Legislature(2011 - 2012)BUTROVICH 205
03/28/2011 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB85 | |
| HJR19 | |
| SCR9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 85 | TELECONFERENCED | |
| *+ | SCR 9 | TELECONFERENCED | |
| + | HJR 19 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 28, 2011
3:39 p.m.
MEMBERS PRESENT
Senator Joe Paskvan, Co-Chair
Senator Thomas Wagoner, Co-Chair
Senator Bill Wielechowski, Vice Chair
Senator Bert Stedman
Senator Lesil McGuire
Senator Hollis French
Senator Gary Stevens
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Cathy Giessel
COMMITTEE CALENDAR
SENATE BILL NO. 85
"An Act providing for a tax credit applicable to the oil and gas
production tax based on the cost of developing new oil and gas
production; and providing for an effective date."
- HEARD & HELD
CS FOR HOUSE JOINT RESOLUTION NO. 19(RES)
Urging the United States Senate to ratify the United Nations
Convention on the Law of the Sea.
- MOVED CSHJR 19(RES) OUT OF COMMITTEE
SENATE CONCURRENT RESOLUTION NO. 9
Creating the Taku River Task Force as a joint legislative task
force.
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 85
SHORT TITLE: TAX CREDIT FOR NEW OIL & GAS DEVELOPMENT
SPONSOR(s): SENATOR(s) WAGONER
02/07/11 (S) READ THE FIRST TIME - REFERRALS
02/07/11 (S) RES, FIN
02/25/11 (S) RES AT 3:30 PM BUTROVICH 205
02/25/11 (S) Heard & Held
02/25/11 (S) MINUTE(RES)
02/28/11 (S) RES AT 3:30 PM BUTROVICH 205
02/28/11 (S) Heard & Held
02/28/11 (S) MINUTE(RES)
03/07/11 (S) RES AT 3:30 PM BUTROVICH 205
03/07/11 (S) Heard & Held
03/07/11 (S) MINUTE(RES)
03/09/11 (S) RES AT 3:30 PM BUTROVICH 205
03/09/11 (S) Heard & Held
03/09/11 (S) MINUTE(RES)
03/25/11 (S) RES AT 3:30 PM BUTROVICH 205
03/25/11 (S) Heard & Held
03/25/11 (S) MINUTE(RES)
03/28/11 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HJR 19
SHORT TITLE: URGING US TO RATIFY LAW OF THE SEA TREATY
SPONSOR(s): ECON. DEV., TRADE & TOURISM
03/07/11 (H) READ THE FIRST TIME - REFERRALS
03/07/11 (H) EDT, RES
03/08/11 (H) EDT AT 10:15 AM BARNES 124
03/08/11 (H) Moved CSHJR 19(EDT) Out of Committee
03/08/11 (H) MINUTE(EDT)
03/09/11 (H) EDT RPT CS(EDT) 7DP 1DNP 1NR
03/09/11 (H) DP: GARDNER, THOMPSON, MUNOZ, JOULE,
TUCK, FOSTER, HERRON
03/09/11 (H) DNP: KELLER
03/09/11 (H) NR: OLSON
03/14/11 (H) RES AT 1:00 PM BARNES 124
03/14/11 (H) Moved CSHJR 19(RES) Out of Committee
03/14/11 (H) MINUTE(RES)
03/16/11 (H) RES RPT CS(RES) 5DP 1DNP 2NR
03/16/11 (H) DP: GARDNER, MUNOZ, P.WILSON, HERRON,
SEATON
03/16/11 (H) DNP: DICK
03/16/11 (H) NR: KAWASAKI, FEIGE
03/16/11 (H) TRANSMITTED TO (S)
03/16/11 (H) VERSION: CSHJR 19(RES)
03/18/11 (S) READ THE FIRST TIME - REFERRALS
03/18/11 (S) RES
03/28/11 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SCR 9
SHORT TITLE: TAKU RIVER TASK FORCE
SPONSOR(s): SENATOR(s) EGAN
03/28/11 (S) READ THE FIRST TIME - REFERRALS
03/28/11 (S) RES
03/28/11 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
CATHY FORESTER, Commissioner
Alaska Oil and Gas Conservation Commission
Anchorage, AK
POSITION STATEMENT: Answered questions related to SB 85.
KEVIN BANKS, Director
Division of Oil and Gas
Department of Natural Resources
Anchorage, AK
POSITION STATEMENT:
REPRESENTATIVE BOB HERRON
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Introduced HJR 19 on behalf of the House
Special Committee on Economic Development, Trade, and Tourism.
CAITLYN ANTRIM, Executive Director
Rule of Law Committee for the Oceans
Arlington, Virginia
POSITION STATEMENT: Provided a summary of the United Nations
Convention on the Law of the Sea and identified areas of
interest.
CATHY WASSERMAN, Executive Director
Alaska Municipal League (AML), stated that AML passed a
resolution urging Congress to ratify UNCLOS because it would
enhance the economic development of Alaska municipalities.
POSITION STATEMENT: Testified in support of HJR 19 urging
Congress to ratify the Law of the Sea treaty.
JESSE KIEHL, Staff
Senator Dennis Egan
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Introduced SCR 9 on behalf of the sponsor.
KIRK HARDCASTLE, Commercial Fisherman and
Owner/Operator
Taku River Reds
Juneau, AK
POSITION STATEMENT: Supported SCR 9.
CHRIS CASEY, Fly Fishing Guide
POSITION STATEMENT: Supported SCR 9.
NEIL MACKINNON, Secretary
Taku Users Group
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
CHERI RUDOLPH, President
Taku River Recreational Association (
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
NIEL ATKINSON, representing himself
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
CARLEEN CONWAY, representing herself
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
ERROL CHAMPION, representing himself
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
JEV SHELTON, representing himself
Juneau, AK
POSITION STATEMENT: Supported SCR 9.
RON SOMERVILLE
Territorial Sportsmen Inc.
Juneau, AK
POSITION STATEMENT: Opposed SCR 9.
ACTION NARRATIVE
3:39:57 PM
CO-CHAIR THOMAS WAGONER called the Senate Resources Standing
Committee meeting to order at 3:39 p.m. Present at the call to
order were Senators French, McGuire, Wielechowski, Stedman,
Paskvan and Wagoner.
SB 85-TAX CREDIT FOR NEW OIL & GAS DEVELOPMENT
3:40:48 PM
CO-CHAIR WAGONER announced the consideration of SB 85, and
stated that he was maintaining his objection to version E.
3:41:25 PM
CATHY FORESTER, Commissioner, Alaska Oil and Gas Conservation
Commission (AOGCC), said she would respond to questions that
were submitted earlier. As to whether the AOGCC could accept the
current definition of "sustained production," she said the
answer was yes. As to how they feel about using the term "pool"
as the defining mechanism for a new discovery, she said they
don't feel at all good about that. She related that the AOGCC
asked the Interstate Oil and Gas Compact Commission to query
other states and the two that responded warned against using
"pool" because a development has to be well underway before it's
possible to ascertain whether there is more than one pool or
just one blanket pool. To incentivize more than just one
operator to explore and develop, the suggestion was to use some
other than means to define a new discovery, but nobody offered a
good alternative.
CO-CHAIR WAGONER asked if the AOGCC talked to anybody in North
Dakota.
MS. FORESTER replied the states that responded were South Dakota
and Indiana.
CO-CHAIR WAGONER reported that someone from North Dakota told
him their defining mechanism for a new discovery was two
sections of land.
MS. FORESTER responded that AOGCC supports using a reasonable
unit of land, and couldn't give a better answer than that until
there was some production and a fair number of wells.
SENATOR WIELECHOWSKI noted that Great Bear testified there were
multiple strata, and asked if she foresaw difficulties arising
if a lease had three different strata of oil formations.
MS. FORESTER explained that each stratum should be viewed as an
individual pool, because they wouldn't have connectivity or
communication.
CO-CHAIR WAGONER added that North Dakota addresses that
situation the same way. The only difference he found was that if
the oil is on two different levels within the two-section
boundary, there would be six wells instead of three.
MS. FORESTER reiterated that each stratum would be a pool.
SENATOR WIELECHOWSKI asked if one well could theoretically deal
with three pools.
MS. FORESTER answered yes, but an AOGCC permit to co-mingle the
pools would be necessary. Co-mingling would require proof that
the recovery wouldn't create waste; the production would have to
be as good as or better than if each pool was produced
separately.
SENATOR WIELECHOWSKI referenced page 3, lines 16-18, that talks
about qualified development expenditures, and asked if operating
expense (opex) might be included in that type of exploration
well.
MS. FORESTER answered it was the committee's prerogative to
define things in the bill, but in general operating costs are
the costs of producing. Operating costs typically begin once the
well starts to operate, and includes things like performing a
workover to fix broken wells, paying an operator to turn valves
and feeding people who work in the camp. The costs up to the
point that production begins would be allocated to exploration
and development.
CO-CHAIR PASKVAN asked hypothetically how many wells could be
drilled in 365 days at the Bakken Shale Oil Field.
MS. FORESTER replied she didn't have enough familiarity with
that operation to give an answer.
CO-CHAIR PASKVAN asked where he could get an answer.
MS. FORESTER offered to ask the question of Lynn Helms, her
counterpart at IOGCC.
3:49:23 PM
CO-CHAIR PASKVAN clarified that he wanted to know how many wells
each of 20 drill rigs could drill in one year's time. He
explained that that was where they would define the qualified
development expenditure as to whether or not production was
going on.
SENATOR WIELECHOWSKI asked if it presented a challenge to define
heavy oil in a pool.
MS. FORESTER replied there are two groups of heavy and viscous
oil. One is the West Sak/Schrader Bluff, which varies in oil
viscosity from very viscous and hard to produce to less viscous
and easier to produce. The less viscous oil is already being
developed. The other very viscous heavy oil is found in the Ugnu
and a very small area is currently under pilot to see if it can
be produced. A lot of both the West Sak/Schrader Bluff and the
Ugnu are not developable with current technology, and the
defining mechanism for those separate blanket reservoirs would
be on viscosity, not new pool. The low viscosity oil is already
under production, and the high viscosity hard-to-get oil should
be incentivized.
3:51:52 PM
SENATOR STEVENS joined the committee.
SENATOR WIELECHOWSKI asked if she foresaw any problems in
defining a pool of heavy oil.
MS. FORESTER replied the West Sak/Schrader Bluff and the Ugnu
are each individual big pools by the AOGCC's definition. And for
the sake of what the committee is trying to do, the standard
definition of "pool" doesn't work. She said it works in
conventional reservoirs, but not in unconventional reservoirs.
Viscous oil, shale oil and gas and probably coal bed methane are
different.
SENATOR WIELECHOWSKI asked her to describe "sustained
production."
MS. FORESTER replied the definition says production goes into a
sale and doesn't include testing, evaluation and pilots. The
Ugnu is called a pilot, but once it gets into a pipeline it's on
production.
SENATOR WIELECHOWSKI recapped that sustained production means
when it goes in a pipeline.
MS. FORESTER replied that's the definition in the statutes, and
the AOGCC has no difficulty understanding and applying that
definition.
3:55:25 PM
CO-CHAIR PASKVAN asked, in a shale oil field, how long it takes,
on average, from the start of drilling to first production.
MS. FORESTER replied she would ask Lynn Helms that question,
because neither she nor Mr. Seamount had experience with shale
oil or gas development.
CO-CHAIR WAGONER asked if on the first well it would be the well
itself, a pipeline, a treatment plant and an agreement to enter
the TAPS.
MS. FORESTER agreed.
SENATOR WIELECHOWSKI referenced an AOGCC chart and asked if she
could explain the variations in time for bringing on North Slope
oil fields. Kuparuk River Melt Water took a year and one-half to
bring to regular production, whereas Coleville River/Nanook took
six and one-half years and Nokia Chuck at Schrader Bluff took
six and three-fourth years.
MS. FORESTER replied one thing was proximity to the
infrastructure and another was having all the commercial
agreements in place. Any problems with either will slow
progress.
3:58:19 PM
SENATOR STEDMAN asked about the status of AOGCC's data gathering
task regarding how may well feet were drilled.
MS. FORESTER replied it was just about finished and Mr. Seamount
would deliver it the next time he was in Juneau.
SENATOR STEDMAN expressed a desire for the committee to hear the
presentation.
MS. FORESTER confirmed that AOGCC would deliver the presentation
at the committee's convenience.
CO-CHAIR WAGONER thanked Ms. Forester and asked if there were
questions for Mr. Banks.
3:59:53 PM
CO-CHAIR PASKVAN asked Mr. Banks how long it takes in a shale
oil field from the start of drilling to sustained production.
KEVIN BANKS, Director, Division of Oil and Gas, Department of
Natural Resources (DNR), replied a company doing work in North
Dakota said that the actual drilling can go fairly quickly, but
that the fracking process can cause a slowdown, because only a
certain number of frac crews are available. He opined that
Commissioner Forester should be able to provide a good average
estimate based on information from the folks in North Dakota.
He said he wanted to confirm agreement with Commissioner
Forester's comments on viscosity and heavy oil. It's difficult
to know what type of oil will be produced until exploration is
well underway, but how credit is awarded under SB 85 is
certainly the single most important variable in identifying
heavy oil in Alaska. Division staff has been challenged to think
about things like depth of drilling and productivity of a well
as the defining mechanism for heavy oil, but every one of those
things falls short of simply identifying heavy oil by its
viscosity.
SENATOR FRENCH asked how much it costs to drill an exploration
oil well on the North Slope.
MR. BANKS replied the numbers go all over the map. Wells that
were drilled in the southwestern part of the NPR-A cost in
excess of $70-80 million, whereas wells drilled at Pt. Thomson
were probably closer to $100 million. In Alaska, shale wells may
cost $20-25 million depending on the distance from the Haul
Road. He noted that information from an earlier presentation
indicated that the average cost for a well in North Dakota was
$6.1 million.
SENATOR FRENCH asked if those were exploration wells.
MR. BANKS answered no, those were shale wells. He estimated that
a North Slope exploration well that was close to the Haul Road
would cost about $25-30 million.
SENATOR FRENCH asked what would be considered a healthy level of
exploration wells drilled every year, and noted that since 2003
the number was about 10 wells per year.
MR. BANKS answered "the more the merrier."
SENATOR FRENCH questioned whether the focus should be on
encouraging more exploration wells or on the development costs
to bring a pool of oil to production.
MR. BANKS responded that Alaska is challenged with high costs
and remoteness, and the state has very few levers to pull that
would have an effect on cost.
SENATOR FRENCH asked what percent of the cost of an exploration
well is state subsidized through credits under ACES.
MR. BANKS replied it would depend on how far the well was from
existing infrastructure, but it could be the 40 percent direct
exploration credit plus the net operating losses. He offered to
follow up with a more exact answer.
SENATOR FRENCH expressed concern that the bill was unclear with
regard to what it would cost the state. He suggested that an
alternative would be for the state to annually appropriate a
sizeable amount of money to stimulate 10 exploration wells. Once
the money was gone that would be it until the next
appropriation.
4:08:22 PM
CO-CHAIR WAGONER asked how to define an exploratory shale well
as opposed to a production well, and the number of wells that
had been drilled through the shale structures.
MR. BANKS offered to follow up with an exact number, but it was
very few. To define a shale prospect for the purposes of SB 85,
he suggested using area rather than the normal definition of a
pool, because the credit may not be available to anyone else
once the once development and production started on the first
set of wells.
4:11:28 PM
]BRUCE TANGEMAN, Deputy Commissioner, Department of Revenue
(DOR), introduced himself.{
CO-CHAIR WAGONER asked if the committee had any questions for
Mr. Tangeman.
SENATOR FRENCH asked what percent of the cost of an exploration
well is state-subsidized through credits under ACES.
MR. TANGEMAN replied that for the exploration stage companies
would be eligible for up to a 40 percent exploration credit and
a 25 percent net operating loss credit for a total of 65
percent.
CO-CHAIR WAGONER observed that the Great Bear properties had the
advantage of proximity to the pipeline, which would make the
price relatively low for the first well to go into production.
SENATOR STEDMAN referenced Senator French's question and
clarified that the 65 percent would be contributed by the state
and federal government and the remaining 35 percent would come
from industry. He expressed a desire to hear from the
administration or the consultants with regard to where else in
the world that magnitude of credit was available.
CO-CHAIR WAGONER said his understanding of SB 85 was that it
addresses credit for production; it does not cover exploration.
MR. TANGEMAN said DOR's reading of the bill was that it
incentivizes development; the expenses that go into that stage
would be credited against a tax liability once production
starts.
SENATOR FRENCH asked if cost ever precluded development because
his sense was that once a pool of oil is found, there's money to
develop it. The hard part is finding the oil in the first place
and that's where the analysis has to take place.
4:16:27 PM
MR. TANGEMAN suggested he ask DNR that question.
SENATOR FRENCH said Armstrong or some other company that was
actively exploring could say they'd found oil but couldn't get
the money to build a production facility to get it to a
pipeline.
MR. TANGEMAN offered his understanding that FEX was in that
position; they found oil and eventually gave their leases back
to the state.
SENATOR FRENCH said he'd look into that.
SENATOR WIELECHOWSKI asked, under current law, if DOR or DNR
audited qualified capital expenditures.
MR. TANGEMAN replied DOR audits the qualified capital
expenditures.
SENATOR WIELECHOWSKI recalled that Gaffney Kline testified that
there was a worry about gold plating if credits were more than
40 percent. He asked if the administration had concerns about
giving 100 percent for capital expenditures and there being gold
plating.
MR. TANGEMAN replied DOR's concern with SB 85 was how it
interacts with the current tax credit structure. Initially the
bill said a company could take either the existing tax credit
structure or the one proposed under SB 85. Now the bill says the
current tax credit structure would stay in place so the company
would have to carry the costs during the development stage, but
they could be 100 percent reimbursed during the production
stage. DOR's concern with the current language is making sure
that qualified reimbursement is capped at 100 percent.
CO-CHAIR PASKVAN asked if he agreed with Mr. Bank's
interpretation of the current version of SB 85: that the first
shale oil well may be the only one that would qualify for the
credit.
MR. TANGEMAN replied he would defer to Director Banks on the
technical aspects, but that was one of the issues related to the
definition of a pool, and when the clock starts and stops in the
development stage.
CO-CHAIR WAGONER recognized that Representative Bob Herron had
joined the meeting.
CO-CHAIR WAGONER thanked the participants and announced he would
hold SB 85 in committee.
4:20:52 PM
At ease
HJR 19-URGING US TO RATIFY LAW OF THE SEA TREATY
4:22:48 PM
CO-CHAIR WAGONER announced the consideration of HJR 19 and asked
for a motion to bring the resolution before the committee.
CO-CHAIR PASKVAN moved to bring CSHJR 19(RES) before the
committee, version D. [Version D was transmitted from the House
to the Senate 3/16/11.]
CO-CHAIR WAGONER objected and asked Representative Herron to
present the bill.
REPRESENTATIVE BOB HERRON, speaking on behalf of the House
Special Committee on Economic Development, Trade, and Tourism,
sponsor of HJR 19, stated that U.S. Senator Lisa Murkowski
supports this resolution, which urges the U.S. Senate to ratify
the United Nations Convention on the Law of the Sea (UNCLOS). It
is important to all U.S. interests in the use and development of
the high seas off Alaska. Under the treaty, the U.S. can gain
another 150 miles beyond the exclusive economic zone (EEZ). This
386,000 square mile area has great economic and scientific
potential and some would say that by not ratifying the treaty
the U.S. is surrendering sovereign rights. Ratification will
make the U.S. a leader in the international Arctic community and
is in the best interest of Alaskans and all U.S. citizens.
SENATOR FRENCH referenced page 3, lines 21-22, and asked if all
the current Joint Chiefs of Staff support ratification.
REPRESENTATIVE HERRON responded that all the Joint Chiefs of
Staff since Ronald Reagan was president have stated support for
ratification.
SENATOR FRENCH asked for confirmation that every single joint
chief to a person supported ratification.
REPRESENTATIVE HERRON offered his understanding that those
collective Joint Chiefs of Staff have supported ratification.
CO-CHAIR PASKVAN observed that every military leader that had
come before the Senate in the last three years unanimously
supported ratification.
CO-CHAIR WAGONER commented that he ordinarily would not support
anything that abrogates sovereignty to an international panel,
but he became very supportive after seeing the Coast Guard
presentation that showed Chinese operations in waters that, with
ratification, would be under the control of the U.S.
CO-CHAIR WAGONER opened public testimony.
4:28:55 PM
CAITLYN ANTRIM, Executive Director, Rule of Law Committee for
the Oceans, Arlington, Virginia, said she has worked on
virtually all of the Law of the Sea conventions since 1982, and
was asked to give a summary of the convention and to identify
areas of interest. She said one area of particular concern is
the exclusive economic zone (EEZ) where the U.S. has management
authority out 200 nautical miles. In the Arctic the U.S. has the
authority to impose marine environmental protection provisions
in ice-covered areas if the regulation is based on scientific
evidence and non-discrimination among users. She highlighted
that that authority was Russia's principle legal mechanism for
instituting control of the northern sea route. On the
continental shelf, the U.S. would have control of mineral
resources in the seabed beyond the EEZ. With indications of
hydrocarbon in the seabed, control may extend as far as 600
miles from shore. The area is even more promising than when the
original provisions were drafted. She said that navigation is
also a critical component of the convention, and the most
critical part is control of straits that would otherwise fall
within the 12-mile territorial sea. This would apply to the
Bering Strait and would give the U.S. authority to establish
traffic separation schemes.
MS. ANTRIM explained that the primary reason that the U.S.
didn't initially join UNCLOS was disagreement on the management
of the resources of the deep seabed beyond the continental
shelf. Ronald Reagan identified six areas as essential and would
only recommend the U.S. join the convention if those were fixed.
In 1994 all six objections were resolved and the U.S. became a
provisional member. The U.S. helped shape the international
regime during its four years of provisional membership, but the
matter was not brought before the U.S. Senate until 2003.
Efforts to move the process forward have been underway since
that time.
MS. ANTRIM said it's important for the U.S. to join UNCLOS to
protect commercial navigation, naval navigation and aviation
rights of over-flight. Furthermore, telecommunication companies
are emphatic about the need for the convention in order to lay
seabed cables and pipelines. UNCLOS clarifies the ways that
companies can get exclusive rights and title to the minerals in
the seabed and continental shelf without which they can't get
investment capital or foreign partners. It clearly specifies
that coastal states are solely responsible for dealing with
environmental issues. Governments may engage in international
discussion about environmental provisions, otherwise it is
entirely a domestic issue. Joining UNCLOS will give the U.S.
more authority to shape the ocean regime not only in the Arctic
but also in areas like the South China Sea. The convention gives
the U.S. sovereign rights over the minerals of the continental
shelf and deep seabed, and recognizes the right for the U.S. to
determine environmental regulations through its own laws.
4:34:06 PM
CO-CHAIR PASKVAN asked what seabed attributes off the north
coast of Alaska might extend up to 600 miles from shore.
MS. ANTRIM replied the definition of "continental shelf" now
says that natural extensions of the continental material are not
subject to an outer limit of 350 miles that applies to ridges.
In 1980 all the Arctic states agreed and specifically noted that
the 350 mile limit did not apply to the Chukchi Plateau.
Research by Larry Mayer that was done with the Coast Guard
indicated that the continental material and the continental
slope beyond the material extends considerably further than
previously thought. Photographs of the seabed indicate gas
upwelling that is sometimes indicative of hydrocarbon deposits
so it's a combination of the law opening up for an extended
claim and the geology justifying a claim to that distance.
CATHY WASSERMAN, Executive Director, Alaska Municipal League
(AML), stated that AML passed a resolution urging Congress to
ratify UNCLOS because it would enhance the economic development
of Alaska municipalities. Research indicated a huge list of
people that have supported the convention over the last 20-30
years, whereas just a small group has been opposed and in fear
of giving away sovereignty. She emphasized the importance of
taking action, because of the rapid increase in interest and
activity in the Arctic.
CO-CHAIR WAGONER closed public testimony and asked the pleasure
of the committee.
CO-CHAIR PASKVAN moved to report CS for HJR 19 from committee
with individual recommendations and attached zero fiscal
note(s). Without objection, CSHJR 19(RES) moved from the Senate
Resources Standing Committee.
4:38:20 PM
At ease
SCR 9-TAKU RIVER TASK FORCE
4:40:11 PM
CO-CHAIR WAGONER announced the consideration of [SCR 9] and
asked the co-chair for a motion to bring the resolution before
the committee.
4:41:31 PM
Brief at ease.
CO-CHAIR PASKVAN moved to bring SCR 9, version A, before the
committee.
CO-CHAIR WAGONER objected for discussion purposes.
JESSE KIEHL, staff to Senator Egan, sponsor of SCR 9, said that
over the last few years, Alaskans in Southeast have discussed a
wide variety of ideas about the Taku River, and sometimes the
conversations were heated. He explained that the proposed Taku
River Task Force would provide a forum for future discussions
and recommendations for the best management of the resources in
that river. The task force was designed to represent a balanced
cross section of user-groups and was small enough so as to not
be unwieldy. Their recommendations would be due by December 1,
2011.
SENATOR STEDMAN said he wasn't sure what the resolution did.
CO-CHAIR WAGONER summarized that it establishes a task force to
review the requests for restrictions and opinions about what
should be done with the waterway. A proposal from a Canadian
mining company was to run a hovercraft up the river. He asked if
that was two years ago.
MR. KIEHL clarified that there wasn't a current proposal for
permits, but past proposals have raised concerns and questions
about activity on the river. The task force would review the
issues and the associated science, but the sponsor didn't want
the resolution to presuppose anything. The idea was to gather
the best knowledge and consider all the interests of all
resource users before making any recommendations to public
agencies. Recommendations to change regulations would go through
a public process and recommendations to change the law would go
before the legislature.
CO-CHAIR WAGONER asked if it was presumptuous to suggest putting
sideboards on the task force.
4:46:07 PM
MR. KIEHL replied the first thing a task force like this should
do is to get up to speed on the existing rules, regulations and
sideboards.
SENATOR STEDMAN asked for confirmation that the resolution
wouldn't preclude a recommendation to build a road or railway
into the area.
MR. KIEHL replied this resolution does not tie the hands of the
group before it starts meeting. If the recommendation of the
task force was to build a road or railway, that's what it would
bring forward.
SENATOR STEDMAN asked if the task force would be precluded from
asking for an expansion of wilderness designations.
MR. KIEHL replied the task force could theoretically come up
with that recommendation as well.
SENATOR STEDMAN pointed out that both the Taku River valley and
the Stikine River valley have been trade routes for thousands of
years, and a long-term goal in Southeast has been to develop
access to the outside. One corridor was north up the Lynn Canal
and others were the Taku, the Stikine and the Bradfield. He
questioned the composition and narrow representation of the task
force.
MR. KIEHL explained that the task force would include the three
elected legislators from the Juneau area, and their positions on
increasing access to the area are matters of public record. The
commissioner of fish and game or the commissioner's designee
would also be a member. The four public members would include 1)
one owner of private recreational property in the Taku river
valley; 2) one commercial fishing permit holder registered in
area A; 3) one owner or employee of a business that derives
significant income from transportation to or within the Taku
River; and 4) one person who uses but does not consume Taku
River resources.
MR. KIEHL said he had no reason to believe that radical or
extreme recommendations would come from the task force.
SENATOR STEVENS asked for an explanation of a "person who uses
but does not consume Taku River resources."
MR. KIEHL replied the notion of a non-consumptive user was
initially inspired by the local fish and game advisory
committee, and was designed to provide some breadth of opinion
on the issues. It would, for example, include people who float
rivers or take photographs.
4:50:37 PM
SENATOR MCGUIRE noted the controversy related to developing an
economic barging or traffic corridor in the area, and asked if
consideration was given to putting someone from the
transportation community on the task force.
MR. KIEHL replied the task force does have one business member
that derives significant income from transportation to or within
the Taku River. There is an established business that hauls
supplies to the area, there's a lodge in the area and the area
is serviced by a number businesses that provide air
transportation in and out. All of these businesses have an
interest in the future of the river.
SENATOR MCGUIRE responded that there's a distinction between
those businesses and a marine transportation company or a barge
owner and their perspectives would be widely divergent. She then
expressed reservation about delving into a very local issue
about which she knew very little.
4:53:48 PM
CO-CHAIR WAGONER agreed that this was a local issue and
suggested that the City and Borough of Juneau should bring the
resolution to the legislature.
SENATOR STEDMAN highlighted that there were long-standing treaty
issues with Canada related to the Stikine corridor and that may
or may not be the case with the Taku corridor as well. In any
event, that should be sorted out before going forward.
MR. KIEHL said the Taku River flows across the international
boundary so treaties are involved, and there was also interplay
between the local municipality and various departments within
the state. Those are the complexities the task force would
address and then bring their recommendations to the appropriate
agencies.
4:57:11 PM
KIRK HARDCASTLE, commercial fisherman and owner/operator, Taku
River Reds, stated support for SCR 9. He highlighted that the
economic road map of Taku River salmon shows that they interact
with all the commercial fish processing plants in Southeast
Alaska. The Taku River sustains all five species of salmon and
has active commercial, sport and subsistent fishing for nearly
six months each year.
4:58:58 PM
CHRIS CASEY, professional fly fishing guide, stated support for
SCR 9. He described the Taku River as a vital public economic
and cultural resource. It is Southeast's largest overall salmon
producer, and according to the 2004 McDowell report, the fishery
is worth over $7 million annually and supports nearly 500 jobs.
There is broad support for increased protection through
legislation.
NEIL MACKINNON, secretary, Taku Users Group, stated that the
Taku River was the last trans-boundary river not encumbered by a
park, wilderness, wild and scenic or other restrictive
designation. That alone was reason for cautious and careful
consideration of the present and future effect of any action. In
particular, a critical habitat designation would be an
unjustifiable misallocation of Alaska's resources that could not
provide commensurate benefit to its citizens.
5:03:10 PM
CHERI RUDOLPH, president, Taku River Recreational Association
(TRRA), said it is TRRA's position that the need for the Taku
River Task Force was unwarranted. The impetus for the resolution
was to further a continuing agenda for special interest groups
seeking a critical habitat or a wild and scenic designation for
this watershed.
CO-CHAIR WAGONER asked the current membership of the TRRA.
MS. RUDOLPH replied one year ago 414 members voted against
critical habitat for the area and 18 in favor. She noted that
the tally was submitted to the sponsor.
5:05:13 PM
NIEL ATKINSON, representing himself, said he was a Taku River
property owner who opposed SCR 9. He opined that appointments to
any task force can be made to ensure a certain end result. The
resolution doesn't direct the task force to look at historic
commercial and private uses and future operations that some may
feel are critical to the enjoyment of their lifestyle.
5:06:51 PM
CARLEEN CONWAY, representing herself, said she was a cabin owner
on the Taku River who opposed SCR 9. The idea for the task force
was primarily brought up by a special interest group with a
specific agenda. Furthermore, the task force would not supersede
the ADF&G advisory committee or the international trans-boundary
laws.
5:07:59 PM
ERROL CHAMPION, representing himself, said the supporting
material for the resolution included an article from the Juneau
Empire about wintertime barge traffic on the Taku River. He was
quoted expressing deep concern about the project and was a
little resentful that it was included since the information
dated back to 2008. At this point, both the business and the
project were defunct, and there was nothing on record about
future permit applications. He said he was also troubled by the
efforts to get the Taku River area designated as critical
habitat. He urged the committee not to pass the resolution.
5:09:34 PM
JEV SHELTON, representing himself, said he had commercially
fished the Taku River for at least 40 years and hoped to
continue. He stated support for proceeding with the review
because the Taku River problems were real. The mining company
that proposed the hoverbarge operation up and down the river did
fail financially, but not before it put a scare in the
community. Even though it was clear that it would wreak havoc
with the fishery resource, it appeared to be on the verge of
being permitted. He said the fishing-related industry in Juneau
supports getting more sensible control over the things that can
occur to the Taku River fishery habitat. He emphasized that the
interest was only in maintaining the habitat in the river and
not sacrificing a significant part of the non-government
employment in the Juneau community. He said there was already
another applicant for that mine and it was a misconception to
think that it wasn't the right time to set up a proper
procedure, because the proposal will come up again.
5:12:09 PM
RON SOMERVILLE, Territorial Sportsmen Inc., cautioned that the
environmental community had for some time been focused on
establishing an international body to govern trans-boundary
rivers like the Stikine and Taku. He said he was also somewhat
disappointed that the task force did not include a sport
fisherman. He pointed out that the resolution was about barging
down the Taku River and possibly impacting fisheries, but it
covered game as well. He recommended removing any reference to
game and appointing more people to the task force, with
particular consideration given to the Territorial Sportsmen
since it was the largest conservation group in Juneau. He
further suggested that if the report to the legislature was
majority based that there should also be an opportunity for a
minority report so that legislators could get the whole picture.
CO-CHAIR WAGONER announced he would hold SCR 9 in the Senate
Resources Standing Committee.
5:15:16 PM
There being no further business to come before the committee,
CO-CHAIR WAGONER adjourned the Senate Resources Standing
Committee meeting at 5:15 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHJR 19 sponsor statement.pdf |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| HJR 19 - EDT and RES Changes (for Senate Resources).pdf |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| HJR 19 - Leg Research Report (revises 3.11.11).pdf |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| HJR 19 - Senate Resources Hearing Request.pdf |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| HJR 19 - Zero Fiscal Note.pdf |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| HJR019C.PDF |
SRES 3/28/2011 3:30:00 PM |
HJR 19 |
| SCR 9_Sponsor Statement.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |
| SCR 9_Version A.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |
| SCR 9_Supporting Documents_Juneau AC Letter.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |
| SCR 9_Supporting Documents_Map.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |
| SCR 9_Supporting Documents_McDowell Taku Report ExSumm.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |
| SCR 9_Supporting Documents_News Articles.pdf |
SRES 3/28/2011 3:30:00 PM |
SCR 9 |