Legislature(2001 - 2002)

03/16/2001 03:47 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                    SENATE RESOURCES COMMITTEE                                                                                
                          March 16, 2001                                                                                        
                              3:47 pm                                                                                           
MEMBERS PRESENT                                                                                                               
Senator John Torgerson, Chair                                                                                                   
Senator Drue Pearce, Vice Chair                                                                                                 
Senator Pete Kelly                                                                                                              
Senator Robin Taylor                                                                                                            
Senator Kim Elton                                                                                                               
MEMBERS ABSENT                                                                                                                
Senator Rick Halford                                                                                                            
Senator Georgianna Lincoln                                                                                                      
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 121                                                                                                             
"An Act  adding, for  purposes  of the Alaska  Right-of-Way  Leasing                                                            
Act, a definition  of 'substantial change' as applied  to an amended                                                            
right-of-way  lease  application;  and providing  for  an  effective                                                            
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 125                                                                                                             
"An Act prescribing  a definition of 'damages' that  a landowner may                                                            
claim  for  injury  to or  interference  with  the  owner's  use  of                                                            
property  by  a  person entering   upon the  land  under  the  state                                                            
reservation  of oil, gas, mineral,  material, or related  interests,                                                            
addressing  the determination of the  form, amount, and security  of                                                            
the surety  bond determined by the  director of lands to  secure the                                                            
landowner payment  for damages, directing  preparation of  notice to                                                            
the landowner  for subsurface activities on the land,  and setting a                                                            
limitation on actions against  a landowner resulting from entry upon                                                            
land under the state reservation of interests."                                                                                 
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE JOINT RESOLUTION NO. 15                                                                                                  
Relating to imports of salmon from Chile.                                                                                       
     MOVED SJR 15 OUT OF COMMITTEE                                                                                              
CS FOR HOUSE JOINT RESOLUTION NO. 10(FSH)                                                                                       
Relating to the management of the Bering Sea/Aleutian Islands and                                                               
Gulf of Alaska groundfish fisheries and the protection and                                                                      
restoration of the Steller sea lion.                                                                                            
     MOVED CSHJR 10 (FSH) OUT OF COMMITTEE                                                                                      
PREVIOUS COMMITTEE ACTION                                                                                                     
SB 121 - No previous action to record.                                                                                          
SJR 15 - No previous action to record.                                                                                          
HJR 10 - No previous action to record.                                                                                          
WITNESS REGISTER                                                                                                              
Ms. Annette Kreitzer                                                                                                            
Staff to Senator Leman                                                                                                          
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Provided sponsor statement for SB 121.                                                                    
Mr. Jim Eason                                                                                                                   
Foothills Pipe Lines Ltd.                                                                                                       
3100 707 Eighth Ave. S.W.                                                                                                       
Calgary, Alberta T2P 3W8                                                                                                        
POSITION STATEMENT: Commented on SB 121.                                                                                      
Mr. Bill Britt                                                                                                                  
State Pipeline Coordinator                                                                                                      
Department of Natural Resources                                                                                                 
411 W 4th Ave., 2nd Floor                                                                                                       
Anchorage AK 99501                                                                                                              
POSITION STATEMENT: Commented on SB 121.                                                                                      
Mr. Ian Fisk                                                                                                                    
Staff to Senator Austerman                                                                                                      
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on SJR 15.                                                                                      
Mr. Paul Shadura, II                                                                                                            
Kenai Peninsula Fishing Association                                                                                             
P.O. Box 1632                                                                                                                   
Kenai AK 99611                                                                                                                  
POSITION STATEMENT: Supported SJR 15.                                                                                         
Mr. Jerry McCune                                                                                                                
United Fishermen of Alaska                                                                                                      
211 4th St., #110                                                                                                               
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Supported SJR 15.                                                                                         
Representative Drew Scalzi                                                                                                      
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT:  Sponsor of HJR 10.                                                                                       
ACTION NARRATIVE                                                                                                              
TAPE 01-21, SIDE A                                                                                                            
Number 001                                                                                                                      
                  SB 121-RIGHT-OF-WAY LEASING ACT                                                                           
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee                                                                 
meeting to order at 3:47 pm and announced SB 121 to be up for                                                                   
MS. ANNETTE  KREITZER, Staff  to Senator Leman,  sponsor, of  SB 121                                                            
said that  commercialization  of North  Slope gas  is a legislative                                                             
priority.  She explained  SB 121  provides certainty  to any  person                                                            
with rights-of-way  under the state's Right-of-Way  Leasing Act. She                                                            
     If   a  person  files   an  amendment   to  the  pipeline                                                                  
     application,  that supposes a  net increase in the amount                                                                  
     of acreage leased for the  right-of-way that is 10 percent                                                                 
     greater than the original  application. That is sufficient                                                                 
     change subjecting  the amendment to all the provisions  of                                                                 
     AS 38.35.  If a person  files an amendment  to a pipeline                                                                  
     application  that proposes  changes to  the design of  the                                                                 
     pipeline  that would use less  effective environmental  or                                                                 
     safety  mitigation measures  or less  advanced technology                                                                  
     than in  the original application,  that is a substantial                                                                  
     change subjecting  the amendment to all the conditions  of                                                                 
     AS  38.35.  When  the  state  calculates  whether  or  not                                                                 
     additional  state acreage must  be part of the 10 percent                                                                  
     calculation,  it must exclude  acreage attributable  to an                                                                 
     amendment  of  an  existing right-of-way   across federal                                                                  
     lands originally issued  by the federal government whether                                                                 
     or  not the state  or the federal  government administers                                                                  
     the  land.   Likely,  that  would  involve  an  applicant                                                                  
     aligning  with the  federal and state  rights-of-way.  The                                                                 
     state must  also not count land under a federal  right-of-                                                                 
     way grant  that has been transferred to the state  for its                                                                 
     Section 2 is a conforming  amendment to the commissioner's                                                                 
     analysis  and public hearing  section of the Right-of-Way                                                                  
     Act.  SB 121 continues  the public process,  but does  not                                                                 
MR. JIM EASON, Foothills Pipe Lines Ltd., testified in support of                                                               
SB 121 with the following:                                                                                                      
     Let me begin  by describing Foothills and summarizing  its                                                                 
     role in efforts to commercialize  Alaska's North Slope gas                                                                 
     reserves.  Foothills is jointly owned by Westcoast  Energy                                                                 
     Ltd.  and TransCanada  PipeLines  Limited,  the two  major                                                                 
     players  in the Canadian gas  pipeline business. Canadian                                                                  
     gas accounts for almost  20 percent of all gas consumed in                                                                 
     the  United State  and  all of  that gas  currently  moves                                                                 
     through   pipelines  owned   in  whole   or  in  part   by                                                                 
     TrnasCanada and Westcoast.  Foothills corporate mission is                                                                 
     very specific  - to build and  operate the Alaska Natural                                                                  
     Gas  Transportation  System, better  known  as the Alaska                                                                  
     Highway Pipeline  Project. Foothills was a leader  in this                                                                 
     project, which was conceived  twenty-five years ago and we                                                                 
     remain  just   as  committed  today  to  completing   that                                                                 
     The  Alaska  Highway  Pipeline  Project  was  approved  in                                                                 
     accordance with the Alaska  Natural Gas Transportation Act                                                                 
     of 1976  in the U.S.,  the 1078 Northern  Pipeline Act  in                                                                 
     Canada and  the 1977 Agreement Applicable to the  Northern                                                                 
     Natural  Gas  Pipeline  between   the  two countries.   As                                                                 
     approved,  the  Alaska  Highway   Pipeline  Project  is  a                                                                 
     4,800-mile  international pipeline  project commencing  at                                                                 
     Prudhoe Bay and terminating  in the Midwest and California                                                                 
     market  areas. It is important  to note that the southern                                                                  
     part of this pipeline has  been constructed and is in full                                                                 
     A substantial  amount of work in addition to constructing                                                                  
     the pre-built  portion of the  project has been completed                                                                  
     by the Alaska  Highway Pipeline Project sponsors  to date.                                                                 
     Significantly,   among  other  permits  in  the  U.S.  the                                                                 
     Project holds a federal  right-of-way grant issued in 1980                                                                 
     by  the  Department  of  the  Interior's  Bureau  of  Land                                                                 
     Management.  That  grant does  not expire  until December                                                                  
     2010  and may be  renewed at  the request  of the Project                                                                  
     sponsors.  On state side, the Project has a pending  State                                                                 
     of  Alaska right-of-way  lease application.  Recently,  we                                                                 
     have  initiated discussions  with state  officials toward                                                                  
     completing the pending application.                                                                                        
     I would  like now to turn to  our specific comments  on SB
     121.  It responds  to a potential  problem  that has  been                                                                 
     identified in Alaska state  law affecting applications for                                                                 
     state right-of-way  leases. Specifically, AS 38.35.050(c)                                                                  
     currently  provides that "Any amendment to an  application                                                                 
     is subject  to all provisions of the Right-of-Was  Leasing                                                                 
     Act applying to the original application."                                                                                 
     The potential problem arises  from the fact that the words                                                                 
      "substantial change" as applied to an amended right-of-                                                                   
     way  lease  application  are  not  currently   defined  in                                                                 
     statute. As a result, should  any party desire to delay or                                                                 
     obstruct the issuance of  a state right-of-way lease, they                                                                 
     are free to argue that any  change to an application after                                                                 
     it  is   submitted  constitutes   a  substantial  change.                                                                  
     Without  clear  policy  direction  from  the legislature,                                                                  
     administrative  appeals and litigation over which  changes                                                                 
     are  substantial are  likely, with the  result being  that                                                                 
     the courts  ultimately get to decide the issue  on a case-                                                                 
     by-case basis.                                                                                                             
     SB 121 proposes  a definition for substantial  change that                                                                 
     is intended  to provide clear guidance for all  parties of                                                                 
     interest,   including   applicants,  the   reviewing   and                                                                 
     authorizing  agencies and the  public. As fully explained                                                                  
     below,  Foothills  supports  Senator  Leman's  efforts  to                                                                 
     amend AS 38.35.050(c)  to avoid ambiguity and  to minimize                                                                 
     the  risk  of  specious  litigation  by  providing   clear                                                                 
     standards  for determining  whether  or not  changes to  a                                                                 
     right-of-way lease application are substantial.                                                                            
     We  believe  that  defining  substantial   change  in  the                                                                 
     context  of an amendment  of an application  will provide                                                                  
     several  important  benefits for  all projects  that  must                                                                 
     procure a  right-of-way lease across state lands,  as well                                                                 
     as for the State of Alaska. These benefits include:                                                                        
     · More timely processing of lease applications, especially                                                                 
        where much work has already been done in support of an                                                                  
        application; (Typically, an application for a major                                                                     
        pipeline can take as much as a couple of year or longer.)                                                               
     · Increased certainty; and                                                                                                 
     · Reduced potential of delay in authorizing and constructing                                                               
        projects of benefit to all Alaskans.                                                                                    
     Under Senator  Leman's proposed language, an amendment  to                                                                 
     an  original application  would constitute  a substantial                                                                  
     change   in   the  application   under   either   of   two                                                                 
     · If the amendment proposes a least a 10 percent net                                                                       
        increase in the amount of state acreage to be leased for                                                                
        the right-of -way when compared to the amount of acreage                                                                
        in the original application;                                                                                            
     · If the amendment proposes a change in the design of the                                                                  
        pipeline that would use less effective environmental or                                                                 
        safety mitigation measures or less advanced technology                                                                  
        than proposed in the original application.                                                                              
     We believe  this approach to  defining substantial change                                                                  
     is compatible  with the  state's goals  as set out in  its                                                                 
     Right-of-Way Leasing Act,  that is, that "the development,                                                                 
     use, and  control of a pipeline  transportation system  be                                                                 
     directed   to  make  the  maximum   contribution  to   the                                                                 
     development  of the  human resources  of  this state,  the                                                                 
     increase  in  the  standard  of  living  for  all  of  its                                                                 
     resident,  the  advancement   of existing  and  potential                                                                  
     sectors   of  its  economy,  the  strengthening   of  free                                                                 
     competition  in  its private  enterprise system,  and  the                                                                 
     careful   protection    of   its   incomparable   natural                                                                  
     environment."   Equally   important,   we   believe   that                                                                 
     incorporation  of  these  proposed  definitions  will  not                                                                 
     diminish  meaningful   agency  and  public  review  of  an                                                                 
     applicant's amended right-of-way lease application.                                                                        
     The  proposed  amendment   would  further  define  how  an                                                                 
     increase  in state  acreage would  be calculated  for  the                                                                 
     purposes of  determining substantiality. Specifically,  in                                                                 
     calculating  the percentage increase in acreage  due to an                                                                 
     amendment, the following  would each be excluded from that                                                                 
     calculation.  First, acreage attributable to an  amendment                                                                 
     to  a right-of-way  grant across federal  land originally                                                                  
     issued by the federal government,  whether administered by                                                                 
     the  state  or  federal  government,  would  be excluded.                                                                  
     Secondly,  land subject to an  existing federal right-of-                                                                  
     way  grant held by  the applicant that  is transferred  to                                                                 
     the state  for its administration would also be  excluded.                                                                 
     We  believe these exclusions  to be  appropriate, as  they                                                                 
     take out of  the calculation land that is already  subject                                                                 
     to a federal  right-of-way lease  and lands that may  come                                                                 
     to  be administered  by  the State  of Alaska.  Such  land                                                                 
     should  be taken out of the calculation  because it  would                                                                 
     not  have   been  subject  to   an  initial  state   lease                                                                 
     application.  It includes such land in the calculation  of                                                                 
     whether  or not there  has been a 10  percent increase  in                                                                 
     the amount  of state land covered by an application  would                                                                 
     penalize  unfairly  those  applicants  that  successfully                                                                  
     procured  a right-of-way  grant across  federal land  that                                                                 
     subsequently  comes  to be administered  by  the State  of                                                                 
Number 700                                                                                                                      
SENATOR ELTON said he could see many reasons for getting an                                                                     
amendment, for example, rerouting a pipeline through a community.                                                               
If the net acreage gain on the new route is less than 10 percent,                                                               
he asked if that would preclude the need to do an amendment.                                                                    
MS. KREITZER answered that it would not be considered to be a                                                                   
substantial change if it was less than 10 percent.                                                                              
SENATOR ELTON added, "Even though it would be a substantial                                                                     
change to the neighborhood."                                                                                                    
MS. KRIETZER said they had discussed this scenario with the                                                                     
department and Mr. Britt could speak better to the question.                                                                    
MR. BILL BRITT, State Pipeline Coordinator, he said that Senator                                                                
Elton is correct that a rerouting of a pipeline would not be                                                                    
captured by the bill in front of them.                                                                                          
CHAIRMAN TORGERSON asked if a community didn't want it, what kind                                                               
of mitigation measures would they do.                                                                                           
MR. BRITT responded that:                                                                                                       
     AS 38.35  gives the commissioner  a great amount of  power                                                                 
     to place stipulations on  right-of-way leases to deal with                                                                 
     a  variety  of public  health,  safety  and environmental                                                                  
     issues.  So  we  could  certainly  be  responsive  to  any                                                                 
     concern  that came out  at any one  process. Their normal                                                                  
     process  would be to analyze  an application. Our version                                                                  
     of  a best interest  finding  is called  a commissioner's                                                                  
     analysis  and  proposed  decision.  We public  notice  the                                                                 
     availability of that commissioner's  analysis and proposed                                                                 
     decision  along with draft lease  and receive comments  on                                                                 
     it through  a comment period or a public hearing  or both.                                                                 
     So we  can receive comments from  the public very late  in                                                                 
     the process  and alter the right-of-way lease  in response                                                                 
     to those.                                                                                                                  
SENATOR ELTON said he imagined this would have tilted the balance                                                               
back toward the company that had the right-of-way in any kind of                                                                
community discussion on a pipeline reroute.                                                                                     
MR. BRITT responded, "It's important to remember that the                                                                       
discussion is regarding an applicant, not an actual lessee. After                                                               
a lease is executed, we are dealing with different questions.                                                                   
This only regards changes to an application."                                                                                   
Number 1000                                                                                                                     
MR. EASON added that it is important to focus on the provision of                                                               
what the substantial change does that they are trying to define.                                                                
He explained:                                                                                                                   
     As  the statute  reads today,  the  undefined substantial                                                                  
     change triggers  all the provisions of the chapter,  which                                                                 
     quite literally  means that you go back to square  one and                                                                 
     file  a new  application,  not  just  notify people  of  a                                                                 
     change  in the application, and  do every procedural  step                                                                 
     that's  outlined  in  Title  38.35.  This  could,  again,                                                                  
     conceivably  include  steps that  have gone  on for 18  or                                                                 
     more months with a very  public process. I certainly stand                                                                 
     to  be corrected,  but it  was my understanding  that  the                                                                 
     intent  is not to limit  or change public  notice so  that                                                                 
     people  should be aware of changes  regardless of whether                                                                  
     there are substantial changes  or changes that rise to the                                                                 
     judgment of  the commissioner as requiring public  notice.                                                                 
     It's  just  a question  of  whether  or  not a  change  is                                                                 
     substantial  enough to trigger  all the provisions of  the                                                                 
     chapter being required to be done again.                                                                                   
     My  understanding  of the example  you gave  of rerouting                                                                  
     that might occur that brings  a project closer or within a                                                                 
     community,  can  happen  in either  of  two ways.  It  can                                                                 
     happen  because an applicant  has requested  it or it  can                                                                 
     happen because  the agencies require it. It's  conceivable                                                                 
     that  an  applicant proposes  something  that  avoids  all                                                                 
     communities,  but it  could be determined  for reasons  of                                                                 
     Fish and Game  or DEC or others that the preferable  route                                                                 
     is actually  closer to the community.  My belief would  be                                                                 
     that  under those circumstances,  those  kinds of changes                                                                  
     would   be  publicly  noticed   and  you  would  have   an                                                                 
     opportunity  to  discuss  them  and  review  them  in  the                                                                 
     context of the application as well as the finding.                                                                         
SENATOR ELTON asked if this had ever been an issue to his                                                                       
knowledge - where someone has defined substantial change in a way                                                               
that has caused economic hardship or regulator hardship.                                                                        
MR. EASON replied:                                                                                                              
     My research  of the files and  I have been able to locate                                                                  
     two  instances  in the  Pipeline Office's  administration                                                                  
     that actually  addresses this  question, one is a written                                                                  
     decision  affecting not the application,  but an existing                                                                  
     conditional  lease that  was issued to  Yukon Pacific.  In                                                                 
     that case, the application  process had been completed and                                                                 
     the  commissioner  had actually  issued the  lease.  Yukon                                                                 
     Pacific came back, as I  recall, some years later, maybe a                                                                 
     couple of years or longer,  and addressed the commissioner                                                                 
     with  a revised  project,  which  increased  the pipeline                                                                  
     pressure.  I believe  it increased the  pipeline size.  It                                                                 
     changed the number of compression  stations and it changed                                                                 
     the  location  of the  compression  stations,  but it  was                                                                 
     their  belief that  those  were not  substantial changes,                                                                  
     because the  changes actually resulted in less  land being                                                                 
     used  than originally  proposed,  even though  the system                                                                  
     looked  quite different.  There's a  written finding  that                                                                 
     the commissioner confirmed  the calculation was the issue.                                                                 
     If  it used  less  acreage,  even though  there  had  been                                                                 
     changes  that in your view or  others' view may very  well                                                                 
     signal substantial changes, but there weren't.                                                                             
     I believe  there is  another instance  with, I believe  it                                                                 
     was,   Badami  where   two  alternative   pipelines   were                                                                 
     proposed,  a buried pipeline  and an elevated pipeline.  I                                                                 
     apologize,  I  can't  remember  which one  went  in  which                                                                 
     direction  or whether  they finally  went  from buried  to                                                                 
     raised or  raised to buried, but my understanding  is that                                                                 
     the  pipeline office  determined  that was  a substantial                                                                  
     change requiring all the provisions of the chapter.                                                                        
     All  that is sort of  preliminary to  the answer from  our                                                                 
     perspective  that's   probably  more  important.  In  some                                                                 
     respects,  these  projects  may  have not  have  risen  in                                                                 
     profile  to invite litigation  and quite honestly, in  our                                                                 
     review  of the statutes  we were surprise  that this  term                                                                 
     had  been  in  the  statute  since  its adoption  without                                                                  
     definition.  We  think that  the uncertainty  surrounding                                                                  
     that is enough given the  high profile nature of a project                                                                 
     to deliver gas from Alaska  that we see it as a great risk                                                                 
     and we think Alaskans should  see it as a great risk - the                                                                 
     policy  direction  for  what  constitutes  a  substantial                                                                  
     change  is not  set so we  don't have,  perhaps, years  of                                                                 
     delay  by people  being  asked to  refile and  refile  and                                                                 
     begin the process again for whatever change may come.                                                                      
CHAIRMAN TORGERSON asked Mr. Britt if he supported the bill.                                                                    
MR. BRITT responded that they are neutral, but they think it's a                                                                
good idea for the legislature to define the term. He said:                                                                      
     There are three instances  they can think of that would be                                                                 
     captured  by  the  bill. Two  of  those  come up,  one  is                                                                 
     routing  and the other  is a change  from below ground  to                                                                 
     above  ground mode or  vice versa and  the third one  that                                                                 
      hasn't been mentioned yet, would be a change from a 12-                                                                   
      inch to 48-inch pipeline. Presumably that would not be                                                                    
     captured by these amendments.                                                                                              
SENATOR TAYLOR asked if he had any other suggestions for the                                                                    
committee with regards to routing and pipe size. "It seems odd                                                                  
that we should  have to do this for  every aspect of the  pipeline…"                                                            
MS. KREITZER  responded that they  attempted to look at the  routing                                                            
issue and tried to deal with that problem and it just made the                                                                  
problem worse. The routing seems to be the highest concern.                                                                     
Regarding the pipeline issue, she thought the department had                                                                    
already answered that with its action in the Yukon Pacific case.                                                                
"It has already said that is not a substantial change. So we're                                                                 
sort of codifying what they have already done."                                                                                 
SENATOR TAYLOR  said he wanted it  on the record that this  is based                                                            
on a previous decision.                                                                                                         
CHAIRMAN TORGERSON asked if the original pipeline was 12 inches.                                                                
MR. EASON replied that it was somewhere between 42 - 48 inches.                                                                 
He didn't anticipate quadrupling it. "The technology is not                                                                     
MS. KREITZER  added that a potential  amendment the committee  might                                                            
consider to  make the clearer is on  page 2, line 5 to insert,  "The                                                            
acreage attributable  to an amendment  of a right-of-way  originally                                                            
issued by the federal government."                                                                                              
CHAIRMAN TORGERSON said it already seemed clear to him, but they                                                                
would consider it, if that's what they need to do. He announced                                                                 
they would hold the bill for further work.                                                                                      
                   SJR 15-CHILEAN FARMED SALMON                                                                             
CHAIRMAN TORGERSON announced SJR 15 to be up for consideration.                                                                 
MR. IAN FISK,  Staff to Senator Austerman,  sponsor of SJR  15, said                                                            
he would answer the committee's questions.                                                                                      
CHAIRMAN TORGERSON stated  there were a couple of letters of support                                                            
for SJR 15.                                                                                                                     
Number 1500                                                                                                                     
MR. PAUL SHADURA II, Kenai  Peninsula Fishing Association, supported                                                            
SJR 15. He said they are  the largest setnet representation group in                                                            
Cook Inlet.  He said that  they target markets  all over the  world,                                                            
but it's  no good if  they are forced  out of  our own markets  with                                                            
unfair  practices.  SJR  15  takes  a big  step  in  protecting  the                                                            
marketing of wild Alaskan salmon.                                                                                               
MR. JERRY MCCUNE,  United Fishermen  of Alaska, said the  purpose of                                                            
this resolution  is that there is  a meeting in Florida on  the pre-                                                            
Chilean trade agreement on March 26. He said:                                                                                   
     Chile is dragging  down everybody's price for  salmon. The                                                                 
     last  time  there  was  a  study,  there   was  3 percent                                                                  
     overproduction  to the  United States.  They are flooding                                                                  
     the  market and the  United States with  fillets. We  feel                                                                 
     that's unfair  competition to us. When they first  started                                                                 
     they said  they weren't going to put salmon on  the market                                                                 
     at  the  same time  we  did,  but they've  gotten  so  big                                                                 
     now…The  Japanese  actually  own a  lot  of the  farms  in                                                                 
     Chile, now,  that are overproducing. We would  like to see                                                                 
     some fair competition in that arena.                                                                                       
SENATOR ELTON  commented that he used  to troll and it's  somewhat                                                              
misleading  on page 2, lines 4 and  14 where it seems to  imply to                                                              
the world that  you can't get fresh  salmon between the months  of                                                              
October and  May. In fact, you can't  get a lot of it, but  it's the                                                            
best fresh salmon you can get with the possible exception of                                                                    
Copper River  reds. He didn't want  to propose an amendment,  but he                                                            
wanted them to acknowledge that we can get fresh salmon most of                                                                 
the year.                                                                                                                       
MR. FISK responded that that was definitely correct and out of                                                                  
respect to  the troll fleet, Senator  Elton's comments are  welcome.                                                            
SENATOR TAYLOR moved to pass SJR 15 from committee with                                                                         
individual recommendations. There were no objections and it was                                                                 
so ordered.                                                                                                                     
         HJR 10-GROUNDFISH FISHERIES AND STELLER SEA LION                                                                   
CHAIRMAN TORGERSON announced HJR 10 to be up for consideration.                                                                 
REPRESENTATIVE DREW SCALZI, sponsor of HJR 10, testified:                                                                       
     Upon passage  of Magnuson Stevens  Fisheries Conservation                                                                  
     Management  Act,  fisheries  in  the  U.S.  waters became                                                                  
     governed  by regional  councils  and they were  set up  to                                                                 
     make  sound   decisions  based  on  biological   data  and                                                                 
     economic viability  to the coastal communities.  The North                                                                 
     Pacific Fisheries Management  Council has done a very good                                                                 
     job in managing the largest  fisheries in the United State                                                                 
     waters, which are predominantly  carried in the Bering Sea                                                                 
     and Gulf of Alaska.                                                                                                        
     In  1973, the  U.S. Congress  also passed  the Endangered                                                                  
     Species  Act, which was  a noble attempt  to place safety                                                                  
     measures around species  deemed threatened to the point of                                                                 
     extinction.  The Western  Stellar Sea  Lion in Alaska  has                                                                 
     become   identified   as  such  an   endangered  species.                                                                  
     Nevertheless,   the fisheries   management  by  the  North                                                                 
     Pacific  Fisheries Management  Council  was challenged  in                                                                 
     court  by Green Peace  and a  stay was issued  in a  Ninth                                                                 
     Circuit  Court  requiring  that a  biological  opinion  to                                                                 
     determine  what measures are  deemed necessary to protect                                                                  
     the Stellar.                                                                                                               
     The  National Marine  Fisheries Service  was charged  with                                                                 
     the  task of formulating  the biological  opinion (BIOP),                                                                  
     which set  in motion a number of restrictions  on our U.S.                                                                 
     and  Alaskan  fisheries.  In  defense  of  NMFS (National                                                                  
     Marine  Fisheries  Service),  the  task  was  to  prove  a                                                                 
     negative.  That  is  a conclusion  proving  there  was  no                                                                 
     conflict  between commercial  fishing and the Stellar  Sea                                                                 
     Lion  and  if  there  was  a  conflict,  what  mitigation                                                                  
     measures they were going to use to offset that.                                                                            
     Four  hundred  and sixty-three  pages  of the  BIOP  sited                                                                 
     numerous assumptions on  the feeding habits of the Stellar                                                                 
     regime shifts  that have taken place in the last  20 years                                                                 
     -   predation  by   Orcas  upon   the  Stellar   and   the                                                                 
     identifiable conflicts between  commercial fishing and the                                                                 
     Stellar Sea Lion. In conclusion,  the scientists could not                                                                 
     determine  100  percent   cause  and  effect  of  any  one                                                                 
     component,  but rather drew assumptions that many  factors                                                                 
     may  have resulted in  decline of the  Stellar. To err  on                                                                 
     the  side  of   conservation,  the  BIOP  concluded   that                                                                 
     shutting down  a large portion of our fisheries  may bring                                                                 
     the  North   Pacific  Fisheries   Management  Council   in                                                                 
     compliance  with the Endangered  Species Act. Frustration                                                                  
     with the process  as the preponderance of evidence  citing                                                                 
     the  decline  of the  Stellar could  find  no conclusion,                                                                  
     because  the evidence  of NMFS was  based on assumptions,                                                                  
     not facts, but assumptions.                                                                                                
     This resolution  asks that we base our management  on good                                                                 
     science and  conclude a reasonable outcome. There  must be                                                                 
     a decision  made to reasonably change the sustained  yield                                                                 
     principal  of fisheries management in U.S. waters  and the                                                                 
     assumptions  that are cited in the BIOP need to  be proven                                                                 
     and  from   there  we'll  draw   a  reasonable  fisheries                                                                  
     management  plan. To this end  we are thankful to Senator                                                                  
     Stevens. We are fortunate  to have $3.5 million of federal                                                                 
     appropriation   that  has  been   distributed  among   the                                                                 
     scientific  community  including the  National Academy  of                                                                 
     Sciences to conduct a peer  review of the BIOP and produce                                                                 
     the  necessary research  upon which to  base a legitimate                                                                  
     Dr.  Bob Small, Marine  Mammals Coordinator  for Fish  and                                                                 
     Game  is  a member  of  the Governor's  Stellar  Sea  Lion                                                                 
     restoration  team  and  will  speak about  the  state  and                                                                 
     federal  research that's planned.  It's ironic that  Green                                                                 
     Peace,  in  their  effort  to  shut  down the  fisheries,                                                                  
     initially targeted the large  factory trawlers. These 200-                                                                 
     300 ft.  vessels are going to  be little affected by  this                                                                 
     act  at all. It's going  to be the  small coastal vessels                                                                  
     that are going to take the  brunt of this. The vessels out                                                                 
     of  Seward, Homer, Kodiak,  King Cove,  Sand Point,  Dutch                                                                 
     Harbor.  They are all ill equipped  to fish in the winter                                                                  
     waters. We  know that this natural phenomenon  has altered                                                                 
     affects  on all living creatures  on the earth, including                                                                  
     mankind  himself. Many  civilizations  have come and  gone                                                                 
     due to regime shifts. All  we're asking in this resolution                                                                 
     is that we manage our fisheries with good science.                                                                         
SENATOR TAYLOR moved and asked for unanimous consent to pass HJR
10 from committee with individual recommendations. There were no                                                                
objections and it was so ordered.                                                                                               
CHAIRMAN TORGERSON adjourned the meeting at 4:24 pm.                                                                            

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