and                                                               
waste heat recovery needs development.  Utilities in rural Alaska                                                               
are  really  struggling  to find  proven  technologies  that  are                                                               
beneficial to their communities without a high risk factor.                                                                     
                                                                                                                                
Kotzebue Electric over  has become a leader  in energy innovation                                                               
to supplement  their diesel consumption  over the last  couple of                                                               
years using  such   ideas as land  fill gasification,  waste heat                                                               
recovery,  waste  heat  power  generation,  and  energy  storage,                                                               
electric  vehicles, and  so  on. Each  of  these technologies  is                                                               
considered pre-commercial and not,  therefore, eligible for state                                                               
funding. Yet each  of these technologies offers  great promise to                                                               
those communities.                                                                                                              
                                                                                                                                
Another  example  would  be the  Venadium  readout  slow  battery                                                               
(VRB),  which  would  help  stabilize   St.  Paul  Island's  high                                                               
penetration wind  systems. The VRB  is sitting at UAS  right now,                                                               
but there is no funding to analyze the data from that equipment.                                                                
                                                                                                                                
MS. KEITH  said with a  20-percent match the state  could receive                                                               
funding from many  sources. ACEP is already  involved in programs                                                               
to  test new  battery systems,  waste heat  recovery devices  and                                                               
hydro-kinetic  turbines, the  goal being  to insure  manufacturer                                                               
claims  are  accurate  and  to insure  that  these  systems  will                                                               
perform in  Alaska. After the  Chena Hot Spring  Geothermal plant                                                               
was  installed a  lot  of  attention was  paid  to  this type  of                                                               
technology.  This emerging  technology fund  will allow  projects                                                               
like this to be proven in Alaska for Alaskan communities.                                                                       
                                                                                                                                
She said  there is  a sense of  urgency in  considering available                                                               
federal  funds. She  said SB  150 should  be considered  a sister                                                               
program to  HB 152.  Efforts in  emerging technology  will ensure                                                               
greater  success  with  existing  and  future  HB  152  projects.                                                               
Lastly, she said  other research programs exist in  the Lower 48,                                                               
but they are not appropriate for Alaska's unique conditions.                                                                    
                                                                                                                                
4:44:41 PM                                                                                                                    
D. DOUGLAS  JOHNSON, Director,  Alaska Projects,  Ocean Renewable                                                               
Power,  said  they  are  currently working  on  two  projects  in                                                               
Alaska, one an ocean energy project  and the other a river energy                                                               
project. He  said his company wouldn't  be where it is  today had                                                               
it  not received  funds from  similar agencies  in the  states of                                                               
Maine  and Massachusetts.  This  fund is  something Alaska  needs                                                               
now. Alaska  is one  of the few  places in the  world that  has a                                                               
full suite of  renewables available. To be able  to fully utilize                                                               
that suite of  renewables, the technologies to do  have to better                                                               
understood. This is  an opportunity for Alaska to be  a leader in                                                               
this area. The one-to-four ratio  for every dollar the state puts                                                               
in makes the federal stimulus funding is a good deal for Alaska.                                                                
                                                                                                                                
4:47:31 PM                                                                                                                    
KATE  TROLL,  Executive  Director, Alaska  Conservation  Alliance                                                               
(ACA), supported  SB 150 for  many of the reason  already stated.                                                               
She said  that the clean  energy business is  looked at as  a $55                                                               
billion/year industry  - one of  the few bright spots  in today's                                                               
slumping economy. This figure is  projected to quadruple by 2015.                                                               
She added that setting up  this fund positions Alaska to leverage                                                               
a lot of not just federal  funds, but a lot of private investment                                                               
in energy.                                                                                                                      
                                                                                                                                
CO-CHAIR WIELECHOWSKI closed public testimony  and held SB 150 in                                                               
committee.                                                                                                                      
                                                                                                                                
4:51:06 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI adjourned the meeting at 4:51.                                                                            

Document Name Date/Time Subjects
Dirk Nickisch - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
Betty Jo Schmitz - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
SB 150 - Bill Packet.pdf SRES 4/1/2009 3:30:00 PM
SB 150
Paul E. Johnson - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
John K. Norman - Confirmation.pdf SRES 4/1/2009 3:30:00 PM
Peter B. Froehlich - Confirmation.pdf SRES 4/1/2009 3:30:00 PM