Legislature(2003 - 2004)

02/03/2003 03:32 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                        February 3, 2003                                                                                        
                           3:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Scott Ogan, Chair                                                                                                       
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Fred Dyson                                                                                                              
Senator Ralph Seekins                                                                                                           
Senator Ben Stevens                                                                                                             
Senator Kim Elton                                                                                                               
Senator Georgianna Lincoln                                                                                                      
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
ORGANIZATIONAL MEETING                                                                                                          
SENATE JOINT RESOLUTION NO. 4                                                                                                   
Urging the United States Congress to pass legislation to open                                                                   
the coastal plain of the Arctic National Wildlife Refuge,                                                                       
Alaska, to oil and gas exploration, development, and production.                                                                
     MOVED OUT OF COMMITTEE                                                                                                     
PREVIOUS ACTION                                                                                                               
SJR 4 - No previous action to record.                                                                                           
WITNESS REGISTER                                                                                                              
Mr. Kurt Olson                                                                                                                  
Staff to Senator Wagoner                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of SJR 4                                                                       
Mr. Mark Myers, Director                                                                                                        
Division of Oil and Gas                                                                                                         
Department of Natural Resources                                                                                                 
550 W. 7th Ave. Ste 800                                                                                                         
Anchorage AK 99501-3560                                                                                                         
POSITION STATEMENT:  Answered questions about ANWR                                                                            
ACTION NARRATIVE                                                                                                              
TAPE 03-1, SIDE A                                                                                                             
CHAIR SCOTT  OGAN called the  Senate Resources Standing  Committee                                                            
meeting to  order at 3:32  p.m. Senators Wagoner,  Dyson, Seekins,                                                              
Elton,  Lincoln   and  Chair   Ogan  were   present.  Chair   Ogan                                                              
introduced  committee  staff  and informed  members  of  committee                                                              
guidelines for  future meetings.  He then announced  the committee                                                              
would take up SJR 4.                                                                                                            
                 SJR  4-ENDORSING ANWR LEASING                                                                              
SENATOR  TOM WAGONER,  sponsor of  SJR 4,  introduced Kurt  Olson,                                                              
his legislative  assistant, and  asked Mr.  Olson to describe  the                                                              
resolution to the committee.                                                                                                    
MR. OLSON told  committee members that  the intent of SJR  4 is to                                                              
urge Congress  to open  the coastal plain  of the Arctic  National                                                              
Wildlife  Refuge (ANWR) to  oil and  gas exploration,  development                                                              
and production.  North Slope production  has been  declining since                                                              
1988,  when peak  production reached  2 million  barrels per  day.                                                              
Current  production   is  approximately   half  of   that  amount.                                                              
Development  of  the  coastal plain  would  provide  stability  to                                                              
national  energy   demands  while   increasing  Alaska's   revenue                                                              
stream. SJR  4 has two zero  fiscal notes from the  Departments of                                                              
Natural  Resources  and  Revenue.  He thanked  members  for  their                                                              
consideration of this legislation.                                                                                              
CHAIR  OGAN  acknowledged  the presence  of  Senator  Stevens  and                                                              
opened the meeting for questions from members.                                                                                  
SENATOR  ELTON referred  to language  on  page 3,  line 10,  which                                                              
states,  "the   legislature  is   adamantly  opposed   to  further                                                              
wilderness  or other restrictive  designation in  the area  of the                                                              
coastal plain...." He  asked if that language will  get in the way                                                              
of further restrictions  on an over-the-top gas line  route at the                                                              
state or federal level.                                                                                                         
MR. OLSON said it  will not, to the best of his  knowledge, but he                                                              
deferred to Mr. Myers for a more definitive answer.                                                                             
MR.  MARK  MYERS,  Director  of  the  Division  of  Oil  and  Gas,                                                              
Department of  Natural Resources (DNR),  said he does  not believe                                                              
that language  will affect  any additional  restrictions.  He said                                                              
the  legislation  is  a  resolution  from  the  state  that  makes                                                              
recommendations  to Congress.  It  should not  unduly restrict  or                                                              
bind  the  federal government  from  creating  further  wilderness                                                              
status lands.                                                                                                                   
CHAIR OGAN  concurred with  Mr. Myers'  assessment and  added that                                                              
language says the legislature supports a gas pipeline.                                                                          
SENATOR  ELTON  expressed  concern  that the  words,  "opposed  to                                                              
further  wilderness or  other  restrictive  designation" might  be                                                              
interpreted  to mean  that  the  State of  Alaska  or the  federal                                                              
government could  not take any action to preclude  an over-the-top                                                              
gas  pipeline   route  because   that  would   be  a   restrictive                                                              
designation in  the area of  the coastal  plain. He said  he would                                                              
hate to  see the  legislature suggest  to Congress  that it  ought                                                              
not do that.                                                                                                                    
CHAIR OGAN said  it is his understanding that putting  any part of                                                              
an over-the-top  gas pipeline on ANWR  is not an option,  which is                                                              
why a gas pipeline would have to be built offshore.                                                                             
SENATOR  ELTON emphasized  that the  language says,  "in the  area                                                              
of." He  said if Mr.  Myers is comfortable  with the  language, he                                                              
will not push the point.                                                                                                        
MR.  MYERS responded  that he  is not  sure of  the legal  nuances                                                              
but,  in terms  of the  state waters  offshore of  ANWR where  the                                                              
pipeline  is  proposed,   such  restrictions  do   not  exist.  He                                                              
indicated  the coastal  lagoon areas  are  too shallow  for a  gas                                                              
pipeline  so if  an offshore  gas  pipeline were  built, it  would                                                              
have  to be  buried below  the ice  [indisc.]  zone in  sufficient                                                              
water   depth,   which   would   be  in   waters   without   those                                                              
restrictions. He said  as far as the onshore  designation goes, he                                                              
does not  believe any  rights to put  pipeline facilities  in ANWR                                                              
itself exist so,  without a change of the current  designation, it                                                              
is  currently restricted.  It is  not likely  that Congress  would                                                              
put any further restrictions on it.                                                                                             
SENATOR ELTON  noted that  one problem  he has  had with  all ANWR                                                              
resolutions  is that  they  have been  focused  on production.  He                                                              
asked Senator Wagoner  if he would consider adding  another clause                                                              
to  link  ANWR   production  to  fuel  conservation   efforts.  He                                                              
explained  that SJR  4  would then  couple  the  notion of  energy                                                              
dependency  with  fuel  conservation  measures,  as  well  as  new                                                              
SENATOR WAGONER  said he  would have no  objection to  adding such                                                              
SENATOR ELTON suggested  adding the following language  on page 3,                                                              
line 14, after the semicolon:                                                                                                   
           and that ANWR production be linked to fuel                                                                           
     conservation efforts and be it further resolved;                                                                           
CHAIR OGAN asked  Senator Elton to provide committee  members with                                                              
written language for later consideration.                                                                                       
SENATOR ELTON  asked if the Chair  planned to hold  the resolution                                                              
in committee.                                                                                                                   
CHAIR OGAN said he did not.                                                                                                     
SENATOR  ELTON asked  the  Chair  if he  was  suggesting that  the                                                              
amendment be offered on the Senate floor.                                                                                       
CHAIR  OGAN  said  when  he  asks   that  a  bill  be  amended  in                                                              
committee, he brings  written language to the committee.  He again                                                              
asked  Senator   Elton  to  provide  the  proposed   amendment  in                                                              
3:40 p.m.                                                                                                                       
SENATOR  LINCOLN asked  if SJR 4  is identical  to the  resolution                                                              
passed by the legislature last year.                                                                                            
MR. OLSON said it is.                                                                                                           
SENATOR  LINCOLN referred  to the  language  on page  3, line  14,                                                              
that  reads,  "to  the  maximum  extent  possible"  and  said  she                                                              
considers  those  words  to  be   "weasel  words."  She  said  she                                                              
understands  that Congress  cannot mandate  that the state's  work                                                              
force be used exclusively. She suggested that phrase be deleted.                                                                
SENATOR  WAGONER   said  he   would  consider  Senator   Lincoln's                                                              
CHAIR OGAN  pointed out that as  much as he would like  to mandate                                                              
Alaska  hire, the  state  has its  hands  tied  by the  Interstate                                                              
Commerce  Clause of  the U.S.  Constitution, so  he believes  that                                                              
language is appropriate.                                                                                                        
SENATOR  LINCOLN  asked  that Senator  Wagoner  consider  changing                                                              
that  phrase. She  then commented  that she  understands that  the                                                              
majority  of  Alaskans  support   the  opening  of  ANWR  and  its                                                              
potential  for  Alaska's  economy.  However,  she  represents  the                                                              
Gwich'in tribe,  which is very  concerned about opening  ANWR. She                                                              
has  long felt  that  the Porcupine  Caribou  Herd is  intricately                                                              
tied to their  lives and that  any disturbance to that  herd would                                                              
be the  demise of that  tribe. The Gwich'in  people use  that herd                                                              
for food, clothing,  shelter and religious purposes.  She does not                                                              
feel that  sufficient protections  are in  place to guarantee  the                                                              
herd will  not go in another  direction. For that reason,  she has                                                              
consistently opposed  development in ANWR. She noted  she will not                                                              
object  to  moving SJR  4  out  of  committee,  but she  will  not                                                              
support it on the Senate floor.                                                                                                 
CHAIR OGAN said  with all due respect, he has killed  many caribou                                                              
and  has  found  them  to  be  the  dumbest  animal  he  has  ever                                                              
encountered  other than  domestic sheep.  As long  as one  doesn't                                                              
act like a  predator, caribou will  walk right up to a  hunter. He                                                              
felt,  regarding oil  development  in  ANWR, if  the  herd is  not                                                              
harassed, it  could care less.  He said  he knows people  who have                                                              
watched caribou  calve within  sight of  production platforms.  He                                                              
said the same  fear was expressed during development  of the North                                                              
Slope  yet the  number  of caribou  in  that  particular herd  has                                                              
increased six times since that area was developed.                                                                              
SENATOR  LINCOLN  said  he  has  heard  that  sentiment  expressed                                                              
before but her mother  speaks about growing up in  Rampart and how                                                              
she could  have literally  walked  across the  Yukon River  on the                                                              
backs of caribou.  However, those caribou changed  their migration                                                              
route  for several  reasons and,  during her  lifetime, there  has                                                              
been  no caribou  herd  in  Rampart. She  said  she  thinks it  is                                                              
possible that  could occur again. She  noted her point  was to let                                                              
the sponsor  know her position on  the resolution and that  it has                                                              
nothing to do with his sponsorship.                                                                                             
SENATOR  ELTON  moved  to  adopt   Amendment  1,  which  reads  as                                                              
     Page 3, line 14, following "extent possible;" add                                                                          
     and that Arctic National Wildlife Refuge production be                                                                     
     debated in the context of fuel conservation efforts;                                                                       
CHAIR  OGAN objected  and said he  believes it  is unnecessary  to                                                              
tie a  CAFÉ [Corporate  Average Fuel Economy]  standard to  SJR 4.                                                              
Congress may  wish to do  so but he believes  putting it in  SJR 4                                                              
might weaken Alaska's  congressional delegation from  getting ANWR                                                              
SENATOR ELTON  noted he used broad  language to craft  Amendment 1                                                              
to merely suggest  that ANWR production be debated  in the context                                                              
of fuel  conservation efforts. It  doesn't make the impact  of the                                                              
resolution  contingent   upon  anything  happening   to  the  CAFÉ                                                              
3:50 p.m.                                                                                                                       
SENATOR  SEEKINS   maintained  that  ANWR  development   could  be                                                              
debated  in   many  contexts  -   independence  on   foreign  oil,                                                              
employment, and others,  and he believes Congress will  look at it                                                              
in all of those contexts.                                                                                                       
CHAIR  OGAN concurred  and  said  the current  advertisement  that                                                              
implies  that  SUV  drivers  are  supporting  terrorism  could  be                                                              
stretched  to mean  that  opponents  of ANWR  development  support                                                              
terrorism. He  said he would  like to add  that to SJR 4  but does                                                              
not believe it would be constructive.                                                                                           
SENATOR ELTON  felt that defeating  the amendment will  narrow the                                                              
CHAIR  OGAN asked  for  a  roll call  vote.  The motion  to  adopt                                                              
Amendment  1  failed  with Senator  Stevens,  Dyson,  Seekins  and                                                              
Chair Ogan  opposed, and  Senators Wagoner,  Elton and  Lincoln in                                                              
SENATOR  SEEKINS said  he  recently read  that  the United  States                                                              
Geological Survey  (USGS) has looked  at oil seeps  and identified                                                              
the oil from ANWR  as low sulfur sweet crude. He  asked if that is                                                              
MR. MYERS  said there  are five  point sources  that can  be typed                                                              
for generating oil.  The USGS's recent work suggests  that some of                                                              
the  lighter, lower  sulfur crude  is from  wells to  the west  of                                                              
Prudhoe Bay.                                                                                                                    
SENATOR SEEKINS  suggested that  exploration for that  crude could                                                              
have added value  from an environmental standpoint and  it is less                                                              
expensive  to refine.  From that  standpoint,  the legislature  is                                                              
bringing the debate into the area of fuel conservation.                                                                         
MR. MYERS  agreed that development  of the lighter  higher quality                                                              
crude  with   less  sulfur   would  have  positive   environmental                                                              
effects, as well as a gas line from associated gas development.                                                                 
CHAIR  OGAN asked  if a  couple of  wells have  been drilled  near                                                              
MR. MYERS  answered that one well  has been drilled by  Chevron on                                                              
Native land near Kaktovik but the results are confidential.                                                                     
CHAIR OGAN asked Mr. Myers if he has access to those results.                                                                   
MR. MYERS said he does but cannot disclose it.                                                                                  
SENATOR  DYSON  moved  SJR  4 out  of  committee  with  individual                                                              
recommendations and  asked for unanimous consent.   There being no                                                              
objection, the motion carried.                                                                                                  
There  being no  further business  to come  before the  committee,                                                              
CHAIR OGAN adjourned the meeting at 4:00 p.m.                                                                                   

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